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. 11 ............ X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 X
Amendment No. 13 .......................... 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, 1995 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, 1995; 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: Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
CROSS-REFERENCE SHEET
This Amendment to the Registration Statement of FEDERATED INDEX TRUST,
which consists of three portfolios, (1) Federated Max-Cap Fund, consisting of
two classes of shares, (a) Institutional Shares and (b) Institutional Service
Shares; (2) Federated Mid-Cap Fund; and (3) Federated 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) Fund Administration;
(1-3) Brokerage Transactions.
Item 6.Capital Stock and Other Securities (1-3) Dividends; (1-3) Capital
Gains; (1-3) Shareholder Information;
(1-3) Voting Rights; (1-3) Tax
Information; (1-3) Federal Income Tax;
(1-3) State and Local Taxes.
Item 7.Purchase of Securities Being
Offered ..................... (1a) Investing in Institutional Shares;
(1b) Investing in Institutional Service
Shares; (2,3) Investing in the Fund; (1-
3) Share Purchases; (1-3) Minimum
Investment Required; (1-3) What Shares
Cost; (1-3) Sub-Accounting 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) 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)
Federated Index Trust Management.
Item 15.............................Control Persons and Principal
Holders of Securities ....... (1-3) Fund Ownership; (1-3) Trustees
Compensation.
Item 16.............................Investment Advisory and Other
Services .................... (1-3) Management Services; (1b)
Distribution Plan; (1a,2,3) Shareholder
Services; (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.
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- --------------------------------------------------------------------------------
FEDERATED 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, 1995,
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 or a paper copy of this prospectus, if you have received your
prospectus electronically, 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, 1995
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
Fund Administration.........................................................10
Net Asset Value...............................................................10
Investing in Institutional Service Shares.....................................10
Share Purchases.............................................................10
Minimum Investment Required.................................................11
What Shares Cost............................................................11
Sub-Accounting Services.....................................................11
Certificates and Confirmations..............................................11
Dividends...................................................................11
Capital Gains...............................................................12
Redeeming Institutional Service Shares........................................12
Telephone Redemption........................................................12
Written Requests............................................................12
Accounts with Low Balances..................................................13
Shareholder Information.......................................................13
Voting Rights...............................................................13
Tax Information...............................................................13
Federal Income Tax..........................................................13
Performance Information.......................................................14
Other Classes of Shares.......................................................14
Financial Highlights--
Institutional Shares........................................................15
Financial Statements..........................................................16
Report of Ernst & Young LLP,
Independent Auditors........................................................44
Addresses......................................................Inside Back Cover
SUMMARY OF FUND EXPENSES
FEDERATED MAX-CAP FUND
INSTITUTIONAL SERVICE SHARES
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price).................................................... None
Maximum Sales Charge 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 OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1)........................................................ 0.22%
12b-1 Fee (after waiver) (2)............................................................. 0.05%
Total Other Expenses..................................................................... 0.34%
Shareholder Services Fee................................................... 0.25%
Total Fund Operating Expenses (3).............................................. 0.61%
</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 operating expenses would have been 0.94% absent the voluntary
waivers of a portion of the management fee and a portion of the 12b-1 fee.
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.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Institutional Service Shares of
the Fund will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Investing in Institutional
Service Shares" and "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 $20 $34 $ 76
</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 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 44.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1994 1993(A)
- -------------------------------------------------------------------------- ------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.02 $12.24 $12.12
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------
Net investment income 0.33 0.28(b) 0.07
- --------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and futures contracts 2.69 0.11 0.12
- -------------------------------------------------------------------------- ------ ------ -------
Total from investment operations 3.02 0.39 0.19
- --------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------
Distributions from net investment income (0.30) (0.27) (0.07 )
- --------------------------------------------------------------------------
Distributions from net realized gain on investment transactions
and futures contracts (0.02) (0.34) --
- -------------------------------------------------------------------------- ------ ------ -------
Total distributions (0.32) (0.61) (0.07 )
- -------------------------------------------------------------------------- ------ ------ -------
NET ASSET VALUE, END OF PERIOD $14.72 $12.02 $12.24
- -------------------------------------------------------------------------- ------ ------ -------
TOTAL RETURN (C) 25.52% 3.30% 1.70 %
- --------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------
Expenses 0.61% 0.62% 0.61 %*
- --------------------------------------------------------------------------
Net investment income 2.55% 2.35% 1.52 %*
- --------------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.33% 0.26% 0.09 %*
- --------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------
Net assets, end of period (000 omitted) $35,195 $8,617 $2,493
- --------------------------------------------------------------------------
Portfolio turnover 57% 2% 13 %
- --------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 30, 1993 (date of initial
public investment) to October 31, 1993.
(b) 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.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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 dated October 31, 1995 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 Service Shares ("Shares") and Institutional Shares. 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 Farm
Credit System including the National Bank for Cooperatives, Farm Credit Banks,
and Banks for Cooperatives, 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. There is the risk that when lending portfolio securities, the securities
may not be available to the Fund on a timely basis and the Fund may, therefore,
lose the opportunity to sell the securities at a desirable price. In addition,
in the event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
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
The Trust is managed by the 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
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 func-
tions. 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.
Both the Trust and the Manager have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
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. With
over $72 billion invested across more than 260 funds under management and/or
administration by its subsidiaries, as of December 31, 1994, Federated Investors
is one of the largest mutual fund investment managers in the United States. With
more than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
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 manage-
ment, .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 First Chicago Investment Management
Company 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, 1995,
placed approximately $20.6 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 331 nationwide non-financial institution clients
invest. In total, ANB manages 77 commingled/common trust funds. Also, since
1990, ANB has served as Sub-Manager for the Federated Mini-Cap Fund and for the
Federated Mid-Cap Fund, which are also portfolios of the Trust.
SUPPLEMENTAL PAYMENTS TO
FINANCIAL INSTITUTIONS
In addition to periodic payments to financial institutions under the
Distribution Plan and Shareholder Services Agreement, 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 PLAN AND SHAREHOLDER SERVICES
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 services or
distribution-related 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 entered into a Shareholder Services Agreement with
Federated Share-
holder Services, a subsidiary of Federated Investors, under which the Fund may
make payments up to 0.25 of 1% of the average daily net asset value of Shares,
computed at an annual rate, to obtain certain personal services for shareholders
and for the maintenance of shareholder accounts ("shareholder services"). From
time to time and for such periods as deemed appropriate, the amount stated above
may be reduced voluntarily. Under the Shareholder Services Agreement, 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.
FUND ADMINISTRATION
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.
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.
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 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 SERVICE 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:
Federated Ser-
vices Company, c/o 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. Shares cannot be purchased by
wire on holidays when wire transfers are restricted. Questions on wire purchases
should be directed to your shareholder services representative at the telephone
number listed on your account statement.
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, P.O. Box 8600, Boston, Massachusetts
02266-8600. 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 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 as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, 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.
SUB-ACCOUNTING 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. State securities laws may require certain
financial institutions such as depository institutions to register as dealers.
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. Proceeds from
redemption requests received on holidays when wire transfers are restricted will
be wired the following business day. Questions about telephone redemptions on
days when wire transfers are restricted should be directed to your shareholder
services representative at the telephone number listed on your account
statement. 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 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 their signatures 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 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 4, 1995, Alltell Corp.
Thrift Plan, San Francisco, CA, owned 26.63% of the voting securities 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.
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.
STATE AND LOCAL TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust, 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.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's 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.
To obtain more information and a prospectus for Institutional Shares, investors
may call 1-800-235-4669.
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 44.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
1995 1994 1993 1992 1991 1990(A)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.02 $12.24 $11.64 $11.07 $ 8.60 $10.00
- ------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------
Net investment income 0.38 0.32 0.30 0.32 0.37 0.12
- ------------------------------------------
Net realized and unrealized gain (loss)
on investments and futures contracts 2.70 0.10 1.29 0.71 2.46 (1.43)
- ------------------------------------------ ------ ------ ------ ------ ------ ------
Total from investment operations 3.08 0.42 1.59 1.03 2.83 (1.31)
- ------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------
Distributions from net investment income (0.34) (0.30) (0.30) (0.34) (0.36) (0.09)
- ------------------------------------------
Distributions from net realized gain on
investment transactions and futures
contracts (0.02) (0.34) (0.69) (0.12) -- --
- ------------------------------------------ ------ ------ ------ ------ ------ ------
Total distributions (0.36) (0.64) (0.99) (0.46) (0.36) (0.09)
- ------------------------------------------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $14.74 $12.02 $12.24 $11.64 $11.07 $ 8.60
- ------------------------------------------ ------ ------ ------ ------ ------ ------
TOTAL RETURN (B) 26% 3.59% 14.35% 9.51% 33.31% (14.46)%
- ------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------
Expenses 0.31% 0.32% 0.31% 0.30% 0.24% 0.00%*
- ------------------------------------------
Net investment income 2.91% 2.70% 2.60% 2.92% 3.74% 5.19%*
- ------------------------------------------
Expense waiver/reimbursement (c) 0.33% 0.07% 0.09% 0.18% 0.45% 0.94%*
- ------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------
Net assets, end of period (000 omitted) $679,237 $443,815 $407,246 $309,614 $144,528 $25,129
- ------------------------------------------
Portfolio turnover 57% 2% 13% 46% 6% 0%
- ------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) 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.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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 dated October 31, 1995 which can be obtained free of charge.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--82.9%
- --------------------------------------------------------------------------------------
COMMERCIAL SERVICES--1.0%
------------------------------------------------------------------
7,500 (a) Alco Standard Corp. $ 663,750
------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <S> <C>
11,400 Deluxe Corp. 306,375
------------------------------------------------------------------
20,900 Donnelley (R.R.) & Sons Co. 762,850
------------------------------------------------------------------
13,500 Dow Jones & Co. 475,875
------------------------------------------------------------------
23,400 Dun & Bradstreet Corp. 1,398,150
------------------------------------------------------------------
5,200 Fleming Cos., Inc. 117,650
------------------------------------------------------------------
7,000 Grainger (W.W.), Inc. 437,500
------------------------------------------------------------------
4,600 Handleman Co. 35,650
------------------------------------------------------------------
4,200 Harland (John H.) Co. 87,150
------------------------------------------------------------------
10,600 Interpublic Group Cos., Inc. 410,750
------------------------------------------------------------------
6,900 McGraw-Hill Cos., Inc. 564,938
------------------------------------------------------------------
13,800 Moore Corp. Ltd. 263,925
------------------------------------------------------------------
6,700 Ogden Corp. 152,425
------------------------------------------------------------------
8,050 Safety-Kleen Corp. 123,769
------------------------------------------------------------------
9,700 Super Valu Stores, Inc. 298,275
------------------------------------------------------------------
25,200 Sysco Corp. 765,450
------------------------------------------------------------------ ------------
Total 6,864,482
------------------------------------------------------------------ ------------
CONSUMER DURABLES--2.4%
------------------------------------------------------------------
10,300 American Greetings Corp., Class A 324,450
------------------------------------------------------------------
2,037 Bassett Furniture Industries, Inc. 40,995
------------------------------------------------------------------
11,700 Black & Decker Corp. 396,337
------------------------------------------------------------------
4,000 Briggs & Stratton Corp. 161,500
------------------------------------------------------------------
13,200 Brunswick Corp. 257,400
------------------------------------------------------------------
3,900 Centex Corp. 127,725
------------------------------------------------------------------
48,984 Chrysler Corp. 2,528,799
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
------------------------------------------------------------------
11,500 Cooper Tire & Rubber Co. $ 265,937
------------------------------------------------------------------
46,900 Eastman Kodak Co. 2,937,112
------------------------------------------------------------------
8,200 Echlin, Inc. 293,150
------------------------------------------------------------------
6,400 Fleetwood Enterprises, Inc. 131,200
------------------------------------------------------------------
141,400 Ford Motor Co. 4,065,250
------------------------------------------------------------------
17,000 Genuine Parts Co. 673,625
------------------------------------------------------------------
20,900 Goodyear Tire & Rubber Co. 794,200
------------------------------------------------------------------
12,200 Hasbro, Inc. 372,100
------------------------------------------------------------------
5,653 Jostens, Inc. 127,899
------------------------------------------------------------------
4,500 Kaufman & Broad Homes Corp. 52,312
------------------------------------------------------------------
30,740 Mattel, Inc. 883,775
------------------------------------------------------------------
14,800 Maytag Corp. 281,200
------------------------------------------------------------------
21,800 Newell Co. 525,925
------------------------------------------------------------------
2,700 Outboard Marine Corp. 56,025
------------------------------------------------------------------
6,400 Polaroid Corp. 273,600
------------------------------------------------------------------
3,800 Pulte Corp. 120,175
------------------------------------------------------------------
22,200 Rubbermaid, Inc. 579,975
------------------------------------------------------------------
5,900 Snap-On Tools Corp. 250,013
------------------------------------------------------------------
6,200 Stanley Works 296,050
------------------------------------------------------------------
10,400 Whirlpool Corp. 551,200
------------------------------------------------------------------
6,300 (a) Zenith Electronics Corp. 52,763
------------------------------------------------------------------ ------------
Total 17,420,692
------------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--9.7%
------------------------------------------------------------------
3,800 Alberto-Culver Co., Class B 119,225
------------------------------------------------------------------
26,300 American Brands, Inc. 1,127,612
------------------------------------------------------------------
35,700 Anheuser-Busch Companies, Inc. 2,356,200
------------------------------------------------------------------
9,500 Avon Products, Inc. 675,687
------------------------------------------------------------------
2,400 Brown Group, Inc. 33,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
------------------------------------------------------------------
9,600 Brown-Forman Corp., Class B $ 366,000
------------------------------------------------------------------
20,300 CPC International, Inc. 1,347,412
------------------------------------------------------------------
34,300 Campbell Soup Co. 1,796,462
------------------------------------------------------------------
7,300 Clorox Co. 523,775
------------------------------------------------------------------
177,200 Coca-Cola Co. 12,736,250
------------------------------------------------------------------
20,100 Colgate-Palmolive Co. 1,391,925
------------------------------------------------------------------
34,300 ConAgra, Inc. 1,324,837
------------------------------------------------------------------
5,200 Coors Adolph Co., Class B 92,950
------------------------------------------------------------------
9,700 (a) Fruit of the Loom, Inc., Class A 168,537
------------------------------------------------------------------
21,800 General Mills, Inc. 1,250,775
------------------------------------------------------------------
61,100 Gillette Co. 2,955,712
------------------------------------------------------------------
33,600 Heinz (H.J.) Co. 1,562,400
------------------------------------------------------------------
11,900 Hershey Foods Corp. 711,025
------------------------------------------------------------------
15,400 International Flavors & Fragrances, Inc. 743,050
------------------------------------------------------------------
30,600 Kellogg Co. 2,210,850
------------------------------------------------------------------
10,700 Liz Claiborne, Inc. 303,613
------------------------------------------------------------------
20,000 Nike, Inc., Class B 1,135,000
------------------------------------------------------------------
109,200 PepsiCo, Inc. 5,760,300
------------------------------------------------------------------
117,400 Philip Morris Cos., Inc. 9,920,300
------------------------------------------------------------------
94,700 Procter & Gamble Co. 7,670,700
------------------------------------------------------------------
18,500 Quaker Oats Co. 631,313
------------------------------------------------------------------
13,900 Ralston Purina Co. 825,313
------------------------------------------------------------------
11,200 Reebok International Ltd. 380,800
------------------------------------------------------------------
5,600 Russell Corp. 138,600
------------------------------------------------------------------
66,100 Sara Lee Corp. 1,941,688
------------------------------------------------------------------
51,400 Seagram Co. Ltd. 1,850,400
------------------------------------------------------------------
6,700 Stride Rite Corp. 75,375
------------------------------------------------------------------
27,700 UST, Inc. 831,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
------------------------------------------------------------------
22,100 Unilever N.V., ADR $ 2,895,100
------------------------------------------------------------------
8,900 V.F. Corp. 426,088
------------------------------------------------------------------
16,100 Wrigley (Wm.), Jr. Co. 748,650
------------------------------------------------------------------ ------------
Total 69,027,924
------------------------------------------------------------------ ------------
CONSUMER SERVICES--3.5%
------------------------------------------------------------------
6,500 (a) Bally Entertainment Group 71,500
------------------------------------------------------------------
14,500 Block (H&R), Inc. 598,125
------------------------------------------------------------------
8,440 CBS, Inc. 681,530
------------------------------------------------------------------
23,050 (a) CUC International, Inc. 798,106
------------------------------------------------------------------
21,300 Capital Cities/ABC, Inc. 2,526,712
------------------------------------------------------------------
33,050 Comcast Corp., Class A 590,769
------------------------------------------------------------------
21,800 Darden Restaurants, Inc. 247,975
------------------------------------------------------------------
71,600 Disney (Walt) Co. 4,125,950
------------------------------------------------------------------
19,200 Gannett Co., Inc. 1,044,000
------------------------------------------------------------------
14,150 (a) Harrah's Entertainment, Inc. 350,212
------------------------------------------------------------------
6,700 Hilton Hotels Corp. 448,900
------------------------------------------------------------------
5,050 (a) King World Productions, Inc. 176,119
------------------------------------------------------------------
7,400 Knight-Ridder, Inc. 410,700
------------------------------------------------------------------
3,350 Luby's Cafeterias, Inc. 69,513
------------------------------------------------------------------
17,200 Marriott Corp. 634,250
------------------------------------------------------------------
96,300 McDonald's Corp. 3,948,300
------------------------------------------------------------------
3,800 Meredith Corp. 135,850
------------------------------------------------------------------
13,700 New York Times Co., Class A 380,175
------------------------------------------------------------------
7,400 (a) Ryan's Family Steak Houses, Inc. 57,350
------------------------------------------------------------------
13,000 Service Corp. International 521,625
------------------------------------------------------------------
5,700 (a) Shoney's, Inc. 63,413
------------------------------------------------------------------
87,400 (a) Tele-Communications, Inc., Class A 1,485,800
------------------------------------------------------------------
52,240 Time Warner, Inc. 1,906,760
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
------------------------------------------------------------------
15,400 Times Mirror Co., Class A $ 446,600
------------------------------------------------------------------
9,300 Tribune Co. 587,063
------------------------------------------------------------------
49,268 (a) Viacom, Inc., Class B 2,463,400
------------------------------------------------------------------
14,000 Wendy's International, Inc. 278,250
------------------------------------------------------------------ ------------
Total 25,048,947
------------------------------------------------------------------ ------------
ELECTRONIC TECHNOLOGY--8.7%
------------------------------------------------------------------
29,980 AMP, Inc. 1,176,715
------------------------------------------------------------------
14,800 (a) Advanced Micro Devices, Inc. 353,350
------------------------------------------------------------------
16,100 (a) Amdahl Corp. 148,925
------------------------------------------------------------------
5,250 (a) Andrew Corp. 221,812
------------------------------------------------------------------
16,700 Apple Computer, Inc. 606,419
------------------------------------------------------------------
23,200 (a) Applied Materials, Inc. 1,162,900
------------------------------------------------------------------
46,900 Boeing Co. 3,077,812
------------------------------------------------------------------
9,800 (a) Cabletron Systems, Inc. 770,525
------------------------------------------------------------------
6,200 (a) Ceridian Corp. 269,700
------------------------------------------------------------------
37,100 (a) Cisco Systems, Inc. 2,875,250
------------------------------------------------------------------
36,100 (a) Compaq Computer Corp. 2,012,575
------------------------------------------------------------------
7,600 (a) Computer Sciences Corp. 508,250
------------------------------------------------------------------
3,500 (a) Cray Research, Inc. 72,625
------------------------------------------------------------------
15,600 (a) DSC Communications Corp. 577,200
------------------------------------------------------------------
5,100 (a) Data General Corp. 58,650
------------------------------------------------------------------
20,200 (a) Digital Equipment Corp. 1,093,325
------------------------------------------------------------------
7,600 EG & G, Inc. 141,550
------------------------------------------------------------------
8,620 General Dynamics Corp. 477,332
------------------------------------------------------------------
5,400 Harris Corp. 313,875
------------------------------------------------------------------
70,400 Hewlett-Packard Co. 6,520,800
------------------------------------------------------------------
114,300 Intel Corp. 7,986,712
------------------------------------------------------------------
6,200 (a) Intergraph Corp. 75,175
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------------
81,000 International Business Machines Corp. $ 7,877,250
------------------------------------------------------------------
31,488 Lockheed Martin Corp. 2,145,120
------------------------------------------------------------------
23,600 Loral Corp. 699,150
------------------------------------------------------------------
16,300 McDonnell-Douglas Corp. 1,332,525
------------------------------------------------------------------
28,400 Micron Technology, Inc. 2,005,750
------------------------------------------------------------------
80,900 Motorola, Inc. 5,309,063
------------------------------------------------------------------
17,200 (a) National Semiconductor Corp. 419,250
------------------------------------------------------------------
34,900 Northern Telecom Ltd. 1,256,400
------------------------------------------------------------------
6,800 Northrop Corp. 389,300
------------------------------------------------------------------
50,600 (a) Novell, Inc. 834,900
------------------------------------------------------------------
5,800 Perkin-Elmer Corp. 203,725
------------------------------------------------------------------
34,000 Raytheon Co. 1,483,250
------------------------------------------------------------------
29,900 Rockwell International Corp. 1,330,550
------------------------------------------------------------------
10,500 Scientific-Atlanta, Inc. 129,938
------------------------------------------------------------------
19,900 (a) Silicon Graphics, Inc. 661,675
------------------------------------------------------------------
13,200 (a) Sun Microsystems, Inc. 1,029,600
------------------------------------------------------------------
16,000 (a) Tandem Computers, Inc. 180,000
------------------------------------------------------------------
4,300 Tektronix, Inc. 254,775
------------------------------------------------------------------
12,200 (a) Tellabs, Inc. 414,800
------------------------------------------------------------------
25,500 Texas Instruments, Inc. 1,740,375
------------------------------------------------------------------
23,700 (a) Unisys Corp. 133,313
------------------------------------------------------------------
16,900 United Technologies Corp. 1,499,875
------------------------------------------------------------------ ------------
Total 61,832,061
------------------------------------------------------------------ ------------
ENERGY MINERALS--6.7%
------------------------------------------------------------------
12,900 Amerada-Hess Corp. 582,112
------------------------------------------------------------------
68,600 Amoco Corp. 4,381,825
------------------------------------------------------------------
8,400 Ashland, Inc. 265,650
------------------------------------------------------------------
22,200 Atlantic Richfield Co. 2,369,850
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
------------------------------------------------------------------
17,500 Burlington Resources, Inc. $ 630,000
------------------------------------------------------------------
89,900 Chevron Corp. 4,202,825
------------------------------------------------------------------
171,300 Exxon Corp. 13,083,037
------------------------------------------------------------------
7,100 Kerr-McGee Corp. 391,388
------------------------------------------------------------------
4,600 Louisiana Land & Exploration Co. 162,725
------------------------------------------------------------------
54,600 Mobil Corp. 5,500,950
------------------------------------------------------------------
43,100 Occidental Petroleum Corp. 926,650
------------------------------------------------------------------
13,600 (a) Oryx Energy Co. 156,400
------------------------------------------------------------------
6,300 Pennzoil Co. 237,825
------------------------------------------------------------------
36,100 Phillips Petroleum Co. 1,164,225
------------------------------------------------------------------
5,700 Pittston Co. 156,750
------------------------------------------------------------------
73,900 Royal Dutch Petroleum Co., ADR 9,080,463
------------------------------------------------------------------
12,412 (a) Santa Fe Energy Resource, Inc. 110,157
------------------------------------------------------------------
14,537 Sun Co., Inc. 416,122
------------------------------------------------------------------
35,800 Texaco, Inc. 2,438,875
------------------------------------------------------------------
39,600 USX Corp. 702,900
------------------------------------------------------------------
33,600 Unocal Corp. 882,000
------------------------------------------------------------------ ------------
Total 47,842,729
------------------------------------------------------------------ ------------
FINANCE--10.3%
------------------------------------------------------------------
15,500 Aetna Life & Casualty Co. 1,090,812
------------------------------------------------------------------
16,100 Ahmanson (H.F.) & Co. 402,500
------------------------------------------------------------------
6,100 Alexander & Alexander Services, Inc. 136,487
------------------------------------------------------------------
62,405 Allstate Corp. 2,293,384
------------------------------------------------------------------
68,300 American Express Co. 2,774,687
------------------------------------------------------------------
28,100 American General Corp. 923,787
------------------------------------------------------------------
65,493 American International Group, Inc. 5,525,972
------------------------------------------------------------------
56,025 Banc One Corp. 1,890,844
------------------------------------------------------------------
14,800 Bank of Boston Corp. 658,600
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
25,900 Bank of New York Co., Inc. $ 1,087,800
------------------------------------------------------------------
51,676 BankAmerica Corp. 2,971,370
------------------------------------------------------------------
10,800 Bankers Trust New York Corp. 688,500
------------------------------------------------------------------
13,300 Barnett Banks, Inc. 734,825
------------------------------------------------------------------
7,200 Beneficial Corp. 352,800
------------------------------------------------------------------
17,600 Boatmen's Bancshares, Inc. 668,800
------------------------------------------------------------------
10,000 CIGNA Corp. 991,250
------------------------------------------------------------------
24,500 Chase Manhattan Corp. 1,396,500
------------------------------------------------------------------
33,690 Chemical Banking Corp. 1,916,119
------------------------------------------------------------------
12,000 Chubb Corp. 1,078,500
------------------------------------------------------------------
54,300 Citicorp 3,522,712
------------------------------------------------------------------
20,000 Corestates Financial Corp. 727,500
------------------------------------------------------------------
23,521 Dean Witter, Discover & Co. 1,170,170
------------------------------------------------------------------
24,900 Federal Home Loan Mortgage Corp. 1,724,325
------------------------------------------------------------------
37,700 Federal National Mortgage Association 3,953,787
------------------------------------------------------------------
18,800 First Bank System, Inc. 935,300
------------------------------------------------------------------
11,300 First Fidelity Bancorporation 738,737
------------------------------------------------------------------
10,900 First Interstate Bancorp 1,406,100
------------------------------------------------------------------
24,200 First Union Corp. 1,200,925
------------------------------------------------------------------
19,400 Fleet Financial Group, Inc. 751,750
------------------------------------------------------------------
11,300 General RE Corp. 1,637,087
------------------------------------------------------------------
8,300 Golden West Financial Corp. 416,037
------------------------------------------------------------------
18,500 Great Western Financial Corp. 418,562
------------------------------------------------------------------
13,200 Household International, Inc. 742,500
------------------------------------------------------------------
26,100 J.P. Morgan & Co., Inc. 2,012,963
------------------------------------------------------------------
6,750 Jefferson-Pilot Corp. 445,500
------------------------------------------------------------------
33,200 KeyCorp. 1,120,500
------------------------------------------------------------------
13,100 Lincoln National Corp. 584,588
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
20,450 MBNA Corp. $ 754,094
------------------------------------------------------------------
10,200 Marsh & McLennan Cos., Inc. 835,125
------------------------------------------------------------------
20,300 Mellon Bank Corp. 1,017,538
------------------------------------------------------------------
25,900 Merrill Lynch & Co., Inc. 1,437,450
------------------------------------------------------------------
10,600 Morgan Stanley & Co., Inc. 922,200
------------------------------------------------------------------
22,050 NBD Bancorp, Inc. 837,900
------------------------------------------------------------------
20,400 National City Corp. 629,850
------------------------------------------------------------------
38,146 NationsBank Corp. 2,508,100
------------------------------------------------------------------
42,600 Norwest Corp. 1,256,700
------------------------------------------------------------------
32,400 PNC Financial Corp. 850,500
------------------------------------------------------------------
13,300 Providian Corp. 522,025
------------------------------------------------------------------
7,200 Republic New York Corp. 422,100
------------------------------------------------------------------
10,900 Ryder Systems, Inc. 262,963
------------------------------------------------------------------
8,600 SAFECO Corp. 552,013
------------------------------------------------------------------
14,600 Salomon, Inc. 527,425
------------------------------------------------------------------
16,600 Shawmut National Corp. 562,325
------------------------------------------------------------------
11,600 St. Paul Companies, Inc. 588,700
------------------------------------------------------------------
16,200 SunTrust Banks, Inc. 1,044,900
------------------------------------------------------------------
9,750 Torchmark Corp. 404,625
------------------------------------------------------------------
9,700 Transamerica Corp. 657,175
------------------------------------------------------------------
221 (a) Transport Holdings, Inc., Class A 8,670
------------------------------------------------------------------
44,178 Travelers Group, Inc. 2,230,989
------------------------------------------------------------------
13,550 U.S. Bancorp. 401,419
------------------------------------------------------------------
10,000 UNUM Corp. 526,250
------------------------------------------------------------------
13,100 USF&G Corp. 219,425
------------------------------------------------------------------
4,800 USLIFE Corp. 136,800
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
23,600 Wachovia Corp. $ 1,041,350
------------------------------------------------------------------
7,100 Wells Fargo & Co. 1,491,888
------------------------------------------------------------------ ------------
Total 73,743,079
------------------------------------------------------------------ ------------
HEALTH SERVICES--0.9%
------------------------------------------------------------------
11,800 (a) Beverly Enterprises, Inc. 138,650
------------------------------------------------------------------
60,938 Columbia/HCA Healthcare Corp. 2,993,579
------------------------------------------------------------------
6,100 (a) Community Psychiatric Centers 66,337
------------------------------------------------------------------
8,650 Manor Care, Inc. 283,288
------------------------------------------------------------------
3,200 Shared Medical Systems Corp. 123,600
------------------------------------------------------------------
27,600 (a) Tenet Healthcare Corp. 493,350
------------------------------------------------------------------
22,100 U.S. Healthcare, Inc. 850,850
------------------------------------------------------------------
23,800 United Healthcare Corp. 1,264,375
------------------------------------------------------------------ ------------
Total 6,214,029
------------------------------------------------------------------ ------------
HEALTH TECHNOLOGY--7.5%
------------------------------------------------------------------
110,600 Abbott Laboratories 4,396,350
------------------------------------------------------------------
8,800 Allergan, Inc. 258,500
------------------------------------------------------------------
268 (a) Allergan Ligand Retinoid Therapeutics, Inc. 3,986
------------------------------------------------------------------
11,300 (a) Alza Corp. 248,600
------------------------------------------------------------------
42,100 American Home Products Corp. 3,731,112
------------------------------------------------------------------
36,600 (a) Amgen, Inc. 1,756,800
------------------------------------------------------------------
7,200 Bard (C.R.), Inc. 203,400
------------------------------------------------------------------
8,100 Bausch & Lomb, Inc. 280,462
------------------------------------------------------------------
38,800 Baxter International, Inc. 1,498,650
------------------------------------------------------------------
9,200 Becton, Dickinson & Co. 598,000
------------------------------------------------------------------
16,100 (a) Biomet, Inc. 267,662
------------------------------------------------------------------
20,700 (a) Boston Scientific Corp. 871,987
------------------------------------------------------------------
70,400 Bristol-Myers Squibb Co. 5,368,000
------------------------------------------------------------------
88,600 Johnson & Johnson 7,220,900
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
------------------------------------------------------------------
40,300 Lilly (Eli) & Co. $ 3,893,988
------------------------------------------------------------------
10,600 Mallinckrodt Group, Inc. 368,350
------------------------------------------------------------------
31,800 Medtronic, Inc. 1,836,450
------------------------------------------------------------------
173,500 Merck & Co., Inc. 9,976,250
------------------------------------------------------------------
86,700 Pfizer, Inc. 4,974,413
------------------------------------------------------------------
51,400 Schering Plough Corp. 2,756,325
------------------------------------------------------------------
6,300 (a) St. Jude Medical, Inc. 335,475
------------------------------------------------------------------
7,800 United States Surgical Corp. 191,100
------------------------------------------------------------------
23,900 Upjohn Co. 1,212,925
------------------------------------------------------------------
18,600 Warner-Lambert Co. 1,583,325
------------------------------------------------------------------ ------------
Total 53,833,010
------------------------------------------------------------------ ------------
INDUSTRIAL SERVICES--1.1%
------------------------------------------------------------------
19,400 Baker Hughes, Inc. 380,725
------------------------------------------------------------------
27,300 Browning-Ferris Industries, Inc. 795,112
------------------------------------------------------------------
11,400 Fluor Corp. 644,100
------------------------------------------------------------------
5,000 Foster Wheeler Corp. 187,500
------------------------------------------------------------------
15,700 Halliburton Co. 651,550
------------------------------------------------------------------
3,400 Helmerich & Payne, Inc. 87,975
------------------------------------------------------------------
38,300 Laidlaw, Inc., Class B 344,700
------------------------------------------------------------------
7,400 McDermott International, Inc. 117,475
------------------------------------------------------------------
4,500 (a) Morrison Knudsen Corp. 29,250
------------------------------------------------------------------
11,600 (a) Rowan Companies, Inc. 76,850
------------------------------------------------------------------
33,500 Schlumberger Ltd. 2,085,375
------------------------------------------------------------------
66,700 WMX Technologies, Inc. 1,875,938
------------------------------------------------------------------
7,300 (a) Western Atlas, Inc. 320,288
------------------------------------------------------------------ ------------
Total 7,596,838
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
NON-ENERGY MINERALS--1.6%
------------------------------------------------------------------
5,800 ASARCO, Inc. $ 187,050
------------------------------------------------------------------
31,000 Alcan Aluminum Ltd. 980,375
------------------------------------------------------------------
24,700 Aluminum Co. of America 1,259,700
------------------------------------------------------------------
14,500 (a) Armco, Inc. 88,812
------------------------------------------------------------------
48,300 Barrick Gold Corp. 1,116,937
------------------------------------------------------------------
15,100 (a) Bethlehem Steel Corp. 198,188
------------------------------------------------------------------
12,850 Cyprus Amax Minerals 335,706
------------------------------------------------------------------
15,500 Echo Bay Mines Ltd. 139,500
------------------------------------------------------------------
1,984 (a) FirstMiss Gold, Inc. 35,706
------------------------------------------------------------------
12,400 Georgia-Pacific Corp. 1,023,000
------------------------------------------------------------------
19,000 Homestake Mining Co. 292,125
------------------------------------------------------------------
16,100 Inco Ltd. 553,437
------------------------------------------------------------------
6,200 Inland Steel Industries, Inc. 144,925
------------------------------------------------------------------
15,500 Louisiana-Pacific Corp. 370,063
------------------------------------------------------------------
11,911 Newmont Mining Corp. 449,640
------------------------------------------------------------------
12,000 Nucor Corp. 577,500
------------------------------------------------------------------
6,100 (a) Owens-Corning Fiberglass Corp. 258,488
------------------------------------------------------------------
9,800 Phelps Dodge Corp. 621,075
------------------------------------------------------------------
32,900 Placer Dome, Inc. 719,688
------------------------------------------------------------------
8,600 Reynolds Metals Co. 433,225
------------------------------------------------------------------
18,135 Santa Fe Pacific Gold 179,083
------------------------------------------------------------------
10,520 USX-U.S. Steel Group, Inc. 314,285
------------------------------------------------------------------
28,300 Weyerhaeuser Co. 1,248,738
------------------------------------------------------------------
12,550 Worthington Industries, Inc. 208,644
------------------------------------------------------------------ ------------
Total 11,735,890
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PROCESS INDUSTRIES--4.4%
------------------------------------------------------------------
15,400 Air Products & Chemicals, Inc. $ 795,025
------------------------------------------------------------------
74,680 Archer-Daniels-Midland Co. 1,204,214
------------------------------------------------------------------
7,400 Avery Dennison Corp. 331,150
------------------------------------------------------------------
4,100 Ball Corp. 113,262
------------------------------------------------------------------
7,100 Bemis Co., Inc. 184,600
------------------------------------------------------------------
6,500 Boise Cascade Corp. 235,625
------------------------------------------------------------------
12,800 Champion International Corp. 684,800
------------------------------------------------------------------
31,400 Corning, Inc. 820,325
------------------------------------------------------------------
12,300 (a) Crown Cork & Seal Co., Inc. 428,962
------------------------------------------------------------------
38,300 Dow Chemical Co. 2,628,337
------------------------------------------------------------------
72,600 Du Pont (E.I.) de Nemours & Co. 4,528,425
------------------------------------------------------------------
11,425 Eastman Chemical Co. 679,787
------------------------------------------------------------------
9,040 Ecolab, Inc. 262,160
------------------------------------------------------------------
19,663 Engelhard Corp. 489,104
------------------------------------------------------------------
5,900 Federal Paper Board Co., Inc. 247,800
------------------------------------------------------------------
28,500 (a) Freeport-McMoRan Copper & Gold, Inc., Class B 648,375
------------------------------------------------------------------
3,600 Goodrich (B.F.) Co. 237,150
------------------------------------------------------------------
13,000 Grace (W.R.) & Co. 724,750
------------------------------------------------------------------
9,500 Great Lakes Chemical Corp. 637,687
------------------------------------------------------------------
16,200 Hercules, Inc. 864,675
------------------------------------------------------------------
34,400 International Paper Co. 1,272,800
------------------------------------------------------------------
11,300 James River Corp. of Virginia 363,012
------------------------------------------------------------------
22,300 Kimberly-Clark Corp. 1,619,538
------------------------------------------------------------------
7,900 Mead Corp. 455,238
------------------------------------------------------------------
6,400 Millipore Corp. 226,400
------------------------------------------------------------------
16,000 Monsanto Co. 1,676,000
------------------------------------------------------------------
20,400 Morton International, Inc. 622,200
------------------------------------------------------------------
9,500 Nalco Chemical Co. 285,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
------------------------------------------------------------------
28,500 PPG Industries, Inc. $ 1,211,250
------------------------------------------------------------------
16,033 Pall Corp. 390,804
------------------------------------------------------------------
11,700 Pioneer Hi-Bred International 580,613
------------------------------------------------------------------
4,100 Potlatch Corp. 172,713
------------------------------------------------------------------
18,900 Praxair, Inc. 510,300
------------------------------------------------------------------
9,400 Rohm & Haas Co. 519,350
------------------------------------------------------------------
20,800 Scott Paper Co. 1,107,600
------------------------------------------------------------------
11,700 Sherwin-Williams Co. 440,213
------------------------------------------------------------------
6,900 Sigma-Aldrich Corp. 327,750
------------------------------------------------------------------
2,500 Springs Industries, Inc., Class A 107,188
------------------------------------------------------------------
12,508 Stone Container Corp. 206,382
------------------------------------------------------------------
7,800 Temple-Inland, Inc. 354,900
------------------------------------------------------------------
9,600 Union Camp Corp. 488,400
------------------------------------------------------------------
20,400 Union Carbide Corp. 772,650
------------------------------------------------------------------
13,950 Westvaco Corp. 387,113
------------------------------------------------------------------
7,700 Willamette Industries, Inc. 446,600
------------------------------------------------------------------ ------------
Total 31,290,227
------------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--6.2%
------------------------------------------------------------------
39,000 Allied-Signal, Inc. 1,657,500
------------------------------------------------------------------
5,200 Armstrong World Industries, Inc. 308,750
------------------------------------------------------------------
27,700 Caterpillar, Inc. 1,554,662
------------------------------------------------------------------
4,600 Cincinnati Milacron, Inc. 118,450
------------------------------------------------------------------
16,100 Cooper Industries, Inc. 543,375
------------------------------------------------------------------
4,100 Crane Co. 145,037
------------------------------------------------------------------
5,800 Cummins Engine Co., Inc. 203,725
------------------------------------------------------------------
13,700 Dana Corp. 351,062
------------------------------------------------------------------
11,900 Deere & Co. 1,063,562
------------------------------------------------------------------
12,800 Dial Corp. Del. 312,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
15,800 Dover Corp. $ 624,100
------------------------------------------------------------------
25,200 Dresser Industries, Inc. 522,900
------------------------------------------------------------------
10,800 Eaton Corp. 553,500
------------------------------------------------------------------
30,900 Emerson Electric Co. 2,201,625
------------------------------------------------------------------
5,000 (a) FMC Corp. 358,125
------------------------------------------------------------------
235,800 General Electric Co. 14,914,350
------------------------------------------------------------------
6,500 General Signal Corp. 207,187
------------------------------------------------------------------
4,700 Giddings & Lewis, Inc. 75,787
------------------------------------------------------------------
6,378 Harnischfeger Industries, Inc. 200,907
------------------------------------------------------------------
17,800 Honeywell, Inc. 747,600
------------------------------------------------------------------
14,700 ITT Corp. 1,800,750
------------------------------------------------------------------
15,700 Illinois Tool Works, Inc. 912,562
------------------------------------------------------------------
14,600 Ingersoll-Rand Co. 516,475
------------------------------------------------------------------
5,700 Johnson Controls, Inc. 332,025
------------------------------------------------------------------
8,000 Loews Corp. 1,173,000
------------------------------------------------------------------
22,100 Masco Industries, Inc. 621,563
------------------------------------------------------------------
58,000 Minnesota Mining & Manufacturing Co. 3,298,750
------------------------------------------------------------------
1,300 NACCO Industries, Inc., Class A 74,425
------------------------------------------------------------------
6,800 National Service Industries, Inc. 202,300
------------------------------------------------------------------
10,370 (a) Navistar International Corp. 106,293
------------------------------------------------------------------
5,440 PACCAR, Inc. 227,120
------------------------------------------------------------------
10,200 Parker-Hannifin Corp. 344,250
------------------------------------------------------------------
21,500 Pitney Bowes, Inc. 937,938
------------------------------------------------------------------
6,100 Raychem Corp. 282,888
------------------------------------------------------------------
8,900 TRW, Inc. 585,175
------------------------------------------------------------------
7,600 Teledyne, Inc. 189,050
------------------------------------------------------------------
26,000 Tenneco, Inc. 1,140,750
------------------------------------------------------------------
12,100 Textron, Inc. 831,875
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
2,600 Thomas & Betts Corp. $ 168,025
------------------------------------------------------------------
4,300 Timken Co. 173,075
------------------------------------------------------------------
4,000 Trinova Corp. 112,500
------------------------------------------------------------------
10,100 Tyco Laboratories, Inc. 613,575
------------------------------------------------------------------
5,880 (a) Varity Corp. 213,150
------------------------------------------------------------------
49,000 Westinghouse Electric Corp. 692,125
------------------------------------------------------------------
14,600 Whitman Corp. 310,250
------------------------------------------------------------------
14,600 Xerox Corp. 1,894,350
------------------------------------------------------------------
1,800 Zurn Industries, Inc. 45,000
------------------------------------------------------------------ ------------
Total 44,463,443
------------------------------------------------------------------ ------------
RETAIL TRADE--3.8%
------------------------------------------------------------------
35,100 Albertsons, Inc. 1,167,075
------------------------------------------------------------------
20,500 American Stores Co. 612,437
------------------------------------------------------------------
14,200 Charming Shoppes, Inc. 40,825
------------------------------------------------------------------
13,200 Circuit City Store, Inc. 440,550
------------------------------------------------------------------
9,800 Dayton-Hudson Corp. 673,750
------------------------------------------------------------------
15,700 Dillard Department Stores, Inc., Class A 425,862
------------------------------------------------------------------
20,000 Gap (The), Inc. 787,500
------------------------------------------------------------------
8,200 Giant Foods, Inc., Class A 263,425
------------------------------------------------------------------
5,200 Great Atlantic & Pacific Tea Co., Inc. 105,300
------------------------------------------------------------------
9,400 Harcourt General, Inc. 372,475
------------------------------------------------------------------
62,600 Home Depot, Inc. 2,331,850
------------------------------------------------------------------
63,000 K Mart Corp. 511,875
------------------------------------------------------------------
16,200 (a) Kroger Co., Inc. 540,675
------------------------------------------------------------------
49,300 Limited, Inc. 905,888
------------------------------------------------------------------
2,900 Longs Drug Stores Corp. 116,000
------------------------------------------------------------------
22,000 Lowe's Cos., Inc. 594,000
------------------------------------------------------------------
34,200 May Department Stores Co. 1,342,350
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
------------------------------------------------------------------
14,500 Melville Corp. $ 464,000
------------------------------------------------------------------
5,000 Mercantile Stores Co., Inc. 224,375
------------------------------------------------------------------
11,300 Nordstrom, Inc. 418,806
------------------------------------------------------------------
32,000 Penney (J.C.) Co., Inc. 1,348,000
------------------------------------------------------------------
8,400 Pep Boys-Manny Moe & Jack 183,750
------------------------------------------------------------------
8,700 Premark International, Inc. 402,375
------------------------------------------------------------------
26,850 (a) Price Co. 456,450
------------------------------------------------------------------
11,600 Rite Aid Corp. 313,200
------------------------------------------------------------------
53,400 Sears, Roebuck & Co. 1,815,600
------------------------------------------------------------------
10,000 TJX Cos., Inc. 135,000
------------------------------------------------------------------
10,065 Tandy Corp. 496,959
------------------------------------------------------------------
38,300 (a) Toys "R" Us, Inc. 837,813
------------------------------------------------------------------
317,000 Wal-Mart Stores, Inc. 6,855,125
------------------------------------------------------------------
33,900 Walgreen Co. 966,150
------------------------------------------------------------------
10,300 Winn-Dixie Stores, Inc. 669,500
------------------------------------------------------------------
18,300 (a) Woolworth (F.W.) Co. 267,638
------------------------------------------------------------------ ------------
Total 27,086,578
------------------------------------------------------------------ ------------
TECHNOLOGY SERVICES--2.8%
------------------------------------------------------------------
6,500 Autodesk, Inc. 221,000
------------------------------------------------------------------
19,700 Automatic Data Processing, Inc. 1,408,550
------------------------------------------------------------------
37,850 Computer Associates International, Inc. 2,081,750
------------------------------------------------------------------
16,600 First Data Corp., Class 1,097,675
------------------------------------------------------------------
103,900 General Motors Corp. 4,545,625
------------------------------------------------------------------
80,100 (a) Microsoft Corp. 8,010,000
------------------------------------------------------------------
59,300 (a) Oracle Corp. 2,586,963
------------------------------------------------------------------ ------------
Total 19,951,563
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
TRANSPORTATION--1.4%
------------------------------------------------------------------
10,500 (a) AMR Corp. $ 693,000
------------------------------------------------------------------
20,912 Burlington Northern Santa Fe 1,753,955
------------------------------------------------------------------
14,500 CSX Corp. 1,214,375
------------------------------------------------------------------
5,900 Consolidated Freightways, Inc. 137,175
------------------------------------------------------------------
10,900 Consolidated Rail Corp. 749,375
------------------------------------------------------------------
7,000 Delta Air Lines, Inc. 459,375
------------------------------------------------------------------
7,800 (a) Federal Express Corp. 640,575
------------------------------------------------------------------
18,600 Norfolk Southern Corp. 1,436,850
------------------------------------------------------------------
5,500 Roadway Services, Inc. 246,125
------------------------------------------------------------------
19,700 Southwest Airlines Co. 394,000
------------------------------------------------------------------
8,300 (a) USAir Group, Inc. 113,088
------------------------------------------------------------------
28,400 Union Pacific Corp. 1,856,650
------------------------------------------------------------------
3,900 (a) Yellow Corp. 51,188
------------------------------------------------------------------ ------------
Total 9,745,731
------------------------------------------------------------------ ------------
UTILITIES--10.9%
------------------------------------------------------------------
215,678 AT&T Corp. 13,803,392
------------------------------------------------------------------
68,000 Airtouch Communications, Inc. 1,938,000
------------------------------------------------------------------
26,000 Alltel Corp. 796,250
------------------------------------------------------------------
25,500 American Electric Power Co., Inc. 972,188
------------------------------------------------------------------
76,100 Ameritech Corp. 4,109,400
------------------------------------------------------------------
20,350 Baltimore Gas & Electric Co. 544,362
------------------------------------------------------------------
60,200 Bell Atlantic Corp. 3,830,225
------------------------------------------------------------------
68,500 BellSouth Corp. 5,240,250
------------------------------------------------------------------
21,600 Carolina Power & Light Co. 707,400
------------------------------------------------------------------
26,200 Central & SouthWest Corp. 700,850
------------------------------------------------------------------
21,340 Cinergy Corp. 605,522
------------------------------------------------------------------
14,400 Coastal Corp. 466,200
------------------------------------------------------------------
7,000 (a) Columbia Gas System, Inc. 269,500
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
32,400 Consolidated Edison Co. $ 984,150
------------------------------------------------------------------
12,800 Consolidated Natural Gas Co. 486,400
------------------------------------------------------------------
20,000 Detroit Edison Co. 675,000
------------------------------------------------------------------
23,750 Dominion Resources, Inc. 944,062
------------------------------------------------------------------
28,300 Duke Power Co. 1,266,425
------------------------------------------------------------------
2,900 Eastern Enterprises 86,637
------------------------------------------------------------------
34,900 Enron Corp. 1,199,687
------------------------------------------------------------------
9,300 Enserch Corp. 134,850
------------------------------------------------------------------
31,300 Entergy Corp. 892,050
------------------------------------------------------------------
25,800 FPL Group, Inc. 1,080,375
------------------------------------------------------------------
132,800 GTE Corp. 5,478,000
------------------------------------------------------------------
15,900 General Public Utilities 496,875
------------------------------------------------------------------
18,100 Houston Industries, Inc. 839,388
------------------------------------------------------------------
93,800 MCI Communications Corp. 2,339,138
------------------------------------------------------------------
7,200 NICOR, Inc. 193,500
------------------------------------------------------------------
58,200 NYNEX Corp. 2,735,400
------------------------------------------------------------------
19,800 Niagara Mohawk Power Corp. 212,850
------------------------------------------------------------------
16,800 Noram Energy Corp. 130,200
------------------------------------------------------------------
9,300 Northern States Power Co. 439,425
------------------------------------------------------------------
21,100 Ohio Edison Co. 482,663
------------------------------------------------------------------
3,700 Oneok, Inc. 90,188
------------------------------------------------------------------
11,300 Pacific Enterprises 279,675
------------------------------------------------------------------
59,600 Pacific Gas & Electric Co. 1,750,750
------------------------------------------------------------------
58,500 Pacific Telesis Group 1,776,938
------------------------------------------------------------------
39,100 Pacificorp 738,013
------------------------------------------------------------------
20,600 Panhandle Eastern Corp. 520,150
------------------------------------------------------------------
30,600 Peco Energy Co. 895,050
------------------------------------------------------------------
4,800 Peoples Energy Corp. 138,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
33,700 Public Service Enterprises Group, Inc. $ 989,938
------------------------------------------------------------------
82,800 SBC Communications, Inc. 4,626,450
------------------------------------------------------------------
61,700 SCE Corp. 1,048,900
------------------------------------------------------------------
12,000 Sonat, Inc. 345,000
------------------------------------------------------------------
90,200 Southern Co. 2,153,525
------------------------------------------------------------------
48,100 Sprint Corp. 1,851,850
------------------------------------------------------------------
31,100 Texas Utilities Co. 1,142,925
------------------------------------------------------------------
62,900 U.S. West, Inc. 2,995,613
------------------------------------------------------------------
29,500 Unicom Corp. 966,125
------------------------------------------------------------------
14,100 Union Electric Co. 549,900
------------------------------------------------------------------
14,000 Williams Companies, Inc. (The) 540,750
------------------------------------------------------------------ ------------
Total 78,480,354
------------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $539,333,079) 592,177,577
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.6%
- --------------------------------------------------------------------------------------
$ 4,500,000 United States Treasury Bill, 11/30/1995 (at amortized cost) $ 4,483,080
------------------------------------------------------------------ ------------
(B) REPURCHASE AGREEMENT--15.8%
- --------------------------------------------------------------------------------------
112,855,000 J.P. Morgan Securities, Inc., 5.90%, dated 10/31/1995, due
11/1/1995 112,855,000
------------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $656,671,159)(C) $709,515,657
------------------------------------------------------------------ ------------
</TABLE>
* The Fund purchases Index futures contracts to efficiently manage cash flows
resulting from shareholder purchases and redemptions, dividend and capital
gain payments to shareholders and corporate actions while maintaining exposure
to the Index and minimizing trading costs. The total market value of open
Index futures contracts is $117,937,700 at October 31, 1995, which represents
16.5% of net assets. Taking into consideration these open Index futures
contracts, the Fund's effective, total exposure to the Index is 99.4%
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. government
obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(c) The cost of investments for federal tax purposes amounts to $660,350,985.
The net unrealized appreciation of investments on a federal tax basis
amounts to $49,164,672 which is comprised of $65,340,734 appreciation and
$16,176,062 depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($714,432,451) at October 31, 1995.
The following acronym is used throughout this portfolio:
ADR -- American Depository Receipt
(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, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------
Investments in repurchase agreements $112,855,000
- --------------------------------------------------------------------
Investments in securities 596,660,657
- -------------------------------------------------------------------- ------------
Total investments in securities, at value
(identified cost $656,671,159 and tax cost $660,350,985) $709,515,657
- -----------------------------------------------------------------------------------
Income receivable 990,626
- -----------------------------------------------------------------------------------
Receivable for shares sold 6,040,960
- -----------------------------------------------------------------------------------
Deferred expenses 250
- ----------------------------------------------------------------------------------- ------------
Total assets 716,547,493
- -----------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------
Payable for shares redeemed 433,930
- --------------------------------------------------------------------
Payable to Bank 966,946
- --------------------------------------------------------------------
Payable for taxes withheld 1,784
- --------------------------------------------------------------------
Payable for daily variation margin 553,860
- --------------------------------------------------------------------
Accrued expenses 158,522
- -------------------------------------------------------------------- ------------
Total liabilities 2,115,042
- ----------------------------------------------------------------------------------- ------------
Net Assets for 48,467,529 shares outstanding $714,432,451
- ----------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------
Paid in capital $558,632,158
- -----------------------------------------------------------------------------------
Net unrealized appreciation on investments and futures contracts 53,339,758
- -----------------------------------------------------------------------------------
Accumulated net realized gain on investments and futures contracts 99,397,047
- -----------------------------------------------------------------------------------
Undistributed net investment income 3,063,488
- ----------------------------------------------------------------------------------- ------------
Total Net Assets $714,432,451
- ----------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -----------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- -----------------------------------------------------------------------------------
$679,237,383 / 46,076,825 shares outstanding $14.74
- ----------------------------------------------------------------------------------- ------------
INSTITUTIONAL SERVICE SHARES:
- -----------------------------------------------------------------------------------
$35,195,068 / 2,390,704 shares outstanding $14.72
- ----------------------------------------------------------------------------------- ------------
</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, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $ 12,163,449
- ---------------------------------------------------------------------------------------------------
Interest 6,393,059
- --------------------------------------------------------------------------------------------------- -----------
Total income 18,556,508
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Management fee $ 1,727,669
- ------------------------------------------------------------------------------------
Custodian fees 150,587
- ------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 112,420
- ------------------------------------------------------------------------------------
Directors'/Trustees' fees 5,093
- ------------------------------------------------------------------------------------
Auditing fees 13,109
- ------------------------------------------------------------------------------------
Legal fees 8,985
- ------------------------------------------------------------------------------------
Portfolio accounting fees 48,764
- ------------------------------------------------------------------------------------
Distribution services fee--Institutional Service Shares 67,923
- ------------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 1,383,122
- ------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 56,603
- ------------------------------------------------------------------------------------
Share registration costs 113,689
- ------------------------------------------------------------------------------------
Printing and postage 42,190
- ------------------------------------------------------------------------------------
Insurance premiums 11,366
- ------------------------------------------------------------------------------------
Taxes 1,984
- ------------------------------------------------------------------------------------
Miscellaneous 6,788
- ------------------------------------------------------------------------------------ ----------
Total expenses 3,750,292
- ------------------------------------------------------------------------------------
Waivers--
- ------------------------------------------------------------------------------------
Waiver of management fee $ (433,282)
- ----------------------------------------------------------------------
Waiver of distribution services fee--Institutional Service Shares (56,603)
- ----------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (1,383,122)
- ---------------------------------------------------------------------- ----------
Total waivers (1,873,007)
- ------------------------------------------------------------------------------------ ----------
Net expenses 1,877,285
- --------------------------------------------------------------------------------------------------- -----------
Net investment income 16,679,223
- --------------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments and futures contracts 99,787,657
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments and futures contracts 21,104,700
- --------------------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain on investments and futures contracts 120,892,357
- --------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $137,571,580
- --------------------------------------------------------------------------------------------------- -----------
</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,
------------------------------
1995 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------
Net investment income $ 16,679,223 $ 11,562,305
- ------------------------------------------------------------------
Net realized gain (loss) on investments and futures contracts
($103,347,377 and $741,350 net gains respectively, as computed for
federal tax purposes) 99,787,657 1,155,375
- ------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 21,104,700 3,003,321
- ------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from operations 137,571,580 15,721,001
- ------------------------------------------------------------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------------
Distributions from net investment income
- ------------------------------------------------------------------
Institutional Shares (14,071,338) (10,781,243)
- ------------------------------------------------------------------
Institutional Service Shares (505,602) (115,401)
- ------------------------------------------------------------------
Distributions from net realized gain on investment transactions
and futures contracts
- ------------------------------------------------------------------
Institutional Shares (729,209) (11,507,864)
- ------------------------------------------------------------------
Institutional Service Shares (14,188) (108,965)
- ------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from distributions to
shareholders (15,320,337) (22,513,473)
- ------------------------------------------------------------------ ------------- -------------
SHARE TRANSACTIONS--
- ------------------------------------------------------------------
Proceeds from sale of shares 374,533,702 215,864,930
- ------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 6,003,498 8,535,336
- ------------------------------------------------------------------
Cost of shares redeemed (240,788,349) (174,914,182)
- ------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from share transactions 139,748,851 49,486,084
- ------------------------------------------------------------------ ------------- -------------
Change in net assets 262,000,094 42,693,612
- ------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------
Beginning of period 452,432,357 409,738,745
- ------------------------------------------------------------------ ------------- -------------
End of period (including undistributed net investment income of
$3,063,488 and $961,205, respectively) $ 714,432,451 $ 452,432,357
- ------------------------------------------------------------------ ------------- -------------
</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, 1995
- --------------------------------------------------------------------------------
(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.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
the prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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.
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock futures contract with a broker, the Fund
is required to deposit in a segregated account an amount of cash or U.S.
government securities. Futures contracts are valued daily and unrealized
gains or losses are recorded in a "variation margin" account. Daily the
Fund receives from or pays to the broker a specified amount of cash based
upon changes in the variation margin account. When a contract is closed,
the Fund recognizes a realized gain or loss.
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities. For the period ended October 31, 1995, the Fund
had realized gains of $24,549,912 on future contracts. At October 31, 1995,
the Fund had outstanding futures contracts as set forth below:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO APPRECIATION
EXPIRATION DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
---------------- ------------------------------ ---------------- ----------------
<S> <C> <C> <C>
December 1995 404 S&P 500 Index Futures Long $495,260
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(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.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1995 1994
---------------------------- ----------------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 26,132,335 $ 343,592,917 17,555,003 $ 207,304,786
- ---------------------------------------------
Shares issued to shareholders in
payment of distributions declared 420,935 5,512,947 718,661 8,439,495
- ---------------------------------------------
Shares redeemed (17,407,051) (230,818,438) (14,617,884) (172,243,416)
- --------------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Share transactions 9,146,219 $ 118,287,426 3,655,780 $ 43,500,865
- --------------------------------------------- ----------- ------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1995 1994
---------------------------- ----------------------------
INSTITUTIONAL SERVICE SHARES SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 2,368,216 $ 30,940,785 734,647 $ 8,560,144
- ---------------------------------------------
Shares issued to shareholders in payment of
distributions declared 36,486 490,551 8,223 95,841
- ---------------------------------------------
Shares redeemed (730,897) (9,969,911) (229,644) (2,670,766)
- --------------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Service Share transactions 1,673,805 $ 21,461,425 513,226 $ 5,985,219
- --------------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from
share transactions 10,820,024 $ 139,748,851 4,169,006 $ 49,486,084
- --------------------------------------------- ----------- ------------- ----------- -------------
</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 .30 of 1% of the
Fund's average daily net assets. The Manager 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 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.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of daily average net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of its fee. FSS can modify or terminate
this voluntary waiver
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
at any time at its sole discretion. For the fiscal year ended October 31, 1995,
Institutional Shares fully waived its shareholder services fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp, ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's 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 to compensate FSC. The distributor may
voluntarily choose to waive any portion of its fee. The distributor can modify
or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the Fund.
This fee is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
year ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------
PURCHASES $406,176,148
- ---------------------------------------------------------------------------------- ------------
SALES $271,130,091
- ---------------------------------------------------------------------------------- ------------
</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, 1995, 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 15 of this prospectus) for each of the periods presented
therein. 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, 1995, 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, 1995, 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 therein, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
December 8, 1995
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 8600
Trust Company Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERATED MAX-CAP FUND
(A PORTFOLIO OF FEDERATED INDEX TRUST)
INSTITUTIONAL SERVICE SHARES
PROSPECTUS
An Open-End, Diversified
Management Investment Company
Prospectus dated December 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 31420E403
0032104A-SS (12/95)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERATED 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, 1995, 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 or a
paper copy of this prospectus, if you have received your prospectus
electronically, 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, 1995
TABLE OF CONTENTS
Summary of Fund Expenses.......................................................1
Financial Highlights--
Institutional 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 Shares.........................................9
Fund Administration..........................................................9
Net Asset Value...............................................................10
Investing in the Institutional Shares.........................................10
Share Purchases.............................................................10
Minimum Investment Required.................................................11
What Shares Cost............................................................11
Sub-Accounting Services.....................................................11
Certificates and Confirmations..............................................11
Dividends...................................................................11
Capital Gains...............................................................11
Redeeming Institutional Shares................................................11
Telephone Redemption........................................................11
Written Requests............................................................12
Accounts with Low Balances..................................................12
Shareholder Information.......................................................13
Voting Rights...............................................................13
Tax Information...............................................................13
Federal Income Tax..........................................................13
Performance Information.......................................................13
Other Classes of Shares.......................................................14
Financial Highlights--
Institutional Service Shares................................................15
Financial Statements..........................................................16
Report of Ernst & Young LLP,
Independent Auditors........................................................44
Addresses......................................................Inside Back Cover
SUMMARY OF FUND EXPENSES
FEDERATED MAX-CAP FUND
INSTITUTIONAL SHARES
<TABLE>
<S> <C> <C>
Shareholder Transaction Expenses
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price).................................................... None
Maximum Sales Charge 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 OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1)........................................................ 0.22%
12b-1 Fee................................................................................ None
Total Other Expenses..................................................................... 0.09%
Shareholder Services Fee (after waiver) (2)................................ 0.00%
Total Fund Operating Expenses (3).............................................. 0.31%
</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 shareholder services fee is 0.25%.
(3) The total operating expenses would have been 0.64% absent the voluntary
waivers of a portion of the management fee and the shareholder services fee.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of the Institutional Shares of the
Fund will bear, either directly or indirectly. For more complete descriptions of
the various costs and expenses, see "Investing in Institutional Shares" and
"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......................................... $3 $10 $17 $ 39
</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 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 44.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
------------------------------------------------------------------
1995 1994 1993 1992 1991 1990(A)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.02 $12.24 $11.64 $11.07 $ 8.60 $10.00
- ------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------
Net investment income 0.38 0.32 0.30 0.32 0.37 0.12
- ------------------------------------------
Net realized and unrealized gain (loss)
on investments and futures contracts 2.70 0.10 1.29 0.71 2.46 (1.43)
- ------------------------------------------ ------ ------ ------ ------ ------ ------
Total from investment operations 3.08 0.42 1.59 1.03 2.83 (1.31)
- ------------------------------------------
LESS DISTRIBUTIONS
- ------------------------------------------
Distributions from net investment income (0.34) (0.30) (0.30) (0.34) (0.36) (0.09)
- ------------------------------------------
Distributions from net realized gain on
investment transactions and futures
contracts (0.02) (0.34) (0.69) (0.12) -- --
- ------------------------------------------ ------ ------ ------ ------ ------ ------
Total distributions (0.36) (0.64) (0.99) (0.46) (0.36) (0.09)
- ------------------------------------------ ------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $14.74 $12.02 $12.24 $11.64 $11.07 $ 8.60
- ------------------------------------------ ------ ------ ------ ------ ------ ------
TOTAL RETURN (B) 26% 3.59% 14.35% 9.51% 33.31% (14.46)%
- ------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------
Expenses 0.31% 0.32% 0.31% 0.30% 0.24% 0.00%*
- ------------------------------------------
Net investment income 2.91% 2.70% 2.60% 2.92% 3.74% 5.19%*
- ------------------------------------------
Expense waiver/reimbursement (c) 0.33% 0.07% 0.09% 0.18% 0.45% 0.94%*
- ------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------
Net assets, end of period (000 omitted) $679,237 $443,815 $407,246 $309,614 $144,528 $25,129
- ------------------------------------------
Portfolio turnover 57% 2% 13% 46% 6% 0%
- ------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) 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.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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 dated
October 31, 1995 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. 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 Farm
Credit System including the National Bank for Cooperatives, Farm Credit Banks,
and Banks for Cooperatives, 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. govern-
ment 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. There is the risk that when lending portfolio securities, the securities
may not be available to the Fund on a timely basis and the Fund may, therefore,
lose the opportunity to sell the securities at a desirable price. In addition,
in the event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
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
The Trust is managed by the 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
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.
Both the Trust and the Manager have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
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. With
over $72 billion invested across more than 260 funds under management and/or
administration by its subsidiaries, as of December 31, 1994, Federated Investors
is one of the largest mutual fund investment managers in the United States. With
more than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
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 manage-
ment, .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 First Chicago Investment Management
Company 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, 1995,
placed approximately $20.6 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 331 nationwide non-financial institution clients
invest. In total, ANB manages 77 commingled/common trust funds. Also, since
1990, ANB has served as Sub-Manager for the Federated Mini-Cap Fund and for the
Federated Mid-Cap Fund, which are also portfolios of the Trust.
SUPPLEMENTAL PAYMENTS TO
FINANCIAL INSTITUTIONS
In addition to periodic payments to financial institutions under the Shareholder
Services Agreement, 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.
FUND ADMINISTRATION
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.
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
The Fund has entered into a Shareholder Services Agreement with Federated
Shareholder Services, a subsidiary of Federated Investors, under which the Fund
may make payments up to 0.25 of 1% of the average daily net asset value of the
Shares,
computed at an annual rate, to obtain certain personal services for shareholders
and for the maintenance of shareholder accounts ("shareholder services"). From
time to time and for such periods as deemed appropriate, the amount stated above
may be reduced voluntarily. Under the Shareholder Services Agreement, 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.
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 Institutional Shares outstanding. The net asset value for Institutional
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:
Federated Services Company, c/o 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. Shares cannot be
purchased by wire on holidays when wire transfers are restricted. Questions on
wire purchases should be directed to your shareholder services representative at
the telephone number listed on your account statement.
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, P.O. Box 8600, Boston, Massachusetts
02266-8600.
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 as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, 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.
SUB-ACCOUNTING 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. State securities laws may require certain
financial institutions such as depository institutions to register as dealers.
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.
Proceeds from redemption requests received on holidays when wire transfers are
restricted will be wired the following business day. Questions about telephone
redemptions on days when wire transfers are restricted should be directed to
your shareholder services representative at the telephone number listed on your
account statement. 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 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 their signatures 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 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 mini-
mum 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.
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.
STATE AND LOCAL TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust, 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.
From time to time, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's 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.
To obtain more information and a prospectus for Institutional Service Shares,
investors may call 1-800-235-4669.
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 44.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
-------------------------------
1995 1994 1993(A)
- -------------------------------------------------------------------------- ------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $12.02 $12.24 $12.12
- --------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------
Net investment income 0.33 0.28(b) 0.07
- --------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and futures
contracts 2.69 0.11 0.12
- -------------------------------------------------------------------------- ------ ------ -------
Total from investment operations 3.02 0.39 0.19
- --------------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------
Distributions from net investment income (0.30) (0.27) (0.07 )
- --------------------------------------------------------------------------
Distributions from net realized gain on investment transactions
and futures contracts (0.02) (0.34) --
- -------------------------------------------------------------------------- ------ ------ -------
Total distributions (0.32) (0.61) (0.07 )
- -------------------------------------------------------------------------- ------ ------ -------
NET ASSET VALUE, END OF PERIOD $14.72 $12.02 $12.24
- -------------------------------------------------------------------------- ------ ------ -------
TOTAL RETURN (C) 25.52% 3.30% 1.70 %
- --------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------
Expenses 0.61% 0.62% 0.61 %*
- --------------------------------------------------------------------------
Net investment income 2.55% 2.35% 1.52 %*
- --------------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.33% 0.26% 0.09 %*
- --------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------
Net assets, end of period (000 omitted) $35,195 $8,617 $2,493
- --------------------------------------------------------------------------
Portfolio turnover 57% 2% 13 %
- --------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 30, 1993 (date of initial
public investment) to October 31, 1993.
(b) 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.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
Further information about the Fund's performance is continued in the Fund's
annual report dated October 31, 1995 which can be obtained free of charge.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--82.9%
- --------------------------------------------------------------------------------------
COMMERCIAL SERVICES--1.0%
------------------------------------------------------------------
7,500 (a) Alco Standard Corp. $ 663,750
------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <C> <S> <C>
11,400 Deluxe Corp. 306,375
------------------------------------------------------------------
20,900 Donnelley (R.R.) & Sons Co. 762,850
------------------------------------------------------------------
13,500 Dow Jones & Co. 475,875
------------------------------------------------------------------
23,400 Dun & Bradstreet Corp. 1,398,150
------------------------------------------------------------------
5,200 Fleming Cos., Inc. 117,650
------------------------------------------------------------------
7,000 Grainger (W.W.), Inc. 437,500
------------------------------------------------------------------
4,600 Handleman Co. 35,650
------------------------------------------------------------------
4,200 Harland (John H.) Co. 87,150
------------------------------------------------------------------
10,600 Interpublic Group Cos., Inc. 410,750
------------------------------------------------------------------
6,900 McGraw-Hill Cos., Inc. 564,938
------------------------------------------------------------------
13,800 Moore Corp. Ltd. 263,925
------------------------------------------------------------------
6,700 Ogden Corp. 152,425
------------------------------------------------------------------
8,050 Safety-Kleen Corp. 123,769
------------------------------------------------------------------
9,700 Super Valu Stores, Inc. 298,275
------------------------------------------------------------------
25,200 Sysco Corp. 765,450
------------------------------------------------------------------ ------------
Total 6,864,482
------------------------------------------------------------------ ------------
CONSUMER DURABLES--2.4%
------------------------------------------------------------------
10,300 American Greetings Corp., Class A 324,450
------------------------------------------------------------------
2,037 Bassett Furniture Industries, Inc. 40,995
------------------------------------------------------------------
11,700 Black & Decker Corp. 396,337
------------------------------------------------------------------
4,000 Briggs & Stratton Corp. 161,500
------------------------------------------------------------------
13,200 Brunswick Corp. 257,400
------------------------------------------------------------------
3,900 Centex Corp. 127,725
------------------------------------------------------------------
48,984 Chrysler Corp. 2,528,799
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
------------------------------------------------------------------
11,500 Cooper Tire & Rubber Co. $ 265,937
------------------------------------------------------------------
46,900 Eastman Kodak Co. 2,937,112
------------------------------------------------------------------
8,200 Echlin, Inc. 293,150
------------------------------------------------------------------
6,400 Fleetwood Enterprises, Inc. 131,200
------------------------------------------------------------------
141,400 Ford Motor Co. 4,065,250
------------------------------------------------------------------
17,000 Genuine Parts Co. 673,625
------------------------------------------------------------------
20,900 Goodyear Tire & Rubber Co. 794,200
------------------------------------------------------------------
12,200 Hasbro, Inc. 372,100
------------------------------------------------------------------
5,653 Jostens, Inc. 127,899
------------------------------------------------------------------
4,500 Kaufman & Broad Homes Corp. 52,312
------------------------------------------------------------------
30,740 Mattel, Inc. 883,775
------------------------------------------------------------------
14,800 Maytag Corp. 281,200
------------------------------------------------------------------
21,800 Newell Co. 525,925
------------------------------------------------------------------
2,700 Outboard Marine Corp. 56,025
------------------------------------------------------------------
6,400 Polaroid Corp. 273,600
------------------------------------------------------------------
3,800 Pulte Corp. 120,175
------------------------------------------------------------------
22,200 Rubbermaid, Inc. 579,975
------------------------------------------------------------------
5,900 Snap-On Tools Corp. 250,013
------------------------------------------------------------------
6,200 Stanley Works 296,050
------------------------------------------------------------------
10,400 Whirlpool Corp. 551,200
------------------------------------------------------------------
6,300 (a) Zenith Electronics Corp. 52,763
------------------------------------------------------------------ ------------
Total 17,420,692
------------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--9.7%
------------------------------------------------------------------
3,800 Alberto-Culver Co., Class B 119,225
------------------------------------------------------------------
26,300 American Brands, Inc. 1,127,612
------------------------------------------------------------------
35,700 Anheuser-Busch Companies, Inc. 2,356,200
------------------------------------------------------------------
9,500 Avon Products, Inc. 675,687
------------------------------------------------------------------
2,400 Brown Group, Inc. 33,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
------------------------------------------------------------------
9,600 Brown-Forman Corp., Class B $ 366,000
------------------------------------------------------------------
20,300 CPC International, Inc. 1,347,412
------------------------------------------------------------------
34,300 Campbell Soup Co. 1,796,462
------------------------------------------------------------------
7,300 Clorox Co. 523,775
------------------------------------------------------------------
177,200 Coca-Cola Co. 12,736,250
------------------------------------------------------------------
20,100 Colgate-Palmolive Co. 1,391,925
------------------------------------------------------------------
34,300 ConAgra, Inc. 1,324,837
------------------------------------------------------------------
5,200 Coors Adolph Co., Class B 92,950
------------------------------------------------------------------
9,700 (a) Fruit of the Loom, Inc., Class A 168,537
------------------------------------------------------------------
21,800 General Mills, Inc. 1,250,775
------------------------------------------------------------------
61,100 Gillette Co. 2,955,712
------------------------------------------------------------------
33,600 Heinz (H.J.) Co. 1,562,400
------------------------------------------------------------------
11,900 Hershey Foods Corp. 711,025
------------------------------------------------------------------
15,400 International Flavors & Fragrances, Inc. 743,050
------------------------------------------------------------------
30,600 Kellogg Co. 2,210,850
------------------------------------------------------------------
10,700 Liz Claiborne, Inc. 303,613
------------------------------------------------------------------
20,000 Nike, Inc., Class B 1,135,000
------------------------------------------------------------------
109,200 PepsiCo, Inc. 5,760,300
------------------------------------------------------------------
117,400 Philip Morris Cos., Inc. 9,920,300
------------------------------------------------------------------
94,700 Procter & Gamble Co. 7,670,700
------------------------------------------------------------------
18,500 Quaker Oats Co. 631,313
------------------------------------------------------------------
13,900 Ralston Purina Co. 825,313
------------------------------------------------------------------
11,200 Reebok International Ltd. 380,800
------------------------------------------------------------------
5,600 Russell Corp. 138,600
------------------------------------------------------------------
66,100 Sara Lee Corp. 1,941,688
------------------------------------------------------------------
51,400 Seagram Co. Ltd. 1,850,400
------------------------------------------------------------------
6,700 Stride Rite Corp. 75,375
------------------------------------------------------------------
27,700 UST, Inc. 831,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
------------------------------------------------------------------
22,100 Unilever N.V., ADR $ 2,895,100
------------------------------------------------------------------
8,900 V.F. Corp. 426,088
------------------------------------------------------------------
16,100 Wrigley (Wm.), Jr. Co. 748,650
------------------------------------------------------------------ ------------
Total 69,027,924
------------------------------------------------------------------ ------------
CONSUMER SERVICES--3.5%
------------------------------------------------------------------
6,500 (a) Bally Entertainment Group 71,500
------------------------------------------------------------------
14,500 Block (H&R), Inc. 598,125
------------------------------------------------------------------
8,440 CBS, Inc. 681,530
------------------------------------------------------------------
23,050 (a) CUC International, Inc. 798,106
------------------------------------------------------------------
21,300 Capital Cities/ABC, Inc. 2,526,712
------------------------------------------------------------------
33,050 Comcast Corp., Class A 590,769
------------------------------------------------------------------
21,800 Darden Restaurants, Inc. 247,975
------------------------------------------------------------------
71,600 Disney (Walt) Co. 4,125,950
------------------------------------------------------------------
19,200 Gannett Co., Inc. 1,044,000
------------------------------------------------------------------
14,150 (a) Harrah's Entertainment, Inc. 350,212
------------------------------------------------------------------
6,700 Hilton Hotels Corp. 448,900
------------------------------------------------------------------
5,050 (a) King World Productions, Inc. 176,119
------------------------------------------------------------------
7,400 Knight-Ridder, Inc. 410,700
------------------------------------------------------------------
3,350 Luby's Cafeterias, Inc. 69,513
------------------------------------------------------------------
17,200 Marriott Corp. 634,250
------------------------------------------------------------------
96,300 McDonald's Corp. 3,948,300
------------------------------------------------------------------
3,800 Meredith Corp. 135,850
------------------------------------------------------------------
13,700 New York Times Co., Class A 380,175
------------------------------------------------------------------
7,400 (a) Ryan's Family Steak Houses, Inc. 57,350
------------------------------------------------------------------
13,000 Service Corp. International 521,625
------------------------------------------------------------------
5,700 (a) Shoney's, Inc. 63,413
------------------------------------------------------------------
87,400 (a) Tele-Communications, Inc., Class A 1,485,800
------------------------------------------------------------------
52,240 Time Warner, Inc. 1,906,760
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
------------------------------------------------------------------
15,400 Times Mirror Co., Class A $ 446,600
------------------------------------------------------------------
9,300 Tribune Co. 587,063
------------------------------------------------------------------
49,268 (a) Viacom, Inc., Class B 2,463,400
------------------------------------------------------------------
14,000 Wendy's International, Inc. 278,250
------------------------------------------------------------------ ------------
Total 25,048,947
------------------------------------------------------------------ ------------
ELECTRONIC TECHNOLOGY--8.7%
------------------------------------------------------------------
29,980 AMP, Inc. 1,176,715
------------------------------------------------------------------
14,800 (a) Advanced Micro Devices, Inc. 353,350
------------------------------------------------------------------
16,100 (a) Amdahl Corp. 148,925
------------------------------------------------------------------
5,250 (a) Andrew Corp. 221,812
------------------------------------------------------------------
16,700 Apple Computer, Inc. 606,419
------------------------------------------------------------------
23,200 (a) Applied Materials, Inc. 1,162,900
------------------------------------------------------------------
46,900 Boeing Co. 3,077,812
------------------------------------------------------------------
9,800 (a) Cabletron Systems, Inc. 770,525
------------------------------------------------------------------
6,200 (a) Ceridian Corp. 269,700
------------------------------------------------------------------
37,100 (a) Cisco Systems, Inc. 2,875,250
------------------------------------------------------------------
36,100 (a) Compaq Computer Corp. 2,012,575
------------------------------------------------------------------
7,600 (a) Computer Sciences Corp. 508,250
------------------------------------------------------------------
3,500 (a) Cray Research, Inc. 72,625
------------------------------------------------------------------
15,600 (a) DSC Communications Corp. 577,200
------------------------------------------------------------------
5,100 (a) Data General Corp. 58,650
------------------------------------------------------------------
20,200 (a) Digital Equipment Corp. 1,093,325
------------------------------------------------------------------
7,600 EG & G, Inc. 141,550
------------------------------------------------------------------
8,620 General Dynamics Corp. 477,332
------------------------------------------------------------------
5,400 Harris Corp. 313,875
------------------------------------------------------------------
70,400 Hewlett-Packard Co. 6,520,800
------------------------------------------------------------------
114,300 Intel Corp. 7,986,712
------------------------------------------------------------------
6,200 (a) Intergraph Corp. 75,175
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
------------------------------------------------------------------
81,000 International Business Machines Corp. $ 7,877,250
------------------------------------------------------------------
31,488 Lockheed Martin Corp. 2,145,120
------------------------------------------------------------------
23,600 Loral Corp. 699,150
------------------------------------------------------------------
16,300 McDonnell-Douglas Corp. 1,332,525
------------------------------------------------------------------
28,400 Micron Technology, Inc. 2,005,750
------------------------------------------------------------------
80,900 Motorola, Inc. 5,309,063
------------------------------------------------------------------
17,200 (a) National Semiconductor Corp. 419,250
------------------------------------------------------------------
34,900 Northern Telecom Ltd. 1,256,400
------------------------------------------------------------------
6,800 Northrop Corp. 389,300
------------------------------------------------------------------
50,600 (a) Novell, Inc. 834,900
------------------------------------------------------------------
5,800 Perkin-Elmer Corp. 203,725
------------------------------------------------------------------
34,000 Raytheon Co. 1,483,250
------------------------------------------------------------------
29,900 Rockwell International Corp. 1,330,550
------------------------------------------------------------------
10,500 Scientific-Atlanta, Inc. 129,938
------------------------------------------------------------------
19,900 (a) Silicon Graphics, Inc. 661,675
------------------------------------------------------------------
13,200 (a) Sun Microsystems, Inc. 1,029,600
------------------------------------------------------------------
16,000 (a) Tandem Computers, Inc. 180,000
------------------------------------------------------------------
4,300 Tektronix, Inc. 254,775
------------------------------------------------------------------
12,200 (a) Tellabs, Inc. 414,800
------------------------------------------------------------------
25,500 Texas Instruments, Inc. 1,740,375
------------------------------------------------------------------
23,700 (a) Unisys Corp. 133,313
------------------------------------------------------------------
16,900 United Technologies Corp. 1,499,875
------------------------------------------------------------------ ------------
Total 61,832,061
------------------------------------------------------------------ ------------
ENERGY MINERALS--6.7%
------------------------------------------------------------------
12,900 Amerada-Hess Corp. 582,112
------------------------------------------------------------------
68,600 Amoco Corp. 4,381,825
------------------------------------------------------------------
8,400 Ashland, Inc. 265,650
------------------------------------------------------------------
22,200 Atlantic Richfield Co. 2,369,850
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
------------------------------------------------------------------
17,500 Burlington Resources, Inc. $ 630,000
------------------------------------------------------------------
89,900 Chevron Corp. 4,202,825
------------------------------------------------------------------
171,300 Exxon Corp. 13,083,037
------------------------------------------------------------------
7,100 Kerr-McGee Corp. 391,388
------------------------------------------------------------------
4,600 Louisiana Land & Exploration Co. 162,725
------------------------------------------------------------------
54,600 Mobil Corp. 5,500,950
------------------------------------------------------------------
43,100 Occidental Petroleum Corp. 926,650
------------------------------------------------------------------
13,600 (a) Oryx Energy Co. 156,400
------------------------------------------------------------------
6,300 Pennzoil Co. 237,825
------------------------------------------------------------------
36,100 Phillips Petroleum Co. 1,164,225
------------------------------------------------------------------
5,700 Pittston Co. 156,750
------------------------------------------------------------------
73,900 Royal Dutch Petroleum Co., ADR 9,080,463
------------------------------------------------------------------
12,412 (a) Santa Fe Energy Resource, Inc. 110,157
------------------------------------------------------------------
14,537 Sun Co., Inc. 416,122
------------------------------------------------------------------
35,800 Texaco, Inc. 2,438,875
------------------------------------------------------------------
39,600 USX Corp. 702,900
------------------------------------------------------------------
33,600 Unocal Corp. 882,000
------------------------------------------------------------------ ------------
Total 47,842,729
------------------------------------------------------------------ ------------
FINANCE--10.3%
------------------------------------------------------------------
15,500 Aetna Life & Casualty Co. 1,090,812
------------------------------------------------------------------
16,100 Ahmanson (H.F.) & Co. 402,500
------------------------------------------------------------------
6,100 Alexander & Alexander Services, Inc. 136,487
------------------------------------------------------------------
62,405 Allstate Corp. 2,293,384
------------------------------------------------------------------
68,300 American Express Co. 2,774,687
------------------------------------------------------------------
28,100 American General Corp. 923,787
------------------------------------------------------------------
65,493 American International Group, Inc. 5,525,972
------------------------------------------------------------------
56,025 Banc One Corp. 1,890,844
------------------------------------------------------------------
14,800 Bank of Boston Corp. 658,600
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
25,900 Bank of New York Co., Inc. $ 1,087,800
------------------------------------------------------------------
51,676 BankAmerica Corp. 2,971,370
------------------------------------------------------------------
10,800 Bankers Trust New York Corp. 688,500
------------------------------------------------------------------
13,300 Barnett Banks, Inc. 734,825
------------------------------------------------------------------
7,200 Beneficial Corp. 352,800
------------------------------------------------------------------
17,600 Boatmen's Bancshares, Inc. 668,800
------------------------------------------------------------------
10,000 CIGNA Corp. 991,250
------------------------------------------------------------------
24,500 Chase Manhattan Corp. 1,396,500
------------------------------------------------------------------
33,690 Chemical Banking Corp. 1,916,119
------------------------------------------------------------------
12,000 Chubb Corp. 1,078,500
------------------------------------------------------------------
54,300 Citicorp 3,522,712
------------------------------------------------------------------
20,000 Corestates Financial Corp. 727,500
------------------------------------------------------------------
23,521 Dean Witter, Discover & Co. 1,170,170
------------------------------------------------------------------
24,900 Federal Home Loan Mortgage Corp. 1,724,325
------------------------------------------------------------------
37,700 Federal National Mortgage Association 3,953,787
------------------------------------------------------------------
18,800 First Bank System, Inc. 935,300
------------------------------------------------------------------
11,300 First Fidelity Bancorporation 738,737
------------------------------------------------------------------
10,900 First Interstate Bancorp 1,406,100
------------------------------------------------------------------
24,200 First Union Corp. 1,200,925
------------------------------------------------------------------
19,400 Fleet Financial Group, Inc. 751,750
------------------------------------------------------------------
11,300 General RE Corp. 1,637,087
------------------------------------------------------------------
8,300 Golden West Financial Corp. 416,037
------------------------------------------------------------------
18,500 Great Western Financial Corp. 418,562
------------------------------------------------------------------
13,200 Household International, Inc. 742,500
------------------------------------------------------------------
26,100 J.P. Morgan & Co., Inc. 2,012,963
------------------------------------------------------------------
6,750 Jefferson-Pilot Corp. 445,500
------------------------------------------------------------------
33,200 KeyCorp. 1,120,500
------------------------------------------------------------------
13,100 Lincoln National Corp. 584,588
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
20,450 MBNA Corp. $ 754,094
------------------------------------------------------------------
10,200 Marsh & McLennan Cos., Inc. 835,125
------------------------------------------------------------------
20,300 Mellon Bank Corp. 1,017,538
------------------------------------------------------------------
25,900 Merrill Lynch & Co., Inc. 1,437,450
------------------------------------------------------------------
10,600 Morgan Stanley & Co., Inc. 922,200
------------------------------------------------------------------
22,050 NBD Bancorp, Inc. 837,900
------------------------------------------------------------------
20,400 National City Corp. 629,850
------------------------------------------------------------------
38,146 NationsBank Corp. 2,508,100
------------------------------------------------------------------
42,600 Norwest Corp. 1,256,700
------------------------------------------------------------------
32,400 PNC Financial Corp. 850,500
------------------------------------------------------------------
13,300 Providian Corp. 522,025
------------------------------------------------------------------
7,200 Republic New York Corp. 422,100
------------------------------------------------------------------
10,900 Ryder Systems, Inc. 262,963
------------------------------------------------------------------
8,600 SAFECO Corp. 552,013
------------------------------------------------------------------
14,600 Salomon, Inc. 527,425
------------------------------------------------------------------
16,600 Shawmut National Corp. 562,325
------------------------------------------------------------------
11,600 St. Paul Companies, Inc. 588,700
------------------------------------------------------------------
16,200 SunTrust Banks, Inc. 1,044,900
------------------------------------------------------------------
9,750 Torchmark Corp. 404,625
------------------------------------------------------------------
9,700 Transamerica Corp. 657,175
------------------------------------------------------------------
221 (a) Transport Holdings, Inc., Class A 8,670
------------------------------------------------------------------
44,178 Travelers Group, Inc. 2,230,989
------------------------------------------------------------------
13,550 U.S. Bancorp. 401,419
------------------------------------------------------------------
10,000 UNUM Corp. 526,250
------------------------------------------------------------------
13,100 USF&G Corp. 219,425
------------------------------------------------------------------
4,800 USLIFE Corp. 136,800
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
FINANCE--CONTINUED
------------------------------------------------------------------
23,600 Wachovia Corp. $ 1,041,350
------------------------------------------------------------------
7,100 Wells Fargo & Co. 1,491,888
------------------------------------------------------------------ ------------
Total 73,743,079
------------------------------------------------------------------ ------------
HEALTH SERVICES--0.9%
------------------------------------------------------------------
11,800 (a) Beverly Enterprises, Inc. 138,650
------------------------------------------------------------------
60,938 Columbia/HCA Healthcare Corp. 2,993,579
------------------------------------------------------------------
6,100 (a) Community Psychiatric Centers 66,337
------------------------------------------------------------------
8,650 Manor Care, Inc. 283,288
------------------------------------------------------------------
3,200 Shared Medical Systems Corp. 123,600
------------------------------------------------------------------
27,600 (a) Tenet Healthcare Corp. 493,350
------------------------------------------------------------------
22,100 U.S. Healthcare, Inc. 850,850
------------------------------------------------------------------
23,800 United Healthcare Corp. 1,264,375
------------------------------------------------------------------ ------------
Total 6,214,029
------------------------------------------------------------------ ------------
HEALTH TECHNOLOGY--7.5%
------------------------------------------------------------------
110,600 Abbott Laboratories 4,396,350
------------------------------------------------------------------
8,800 Allergan, Inc. 258,500
------------------------------------------------------------------
268 (a) Allergan Ligand Retinoid Therapeutics, Inc. 3,986
------------------------------------------------------------------
11,300 (a) Alza Corp. 248,600
------------------------------------------------------------------
42,100 American Home Products Corp. 3,731,112
------------------------------------------------------------------
36,600 (a) Amgen, Inc. 1,756,800
------------------------------------------------------------------
7,200 Bard (C.R.), Inc. 203,400
------------------------------------------------------------------
8,100 Bausch & Lomb, Inc. 280,462
------------------------------------------------------------------
38,800 Baxter International, Inc. 1,498,650
------------------------------------------------------------------
9,200 Becton, Dickinson & Co. 598,000
------------------------------------------------------------------
16,100 (a) Biomet, Inc. 267,662
------------------------------------------------------------------
20,700 (a) Boston Scientific Corp. 871,987
------------------------------------------------------------------
70,400 Bristol-Myers Squibb Co. 5,368,000
------------------------------------------------------------------
88,600 Johnson & Johnson 7,220,900
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
------------------------------------------------------------------
40,300 Lilly (Eli) & Co. $ 3,893,988
------------------------------------------------------------------
10,600 Mallinckrodt Group, Inc. 368,350
------------------------------------------------------------------
31,800 Medtronic, Inc. 1,836,450
------------------------------------------------------------------
173,500 Merck & Co., Inc. 9,976,250
------------------------------------------------------------------
86,700 Pfizer, Inc. 4,974,413
------------------------------------------------------------------
51,400 Schering Plough Corp. 2,756,325
------------------------------------------------------------------
6,300 (a) St. Jude Medical, Inc. 335,475
------------------------------------------------------------------
7,800 United States Surgical Corp. 191,100
------------------------------------------------------------------
23,900 Upjohn Co. 1,212,925
------------------------------------------------------------------
18,600 Warner-Lambert Co. 1,583,325
------------------------------------------------------------------ ------------
Total 53,833,010
------------------------------------------------------------------ ------------
INDUSTRIAL SERVICES--1.1%
------------------------------------------------------------------
19,400 Baker Hughes, Inc. 380,725
------------------------------------------------------------------
27,300 Browning-Ferris Industries, Inc. 795,112
------------------------------------------------------------------
11,400 Fluor Corp. 644,100
------------------------------------------------------------------
5,000 Foster Wheeler Corp. 187,500
------------------------------------------------------------------
15,700 Halliburton Co. 651,550
------------------------------------------------------------------
3,400 Helmerich & Payne, Inc. 87,975
------------------------------------------------------------------
38,300 Laidlaw, Inc., Class B 344,700
------------------------------------------------------------------
7,400 McDermott International, Inc. 117,475
------------------------------------------------------------------
4,500 (a) Morrison Knudsen Corp. 29,250
------------------------------------------------------------------
11,600 (a) Rowan Companies, Inc. 76,850
------------------------------------------------------------------
33,500 Schlumberger Ltd. 2,085,375
------------------------------------------------------------------
66,700 WMX Technologies, Inc. 1,875,938
------------------------------------------------------------------
7,300 (a) Western Atlas, Inc. 320,288
------------------------------------------------------------------ ------------
Total 7,596,838
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
NON-ENERGY MINERALS--1.6%
------------------------------------------------------------------
5,800 ASARCO, Inc. $ 187,050
------------------------------------------------------------------
31,000 Alcan Aluminum Ltd. 980,375
------------------------------------------------------------------
24,700 Aluminum Co. of America 1,259,700
------------------------------------------------------------------
14,500 (a) Armco, Inc. 88,812
------------------------------------------------------------------
48,300 Barrick Gold Corp. 1,116,937
------------------------------------------------------------------
15,100 (a) Bethlehem Steel Corp. 198,188
------------------------------------------------------------------
12,850 Cyprus Amax Minerals 335,706
------------------------------------------------------------------
15,500 Echo Bay Mines Ltd. 139,500
------------------------------------------------------------------
1,984 (a) FirstMiss Gold, Inc. 35,706
------------------------------------------------------------------
12,400 Georgia-Pacific Corp. 1,023,000
------------------------------------------------------------------
19,000 Homestake Mining Co. 292,125
------------------------------------------------------------------
16,100 Inco Ltd. 553,437
------------------------------------------------------------------
6,200 Inland Steel Industries, Inc. 144,925
------------------------------------------------------------------
15,500 Louisiana-Pacific Corp. 370,063
------------------------------------------------------------------
11,911 Newmont Mining Corp. 449,640
------------------------------------------------------------------
12,000 Nucor Corp. 577,500
------------------------------------------------------------------
6,100 (a) Owens-Corning Fiberglass Corp. 258,488
------------------------------------------------------------------
9,800 Phelps Dodge Corp. 621,075
------------------------------------------------------------------
32,900 Placer Dome, Inc. 719,688
------------------------------------------------------------------
8,600 Reynolds Metals Co. 433,225
------------------------------------------------------------------
18,135 Santa Fe Pacific Gold 179,083
------------------------------------------------------------------
10,520 USX-U.S. Steel Group, Inc. 314,285
------------------------------------------------------------------
28,300 Weyerhaeuser Co. 1,248,738
------------------------------------------------------------------
12,550 Worthington Industries, Inc. 208,644
------------------------------------------------------------------ ------------
Total 11,735,890
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PROCESS INDUSTRIES--4.4%
------------------------------------------------------------------
15,400 Air Products & Chemicals, Inc. $ 795,025
------------------------------------------------------------------
74,680 Archer-Daniels-Midland Co. 1,204,214
------------------------------------------------------------------
7,400 Avery Dennison Corp. 331,150
------------------------------------------------------------------
4,100 Ball Corp. 113,262
------------------------------------------------------------------
7,100 Bemis Co., Inc. 184,600
------------------------------------------------------------------
6,500 Boise Cascade Corp. 235,625
------------------------------------------------------------------
12,800 Champion International Corp. 684,800
------------------------------------------------------------------
31,400 Corning, Inc. 820,325
------------------------------------------------------------------
12,300 (a) Crown Cork & Seal Co., Inc. 428,962
------------------------------------------------------------------
38,300 Dow Chemical Co. 2,628,337
------------------------------------------------------------------
72,600 Du Pont (E.I.) de Nemours & Co. 4,528,425
------------------------------------------------------------------
11,425 Eastman Chemical Co. 679,787
------------------------------------------------------------------
9,040 Ecolab, Inc. 262,160
------------------------------------------------------------------
19,663 Engelhard Corp. 489,104
------------------------------------------------------------------
5,900 Federal Paper Board Co., Inc. 247,800
------------------------------------------------------------------
28,500 (a) Freeport-McMoRan Copper & Gold, Inc., Class B 648,375
------------------------------------------------------------------
3,600 Goodrich (B.F.) Co. 237,150
------------------------------------------------------------------
13,000 Grace (W.R.) & Co. 724,750
------------------------------------------------------------------
9,500 Great Lakes Chemical Corp. 637,687
------------------------------------------------------------------
16,200 Hercules, Inc. 864,675
------------------------------------------------------------------
34,400 International Paper Co. 1,272,800
------------------------------------------------------------------
11,300 James River Corp. of Virginia 363,012
------------------------------------------------------------------
22,300 Kimberly-Clark Corp. 1,619,538
------------------------------------------------------------------
7,900 Mead Corp. 455,238
------------------------------------------------------------------
6,400 Millipore Corp. 226,400
------------------------------------------------------------------
16,000 Monsanto Co. 1,676,000
------------------------------------------------------------------
20,400 Morton International, Inc. 622,200
------------------------------------------------------------------
9,500 Nalco Chemical Co. 285,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
------------------------------------------------------------------
28,500 PPG Industries, Inc. $ 1,211,250
------------------------------------------------------------------
16,033 Pall Corp. 390,804
------------------------------------------------------------------
11,700 Pioneer Hi-Bred International 580,613
------------------------------------------------------------------
4,100 Potlatch Corp. 172,713
------------------------------------------------------------------
18,900 Praxair, Inc. 510,300
------------------------------------------------------------------
9,400 Rohm & Haas Co. 519,350
------------------------------------------------------------------
20,800 Scott Paper Co. 1,107,600
------------------------------------------------------------------
11,700 Sherwin-Williams Co. 440,213
------------------------------------------------------------------
6,900 Sigma-Aldrich Corp. 327,750
------------------------------------------------------------------
2,500 Springs Industries, Inc., Class A 107,188
------------------------------------------------------------------
12,508 Stone Container Corp. 206,382
------------------------------------------------------------------
7,800 Temple-Inland, Inc. 354,900
------------------------------------------------------------------
9,600 Union Camp Corp. 488,400
------------------------------------------------------------------
20,400 Union Carbide Corp. 772,650
------------------------------------------------------------------
13,950 Westvaco Corp. 387,113
------------------------------------------------------------------
7,700 Willamette Industries, Inc. 446,600
------------------------------------------------------------------ ------------
Total 31,290,227
------------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--6.2%
------------------------------------------------------------------
39,000 Allied-Signal, Inc. 1,657,500
------------------------------------------------------------------
5,200 Armstrong World Industries, Inc. 308,750
------------------------------------------------------------------
27,700 Caterpillar, Inc. 1,554,662
------------------------------------------------------------------
4,600 Cincinnati Milacron, Inc. 118,450
------------------------------------------------------------------
16,100 Cooper Industries, Inc. 543,375
------------------------------------------------------------------
4,100 Crane Co. 145,037
------------------------------------------------------------------
5,800 Cummins Engine Co., Inc. 203,725
------------------------------------------------------------------
13,700 Dana Corp. 351,062
------------------------------------------------------------------
11,900 Deere & Co. 1,063,562
------------------------------------------------------------------
12,800 Dial Corp. Del. 312,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
15,800 Dover Corp. $ 624,100
------------------------------------------------------------------
25,200 Dresser Industries, Inc. 522,900
------------------------------------------------------------------
10,800 Eaton Corp. 553,500
------------------------------------------------------------------
30,900 Emerson Electric Co. 2,201,625
------------------------------------------------------------------
5,000 (a) FMC Corp. 358,125
------------------------------------------------------------------
235,800 General Electric Co. 14,914,350
------------------------------------------------------------------
6,500 General Signal Corp. 207,187
------------------------------------------------------------------
4,700 Giddings & Lewis, Inc. 75,787
------------------------------------------------------------------
6,378 Harnischfeger Industries, Inc. 200,907
------------------------------------------------------------------
17,800 Honeywell, Inc. 747,600
------------------------------------------------------------------
14,700 ITT Corp. 1,800,750
------------------------------------------------------------------
15,700 Illinois Tool Works, Inc. 912,562
------------------------------------------------------------------
14,600 Ingersoll-Rand Co. 516,475
------------------------------------------------------------------
5,700 Johnson Controls, Inc. 332,025
------------------------------------------------------------------
8,000 Loews Corp. 1,173,000
------------------------------------------------------------------
22,100 Masco Industries, Inc. 621,563
------------------------------------------------------------------
58,000 Minnesota Mining & Manufacturing Co. 3,298,750
------------------------------------------------------------------
1,300 NACCO Industries, Inc., Class A 74,425
------------------------------------------------------------------
6,800 National Service Industries, Inc. 202,300
------------------------------------------------------------------
10,370 (a) Navistar International Corp. 106,293
------------------------------------------------------------------
5,440 PACCAR, Inc. 227,120
------------------------------------------------------------------
10,200 Parker-Hannifin Corp. 344,250
------------------------------------------------------------------
21,500 Pitney Bowes, Inc. 937,938
------------------------------------------------------------------
6,100 Raychem Corp. 282,888
------------------------------------------------------------------
8,900 TRW, Inc. 585,175
------------------------------------------------------------------
7,600 Teledyne, Inc. 189,050
------------------------------------------------------------------
26,000 Tenneco, Inc. 1,140,750
------------------------------------------------------------------
12,100 Textron, Inc. 831,875
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
------------------------------------------------------------------
2,600 Thomas & Betts Corp. $ 168,025
------------------------------------------------------------------
4,300 Timken Co. 173,075
------------------------------------------------------------------
4,000 Trinova Corp. 112,500
------------------------------------------------------------------
10,100 Tyco Laboratories, Inc. 613,575
------------------------------------------------------------------
5,880 (a) Varity Corp. 213,150
------------------------------------------------------------------
49,000 Westinghouse Electric Corp. 692,125
------------------------------------------------------------------
14,600 Whitman Corp. 310,250
------------------------------------------------------------------
14,600 Xerox Corp. 1,894,350
------------------------------------------------------------------
1,800 Zurn Industries, Inc. 45,000
------------------------------------------------------------------ ------------
Total 44,463,443
------------------------------------------------------------------ ------------
RETAIL TRADE--3.8%
------------------------------------------------------------------
35,100 Albertsons, Inc. 1,167,075
------------------------------------------------------------------
20,500 American Stores Co. 612,437
------------------------------------------------------------------
14,200 Charming Shoppes, Inc. 40,825
------------------------------------------------------------------
13,200 Circuit City Store, Inc. 440,550
------------------------------------------------------------------
9,800 Dayton-Hudson Corp. 673,750
------------------------------------------------------------------
15,700 Dillard Department Stores, Inc., Class A 425,862
------------------------------------------------------------------
20,000 Gap (The), Inc. 787,500
------------------------------------------------------------------
8,200 Giant Foods, Inc., Class A 263,425
------------------------------------------------------------------
5,200 Great Atlantic & Pacific Tea Co., Inc. 105,300
------------------------------------------------------------------
9,400 Harcourt General, Inc. 372,475
------------------------------------------------------------------
62,600 Home Depot, Inc. 2,331,850
------------------------------------------------------------------
63,000 K Mart Corp. 511,875
------------------------------------------------------------------
16,200 (a) Kroger Co., Inc. 540,675
------------------------------------------------------------------
49,300 Limited, Inc. 905,888
------------------------------------------------------------------
2,900 Longs Drug Stores Corp. 116,000
------------------------------------------------------------------
22,000 Lowe's Cos., Inc. 594,000
------------------------------------------------------------------
34,200 May Department Stores Co. 1,342,350
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
------------------------------------------------------------------
14,500 Melville Corp. $ 464,000
------------------------------------------------------------------
5,000 Mercantile Stores Co., Inc. 224,375
------------------------------------------------------------------
11,300 Nordstrom, Inc. 418,806
------------------------------------------------------------------
32,000 Penney (J.C.) Co., Inc. 1,348,000
------------------------------------------------------------------
8,400 Pep Boys-Manny Moe & Jack 183,750
------------------------------------------------------------------
8,700 Premark International, Inc. 402,375
------------------------------------------------------------------
26,850 (a) Price Co. 456,450
------------------------------------------------------------------
11,600 Rite Aid Corp. 313,200
------------------------------------------------------------------
53,400 Sears, Roebuck & Co. 1,815,600
------------------------------------------------------------------
10,000 TJX Cos., Inc. 135,000
------------------------------------------------------------------
10,065 Tandy Corp. 496,959
------------------------------------------------------------------
38,300 (a) Toys "R" Us, Inc. 837,813
------------------------------------------------------------------
317,000 Wal-Mart Stores, Inc. 6,855,125
------------------------------------------------------------------
33,900 Walgreen Co. 966,150
------------------------------------------------------------------
10,300 Winn-Dixie Stores, Inc. 669,500
------------------------------------------------------------------
18,300 (a) Woolworth (F.W.) Co. 267,638
------------------------------------------------------------------ ------------
Total 27,086,578
------------------------------------------------------------------ ------------
TECHNOLOGY SERVICES--2.8%
------------------------------------------------------------------
6,500 Autodesk, Inc. 221,000
------------------------------------------------------------------
19,700 Automatic Data Processing, Inc. 1,408,550
------------------------------------------------------------------
37,850 Computer Associates International, Inc. 2,081,750
------------------------------------------------------------------
16,600 First Data Corp., Class 1,097,675
------------------------------------------------------------------
103,900 General Motors Corp. 4,545,625
------------------------------------------------------------------
80,100 (a) Microsoft Corp. 8,010,000
------------------------------------------------------------------
59,300 (a) Oracle Corp. 2,586,963
------------------------------------------------------------------ ------------
Total 19,951,563
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
TRANSPORTATION--1.4%
------------------------------------------------------------------
10,500 (a) AMR Corp. $ 693,000
------------------------------------------------------------------
20,912 Burlington Northern Santa Fe 1,753,955
------------------------------------------------------------------
14,500 CSX Corp. 1,214,375
------------------------------------------------------------------
5,900 Consolidated Freightways, Inc. 137,175
------------------------------------------------------------------
10,900 Consolidated Rail Corp. 749,375
------------------------------------------------------------------
7,000 Delta Air Lines, Inc. 459,375
------------------------------------------------------------------
7,800 (a) Federal Express Corp. 640,575
------------------------------------------------------------------
18,600 Norfolk Southern Corp. 1,436,850
------------------------------------------------------------------
5,500 Roadway Services, Inc. 246,125
------------------------------------------------------------------
19,700 Southwest Airlines Co. 394,000
------------------------------------------------------------------
8,300 (a) USAir Group, Inc. 113,088
------------------------------------------------------------------
28,400 Union Pacific Corp. 1,856,650
------------------------------------------------------------------
3,900 (a) Yellow Corp. 51,188
------------------------------------------------------------------ ------------
Total 9,745,731
------------------------------------------------------------------ ------------
UTILITIES--10.9%
------------------------------------------------------------------
215,678 AT&T Corp. 13,803,392
------------------------------------------------------------------
68,000 Airtouch Communications, Inc. 1,938,000
------------------------------------------------------------------
26,000 Alltel Corp. 796,250
------------------------------------------------------------------
25,500 American Electric Power Co., Inc. 972,188
------------------------------------------------------------------
76,100 Ameritech Corp. 4,109,400
------------------------------------------------------------------
20,350 Baltimore Gas & Electric Co. 544,362
------------------------------------------------------------------
60,200 Bell Atlantic Corp. 3,830,225
------------------------------------------------------------------
68,500 BellSouth Corp. 5,240,250
------------------------------------------------------------------
21,600 Carolina Power & Light Co. 707,400
------------------------------------------------------------------
26,200 Central & SouthWest Corp. 700,850
------------------------------------------------------------------
21,340 Cinergy Corp. 605,522
------------------------------------------------------------------
14,400 Coastal Corp. 466,200
------------------------------------------------------------------
7,000 (a) Columbia Gas System, Inc. 269,500
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
32,400 Consolidated Edison Co. $ 984,150
------------------------------------------------------------------
12,800 Consolidated Natural Gas Co. 486,400
------------------------------------------------------------------
20,000 Detroit Edison Co. 675,000
------------------------------------------------------------------
23,750 Dominion Resources, Inc. 944,062
------------------------------------------------------------------
28,300 Duke Power Co. 1,266,425
------------------------------------------------------------------
2,900 Eastern Enterprises 86,637
------------------------------------------------------------------
34,900 Enron Corp. 1,199,687
------------------------------------------------------------------
9,300 Enserch Corp. 134,850
------------------------------------------------------------------
31,300 Entergy Corp. 892,050
------------------------------------------------------------------
25,800 FPL Group, Inc. 1,080,375
------------------------------------------------------------------
132,800 GTE Corp. 5,478,000
------------------------------------------------------------------
15,900 General Public Utilities 496,875
------------------------------------------------------------------
18,100 Houston Industries, Inc. 839,388
------------------------------------------------------------------
93,800 MCI Communications Corp. 2,339,138
------------------------------------------------------------------
7,200 NICOR, Inc. 193,500
------------------------------------------------------------------
58,200 NYNEX Corp. 2,735,400
------------------------------------------------------------------
19,800 Niagara Mohawk Power Corp. 212,850
------------------------------------------------------------------
16,800 Noram Energy Corp. 130,200
------------------------------------------------------------------
9,300 Northern States Power Co. 439,425
------------------------------------------------------------------
21,100 Ohio Edison Co. 482,663
------------------------------------------------------------------
3,700 Oneok, Inc. 90,188
------------------------------------------------------------------
11,300 Pacific Enterprises 279,675
------------------------------------------------------------------
59,600 Pacific Gas & Electric Co. 1,750,750
------------------------------------------------------------------
58,500 Pacific Telesis Group 1,776,938
------------------------------------------------------------------
39,100 Pacificorp 738,013
------------------------------------------------------------------
20,600 Panhandle Eastern Corp. 520,150
------------------------------------------------------------------
30,600 Peco Energy Co. 895,050
------------------------------------------------------------------
4,800 Peoples Energy Corp. 138,000
------------------------------------------------------------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
*COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------
UTILITIES--CONTINUED
------------------------------------------------------------------
33,700 Public Service Enterprises Group, Inc. $ 989,938
------------------------------------------------------------------
82,800 SBC Communications, Inc. 4,626,450
------------------------------------------------------------------
61,700 SCE Corp. 1,048,900
------------------------------------------------------------------
12,000 Sonat, Inc. 345,000
------------------------------------------------------------------
90,200 Southern Co. 2,153,525
------------------------------------------------------------------
48,100 Sprint Corp. 1,851,850
------------------------------------------------------------------
31,100 Texas Utilities Co. 1,142,925
------------------------------------------------------------------
62,900 U.S. West, Inc. 2,995,613
------------------------------------------------------------------
29,500 Unicom Corp. 966,125
------------------------------------------------------------------
14,100 Union Electric Co. 549,900
------------------------------------------------------------------
14,000 Williams Companies, Inc. (The) 540,750
------------------------------------------------------------------ ------------
Total 78,480,354
------------------------------------------------------------------ ------------
TOTAL COMMON STOCKS (IDENTIFIED COST $539,333,079) 592,177,577
------------------------------------------------------------------ ------------
</TABLE>
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------ ------------------------------------------------------------------ ------------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.6%
- --------------------------------------------------------------------------------------
$ 4,500,000 United States Treasury Bill, 11/30/1995 (at amortized cost) $ 4,483,080
------------------------------------------------------------------ ------------
(B) REPURCHASE AGREEMENT--15.8%
- --------------------------------------------------------------------------------------
112,855,000 J.P. Morgan Securities, Inc., 5.90%, dated 10/31/1995, due
11/1/1995 112,855,000
------------------------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST $656,671,159)(C) $709,515,657
------------------------------------------------------------------ ------------
</TABLE>
* The Fund purchases Index futures contracts to efficiently manage cash flows
resulting from shareholder purchases and redemptions, dividend and capital
gain payments to shareholders and corporate actions while maintaining exposure
to the Index and minimizing trading costs. The total market value of open
Index futures contracts is $117,937,700 at October 31, 1995, which represents
16.5% of net assets. Taking into consideration these open Index futures
contracts, the Fund's effective, total exposure to the Index is 99.4%
(a) Non-income producing.
(b) The repurchase agreement is fully collateralized by U.S. government
obligations based on market prices at the date of the portfolio. The
investment in the repurchase agreement is through participation in a joint
account with other Federated funds.
(c) The cost of investments for federal tax purposes amounts to $660,350,985.
The net unrealized appreciation of investments on a federal tax basis
amounts to $49,164,672 which is comprised of $65,340,734 appreciation and
$16,176,062 depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($714,432,451) at October 31, 1995.
The following acronym is used throughout this portfolio:
ADR -- American Depository Receipt
(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, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------
Investments in repurchase agreements $112,855,000
- --------------------------------------------------------------------
Investments in securities 596,660,657
- -------------------------------------------------------------------- ------------
Total investments in securities, at value
(identified cost $656,671,159 and tax cost $660,350,985) $709,515,657
- -----------------------------------------------------------------------------------
Income receivable 990,626
- -----------------------------------------------------------------------------------
Receivable for shares sold 6,040,960
- -----------------------------------------------------------------------------------
Deferred expenses 250
- ----------------------------------------------------------------------------------- ------------
Total assets 716,547,493
- -----------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------
Payable for shares redeemed 433,930
- --------------------------------------------------------------------
Payable to Bank 966,946
- --------------------------------------------------------------------
Payable for taxes withheld 1,784
- --------------------------------------------------------------------
Payable for daily variation margin 553,860
- --------------------------------------------------------------------
Accrued expenses 158,522
- -------------------------------------------------------------------- ------------
Total liabilities 2,115,042
- ----------------------------------------------------------------------------------- ------------
Net Assets for 48,467,529 shares outstanding $714,432,451
- ----------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------
Paid in capital $558,632,158
- -----------------------------------------------------------------------------------
Net unrealized appreciation on investments and futures contracts 53,339,758
- -----------------------------------------------------------------------------------
Accumulated net realized gain on investments and futures contracts 99,397,047
- -----------------------------------------------------------------------------------
Undistributed net investment income 3,063,488
- ----------------------------------------------------------------------------------- ------------
Total Net Assets $714,432,451
- ----------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -----------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- -----------------------------------------------------------------------------------
$679,237,383 / 46,076,825 shares outstanding $14.74
- ----------------------------------------------------------------------------------- ------------
INSTITUTIONAL SERVICE SHARES:
- -----------------------------------------------------------------------------------
$35,195,068 / 2,390,704 shares outstanding $14.72
- ----------------------------------------------------------------------------------- ------------
</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, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $ 12,163,449
- ---------------------------------------------------------------------------------------------------
Interest 6,393,059
- --------------------------------------------------------------------------------------------------- -----------
Total income 18,556,508
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Management fee $ 1,727,669
- ------------------------------------------------------------------------------------
Custodian fees 150,587
- ------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 112,420
- ------------------------------------------------------------------------------------
Directors'/Trustees' fees 5,093
- ------------------------------------------------------------------------------------
Auditing fees 13,109
- ------------------------------------------------------------------------------------
Legal fees 8,985
- ------------------------------------------------------------------------------------
Portfolio accounting fees 48,764
- ------------------------------------------------------------------------------------
Distribution services fee--Institutional Service Shares 67,923
- ------------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 1,383,122
- ------------------------------------------------------------------------------------
Shareholder services fee--Institutional Service Shares 56,603
- ------------------------------------------------------------------------------------
Share registration costs 113,689
- ------------------------------------------------------------------------------------
Printing and postage 42,190
- ------------------------------------------------------------------------------------
Insurance premiums 11,366
- ------------------------------------------------------------------------------------
Taxes 1,984
- ------------------------------------------------------------------------------------
Miscellaneous 6,788
- ------------------------------------------------------------------------------------ ----------
Total expenses 3,750,292
- ------------------------------------------------------------------------------------
Waivers--
- ------------------------------------------------------------------------------------
Waiver of management fee $ (433,282)
- ----------------------------------------------------------------------
Waiver of distribution services fee--Institutional Service Shares (56,603)
- ----------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (1,383,122)
- ---------------------------------------------------------------------- ----------
Total waivers (1,873,007)
- ------------------------------------------------------------------------------------ ----------
Net expenses 1,877,285
- --------------------------------------------------------------------------------------------------- -----------
Net investment income 16,679,223
- --------------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments and futures contracts 99,787,657
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments and futures contracts 21,104,700
- --------------------------------------------------------------------------------------------------- -----------
Net realized and unrealized gain on investments and futures contracts 120,892,357
- --------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $137,571,580
- --------------------------------------------------------------------------------------------------- -----------
</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,
------------------------------
1995 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------
Net investment income $ 16,679,223 $ 11,562,305
- ------------------------------------------------------------------
Net realized gain (loss) on investments and futures contracts
($103,347,377 and $741,350 net gains respectively, as computed for
federal tax purposes) 99,787,657 1,155,375
- ------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 21,104,700 3,003,321
- ------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from operations 137,571,580 15,721,001
- ------------------------------------------------------------------ ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------------
Distributions from net investment income
- ------------------------------------------------------------------
Institutional Shares (14,071,338) (10,781,243)
- ------------------------------------------------------------------
Institutional Service Shares (505,602) (115,401)
- ------------------------------------------------------------------
Distributions from net realized gain on investment transactions
and futures contracts
- ------------------------------------------------------------------
Institutional Shares (729,209) (11,507,864)
- ------------------------------------------------------------------
Institutional Service Shares (14,188) (108,965)
- ------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from distributions to
shareholders (15,320,337) (22,513,473)
- ------------------------------------------------------------------ ------------- -------------
SHARE TRANSACTIONS--
- ------------------------------------------------------------------
Proceeds from sale of shares 374,533,702 215,864,930
- ------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 6,003,498 8,535,336
- ------------------------------------------------------------------
Cost of shares redeemed (240,788,349) (174,914,182)
- ------------------------------------------------------------------ ------------- -------------
Change in net assets resulting from share transactions 139,748,851 49,486,084
- ------------------------------------------------------------------ ------------- -------------
Change in net assets 262,000,094 42,693,612
- ------------------------------------------------------------------
NET ASSETS:
- ------------------------------------------------------------------
Beginning of period 452,432,357 409,738,745
- ------------------------------------------------------------------ ------------- -------------
End of period (including undistributed net investment income of
$3,063,488 and $961,205, respectively) $ 714,432,451 $ 452,432,357
- ------------------------------------------------------------------ ------------- -------------
</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, 1995
- --------------------------------------------------------------------------------
(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.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
the prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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.
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock futures contract with a broker, the Fund
is required to deposit in a segregated account an amount of cash or U.S.
government securities. Futures contracts are valued daily and unrealized
gains or losses are recorded in a "variation margin" account. Daily the
Fund receives from or pays to the broker a specified amount of cash based
upon changes in the variation margin account. When a contract is closed,
the Fund recognizes a realized gain or loss.
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities. For the period ended October 31, 1995, the Fund
had realized gains of $24,549,912 on future contracts. At October 31, 1995,
the Fund had outstanding futures contracts as set forth below:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO APPRECIATION
EXPIRATION DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
---------------- ------------------------------ ---------------- ----------------
<S> <C> <C> <C>
December 1995 404 S&P 500 Index Futures Long $495,260
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(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.
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
Transactions in shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1995 1994
---------------------------- ----------------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 26,132,335 $ 343,592,917 17,555,003 $ 207,304,786
- ---------------------------------------------
Shares issued to shareholders in
payment of distributions declared 420,935 5,512,947 718,661 8,439,495
- ---------------------------------------------
Shares redeemed (17,407,051) (230,818,438) (14,617,884) (172,243,416)
- --------------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Share transactions 9,146,219 $ 118,287,426 3,655,780 $ 43,500,865
- --------------------------------------------- ----------- ------------- ----------- -------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------
1995 1994
---------------------------- ----------------------------
INSTITUTIONAL SERVICE SHARES SHARES AMOUNT SHARES AMOUNT
- --------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Shares sold 2,368,216 $ 30,940,785 734,647 $ 8,560,144
- ---------------------------------------------
Shares issued to shareholders in payment of
distributions declared 36,486 490,551 8,223 95,841
- ---------------------------------------------
Shares redeemed (730,897) (9,969,911) (229,644) (2,670,766)
- --------------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from Institutional
Service Share transactions 1,673,805 $ 21,461,425 513,226 $ 5,985,219
- --------------------------------------------- ----------- ------------- ----------- -------------
Net change resulting from
share transactions 10,820,024 $ 139,748,851 4,169,006 $ 49,486,084
- --------------------------------------------- ----------- ------------- ----------- -------------
</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 .30 of 1% of the
Fund's average daily net assets. The Manager 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 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.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of daily average net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of its fee. FSS can modify or terminate
this voluntary waiver
FEDERATED MAX-CAP FUND
(FORMERLY, MAX-CAP FUND)
- --------------------------------------------------------------------------------
at any time at its sole discretion. For the fiscal year ended October 31, 1995,
Institutional Shares fully waived its shareholder services fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp, ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's 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 to compensate FSC. The distributor may
voluntarily choose to waive any portion of its fee. The distributor can modify
or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the Fund.
This fee is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
year ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------
PURCHASES $406,176,148
- ---------------------------------------------------------------------------------- ------------
SALES $271,130,091
- ---------------------------------------------------------------------------------- ------------
</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, 1995, 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 15 of this prospectus) for each of the periods presented
therein. 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, 1995, 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, 1995, 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 therein, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
December 8, 1995
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 8600
Trust Company Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERATED MAX-CAP FUND
(A PORTFOLIO OF FEDERATED INDEX TRUST)
INSTITUTIONAL SHARES
PROSPECTUS
An Open-End, Diversified
Management Investment Company
Prospectus dated December 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 31420E106
0032104A-IS (12/95)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERATED 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, 1995, 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 or a paper copy of this prospectus, if you have received your
prospectus electronically, 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, 1995
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.......................................................6
Federated Index Trust Information..............................................7
Management of the Trust......................................................7
Distribution of Fund Shares..................................................9
Fund Administration..........................................................9
Net Asset Value...............................................................10
Investing in the Fund.........................................................10
Share Purchases.............................................................10
Minimum Investment Required.................................................10
What Shares Cost............................................................10
Exchanging Securities for Fund Shares.......................................11
Sub-Accounting Services.....................................................11
Certificates and Confirmations..............................................11
Dividends...................................................................11
Capital Gains...............................................................11
Redeeming Shares..............................................................11
Telephone Redemption........................................................11
Written Requests............................................................12
Accounts with Low Balances..................................................12
Shareholder Information.......................................................13
Voting Rights...............................................................13
Tax Information...............................................................13
Federal Income Tax..........................................................13
Performance Information.......................................................13
Financial Statements..........................................................14
Report of Ernst & Young LLP,
Independent Auditors........................................................39
Addresses.....................................................................40
SUMMARY OF FUND EXPENSES
FEDERATED MID-CAP FUND
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price).................................................... None
Maximum Sales Charge 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)........................................................ 0.20%
12b-1 Fee................................................................................ None
Total Other Expenses..................................................................... 0.40%
Shareholder Services Fee (after waiver) (2)........................... 0.07%
Total Operating Expenses (3)........................................................ 0.60%
</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
0.40%.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses in the table above are based on expenses
expected during the fiscal year ending October 31, 1996. The total operating
expenses were 0.60% for the fiscal year ended October 31, 1995 and would
have been 1.01% absent the voluntary waivers of a portion of the management
fee and a portion of the shareholder services fee.
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 39.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
----------------------------------------
1995 1994 1993 1992(A)
- ------------------------------------------------------ ------ ------ ------ -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.02 $11.57 $ 9.99 $10.00
- ------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------
Net investment income 0.22 0.21 0.25 0.080
- ------------------------------------------------------
Net realized and unrealized gain (loss) on
investments and futures contracts 1.93 (0.07) 1.56 (0.086 )
- ------------------------------------------------------ ------ ------ ------ ------
Total from investment operations 2.15 0.14 1.81 (0.006 )
- ------------------------------------------------------ ------ ------ ------ ------
LESS DISTRIBUTIONS
- ------------------------------------------------------
Distributions from net investment income (0.20) (0.19) (0.23) (0.004 )
- ------------------------------------------------------
Distributions from net realized gain on investment
transactions and futures contracts (0.19) (0.50) -- --
- ------------------------------------------------------ ------ ------ ------ ------
Total distributions (0.39) (0.69) (0.23) (0.004 )
- ------------------------------------------------------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $12.78 $11.02 $11.57 $ 9.99
- ------------------------------------------------------ ------ ------ ------ ------
TOTAL RETURN (B) 20.12% 1.25% 17.33% 0.00%
- ------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------
Expenses 0.60% 0.54% 0.00% 0.00%
- ------------------------------------------------------
Net investment income 1.89% 1.84% 2.33% 0.93%*
- ------------------------------------------------------
Expense waiver/reimbursement (c) 0.41% 0.59% 1.75% 0.40%*
- ------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------
Net assets, end of period (000 omitted) $62,580 $44,012 $16,192 $3
- ------------------------------------------------------
Portfolio turnover 26% 30% 59% 0 %
- ------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from September 3, 1992 (date of initial
public investment) to October 31, 1992.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(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, 1995, 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. 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 in-
vested 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
replicate 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.
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 Farm
Credit System, including the National Bank for Cooperatives, Farm Credit
Banks, and Banks for Cooperatives, 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 repur-
chase 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 associations (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 borrow-
ers 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. There is the risk that when
lending portfolio securities, the securities may not be available to the Fund on
a timely basis and the Fund may, therefore, lose the opportunity to sell the
securities at a desirable price. In addition, in the event that a borrower of
securities would file for bankruptcy or become insolvent, disposition of the
securities may be delayed pending court action.
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 bor-
row 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
The Trust is managed by the 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
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 Man-
ager receives an annual fee from the Fund for performing its responsibilities
under the Management Contract.
Both the Trust and the Manager have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
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. With
over $72 billion invested across more than 260 funds under management and/or
administration by its subsidiaries, as of December 31, 1994, Federated Investors
is one of the largest mutual fund investment managers in the United States. With
more than 1,750 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide. More than 100,000 investment
professionals have selected Federated funds for their clients.
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 First Chicago Investment Manage-
ment Company 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,
1995, placed approximately $20.6 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 331 nationwide non-financial institution
clients invest. In total, ANB manages 77 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.
SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS
In addition to periodic payments to financial institutions under the Shareholder
Services Agreement, 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.
FUND ADMINISTRATION
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.
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
The Fund has entered into a Shareholder Services Agreement with Federated
Shareholder Services, a subsidiary of Federated Investors, under which the Fund
may make payments up to 0.25 of 1% of the average daily net asset value of the
shares, computed at an annual rate, to obtain certain personal services for
shareholders and for the maintenance of shareholder accounts ("shareholder
services"). From time to time and for such periods as deemed appropriate, the
amount stated above may be reduced voluntarily. Under the Shareholder Services
Agreement, 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.
NET ASSET VALUE
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: Federated Services Company, c/o 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. Shares cannot be purchased by wire on
holidays when wire transfers are restricted. Questions on wire purchases should
be directed to your shareholder services representative at the telephone number
listed on your account statement.
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, P.O. Box 8600, Boston, Massachusetts 02266-8600. 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 as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, 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
three 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. State
securities laws may require certain financial institutions such as depository
institutions to register as dealers.
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. Proceeds from
redemption requests on holidays when wire transfers are restricted will be wired
the following business day. Questions about telephone redemptions on days when
wire transfers are restricted should be directed to your shareholder services
representative at the telephone number listed on your account statement. 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 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 their signatures 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 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.
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.
STATE AND LOCAL TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust, 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, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
*COMMON STOCKS--88.6%
- ----------------------------------------------------------------------------------------
COMMERCIAL SERVICES--3.6%
---------------------------------------------------------------------
900 Angelica Corp. $ 20,250
---------------------------------------------------------------------
2,000 Banta Corp. 86,500
---------------------------------------------------------------------
4,600 Cintas Corp. 193,200
---------------------------------------------------------------------
1,600 Ennis Business Forms, Inc. 22,400
---------------------------------------------------------------------
7,500 Equifax, Inc. 292,500
---------------------------------------------------------------------
3,100 Flightsafety International, Inc. 148,025
---------------------------------------------------------------------
3,775 Kelly Services, Inc., Class A 94,847
---------------------------------------------------------------------
1,200 Lawson Products, Inc. 28,800
---------------------------------------------------------------------
7,400 Manpower, Inc. 200,725
---------------------------------------------------------------------
4,100 Olsten Corp. 157,850
---------------------------------------------------------------------
3,600 Omnicom Group, Inc. 229,950
---------------------------------------------------------------------
4,450 Paychex, Inc. 193,019
---------------------------------------------------------------------
4,100 Reynolds & Reynolds Co., Class A 146,062
---------------------------------------------------------------------
3,500 Rollins, Inc. 73,500
---------------------------------------------------------------------
7,200 Sensormatic Electronics Corp. 153,900
---------------------------------------------------------------------
2,800 Standard Register 63,000
---------------------------------------------------------------------
2,200 Wallace Computer, Inc. 124,025
--------------------------------------------------------------------- -----------
Total 2,228,553
--------------------------------------------------------------------- -----------
CONSUMER DURABLES--2.3%
---------------------------------------------------------------------
6,700 Callaway Golf Co. 109,713
---------------------------------------------------------------------
1,500 Carlisle Cos., Inc. 61,688
---------------------------------------------------------------------
7,425 Clayton Homes, Inc. 194,906
---------------------------------------------------------------------
1,600 Cross (A.T.) Co., Class A 22,800
---------------------------------------------------------------------
5,000 (a) Electronic Arts, Inc. 183,125
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
---------------------------------------------------------------------
1,600 (a) Gibson Greetings, Inc. $ 22,200
---------------------------------------------------------------------
7,400 Harley Davidson, Inc. 197,950
---------------------------------------------------------------------
12,800 International Game Technology 148,800
---------------------------------------------------------------------
8,200 Leggett and Platt, Inc. 196,800
---------------------------------------------------------------------
700 National Presto Industries, Inc. 28,350
---------------------------------------------------------------------
13,400 Shaw Industries, Inc. 170,850
---------------------------------------------------------------------
1,900 Stanhome, Inc. 57,950
---------------------------------------------------------------------
4,600 (a) Topps Co. 28,175
--------------------------------------------------------------------- -----------
Total 1,423,307
--------------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--3.4%
---------------------------------------------------------------------
1,900 Church and Dwight, Inc. 38,713
---------------------------------------------------------------------
12,800 Coca Cola Enterprises, Inc. 340,800
---------------------------------------------------------------------
3,900 Dean Foods Co. 108,713
---------------------------------------------------------------------
1,300 Dreyers Grand Ice Cream, Inc. 44,850
---------------------------------------------------------------------
2,100 First Brands Corp. 96,075
---------------------------------------------------------------------
3,900 Flowers Industries, Inc. 84,338
---------------------------------------------------------------------
4,700 IBP, Inc. 281,413
---------------------------------------------------------------------
1,800 International Multifoods Corp. 36,900
---------------------------------------------------------------------
2,600 (a) Jones Apparel Group, Inc. 89,050
---------------------------------------------------------------------
3,000 Lance, Inc. 50,625
---------------------------------------------------------------------
8,000 McCormick & Co., Inc. 198,000
---------------------------------------------------------------------
1,900 Michael Foods, Inc. 23,037
---------------------------------------------------------------------
2,600 Savannah Foods & Industries, Inc. 32,500
---------------------------------------------------------------------
2,900 Smucker (J.M.) Co., Class A 56,912
---------------------------------------------------------------------
3,600 Tambrands, Inc. 161,100
---------------------------------------------------------------------
14,200 Tyson Foods, Inc., Class A 339,025
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
---------------------------------------------------------------------
3,500 Universal Corp. $ 73,500
---------------------------------------------------------------------
2,600 Universal Foods Corp. 89,050
--------------------------------------------------------------------- -----------
Total 2,144,601
--------------------------------------------------------------------- -----------
CONSUMER SERVICES--4.4%
---------------------------------------------------------------------
3,900 Belo (A.H.) Corp., Series A 135,038
---------------------------------------------------------------------
4,200 Bob Evans Farms, Inc. 75,600
---------------------------------------------------------------------
7,475 (a) Brinker International, Inc. 90,634
---------------------------------------------------------------------
3,100 (a) Buffets, Inc. 38,750
---------------------------------------------------------------------
2,821 (a) Chris Craft Industries, Inc. 112,487
---------------------------------------------------------------------
10,100 (a) Circus Circus Enterprises, Inc. 268,913
---------------------------------------------------------------------
5,950 Cracker Barrel Old Country Store 101,150
---------------------------------------------------------------------
4,900 (a) HFS, Inc. 300,125
---------------------------------------------------------------------
1,400 Houghton Mifflin Co. 57,400
---------------------------------------------------------------------
2,300 (a) International Dairy Queen, Inc., Class A 48,875
---------------------------------------------------------------------
2,300 Lee Enterprises, Inc. 91,712
---------------------------------------------------------------------
2,600 Media General, Inc., Class A 72,150
---------------------------------------------------------------------
9,000 Mirage Resorts, Inc. 294,750
---------------------------------------------------------------------
3,450 Morrison Restaurants, Inc. 53,906
---------------------------------------------------------------------
3,700 Multi Media, Inc. 163,725
---------------------------------------------------------------------
4,200 (a) Outback Steakhouse, Inc. 131,775
---------------------------------------------------------------------
5,100 (a) Promus Hotel Corp. 112,200
---------------------------------------------------------------------
2,000 Sbarro, Inc. 41,750
---------------------------------------------------------------------
1,500 (a) Scholastic Corp. 92,625
---------------------------------------------------------------------
2,700 Sizzler International, Inc. 9,450
---------------------------------------------------------------------
5,500 Sothebys Holdings, Inc., Class A 76,312
---------------------------------------------------------------------
2,400 TCA Cable TV, Inc. 71,100
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
---------------------------------------------------------------------
1,100 Washington Post Co., Class B $ 319,000
---------------------------------------------------------------------
2,100 (a) Western Publishing Group, Inc. 17,194
--------------------------------------------------------------------- -----------
Total 2,776,621
--------------------------------------------------------------------- -----------
ELECTRONIC TECHNOLOGY--12.0%
---------------------------------------------------------------------
6,100 (a) ADC Telecommunications, Inc. 244,000
---------------------------------------------------------------------
4,321 (a) AST Research, Inc. 38,349
---------------------------------------------------------------------
4,300 (a) Altera Corp. 260,150
---------------------------------------------------------------------
7,500 (a) Analog Devices, Inc. 270,938
---------------------------------------------------------------------
9,400 (a) Atmel Corp. 293,750
---------------------------------------------------------------------
11,462 (a) Bay Networks, Inc. 759,357
---------------------------------------------------------------------
2,900 Beckman Instruments, Inc. 96,063
---------------------------------------------------------------------
6,100 (a) Cirrus Logic, Inc. 256,963
---------------------------------------------------------------------
5,200 Conner Peripherals, Inc. 93,600
---------------------------------------------------------------------
2,600 (a) Convex Computer Corp. 11,700
---------------------------------------------------------------------
4,000 (a) Cypress Semiconductor Corp. 141,000
---------------------------------------------------------------------
9,000 (a) Dell Computer Corp. 419,625
---------------------------------------------------------------------
21,100 (a) EMC Corp. Mass 327,050
---------------------------------------------------------------------
2,100 (a) Exabyte Corp. 27,169
---------------------------------------------------------------------
3,200 GenCorp, Inc. 33,600
---------------------------------------------------------------------
7,600 (a) Integrated Device Technology, Inc. 144,400
---------------------------------------------------------------------
12,700 (a) LSI Logic Corp. 598,487
---------------------------------------------------------------------
7,200 Linear Technology Corp. 315,000
---------------------------------------------------------------------
4,500 (a) Litton Industries, Inc. 178,312
---------------------------------------------------------------------
1,500 Measurex Corp. 46,125
---------------------------------------------------------------------
5,100 (a) Mentor Graphics Corp. 107,100
---------------------------------------------------------------------
10,000 Molex, Inc. 330,000
---------------------------------------------------------------------
2,000 (a) OEA, Inc. 54,500
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------
2,300 (a) Octel Communications Corp. $ 78,487
---------------------------------------------------------------------
5,100 (a) Quantum Corp. 88,612
---------------------------------------------------------------------
1,800 (a) Rohr, Inc. 26,775
---------------------------------------------------------------------
7,000 (a) Seagate Technology, Inc. 313,250
---------------------------------------------------------------------
1,000 (a) Sequa Corp., Class A 25,750
---------------------------------------------------------------------
3,100 (a) Sequent Computer System, Inc. 53,862
---------------------------------------------------------------------
5,180 (a) Storage Technology Corp. 127,557
---------------------------------------------------------------------
2,300 (a) Stratus Computer, Inc. 71,587
---------------------------------------------------------------------
3,100 Sundstrand Corp. 189,875
---------------------------------------------------------------------
2,500 (a) Symbol Technologies, Inc. 87,187
---------------------------------------------------------------------
7,400 (a) Teradyne, Inc. 246,975
---------------------------------------------------------------------
1,800 Thiokol Corp. 62,325
---------------------------------------------------------------------
4,000 (a) U S Robotics Corp. 370,000
---------------------------------------------------------------------
3,000 Varian Association, Inc. 154,125
---------------------------------------------------------------------
2,200 (a) Verifone, Inc. 59,400
---------------------------------------------------------------------
5,200 (a) Vishay Intertechnology, Inc. 183,300
---------------------------------------------------------------------
6,900 (a) Xilinx, Inc. 317,400
--------------------------------------------------------------------- -----------
Total 7,503,705
--------------------------------------------------------------------- -----------
ENERGY MINERALS--2.4%
---------------------------------------------------------------------
5,800 Anadarko Petroleum Corp. 251,575
---------------------------------------------------------------------
8,400 Apache Corp. 214,200
---------------------------------------------------------------------
2,900 Diamond Shamrock, Inc. 74,675
---------------------------------------------------------------------
7,900 Lyondell Petrochemical Co. 168,862
---------------------------------------------------------------------
2,900 Mapco, Inc. 149,350
---------------------------------------------------------------------
4,400 Murphy Oil Corp. 166,650
---------------------------------------------------------------------
4,900 Noble Affiliates, Inc. 121,275
---------------------------------------------------------------------
3,400 Parker & Parsley Petroleum Co. 62,900
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
---------------------------------------------------------------------
3,100 Quaker State Corp. $ 40,687
---------------------------------------------------------------------
9,700 Ranger Oil Ltd. 55,775
---------------------------------------------------------------------
3,700 Tosco Corp. 127,650
---------------------------------------------------------------------
4,300 Valero Energy Corp. 101,587
--------------------------------------------------------------------- -----------
Total 1,535,186
--------------------------------------------------------------------- -----------
FINANCE--13.3%
---------------------------------------------------------------------
10,650 AON Corp. 437,981
---------------------------------------------------------------------
9,550 Aflac, Inc. 389,163
---------------------------------------------------------------------
4,150 Bancorp Hawaii, Inc. 139,025
---------------------------------------------------------------------
11,615 Bear Stearns Cos., Inc. 230,853
---------------------------------------------------------------------
3,850 Central Fidelity Banks, Inc. 119,350
---------------------------------------------------------------------
4,500 City National Corp. 59,625
---------------------------------------------------------------------
3,500 Comdisco, Inc. 106,750
---------------------------------------------------------------------
11,300 Comerica, Inc. 379,963
---------------------------------------------------------------------
3,700 Crestar Financial Corp. 210,900
---------------------------------------------------------------------
3,000 Dauphin Deposit Corp. 87,000
---------------------------------------------------------------------
6,125 Edwards(AG), Inc. 156,188
---------------------------------------------------------------------
6,400 Fifth Third Bancorp 430,400
---------------------------------------------------------------------
6,200 First America Bank Corp. 264,275
---------------------------------------------------------------------
4,900 First Security Corp. 160,475
---------------------------------------------------------------------
3,400 First Tennessee National Corp. 181,900
---------------------------------------------------------------------
3,400 First Virginia Bank, Inc. 138,975
---------------------------------------------------------------------
8,000 Franklin Resources, Inc. 406,000
---------------------------------------------------------------------
2,000 GATX Corp. 95,000
---------------------------------------------------------------------
13,400 Green Tree Financial Corp. 356,775
---------------------------------------------------------------------
2,000 Hartford Steam Boiler Insurance 93,250
---------------------------------------------------------------------
11,800 Hibernia Corp., Class A 116,525
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------
3,400 Kemper Corp. $ 164,900
---------------------------------------------------------------------
9,100 Marshall & Ilsley Corp. 220,675
---------------------------------------------------------------------
5,550 Mercantile Bancorporation, Inc. 244,200
---------------------------------------------------------------------
4,700 Mercantile Bankshares Corp. 129,250
---------------------------------------------------------------------
5,700 Meridian Bancorp, Inc. 243,675
---------------------------------------------------------------------
5,500 Northern Trust Corp. 262,625
---------------------------------------------------------------------
1,700 PHH Corp. 74,375
---------------------------------------------------------------------
9,800 PaineWebber Group, Inc. 215,600
---------------------------------------------------------------------
1,900 (a) Policy Management System Corp. 89,537
---------------------------------------------------------------------
7,100 Progressive Corp. Ohio 294,650
---------------------------------------------------------------------
4,500 Provident Life & Accidental, Inc., Class B 120,375
---------------------------------------------------------------------
4,530 Regions Financial Corp. 180,634
---------------------------------------------------------------------
17,250 Schwab (Charles) Corp. 394,594
---------------------------------------------------------------------
8,100 SouthTrust Corp. 203,512
---------------------------------------------------------------------
8,200 State Street Boston Corp. 318,775
---------------------------------------------------------------------
2,300 Transatlantic Holdings, Inc. 154,962
---------------------------------------------------------------------
5,700 UJB Financial Corp. 181,687
---------------------------------------------------------------------
3,600 West One Bancorp. 153,000
---------------------------------------------------------------------
3,500 Wilmington Trust Corp. 103,250
--------------------------------------------------------------------- -----------
Total 8,310,649
--------------------------------------------------------------------- -----------
HEALTH SERVICES--3.5%
---------------------------------------------------------------------
2,800 (a) Applied Bioscience International, Inc. 17,850
---------------------------------------------------------------------
3,965 Bergen Brunswig Corp., Class A 82,274
---------------------------------------------------------------------
4,175 Cardinal Health, Inc. 214,491
---------------------------------------------------------------------
3,927 (a) Coram Healthcare Corp. 15,708
---------------------------------------------------------------------
3,900 (a) FHP International Corp. 94,575
---------------------------------------------------------------------
5,600 (a) Foundation Health Corp 237,300
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
HEALTH SERVICES--CONTINUED
---------------------------------------------------------------------
10,500 (a) HEALTHSOUTH Rehabilitation $ 274,313
---------------------------------------------------------------------
3,400 (a) HealthCare COMPARE Corp. 125,800
---------------------------------------------------------------------
3,100 (a) Healthcare & Retirement Corp. 91,063
---------------------------------------------------------------------
3,100 (a) Healthsource, Inc. 164,300
---------------------------------------------------------------------
4,935 (a) Horizon/CMS Healthcare Corp. 99,933
---------------------------------------------------------------------
12,100 (a) Laboratory Corporation of America Holdings 102,850
---------------------------------------------------------------------
4,300 McKesson Corp. 205,325
---------------------------------------------------------------------
6,400 (a) NovaCare, Inc. 40,000
---------------------------------------------------------------------
3,000 (a) PacifiCare Health Systems, Inc., Class B 218,250
---------------------------------------------------------------------
3,800 Surgical Care Affiliates, Inc. 112,575
---------------------------------------------------------------------
5,195 (a) Value Health, Inc. 118,824
--------------------------------------------------------------------- -----------
Total 2,215,431
--------------------------------------------------------------------- -----------
HEALTH TECHNOLOGY--3.9%
---------------------------------------------------------------------
2,800 (a) Acuson Corp. 32,550
---------------------------------------------------------------------
1,300 (a) Advanced Technology Labs, Inc. 23,400
---------------------------------------------------------------------
3,300 (a) Biogen, Inc. 202,125
---------------------------------------------------------------------
4,600 Carter Wallace, Inc. 48,300
---------------------------------------------------------------------
5,700 (a) Centocor, Inc. 64,125
---------------------------------------------------------------------
3,956 (a) Chiron Corp. 359,996
---------------------------------------------------------------------
1,600 (a) Cordis Corp. 176,800
---------------------------------------------------------------------
1,600 (a) Datascope Corp. 38,000
---------------------------------------------------------------------
2,600 Dentsply International, Inc. 89,700
---------------------------------------------------------------------
1,300 Diagnostic Products Corp. 48,100
---------------------------------------------------------------------
4,500 (a) Forest Labratories, Inc., Class A 186,188
---------------------------------------------------------------------
2,600 (a) Genzyme Corp. 151,450
---------------------------------------------------------------------
11,300 Ivax Corp. 257,075
---------------------------------------------------------------------
11,700 Mylan Laboratories, Inc. 222,300
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
---------------------------------------------------------------------
2,700 (a) Nellcor, Inc. $ 155,250
---------------------------------------------------------------------
7,500 (a) Perrigo Co. 91,875
---------------------------------------------------------------------
2,300 (a) Scherer (R.P.) Corp. 102,350
---------------------------------------------------------------------
4,800 (a) Stryker Corp. 216,600
--------------------------------------------------------------------- -----------
Total 2,466,184
--------------------------------------------------------------------- -----------
INDUSTRIAL SERVICES--1.4%
---------------------------------------------------------------------
7,359 (a) AES Corp. 145,340
---------------------------------------------------------------------
3,200 (a) Air and Water Technology Corp., Class A 16,000
---------------------------------------------------------------------
2,800 (a) BJ Services Co. 65,800
---------------------------------------------------------------------
4,900 (a) California Energy Co., Inc. 88,813
---------------------------------------------------------------------
16,300 (a) Global Marine, Inc. 105,950
---------------------------------------------------------------------
1,200 Granite Construction, Inc. 34,050
---------------------------------------------------------------------
2,500 (a) Jacobs Engineering Group, Inc. 54,688
---------------------------------------------------------------------
8,300 (a) Nabors Industries, Inc. 71,587
---------------------------------------------------------------------
5,500 (a) Parker Drilling Co. 28,875
---------------------------------------------------------------------
6,000 (a) Rollins Environmental Services, Inc. 20,250
---------------------------------------------------------------------
3,900 (a) Smith International, Inc. 62,400
---------------------------------------------------------------------
3,000 (a) Varco International, Inc. 27,375
---------------------------------------------------------------------
2,282 (a) Weatherford Enterra, Inc. 55,041
---------------------------------------------------------------------
5,400 (a) Weatherford International, Inc. 130,275
--------------------------------------------------------------------- -----------
Total 906,444
--------------------------------------------------------------------- -----------
NON-ENERGY MINERALS--1.5%
---------------------------------------------------------------------
6,900 Allegheny Ludlum Corp. 116,438
---------------------------------------------------------------------
4,400 (a) Alumax, Inc. 129,800
---------------------------------------------------------------------
8,000 Battle Mountain Gold Co. 61,000
---------------------------------------------------------------------
1,600 Brush Wellman, Inc. 26,800
---------------------------------------------------------------------
2,300 CalMat Co. 38,813
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
NON-ENERGY MINERALS--CONTINUED
---------------------------------------------------------------------
1,600 Carpenter Technology Corp. $ 60,600
---------------------------------------------------------------------
1,200 Cleveland Cliffs, Inc. 44,850
---------------------------------------------------------------------
1,400 Lukens, Inc. 43,050
---------------------------------------------------------------------
900 (a) Maxxam, Inc. 33,300
---------------------------------------------------------------------
1,900 Oregon Steel Mills 27,075
---------------------------------------------------------------------
2,900 Rayonier, Inc. 108,750
---------------------------------------------------------------------
1,700 (a) Southdown, Inc. 27,625
---------------------------------------------------------------------
3,500 Vulcan Materials Co. 194,687
--------------------------------------------------------------------- -----------
Total 912,788
--------------------------------------------------------------------- -----------
PROCESS INDUSTRIES--6.3%
---------------------------------------------------------------------
3,000 Albany International Corp., Class A 62,250
---------------------------------------------------------------------
6,500 Albemarle Corp. 121,063
---------------------------------------------------------------------
2,700 Betz Laboratories, Inc. 108,675
---------------------------------------------------------------------
3,800 Bowater, Inc. 168,150
---------------------------------------------------------------------
6,400 (a) Burlington Industries, Inc. 71,200
---------------------------------------------------------------------
3,800 CBI Industries, Inc. 118,275
---------------------------------------------------------------------
3,800 Cabot Corp. 180,500
---------------------------------------------------------------------
4,000 Calgon Carbon Corp. 45,500
---------------------------------------------------------------------
2,300 Chesapeake Corp. 70,438
---------------------------------------------------------------------
4,400 Consolidated Papers, Inc. 251,900
---------------------------------------------------------------------
4,800 Crompton and Knowles Corp. 60,600
---------------------------------------------------------------------
2,400 Dexter Corp. 57,300
---------------------------------------------------------------------
5,900 Dole Food, Inc. 221,988
---------------------------------------------------------------------
2,600 Donaldson Company, Inc. 63,375
---------------------------------------------------------------------
11,700 Ethyl Corp. 130,163
---------------------------------------------------------------------
2,700 Ferro Corp. 62,438
---------------------------------------------------------------------
1 (a) Freeport-McMoRan Copper & Gold, Inc., Class B 12
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
---------------------------------------------------------------------
1,400 Fuller (H.B.) Co. $ 44,100
---------------------------------------------------------------------
3,800 Georgia Gulf Corp. 125,875
---------------------------------------------------------------------
4,400 Glatfelter (P.H.) Co. 81,400
---------------------------------------------------------------------
3,500 Hanna (M.A.) Co. 89,688
---------------------------------------------------------------------
2,900 IMC Global, Inc. 203,000
---------------------------------------------------------------------
4,400 Lawter International, Inc. 46,750
---------------------------------------------------------------------
3,500 Loctite Corp. 165,375
---------------------------------------------------------------------
5,100 Longview Fibre Co. 73,950
---------------------------------------------------------------------
6,400 Lubrizol Corp. 184,000
---------------------------------------------------------------------
800 NCH, Corp. 43,500
---------------------------------------------------------------------
5,600 RPM, Inc. 108,500
---------------------------------------------------------------------
3,725 Schulman (A.), Inc. 69,844
---------------------------------------------------------------------
6,300 (a) Sealed Air Corp. 166,162
---------------------------------------------------------------------
9,085 Sonoco Products Co. 224,854
---------------------------------------------------------------------
5,500 (a) Sterling Chemicals, Inc. 44,000
---------------------------------------------------------------------
6,700 Unifi, Inc. 150,750
---------------------------------------------------------------------
2,914 Wausau Paper Mills Co. 71,393
---------------------------------------------------------------------
3,300 Wellman, Inc. 77,550
---------------------------------------------------------------------
5,500 Witco Corp. 155,375
--------------------------------------------------------------------- -----------
Total 3,919,893
--------------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--5.5%
---------------------------------------------------------------------
5,200 American Financial Group, Inc. 145,600
---------------------------------------------------------------------
9,100 (a) American Power Conversion Corp. 93,275
---------------------------------------------------------------------
3,300 Ametek, Inc. 58,163
---------------------------------------------------------------------
2,200 Arvin Industries, Inc. 39,050
---------------------------------------------------------------------
5,800 Danaher Corp. 179,800
---------------------------------------------------------------------
2,975 Diebold, Inc. 157,675
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
---------------------------------------------------------------------
1,900 Duriron, Inc. $ 50,825
---------------------------------------------------------------------
4,500 Federal Signal Corp. 100,688
---------------------------------------------------------------------
3,400 Federal-Mogul Corp. 60,775
---------------------------------------------------------------------
2,100 Goulds Pumps, Inc. 49,875
---------------------------------------------------------------------
3,000 HON Industries, Inc. 83,250
---------------------------------------------------------------------
2,500 Harsco Corp. 131,875
---------------------------------------------------------------------
3,240 Hubbell, Inc., Class B 195,210
---------------------------------------------------------------------
1,600 Kaydon Corp. 46,200
---------------------------------------------------------------------
2,600 Kennametal, Inc. 80,925
---------------------------------------------------------------------
3,500 Keystone International, Inc. 77,875
---------------------------------------------------------------------
2,933 Lancaster Colony Corp. 97,522
---------------------------------------------------------------------
2,400 Magnetek, Inc. 23,700
---------------------------------------------------------------------
5,962 Mark IV Industries, Inc. 116,259
---------------------------------------------------------------------
2,400 Miller Herman, Inc. 71,100
---------------------------------------------------------------------
2,900 Modine Manufacturing Co. 79,750
---------------------------------------------------------------------
1,800 Nordson Corp. 103,950
---------------------------------------------------------------------
2,400 Olin Corp. 153,600
---------------------------------------------------------------------
1,800 Pentair, Inc. 90,900
---------------------------------------------------------------------
1,950 Precision Castparts Corp. 69,712
---------------------------------------------------------------------
3,300 Stewart & Stevenson Services 75,075
---------------------------------------------------------------------
2,900 Superior Industries International, Inc. 81,562
---------------------------------------------------------------------
2,200 Tecumseh Products Co., Class A 103,400
---------------------------------------------------------------------
1,700 Teleflex, Inc. 72,037
---------------------------------------------------------------------
8,200 (a) Thermo Electron Corp. 377,200
---------------------------------------------------------------------
3,950 Trinity Industries, Inc. 117,019
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
---------------------------------------------------------------------
2,900 Watts Industries, Inc., Class A $ 59,812
---------------------------------------------------------------------
4,100 York International Corp. 179,375
--------------------------------------------------------------------- -----------
Total 3,423,034
--------------------------------------------------------------------- -----------
RETAIL TRADE--4.3%
---------------------------------------------------------------------
2,300 (a) Ann Taylor Stores Corp. 25,300
---------------------------------------------------------------------
4,200 (a) Best Buy Co., Inc. 87,150
---------------------------------------------------------------------
4,950 CML Group, Inc. 28,463
---------------------------------------------------------------------
1,400 CPI Corp. 25,550
---------------------------------------------------------------------
2,100 Claire's Stores, Inc. 41,213
---------------------------------------------------------------------
6,578 Dollar General Corp. 161,161
---------------------------------------------------------------------
2,700 Duty Free International, Inc. 38,475
---------------------------------------------------------------------
2,200 Edison Brothers Stores, Inc. 7,975
---------------------------------------------------------------------
5,600 Family Dollar Stores, Inc. 85,400
---------------------------------------------------------------------
4,500 Fingerhut Companies, Inc. 61,313
---------------------------------------------------------------------
2,100 Hancock Fabrics, Inc. 18,375
---------------------------------------------------------------------
4,200 Hannaford Brothers Co. 109,725
---------------------------------------------------------------------
4,750 Heilig-Meyers Co. 87,281
---------------------------------------------------------------------
8,979 (a) Home Shopping Network, Inc. 72,954
---------------------------------------------------------------------
3,400 Intelligent Electronics, Inc. 25,925
---------------------------------------------------------------------
3,600 (a) Kohl's Corp. 163,350
---------------------------------------------------------------------
3,400 Lands' End, Inc. 51,000
---------------------------------------------------------------------
2,500 (a) MacFrugal's Bargains CloseOuts, Inc. 29,687
---------------------------------------------------------------------
2,600 (a) Meyer (Fred), Inc. 48,425
---------------------------------------------------------------------
2,900 (a) Micro Warehouse, Inc. 129,050
---------------------------------------------------------------------
3,400 (a) Nine West Group, Inc. 151,300
---------------------------------------------------------------------
14,725 (a) Office Depot, Inc. 421,503
---------------------------------------------------------------------
6,600 (a) Revco D. S., Inc. 156,750
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
---------------------------------------------------------------------
6,900 Ruddick Corp. $ 87,975
---------------------------------------------------------------------
9,800 (a) Service Merchandise, Inc. 52,675
---------------------------------------------------------------------
10,350 (a) Staples, Inc. 275,569
---------------------------------------------------------------------
1,600 Tiffany & Co. 69,800
---------------------------------------------------------------------
4,300 (a) Vons Companies, Inc. 109,112
---------------------------------------------------------------------
3,300 (a) Waban, Inc. 51,562
--------------------------------------------------------------------- -----------
Total 2,674,018
--------------------------------------------------------------------- -----------
TECHNOLOGY SERVICES--4.8%
---------------------------------------------------------------------
6,200 Adobe System, Inc. 353,400
---------------------------------------------------------------------
4,575 (a) Arrow Electronics, Inc. 232,181
---------------------------------------------------------------------
4,000 Avnet, Inc. 201,500
---------------------------------------------------------------------
5,000 (a) BMC Software, Inc. 178,125
---------------------------------------------------------------------
2,700 (a) Borland International, Inc. 36,788
---------------------------------------------------------------------
5,400 (a) Cadence Design Systems, Inc. 174,150
---------------------------------------------------------------------
4,500 (a) Compuware Corp. 102,375
---------------------------------------------------------------------
4,400 (a) FIserv, Inc. 113,300
---------------------------------------------------------------------
9,991 First Data Corp., Class 660,666
---------------------------------------------------------------------
2,600 (a) Information Resources, Inc. 28,275
---------------------------------------------------------------------
13,200 (a) Informix Corp. 384,450
---------------------------------------------------------------------
6,100 (a) Parametric Technology Corp. 408,700
---------------------------------------------------------------------
2,900 (a) Structural Dynamics Research Corp. 52,925
---------------------------------------------------------------------
3,800 (a) Symantec Corp. 92,387
--------------------------------------------------------------------- -----------
Total 3,019,222
--------------------------------------------------------------------- -----------
TRANSPORTATION--1.6%
---------------------------------------------------------------------
2,100 Airborne Freight Corp. 55,125
---------------------------------------------------------------------
1,300 (a) Alaska Air Group, Inc. 19,338
---------------------------------------------------------------------
4,500 Alexander and Baldwin, Inc. 103,500
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
TRANSPORTATION--CONTINUED
---------------------------------------------------------------------
2,300 American President Cos., Ltd. $ 55,775
---------------------------------------------------------------------
2,600 Arnold Industries, Inc. 42,250
---------------------------------------------------------------------
3,300 Atlantic Southeast Airlines, Inc. 81,675
---------------------------------------------------------------------
3,800 Hunt (J.B.) Transportation Services, Inc. 58,900
---------------------------------------------------------------------
4,200 Illinois Central Corp. 160,650
---------------------------------------------------------------------
4,300 Kansas City Southern Industries, Inc. 200,487
---------------------------------------------------------------------
3,600 Overseas Shipholding Group, Inc. 61,200
---------------------------------------------------------------------
5,300 Tidewater, Inc. 139,787
--------------------------------------------------------------------- -----------
Total 978,687
--------------------------------------------------------------------- -----------
UTILITIES--14.4%
---------------------------------------------------------------------
11,800 Allegheny Power Systems, Inc. 311,225
---------------------------------------------------------------------
2,700 Atlanta Gas Light Co. 104,288
---------------------------------------------------------------------
5,300 Atlantic Energy, Inc. NJ 102,688
---------------------------------------------------------------------
1,400 Black Hills Corp. 35,175
---------------------------------------------------------------------
4,700 Brooklyn Union Gas Co. 118,088
---------------------------------------------------------------------
8,700 CMS Energy Corp. 240,338
---------------------------------------------------------------------
2,200 Central LA Electric Co. 59,125
---------------------------------------------------------------------
3,200 Central Maine Power Co. 44,400
---------------------------------------------------------------------
5,800 Century Telephone Enterprises, Inc. 168,200
---------------------------------------------------------------------
4,700 Comsat Corp. 93,413
---------------------------------------------------------------------
5,900 Delmarva Power and Light Co. 129,800
---------------------------------------------------------------------
3,500 El Paso Natural Gas 94,500
---------------------------------------------------------------------
9,400 Florida Progress Corp. 311,375
---------------------------------------------------------------------
15,900 Frontier Corp. 429,300
---------------------------------------------------------------------
2,900 Hawaiian Electric Industries, Inc. 113,100
---------------------------------------------------------------------
3,700 Idaho Power Co. 102,675
---------------------------------------------------------------------
7,500 Illinova Corp. 212,813
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
UTILITIES--CONTINUED
---------------------------------------------------------------------
2,250 Indiana Energy, Inc. $ 47,531
---------------------------------------------------------------------
3,700 Ipalco Enterprises, Inc. 136,438
---------------------------------------------------------------------
6,100 Kansas City Power And Light Co. 151,738
---------------------------------------------------------------------
3,300 LG&E Energy Corp. 136,950
---------------------------------------------------------------------
3,600 Lincoln Telecommunications Co. 62,100
---------------------------------------------------------------------
6,500 MCN Corp. 141,375
---------------------------------------------------------------------
9,922 MidAmerican Energy Co. 158,752
---------------------------------------------------------------------
3,100 Minnesota Power And Light Co. 88,737
---------------------------------------------------------------------
5,300 Montana Power Co. 120,575
---------------------------------------------------------------------
19,100 (a) NEXTEL Communications, Inc. 265,012
---------------------------------------------------------------------
6,300 NIPSCO Industries, Inc. 229,950
---------------------------------------------------------------------
3,700 National Fuel Gas Co. 110,075
---------------------------------------------------------------------
4,500 Nevada Power Co. 98,437
---------------------------------------------------------------------
6,400 New England Electric System 249,600
---------------------------------------------------------------------
7,100 New York State Electric and Gas Corp. 179,275
---------------------------------------------------------------------
12,400 Northeast Utilities Co. 306,900
---------------------------------------------------------------------
4,000 Oklahoma Gas and Electric Co. 160,000
---------------------------------------------------------------------
8,600 Pinnacle West Capital Corp. 236,500
---------------------------------------------------------------------
5,000 Portland General Corp. 135,625
---------------------------------------------------------------------
11,700 Potomac Electric Power Co. 292,500
---------------------------------------------------------------------
6,200 Public Service Co. Colo 211,575
---------------------------------------------------------------------
4,100 (a) Public Service Co. New Mexico 68,675
---------------------------------------------------------------------
6,300 Puget Sound Power & Light Co. 143,325
---------------------------------------------------------------------
4,000 Questar Corp. 120,500
---------------------------------------------------------------------
10,200 SCANA Corp. 258,825
---------------------------------------------------------------------
3,600 (a) Seagull Energy Corp. 61,650
---------------------------------------------------------------------
6,400 Southern New England Telecommunications 231,200
---------------------------------------------------------------------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
COMMON STOCKS--CONTINUED
- ----------------------------------------------------------------------------------------
UTILITIES--CONTINUED
---------------------------------------------------------------------
4,000 Southwestern Public Service Co. $ 131,500
---------------------------------------------------------------------
11,500 TECO Energy, Inc. 271,687
---------------------------------------------------------------------
5,600 Telephone and Data System, Inc. 224,000
---------------------------------------------------------------------
4,400 Utilicorp United, Inc. 127,050
---------------------------------------------------------------------
4,100 (a) Vanguard Cellular System, Inc., Class A 91,737
---------------------------------------------------------------------
3,000 WPL Holdings, Inc. 91,500
---------------------------------------------------------------------
4,200 Washington Gas Light Co. 80,325
---------------------------------------------------------------------
10,800 Wisconsin Energy Corp. 318,600
---------------------------------------------------------------------
18,818 (a) WorldCom, Inc. 613,937
--------------------------------------------------------------------- -----------
Total 9,024,659
--------------------------------------------------------------------- -----------
TOTAL COMMON STOCKS (IDENTIFIED COST $50,087,295) 55,462,982
--------------------------------------------------------------------- -----------
</TABLE>
FEDERATED MID-CAP FUND
(FORMERLY, MID-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- --------------------------------------------------------------------- -----------
<C> <C> <S> <C>
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.3%
- ----------------------------------------------------------------------------------------
$200,000 United States Treasury Bills, 12/14/1995 (at amortized cost) $ 198,804
--------------------------------------------------------------------- -----------
(B) REPURCHASE AGREEMENT--7.2%
- ----------------------------------------------------------------------------------------
4,480,000 J.P. Morgan Securities, Inc., 5.90%, dated 10/31/1995, due 11/1/1995
(at amortized cost) 4,480,000
--------------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $54,766,099)(C) $60,141,786
--------------------------------------------------------------------- -----------
</TABLE>
* The Fund purchases Index futures contracts to efficiently manage cash flows
resulting from shareholder purchases and redemptions, dividend and capital
gain payments to shareholders and corporate actions while maintaining
exposure to the Index and minimizing trading costs. The total market value
of open Index futures contracts is $4,525,750 at October 31, 1995, which
represents 7.2% of net assets. Taking into consideration these open Index
futures contracts, the Fund's effective, total exposure to the Index is
95.9%.
(a) Non-income producing security.
(b) 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
investments in the repurchase agreements is through participation in joint
accounts with other Federated funds.
(c) The cost of investments for federal tax purposes amounts to $54,769,482. The
unrealized appreciation of investments on a federal tax basis amounts to
$5,372,304 which is comprised of $8,785,117 appreciation and $3,412,813
depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($62,579,603) at October 31, 1995.
(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, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ----------------------------------------------------------------------------------
Total investments in securities, at value
(identified cost $54,766,099, and tax cost $54,769,482) $60,141,786
- ----------------------------------------------------------------------------------
Income receivable 61,040
- ----------------------------------------------------------------------------------
Receivable for shares sold 2,596,634
- ----------------------------------------------------------------------------------
Receivable for daily variation margin 244,575
- ----------------------------------------------------------------------------------
Deferred expenses 11,117
- ---------------------------------------------------------------------------------- -----------
Total assets 63,055,152
- ----------------------------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------------------------------------
Payable for investments purchased $221,962
- -----------------------------------------------------------------------
Payable for shares redeemed 447
- -----------------------------------------------------------------------
Payable to bank 220,316
- -----------------------------------------------------------------------
Accrued expenses 32,824
- ----------------------------------------------------------------------- --------
Total liabilities 475,549
- ---------------------------------------------------------------------------------- -----------
NET ASSETS for 4,895,491 shares outstanding $62,579,603
- ---------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------------------------
Paid in capital $53,646,360
- ----------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures contracts 5,167,683
- ----------------------------------------------------------------------------------
Accumulated net realized gain on investments and futures contracts 3,618,287
- ----------------------------------------------------------------------------------
Undistributed net investment income 147,273
- ---------------------------------------------------------------------------------- -----------
Total Net Assets $62,579,603
- ---------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$62,579,603 / 4,895,491 shares outstanding $12.78
- ---------------------------------------------------------------------------------- -----------
</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, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------
Dividends $ 921,677
- --------------------------------------------------------------------------------------------
Interest 380,122
- -------------------------------------------------------------------------------------------- ----------
Total income 1,301,799
- --------------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------------
Management fee $ 208,809
- -------------------------------------------------------------------------------
Custodian fees 40,008
- -------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 43,914
- -------------------------------------------------------------------------------
Directors'/Trustees' fees 2,863
- -------------------------------------------------------------------------------
Auditing fees 14,020
- -------------------------------------------------------------------------------
Legal fees 5,198
- -------------------------------------------------------------------------------
Portfolio accounting fees 22,658
- -------------------------------------------------------------------------------
Shareholder services fee 130,516
- -------------------------------------------------------------------------------
Share registration costs 29,598
- -------------------------------------------------------------------------------
Printing and postage 14,419
- -------------------------------------------------------------------------------
Insurance premiums 3,350
- -------------------------------------------------------------------------------
Taxes 1,023
- -------------------------------------------------------------------------------
Miscellaneous 12,525
- ------------------------------------------------------------------------------- ---------
Total expenses 528,901
- -------------------------------------------------------------------------------
Waivers--
- -------------------------------------------------------------------------------
Waiver of management fee $(106,606)
- -------------------------------------------------------------------
Waiver of shareholder services fee (107,993)
- ------------------------------------------------------------------- ---------
Total waivers (214,599)
- ------------------------------------------------------------------------------- ---------
Net expenses 314,302
- -------------------------------------------------------------------------------------------- ----------
Net investment income 987,497
- -------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
- --------------------------------------------------------------------------------------------
Net realized gain on investments and futures contracts 3,630,556
- --------------------------------------------------------------------------------------------
Net change in unrealized appreciation on investments and futures contracts 5,366,839
- -------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain on investments and futures contracts 8,997,395
- -------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $9,984,892
- -------------------------------------------------------------------------------------------- ----------
</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,
----------------------------
1995 1994
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------------
Net investment income $ 987,497 $ 529,031
- --------------------------------------------------------------------
Net realized gain (loss) on investment transactions and futures
contracts ($3,414,170 net gain and $778,310 net gain,
respectively, as computed for federal tax purposes) 3,630,556 804,342
- --------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments
and futures contracts 5,366,839 (248,356)
- -------------------------------------------------------------------- ------------ -----------
Change in net assets resulting from operations 9,984,892 1,085,017
- -------------------------------------------------------------------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------------
Distributions from net investment income (893,649) (488,588)
- --------------------------------------------------------------------
Distributions from net realized gain on investment transactions and
futures contracts (778,952) (890,225)
- -------------------------------------------------------------------- ------------ -----------
Change in net assets from distributions to shareholders (1,672,601) (1,378,813)
- -------------------------------------------------------------------- ------------ -----------
SHARE TRANSACTIONS--
- --------------------------------------------------------------------
Proceeds from sale of shares 48,339,864 36,764,807
- --------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 858,211 531,029
- --------------------------------------------------------------------
Cost of shares redeemed (38,942,349) (9,181,997)
- -------------------------------------------------------------------- ------------ -----------
Change in net assets resulting from share transactions 10,255,726 28,113,839
- -------------------------------------------------------------------- ------------ -----------
Change in net assets 18,568,017 27,820,043
- --------------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------------
Beginning of period 44,011,586 16,191,543
- -------------------------------------------------------------------- ------------ -----------
End of period (including undistributed net investment income of
$147,273 and $53,425, respectively) $ 62,579,603 $44,011,586
- -------------------------------------------------------------------- ------------ -----------
</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, 1995
- --------------------------------------------------------------------------------
(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 are 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.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERATED MID-CAP FUND
- --------------------------------------------------------------------------------
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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 over a period of five years from
the Fund's commencement date.
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock futures contract with a broker, the Fund
is required to deposit in a segregated account an amount of cash or U.S.
government securities. Futures contracts are valued daily and unrealized
gains or losses are recorded in a "variation margin" account. Daily the
Fund receives from or pays to the broker a specified amount of cash based
upon changes in the variation margin account. When a contract is closed,
the Fund recognizes a realized gain or loss.
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities. For the period ended October 31, 1995, the Fund
had realized gains of $1,046,222 on future contracts.
At October 31, 1995, the Fund had outstanding futures contracts as set
forth below:
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
EXPIRATION DATE CONTRACTS TO DELIVER/RECEIVE POSITION (DEPRECIATION)
----------------- ------------------------------ -------- --------------
<S> <C> <C> <C>
December 1995 43 S&P 400 Index Futures Long ($ 208,004)
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
FEDERATED MID-CAP FUND
- --------------------------------------------------------------------------------
(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 shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------
1995 1994
---------- ---------
<S> <C> <C>
- ----------------------------------------------------------------------
Shares sold 4,033,312 3,384,065
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 78,357 48,638
- ----------------------------------------------------------------------
Shares redeemed (3,208,182) (839,960)
- ---------------------------------------------------------------------- ---------- ---------
Net change resulting from share transactions 903,487 2,592,743
- ---------------------------------------------------------------------- ---------- ---------
</TABLE>
(4) INVESTMENT ADVISORY 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 .40 of 1% of the
Fund's average daily net assets. Under the terms of a sub-advisory agreement
between the Manager and the Trust Division of ANB Investment Management and
Trust Company (the "Sub-Manager"), the Sub-Manager receives an annual fee from
the Manager equal to .035 of 1% of the Fund's average daily net assets. In
addition, the Sub-Manager may voluntarily choose to reduce its compensation. 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.
SHAREHOLDER SERVICES FEE--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 daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts. FSS may
voluntarily choose to waive a portion of its fee. FSS can modify or terminate
this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the Fund.
This fee is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $23,784 were borne initially
by the Manager. The Fund has agreed to reimburse the Manager for the
organizational expenses at an annual rate of .005 of 1% of average daily net
assets until expenses initially borne are fully reimbursed or the expiration of
five years after effective date--whichever occurs earlier. For the period ended
October 31, 1995, the Fund paid $5,285 pursuant to this agreement.
FEDERATED MID-CAP FUND
- --------------------------------------------------------------------------------
GENERAL--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, 1995, were as follows:
<TABLE>
<S> <C>
- -----------------------------------------------------------------------------------
Purchases $21,360,166
- ----------------------------------------------------------------------------------- -----------
Sales $12,098,430
- ----------------------------------------------------------------------------------- -----------
</TABLE>
38
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, 1995, 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 2 of this prospectus) for each of the periods presented therein. 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, 1995, 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, 1995, 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 therein, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
December 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Federated Investors Tower
Federated Mid-Cap Fund 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 8600
Trust Company Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- ------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- ------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FEDERATED MID-CAP FUND
(A PORTFOLIO OF FEDERATED INDEX TRUST)
PROSPECTUS
An Open-End, Diversified
Management Investment Company
Prospectus dated December 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
CUSIP 31420E205
2062304A (12/95)
FEDERATED MINI-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 Mini-Cap Fund (the "Fund"), a portfolio of
the Trust, seeks to provide investment results corresponding to the aggregate
price and dividend performance of publicly traded common stocks comprising the
small-stock capitalization sector of the United States equity market.
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, 1995, 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 or a paper copy of this prospectus if you have received your
prospectus electronically, 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, 1995
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.......................................................6
Federated Index Trust Information..............................................7
Management of the Trust......................................................7
Distribution of Fund Shares..................................................9
Fund Administration..........................................................9
Net Asset Value...............................................................10
Investing in the Fund.........................................................10
Share Purchases.............................................................10
Minimum Investment Required.................................................10
What Shares Cost............................................................11
Exchanging Securities for Fund Shares.......................................11
Sub-Accounting Services.....................................................11
Certificates and Confirmations..............................................11
Dividends...................................................................11
Capital Gains...............................................................11
Redeeming Shares..............................................................12
Telephone Redemption........................................................12
Written Requests............................................................12
Accounts with Low Balances..................................................13
Shareholder Information.......................................................13
Voting Rights...............................................................13
Tax Information...............................................................13
Federal Income Tax..........................................................13
Performance Information.......................................................14
Financial Statements..........................................................15
Report of Ernst & Young LLP
Independent Auditors........................................................97
Addresses.....................................................................98
SUMMARY OF FUND EXPENSES
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price).................................... None
Maximum Sales Charge 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)................................................................................ 0.45%
12b-1 Fee........................................................................................................ None
Total Other Expenses............................................................................................. 0.30%
Shareholder Services Fee (after waiver) (2)....................................................... 0.04%
Total Operating Expenses (3)............................................................................ 0.75%
</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
0.50%.
(2) The maximum shareholder services fee is 0.25%.
(3) The total operating expenses in the table above are based on expenses
expected during the fiscal year ending October 31, 1996. The total operating
expenses were 0.75% for the fiscal year ended October 31, 1995 and would
have been 0.80% 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 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....................................................................... $8 $24 $42 $93
</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.
FINANCIAL HIGHLIGHTS
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Ernst & Young LLP, Independent Auditors'
report on page 97.
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C>
1995 1994 1993 1992(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.65 $ 12.66 $ 10.39 $ 10.00
- --------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------------------
Net investment income 0.15 0.11 0.17 0.02
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and futures contracts 1.74 (0.23) 2.27 0.38
- -------------------------------------------------------------------------------- --------- --------- --------- -----------
Total from investment operations 1.89 (0.12) 2.44 0.40
- -------------------------------------------------------------------------------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------------------
Distributions from net investment income (0.14) (0.11) (0.17) (0.01)
- --------------------------------------------------------------------------------
Distributions from net realized gain on investment transactions and futures
contracts (0.07) (0.78) -- --
- -------------------------------------------------------------------------------- --------- --------- --------- -----------
Total distributions (0.21) (0.89) (0.17) (0.01)
- -------------------------------------------------------------------------------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 13.33 $ 11.65 $ 12.66 $ 10.39
- -------------------------------------------------------------------------------- --------- --------- --------- -----------
TOTAL RETURN (B) 16.44% (0.91%) 23.73% 4.00%
- --------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------------------
Expenses 0.75% 0.73% 0.37% 0.00%*
- --------------------------------------------------------------------------------
Net investment income 1.23% 0.98% 1.48% 2.04%*
- --------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.05% 0.11% 0.86% 0.87%*
- --------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $132,399 $98,441 $76,139 $7,751
- --------------------------------------------------------------------------------
Portfolio turnover 42% 32% 48% 1%
- --------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from August 10, 1992 (commencement of
operations) to October 31, 1992.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) 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, 1995, 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. 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 that
generally correspond to the aggregate price and dividend performance of the
approximately 2,000 publicly traded common stocks that are ranked in terms of
capitalization below the top 1,000 stocks that comprise the large and mid-range
capitalization sector of the United States equity market. The investment
objective of the Fund cannot be changed without the approval of shareholders.
These stocks comprise the Russell 2000T Index (the "Index"), an index of small
capitalization stocks. 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.
The Fund is neither affiliated with nor promoted, sponsored or endorsed by the
Frank Russell Company. Frank Russell's only relationship to the Fund is the
licensing of the use of the Index. Frank Russell Company is the owner of the
trademarks and copyrights relating to the Index. The Russell 2000T Index is a
trademark/ service mark of the Frank Russell Company. RussellTM is a trademark
of the Frank Russell Company. Frank Russell Company is not responsible for and
has not reviewed the Fund or any associated literature or publications and Frank
Russell Company makes no representation or warranty, express or implied, as to
their accuracy, or completeness, or otherwise.
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 a pool of
securities that will duplicate the investment characteristics of the Index.
Under normal market circumstances, the Fund will invest at least 80% of its
assets in the common stock included in the Index.
In pursuit of its investment objective, the Fund uses a "passive" versus an
"active" investment approach. In the case of a fund using an active investment
approach, the fund would be managed by buying and selling securities based upon
economic, financial and market analysis as well as active investment judgment.
In contrast, the Fund uses a passive approach that attempts to approximate the
investment performance of the Index. Stocks are selected for inclusion in the
Fund's portfolio in the order of their contribution to the Fund's market
capitalization, industry and fundamental characteristics. Thus, small stocks
with the highest market capitalizations will comprise the highest percentage of
the Fund's investment portfolio, and those with the lowest market
capitalizations will comprise the lowest percentage of the Fund's investment
portfolio.
The Fund will not attempt to duplicate or approximate the composition of the
Index, although at least 80% of the assets comprising the Fund's portfolio will
be invested in stocks included in the Index. It is expected that by investing in
a pool of the issues that comprise the Index, the Fund's portfolio will closely
resemble the characteristics of the small stock capitalization sector of the
United States equity market. It is also anticipated that the Fund's performance
will achieve at least a 95% correlation to the performance of the Index, even
though the Fund will not, and does not seek to, duplicate the Index's
performance precisely.
The Index is updated monthly, which results in a significant annual turnover
rate. The Fund would incur high transaction costs if it rebalanced its portfolio
each time the Index was updated. Consequently, adjustments will be made to the
Fund's portfolio less frequently. As a result, portfolio turnover is expected to
be well below that encountered in actively managed investment company
portfolios. Therefore, the accompanying costs, including accounting costs,
brokerage fees, custodial expenses, and transfer taxes are expected to be
relatively low. 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 as well as in the composition of the Index will determine how frequently
the Fund's portfolio will be rebalanced to resemble the characteristics 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
futures contracts. This will allow the Fund to simultaneously maximize the level
of the Fund assets used to track the performance of the small stock
capitalization sector of the United States equity market. 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 futures contracts for speculative purposes.
ACCEPTABLE INVESTMENTS
Under normal market circumstances, the Fund will invest 80% of its assets in
stocks that comprise 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 Farm
Credit System including the National Bank for Cooperatives, Farm Credit
Banks, and Banks for Cooperatives, 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 associations (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
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 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. There is the risk that when lending portfolio
securities, the securities may not be available to the Fund on a timely basis
and the Fund may, therefore, lose the opportunity to sell the securities at a
desirable price. In addition, in the event that a borrower of securities would
file for bankruptcy or become insolvent, disposition of the securities may be
delayed pending court action.
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 small capitalization stocks, there are
some additional risk factors associated with investments in the Fund. In
particular, stocks in the small capitalization sector of the United States
equity market have historically been 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, small
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 greater
volatility, the stocks of small companies may, to some degree, fluctuate
independently of the stocks of large companies. That is, the stocks of small
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
MANAGEMENT OF THE TRUST
TRUSTEES
The Trust is managed by the 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 herein 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 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 errors; monitoring and analyzing the use of futures
contracts; monitoring the futures holdings of the Fund as a percentage of Fund
assets; monitoring market timing in the Fund; discussing with the Sub-Manager
the portfolio sampling techniques employed by the Sub-
Manager; defining with the Sub-Manager the universe of stocks that comprise the
small capitalization sector of the United States equity market; 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.
Both the Trust and the Manager have adopted strict codes of ethics governing the
conduct of all employees who manage the Fund and its portfolio securities. These
codes recognize that such persons owe a fiduciary duty to the Fund's
shareholders and must place the interests of shareholders ahead of the
employees' own interest. Among other things, the codes: require preclearance and
periodic reporting of personal securities transactions; prohibit personal
transactions in securities being purchased or sold, or being considered for
purchase or sale, by the Fund; prohibit purchasing securities in initial public
offerings; and prohibit taking profits on securities held for less than sixty
days. Violations of the codes are subject to review by the Trustees, and could
result in severe penalties.
MANAGEMENT FEES
The Fund's Manager receives an annual management fee equal to 0.50 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. With over $72 billion invested
across more than 260 funds under management and/or administration by its
subsidiaries, as of December 31, 1994, Federated Investors is one of the largest
mutual fund investment managers in the United States. With more than 1,750
employees, Federated continues to be led by the management who founded the
company in 1955. Federated funds are presently at work in and through 4,000
financial institutions nationwide. More than 100,000 investment professionals
have selected Federated funds for their clients.
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 .065 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 First Chicago Investment Management Company 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, 1995, placed
approximately $20.6 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 331 nationwide non-
financial institution clients invest. In total, ANB manages 77 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 Mid-Cap Fund, another
portfolio of the Trust.
SUPPLEMENTAL PAYMENTS
TO FINANCIAL INSTITUTIONS
In addition to periodic payments to financial institutions under the Shareholder
Services Agreement, 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.
FUND ADMINISTRATION
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.
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
The Fund has entered into a Shareholder Services Agreement with Federated
Shareholder Services, a subsidiary of Federated Investors, under which the Fund
may make payments up to 0.25 of 1% of the average daily net asset value of the
Shares, computed at an annual rate, to
obtain certain personal services for shareholders and for the maintenance of
shareholder accounts ("shareholder services"). From time to time and for such
periods as deemed appropriate, the amount stated above may be reduced
voluntarily. Under the Shareholder Services Agreement, 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.
NET ASSET VALUE
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: Federated Services Company, c/o State Street Bank and Trust
Company, Boston, Massachusetts; Attention: EDGEWIRE; For Credit to: Federated
Index Trust, Federated Mini-Cap Fund; Group Number or Order Number; Nominee or
Institution Name; ABA Number 011000028. Shares cannot be purchased by wire on
holidays when wire transfers are restricted. Questions on wire purchases should
be directed to your shareholder services representative at the telephone number
listed on your account statement.
BY MAIL
To purchase shares of the Fund by mail, send a check made payable to Federated
Index Trust, Federated Mini-Cap Fund, to the Fund's transfer agent, Federated
Services Company, P.O. Box 8600, Boston, Massachusetts 02266-8600. 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 institution 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 as of the close of trading (normally 4:00
p.m., Eastern time) on the New York Stock Exchange, 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 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 the 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 sub-
accounting 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. 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. State securities laws may require certain financial
institutions such as depository institutions to register as dealers.
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. Proceeds from
redemption requests received on holidays when wire transfers are restricted will
be wired the following business day. Questions about telephone redemptions on
days when wire transfers are restricted should be directed to your shareholder
services representative at the telephone number listed on your account
statement. 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 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 their signatures 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 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 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.
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.
STATE AND LOCAL TAXES
In the opinion of Houston, Houston & Donnelly, counsel to the Trust, 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, advertisements for the Fund may refer to ratings, rankings,
and other information in certain financial publications and/or compare the
Fund's performance to certain indices.
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
*COMMON STOCKS--87.1%
- ------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--3.5%
---------------------------------------------------------------------------------
1,500 ABM Industries, Inc. $ 39,750
---------------------------------------------------------------------------------
1,100 (a)ABR Information Services, Inc. 32,450
---------------------------------------------------------------------------------
4,300 ADVO, Inc. 109,650
---------------------------------------------------------------------------------
3,100 (a)APS Holding Corp., Class A 63,550
---------------------------------------------------------------------------------
600 (a)AccuStaff, Inc. 26,700
---------------------------------------------------------------------------------
2,200 Ackerley Communications, Inc. 29,975
---------------------------------------------------------------------------------
2,250 (a)American Business Information 39,375
---------------------------------------------------------------------------------
2,950 American Business Products, Inc. 64,531
---------------------------------------------------------------------------------
400 American List Corp. 10,350
---------------------------------------------------------------------------------
4,800 Amresco, Inc. 51,000
---------------------------------------------------------------------------------
1,900 Angelica Corp. 42,750
---------------------------------------------------------------------------------
4,500 Banta Corp. 194,625
---------------------------------------------------------------------------------
1,700 Bearings, Inc. 61,625
---------------------------------------------------------------------------------
700 (a)Berlitz International, Inc. 10,237
---------------------------------------------------------------------------------
2,900 (a)Borg Warner Security Corp. 30,087
---------------------------------------------------------------------------------
3,300 Bowne & Co., Inc. 61,462
---------------------------------------------------------------------------------
5,300 CCH, Inc., Class A 123,225
---------------------------------------------------------------------------------
2,500 (a)CDI Corp. 36,875
---------------------------------------------------------------------------------
1,800 (a)CSS Industries, Inc. 40,725
---------------------------------------------------------------------------------
1,200 Cadmus Communications Corp. 29,100
---------------------------------------------------------------------------------
1,100 (a)Career Horizons, Inc. 29,425
---------------------------------------------------------------------------------
2,100 Castle (A.M.) & Co. 51,187
---------------------------------------------------------------------------------
2,300 (a)Catalina Marketing Corp. 116,150
---------------------------------------------------------------------------------
7,800 (a)Century Communications, Corp., Class A 66,300
---------------------------------------------------------------------------------
375 Champion Industries, Inc. W VA 7,875
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--CONTINUED
---------------------------------------------------------------------------------
3,100 (a)Checkpoint System, Inc. $ 89,512
---------------------------------------------------------------------------------
3,700 (a)Comdata Holdings Corp. 89,725
---------------------------------------------------------------------------------
5,425 (a)Concord EFS, Inc. 187,162
---------------------------------------------------------------------------------
1,500 (a)Copart, Inc. 34,125
---------------------------------------------------------------------------------
3,400 (a)Corrections Corp. America 185,300
---------------------------------------------------------------------------------
800 (a)Daisytek International Corp. 22,600
---------------------------------------------------------------------------------
900 (a)Day Runner, Inc. 22,725
---------------------------------------------------------------------------------
1,300 (a)Devon Group, Inc. 50,700
---------------------------------------------------------------------------------
1,200 (a)DiMark, Inc. 16,500
---------------------------------------------------------------------------------
3,800 Duff & Phelps Corp. 41,325
---------------------------------------------------------------------------------
3,700 Ennis Business Forms, Inc. 51,800
---------------------------------------------------------------------------------
1,600 Fair Isaac & Co., Inc. 43,200
---------------------------------------------------------------------------------
3,600 Fisher Scientific International, Inc. 112,950
---------------------------------------------------------------------------------
4,100 (a)Franklin Quest Co. 97,887
---------------------------------------------------------------------------------
4,550 G & K Services, Inc., Class A 101,237
---------------------------------------------------------------------------------
1,900 GRC International 42,037
---------------------------------------------------------------------------------
1,501 Graphic Industries, Inc. 14,635
---------------------------------------------------------------------------------
200 Grey Advertising, Inc. 37,400
---------------------------------------------------------------------------------
7,200 Handleman Co. 55,800
---------------------------------------------------------------------------------
6,900 Harland (John H.) Co. 143,175
---------------------------------------------------------------------------------
3,800 (a)Heritage Media Corp., Class A 105,450
---------------------------------------------------------------------------------
900 Hughes Supply, Inc. 21,712
---------------------------------------------------------------------------------
3,600 (a)Identix, Inc. 42,300
---------------------------------------------------------------------------------
2,200 (a)Insurance Automotive Auctions, Inc. 14,850
---------------------------------------------------------------------------------
2,600 (a)Interim Services, Inc. 77,350
---------------------------------------------------------------------------------
2,200 (a)JP Foodservice, Inc. 33,550
---------------------------------------------------------------------------------
1,700 Lawson Products, Inc. 40,800
---------------------------------------------------------------------------------
1,300 Merrill Corp. $ 20,800
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--CONTINUED
---------------------------------------------------------------------------------
1,200 (a)NFO Research, Inc. 27,300
---------------------------------------------------------------------------------
2,400 Nash Finch Co. 42,900
---------------------------------------------------------------------------------
1,200 Norrell Corp. 37,050
---------------------------------------------------------------------------------
1,300 (a)PEC Israel Economic Corp. 29,250
---------------------------------------------------------------------------------
900 (a)Performance Food Group Co. 20,925
---------------------------------------------------------------------------------
1,200 (a)Pinkertons, Inc. 23,550
---------------------------------------------------------------------------------
4,200 (a)Primark Corp. 95,550
---------------------------------------------------------------------------------
2,900 (a)Rexel, Inc. 33,350
---------------------------------------------------------------------------------
5,628 Richfood Holdings, Inc. 140,700
---------------------------------------------------------------------------------
4,900 (a)Robert Half International, Inc. 178,850
---------------------------------------------------------------------------------
3,100 Rykoff Sexton, Inc. 69,750
---------------------------------------------------------------------------------
3,000 SEI Corp. 63,750
---------------------------------------------------------------------------------
2,900 Standard Register 65,250
---------------------------------------------------------------------------------
3,800 Storage USA, Inc. 111,150
---------------------------------------------------------------------------------
2,500 Super Food Services, Inc. 33,438
---------------------------------------------------------------------------------
1,600 (a)Sylvan Learning Systems, Inc. 38,400
---------------------------------------------------------------------------------
800 (a)Thompson PBE, Inc. 14,600
---------------------------------------------------------------------------------
4,200 True North Communications, Inc. 85,050
---------------------------------------------------------------------------------
700 (a)US Delivery Systems, Inc. 14,525
---------------------------------------------------------------------------------
4,600 Unifirst Corp. 64,400
---------------------------------------------------------------------------------
2,600 Univar Corp. 34,775
---------------------------------------------------------------------------------
2,500 (a)VWR Scientific Products Corp. 34,375
---------------------------------------------------------------------------------
5,000 (a)Valassis Communication, Inc. 69,375
---------------------------------------------------------------------------------
400 Value Line, Inc. 13,100
---------------------------------------------------------------------------------
1,200 (a)Volt Information Science, Inc. 27,900
---------------------------------------------------------------------------------
1,600 Wackenhut Corp., Class A 24,800
---------------------------------------------------------------------------------
500 Wackenhut Corrections Corp. $ 10,500
---------------------------------------------------------------------------------
3,900 (a)Westcott Communications 53,625
--------------------------------------------------------------------------------- --------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES--CONTINUED
---------------------------------------------------------------------------------
Total 4,623,774
--------------------------------------------------------------------------------- --------------
CONSUMER DURABLES--3.8%
---------------------------------------------------------------------------------
3,100 (a)3DO Co. 33,325
---------------------------------------------------------------------------------
900 (a)Ag-Chem Equipment Co., Inc. 25,200
---------------------------------------------------------------------------------
2,317 Anthony Industries, Inc. 43,154
---------------------------------------------------------------------------------
2,300 Apogee Enterprises, Inc. 34,500
---------------------------------------------------------------------------------
6,650 Arctco, Inc. 74,812
---------------------------------------------------------------------------------
2,100 Armor All Products Corp. 34,650
---------------------------------------------------------------------------------
3,600 (a)Atari Corp. 7,425
---------------------------------------------------------------------------------
5,200 (a)Autotote Corp. 15,600
---------------------------------------------------------------------------------
1,500 (a)Avatar Holdings, Inc. 55,875
---------------------------------------------------------------------------------
700 Barnes Group, Inc. 26,250
---------------------------------------------------------------------------------
3,200 Bassett Furniture Industries, Inc. 64,400
---------------------------------------------------------------------------------
1,300 (a)Beazer Homes USA, Inc. 22,750
---------------------------------------------------------------------------------
1,900 (a)Blyth Industries, Inc. 95,950
---------------------------------------------------------------------------------
3,300 CLARCOR, Inc. 75,075
---------------------------------------------------------------------------------
1,000 (a)Cannondale Corp. 16,000
---------------------------------------------------------------------------------
3,100 Carlisle Cos., Inc. 127,487
---------------------------------------------------------------------------------
3,400 (a)Champion Enterprises, Inc. 87,975
---------------------------------------------------------------------------------
1,300 (a)Chromcraft Revington, Inc. 31,200
---------------------------------------------------------------------------------
2,500 (a)Cincinnati Microwave, Inc. 14,375
---------------------------------------------------------------------------------
2,400 (a)Cobra Golf, Inc. 62,400
---------------------------------------------------------------------------------
900 (a)Congoleum Corp. 7,537
---------------------------------------------------------------------------------
1,300 Continental Homes Holding Corp. 26,650
---------------------------------------------------------------------------------
2,800 Cross (A.T.) Co., Class A 39,900
---------------------------------------------------------------------------------
1,500 Crown Crafts, Inc. $ 19,125
---------------------------------------------------------------------------------
2,228 D. R. Horton, Inc. 24,786
---------------------------------------------------------------------------------
900 (a)Duracraft Corp. 19,575
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
---------------------------------------------------------------------------------
3,600 Ekco Group, Inc. 20,250
---------------------------------------------------------------------------------
3,200 (a)Ethan Allen Interiors, Inc. 63,200
---------------------------------------------------------------------------------
3,800 Exide Corp. 166,725
---------------------------------------------------------------------------------
1,300 Falcon Products, Inc. 18,200
---------------------------------------------------------------------------------
9,000 Fedders Corp. 52,875
---------------------------------------------------------------------------------
350 Fedders Corp., Class A 1,487
---------------------------------------------------------------------------------
5,400 (a)First Alert, Inc. 83,700
---------------------------------------------------------------------------------
1,300 (a)First Team Sports, Inc. 17,875
---------------------------------------------------------------------------------
800 (a)Fossil, Inc. 8,700
---------------------------------------------------------------------------------
3,600 (a)Gibson Greetings, Inc. 49,950
---------------------------------------------------------------------------------
2,920 Harman International Industries, Inc. 134,685
---------------------------------------------------------------------------------
1,500 (a)Harvard Industries, Inc., Class B 41,437
---------------------------------------------------------------------------------
3,600 (a)Hovnanian Enterprises, Inc., Class A 24,750
---------------------------------------------------------------------------------
3,000 Huffy Corp. 31,125
---------------------------------------------------------------------------------
1,900 (a)ITI Technologies, Inc. 47,975
---------------------------------------------------------------------------------
11,300 (a)Interco, Inc. 83,337
---------------------------------------------------------------------------------
1,100 (a)Johnson Worldwide Associates, Inc., Class A 25,575
---------------------------------------------------------------------------------
6,500 Kaufman & Broad Homes Corp. 75,562
---------------------------------------------------------------------------------
1,566 LADD Furniture, Inc. 20,749
---------------------------------------------------------------------------------
2,900 La-Z Boy Chair Co. 86,275
---------------------------------------------------------------------------------
5,200 Lennar Corp. 118,950
---------------------------------------------------------------------------------
2,900 Libbey, Inc. 59,450
---------------------------------------------------------------------------------
1,166 (a)Lifetime Hoan Corp. 11,077
---------------------------------------------------------------------------------
4,100 (a)Lo-Jack Corp. 63,550
---------------------------------------------------------------------------------
3,800 M.D.C. Holdings, Inc. $ 28,025
---------------------------------------------------------------------------------
2,000 Matthews International Corp., Class A 40,500
---------------------------------------------------------------------------------
1,700 (a)Mikasa, Inc. 22,100
---------------------------------------------------------------------------------
4,500 (a)Mohawk Industries, Inc. 67,500
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
---------------------------------------------------------------------------------
2,847 Myers Industries, Inc. 40,926
---------------------------------------------------------------------------------
3,000 (a)NVR, Inc. 30,000
---------------------------------------------------------------------------------
1,300 National Presto Industries, Inc. 52,650
---------------------------------------------------------------------------------
3,800 (a)O'Sullivan Industries Holdings, Inc. 28,500
---------------------------------------------------------------------------------
5,000 Oakwood Homes Corp. 187,500
---------------------------------------------------------------------------------
2,100 Oneida Ltd. 34,650
---------------------------------------------------------------------------------
4,500 Outboard Marine Corp. 93,375
---------------------------------------------------------------------------------
1,100 (a)Pillowtex Corp. 12,100
---------------------------------------------------------------------------------
10,000 (a)Presley Cos., Class A 18,750
---------------------------------------------------------------------------------
4,300 Pulte Corp. 135,988
---------------------------------------------------------------------------------
2,099 (a)Recoton Corp. 46,703
---------------------------------------------------------------------------------
1,600 (a)Redman Industries, Inc. 41,600
---------------------------------------------------------------------------------
2,000 Rival Co. 39,000
---------------------------------------------------------------------------------
9,200 (a)Roadmaster Industries, Inc. 23,000
---------------------------------------------------------------------------------
2,100 Russ Berrie & Co., Inc. 29,138
---------------------------------------------------------------------------------
3,100 Ryland Group, Inc. 45,338
---------------------------------------------------------------------------------
2,500 SPX Corp. 38,750
---------------------------------------------------------------------------------
800 (a)Safety 1st, Inc. 13,800
---------------------------------------------------------------------------------
2,700 (a)Samsonite Corp. 27,338
---------------------------------------------------------------------------------
1,900 (a)Schuler Homes, Inc. 22,563
---------------------------------------------------------------------------------
4,200 (a)Scotts Co. 83,475
---------------------------------------------------------------------------------
3,500 (a)Sierra On-Line, Inc. 130,375
---------------------------------------------------------------------------------
2,200 Skyline Corp. 38,500
---------------------------------------------------------------------------------
6,000 (a)Sola International, Inc. $ 147,000
---------------------------------------------------------------------------------
3,800 (a)Spectrum Holobyte, Inc. 38,950
---------------------------------------------------------------------------------
1,800 Standard Motor Products, Inc. 29,700
---------------------------------------------------------------------------------
5,800 Standard Pacific Corp. 37,700
---------------------------------------------------------------------------------
4,200 Stanhome, Inc. 128,100
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER DURABLES--CONTINUED
---------------------------------------------------------------------------------
3,600 Stant Corp. 33,750
---------------------------------------------------------------------------------
1,600 Starrett (L.S.) Co., Class A 36,600
---------------------------------------------------------------------------------
2,200 Sturm Ruger & Co., Inc. 59,400
---------------------------------------------------------------------------------
1,300 (a)Syratech Corp. 28,600
---------------------------------------------------------------------------------
5,650 (a)TBC Corp. 39,550
---------------------------------------------------------------------------------
1,200 Thor Industries, Inc. 19,050
---------------------------------------------------------------------------------
4,200 (a)Toll Brothers, Inc. 75,075
---------------------------------------------------------------------------------
9,300 (a)Topps Co. 56,963
---------------------------------------------------------------------------------
2,900 Toro Co. 83,738
---------------------------------------------------------------------------------
3,800 (a)Toy Biz, Inc., Class A 85,025
---------------------------------------------------------------------------------
7,800 (a)Tyco Toys, Inc. 42,900
---------------------------------------------------------------------------------
2,501 (a)U.S. Home Corp. 67,214
---------------------------------------------------------------------------------
1,500 WD 40 Co. 59,063
---------------------------------------------------------------------------------
3,800 Windmere Corp. 23,750
---------------------------------------------------------------------------------
3,100 (a)Winnebago Industries, Inc. 24,800
---------------------------------------------------------------------------------
1,300 Wynns International, Inc. 35,750
---------------------------------------------------------------------------------
3,000 X-Rite, Inc. 46,875
---------------------------------------------------------------------------------
10,600 (a)Zenith Electronics Corp. 88,775
--------------------------------------------------------------------------------- --------------
Total 5,053,907
--------------------------------------------------------------------------------- --------------
CONSUMER NON-DURABLES--3.0%
---------------------------------------------------------------------------------
2,700 (a)American Safety Razor Co. 22,612
---------------------------------------------------------------------------------
3,600 (a)Authentic Fitness Corp. 73,800
---------------------------------------------------------------------------------
2,772 Block Drug, Inc., Class A $ 106,722
---------------------------------------------------------------------------------
800 Bridgford Foods Corp. 7,800
---------------------------------------------------------------------------------
3,800 Brown Group, Inc. 52,250
---------------------------------------------------------------------------------
3,500 (a)Burlington Coat Factory Warehouse 38,937
---------------------------------------------------------------------------------
3,000 (a)Canandaigua Wine Co., Inc., Class B 142,500
---------------------------------------------------------------------------------
1,800 (a)Chic by H.I.S., Inc. 9,900
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
---------------------------------------------------------------------------------
6,100 Chiquita Brands International 99,125
---------------------------------------------------------------------------------
3,900 Church and Dwight, Inc. 79,462
---------------------------------------------------------------------------------
1,000 Coca-Cola Bottling Co. 34,000
---------------------------------------------------------------------------------
3,800 (a)Converse, Inc. 17,100
---------------------------------------------------------------------------------
8,600 Coors Adolph Co., Class B 153,725
---------------------------------------------------------------------------------
500 (a)Culbro Corp. 22,562
---------------------------------------------------------------------------------
6,950 (a)Dimon, Inc. 101,644
---------------------------------------------------------------------------------
1,200 (a)Donnkenny, Inc. 34,200
---------------------------------------------------------------------------------
2,500 Dreyers Grand Ice Cream, Inc. 86,250
---------------------------------------------------------------------------------
200 Farmer Brothers Co. 25,500
---------------------------------------------------------------------------------
8,900 Flowers Industries, Inc. 192,462
---------------------------------------------------------------------------------
2,800 (a)FoodBrands America, Inc. 32,200
---------------------------------------------------------------------------------
1,000 GoodMark Foods, Inc. 18,500
---------------------------------------------------------------------------------
1,350 (a)Guest Supply, Inc. 25,481
---------------------------------------------------------------------------------
5,600 (a)Gymboree Corp. 126,700
---------------------------------------------------------------------------------
1,500 Haggar Corp. 24,750
---------------------------------------------------------------------------------
5,500 (a)Hartmarx Corp. 27,500
---------------------------------------------------------------------------------
1,500 Helene Curtis Industries, Inc. 44,812
---------------------------------------------------------------------------------
2,800 Herbalife International, Inc. 21,000
---------------------------------------------------------------------------------
5,300 Hudson Foods, Inc., Class A 74,862
---------------------------------------------------------------------------------
4,600 Hydron Technologies, Inc. 12,075
---------------------------------------------------------------------------------
3,700 International Multifoods Corp. $ 75,850
---------------------------------------------------------------------------------
4,400 Interstate Bakeries Corp. 94,050
---------------------------------------------------------------------------------
1,500 (a)J & J Snack Foods Corp. 16,687
---------------------------------------------------------------------------------
1,650 (a)Just For Feet, Inc. 38,981
---------------------------------------------------------------------------------
4,300 Justin Industries, Inc. 43,000
---------------------------------------------------------------------------------
4,700 Kellwood Co. 88,125
---------------------------------------------------------------------------------
700 (a)Kenneth Cole Productions, Inc., Class A 28,612
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
---------------------------------------------------------------------------------
3,600 Lance, Inc. 60,750
---------------------------------------------------------------------------------
3,092 Maybelline, Inc. 73,049
---------------------------------------------------------------------------------
2,700 Michael Foods, Inc. 32,738
---------------------------------------------------------------------------------
1,000 (a)Mondavi Robert Corp., Class A 28,250
---------------------------------------------------------------------------------
1,700 (a)Morningstar Group, Inc. 13,175
---------------------------------------------------------------------------------
3,400 (a)NBTY, Inc. 17,000
---------------------------------------------------------------------------------
2,116 Natures Sunshine Products, Inc. 52,371
---------------------------------------------------------------------------------
3,900 (a)Nautica Enterprise, Inc. 133,575
---------------------------------------------------------------------------------
1,300 (a)Norton McNaughton, Inc. 25,675
---------------------------------------------------------------------------------
2,600 OshKosh B'Gosh, Inc., Class A 34,450
---------------------------------------------------------------------------------
1,600 Oxford Industries, Inc. 26,000
---------------------------------------------------------------------------------
2,500 (a)Paragon Trade Brands, Inc. 39,688
---------------------------------------------------------------------------------
5,300 Phillips Van Heusen Corp. 53,663
---------------------------------------------------------------------------------
900 Pilgrims Pride Corp. 6,863
---------------------------------------------------------------------------------
5,400 (a)Playtex Products, Inc. 37,800
---------------------------------------------------------------------------------
1,300 (a)Quicksilver, Inc. 40,300
---------------------------------------------------------------------------------
7,000 Ralcorp Holdings, Inc. 161,000
---------------------------------------------------------------------------------
3,600 Riviana Foods, Inc. 46,350
---------------------------------------------------------------------------------
1,600 Sanderson Farms, Inc. 17,200
---------------------------------------------------------------------------------
5,000 Savannah Foods & Industries, Inc. 62,500
---------------------------------------------------------------------------------
100 Seaboard Corp. $ 26,400
---------------------------------------------------------------------------------
2,800 (a)Smithfield Foods, Inc. 70,700
---------------------------------------------------------------------------------
6,600 Smucker (J.M.) Co., Class A 129,525
---------------------------------------------------------------------------------
1,600 St. John Knits, Inc. 76,600
---------------------------------------------------------------------------------
1,341 Standard Commercial Corp. 14,583
---------------------------------------------------------------------------------
2,000 (a)Starter Corp. 15,250
---------------------------------------------------------------------------------
11,100 Stride Rite Corp. 124,875
---------------------------------------------------------------------------------
2,600 (a)Thermolase Corp. 52,975
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
---------------------------------------------------------------------------------
800 Thorn Apple Valley, Inc. 13,800
---------------------------------------------------------------------------------
1,700 (a)Timberland Co., Class A 32,725
---------------------------------------------------------------------------------
3,908 Tootsie Roll Industries, Inc. 141,177
---------------------------------------------------------------------------------
6,700 (a)Tultex Corp. 31,825
---------------------------------------------------------------------------------
1,800 Unitog Co. 42,300
---------------------------------------------------------------------------------
3,550 WLR Foods, Inc. 48,813
---------------------------------------------------------------------------------
3,625 Wolverine World Wide, Inc. 108,750
--------------------------------------------------------------------------------- --------------
Total 3,986,431
--------------------------------------------------------------------------------- --------------
CONSUMER SERVICES--4.6%
---------------------------------------------------------------------------------
600 (a)AMC Entertainment, Inc. 10,875
---------------------------------------------------------------------------------
2,700 Actava Group, Inc. 46,912
---------------------------------------------------------------------------------
300 (a)Adelphia Communications Corp., Class A 2,625
---------------------------------------------------------------------------------
3,100 (a)Alliance Entertainment Corp. 20,925
---------------------------------------------------------------------------------
9,400 American Media, Inc. 45,825
---------------------------------------------------------------------------------
1,900 (a)American Telecasting, Inc. 25,650
---------------------------------------------------------------------------------
600 (a)Ameristar Casinos, Inc. 3,900
---------------------------------------------------------------------------------
1,200 (a)Anchor Gaming 26,400
---------------------------------------------------------------------------------
1,500 (a)Apollo Group, Inc., Class A 39,375
---------------------------------------------------------------------------------
4,137 Apple South, Inc. 84,808
---------------------------------------------------------------------------------
6,800 Applebee's International, Inc. $ 191,250
---------------------------------------------------------------------------------
2,700 (a)Argosy Gaming Corp. 24,975
---------------------------------------------------------------------------------
1,400 (a)Au Bon Pain Co., Inc., Class A 10,675
---------------------------------------------------------------------------------
8,600 (a)Aztar Corp. 69,875
---------------------------------------------------------------------------------
1,800 (a)BET Holdings, Inc., Class A 37,350
---------------------------------------------------------------------------------
10,600 (a)Bally Entertainment Group 116,600
---------------------------------------------------------------------------------
400 (a)Bally's Grand, Inc. 5,750
---------------------------------------------------------------------------------
3,500 Barefoot, Inc. 42,437
---------------------------------------------------------------------------------
6,100 (a)Buffets, Inc. 76,250
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
---------------------------------------------------------------------------------
4,765 (a)CAI Wireless Systems, Inc. 39,311
---------------------------------------------------------------------------------
4,200 CKE Restaurants, Inc. 61,950
---------------------------------------------------------------------------------
2,200 (a)Carmike Cinemas, Inc., Class A 45,925
---------------------------------------------------------------------------------
2,250 (a)Casino American, Inc. 15,750
---------------------------------------------------------------------------------
4,400 (a)Casino Magic Corp. 19,800
---------------------------------------------------------------------------------
9,800 (a)Checkers Drive-In Restaurant 15,312
---------------------------------------------------------------------------------
1,900 (a)Cheesecake Factory, Inc. 41,325
---------------------------------------------------------------------------------
1,100 (a)Children's Discovery Centers of America, Inc. 8,525
---------------------------------------------------------------------------------
600 Churchill Downs, Inc. 21,600
---------------------------------------------------------------------------------
2,350 (a)Citicasters, Inc., Class A 72,556
---------------------------------------------------------------------------------
2,300 (a)Consolidated Products, Inc. 38,525
---------------------------------------------------------------------------------
1,000 (a)DF&R Restaurants, Inc. 30,500
---------------------------------------------------------------------------------
3,000 (a)DeVRY, Inc. 66,750
---------------------------------------------------------------------------------
1,000 (a)Dollar Tree Stores, Inc. 27,000
---------------------------------------------------------------------------------
4,400 (a)Doubletree Corp. 96,800
---------------------------------------------------------------------------------
1,500 (a)EZ Communications, Inc., Class A 24,375
---------------------------------------------------------------------------------
1,600 (a)Emmis Broadcasting Corp., Class A 42,400
---------------------------------------------------------------------------------
1,000 (a)Equity Corporation International 21,000
---------------------------------------------------------------------------------
2,200 (a)Evergreen Media Corp., Class A $ 59,950
---------------------------------------------------------------------------------
7,000 (a)Flagstar Companies, Inc. 28,875
---------------------------------------------------------------------------------
8,700 (a)Foodmaker, Inc. 52,200
---------------------------------------------------------------------------------
1,600 (a)Franklin Electronic Publishers, Inc. 66,200
---------------------------------------------------------------------------------
1,300 (a)GC Cos., Inc. 41,925
---------------------------------------------------------------------------------
3,900 (a)Grand Casinos, Inc. 155,025
---------------------------------------------------------------------------------
11,400 (a)Greyhound Lines, Inc. 42,750
---------------------------------------------------------------------------------
1,400 (a)Griffin Gaming & Entertainment, Inc. 17,500
---------------------------------------------------------------------------------
1,700 Harte-Hanks 51,425
---------------------------------------------------------------------------------
1,200 Harveys Casino Resorts 19,350
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
---------------------------------------------------------------------------------
700 (a)Heartland Wireless Communications, Inc. 18,025
---------------------------------------------------------------------------------
1,700 (a)Heftel Broadcasting Corp. , Class A 31,025
---------------------------------------------------------------------------------
2,600 (a)Hollywood Casino Corp., Class A 15,925
---------------------------------------------------------------------------------
3,300 (a)Hollywood Park, Inc. 32,175
---------------------------------------------------------------------------------
2,200 (a)Hometown Buffet, Inc. 28,875
---------------------------------------------------------------------------------
3,200 Houghton Mifflin Co. 131,200
---------------------------------------------------------------------------------
2,100 (a)IHOP Corp. 45,150
---------------------------------------------------------------------------------
500 (a)ITT Educational Services, Inc. 11,750
---------------------------------------------------------------------------------
6,500 Ideon Group, Inc. 57,687
---------------------------------------------------------------------------------
2,700 (a)International Dairy Queen, Inc., Class A 57,375
---------------------------------------------------------------------------------
4,400 (a)International Family Entertainment, Inc., Class B 81,400
---------------------------------------------------------------------------------
1,400 (a)Jacor Communications, Inc., Class A 21,350
---------------------------------------------------------------------------------
4,182 Jones Intercable, Inc. 56,457
---------------------------------------------------------------------------------
4,500 (a)Kinder-Care Learning Centers, Inc. 60,187
---------------------------------------------------------------------------------
1,600 (a)Landrys Seafood Restaurants, Inc. 21,600
---------------------------------------------------------------------------------
1,400 (a)Learning Co. 82,600
---------------------------------------------------------------------------------
5,200 Luby's Cafeterias, Inc. 107,900
---------------------------------------------------------------------------------
1,500 Marcus Corp. $ 51,938
---------------------------------------------------------------------------------
3,400 McClatchy Newspapers, Inc. , Class A 67,150
---------------------------------------------------------------------------------
5,900 Meredith Corp. 210,925
---------------------------------------------------------------------------------
6,300 Morrison Restaurants, Inc. 98,438
---------------------------------------------------------------------------------
3,800 (a)NPC International, Inc. 24,700
---------------------------------------------------------------------------------
6,600 (a)National Education Corp. 53,625
---------------------------------------------------------------------------------
2,000 (a)Orion Pictures Corp. 20,000
---------------------------------------------------------------------------------
400 (a)Outlet Communications, Inc., Class A 18,600
---------------------------------------------------------------------------------
700 (a)Papa Johns International, Inc. 26,950
---------------------------------------------------------------------------------
5,900 (a)Paxson Communications Corp. 72,275
---------------------------------------------------------------------------------
1,500 (a)Peoples Choice TV Corp. 31,125
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
---------------------------------------------------------------------------------
5,700 Petroleum Heat & Power, Inc., Class A 44,175
---------------------------------------------------------------------------------
3,400 (a)Playboy Enterprises, Inc., Class B 28,900
---------------------------------------------------------------------------------
6,100 (a)Players International, Inc. 65,575
---------------------------------------------------------------------------------
900 Plenum Publishing Corp. 31,500
---------------------------------------------------------------------------------
4,600 (a)Prepaid Legal Services, Inc. 36,513
---------------------------------------------------------------------------------
4,600 (a)President Casinos, Inc. 14,088
---------------------------------------------------------------------------------
1,500 (a)Primadonna Resorts, Inc. 23,438
---------------------------------------------------------------------------------
6,900 (a)Prime Hospitality Corp. 68,138
---------------------------------------------------------------------------------
1,000 Pulitzer Publishing Co. 45,250
---------------------------------------------------------------------------------
1,550 (a)Regal Cinemas, Inc. 60,838
---------------------------------------------------------------------------------
6,600 (a)Renaissance Communications Corp. 147,675
---------------------------------------------------------------------------------
3,400 (a)Rio Hotel & Casino, Inc. 42,925
---------------------------------------------------------------------------------
900 (a)Rock Bottom Restaurants, Inc. 14,400
---------------------------------------------------------------------------------
500 Roto-Rooter, Inc. 16,500
---------------------------------------------------------------------------------
1,400 (a)Rural / Metro Corp. 33,600
---------------------------------------------------------------------------------
12,000 (a)Ryan's Family Steak Houses, Inc. 93,000
---------------------------------------------------------------------------------
900 (a)SFX Broadcasting, Inc. $ 24,300
---------------------------------------------------------------------------------
6,800 (a)Savoy Pictures Entertainment, Inc. 38,250
---------------------------------------------------------------------------------
2,650 Sbarro, Inc. 55,319
---------------------------------------------------------------------------------
2,900 (a)Scientific Games Holdings Corp. 94,975
---------------------------------------------------------------------------------
1,000 (a)Seattle Filmworks, Inc. 20,250
---------------------------------------------------------------------------------
1,433 (a)ShoLodge, Inc. 12,718
---------------------------------------------------------------------------------
7,600 (a)Shoney's, Inc. 84,550
---------------------------------------------------------------------------------
2,400 (a)ShowBiz Pizza Time, Inc. 29,400
---------------------------------------------------------------------------------
3,500 Showboat, Inc. 84,000
---------------------------------------------------------------------------------
1,800 (a)Shuffle Master, Inc. 22,050
---------------------------------------------------------------------------------
2,600 Shurgard Storage Centers, Inc., Class A 66,300
---------------------------------------------------------------------------------
2,000 (a)Silver King Communications, Inc. 58,500
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
CONSUMER SERVICES--CONTINUED
---------------------------------------------------------------------------------
4,900 Sizzler International, Inc. 17,150
---------------------------------------------------------------------------------
1,000 (a)Sodak Gaming, Inc. 18,250
---------------------------------------------------------------------------------
2,650 (a)Sonic Corp. 58,300
---------------------------------------------------------------------------------
9,700 Sothebys Holdings, Inc., Class A 134,588
---------------------------------------------------------------------------------
1,000 (a)Speedway Motorsports, Inc. 29,500
---------------------------------------------------------------------------------
3,000 (a)Starsight Telecast, Inc. 11,250
---------------------------------------------------------------------------------
4,100 (a)Station Casinos, Inc. 53,300
---------------------------------------------------------------------------------
3,500 TCA Cable TV, Inc. 103,688
---------------------------------------------------------------------------------
3,700 TCBY Enterprises, Inc. 16,188
---------------------------------------------------------------------------------
3,575 Thomas Nelson, Inc. 59,434
---------------------------------------------------------------------------------
1,900 Transmedia Network, Inc. 17,338
---------------------------------------------------------------------------------
7,600 (a)United International Holdings, Inc., Class A 119,700
---------------------------------------------------------------------------------
1,000 (a)United Television, Inc. 85,250
---------------------------------------------------------------------------------
1,100 (a)United Video Satellite Group, Inc., Class A 28,325
---------------------------------------------------------------------------------
1,550 (a)Uno Restaurant Corp. 11,819
---------------------------------------------------------------------------------
2,000 (a)Vicorp Restaurants, Inc. $ 22,000
---------------------------------------------------------------------------------
4,100 (a)WMS Industries, Inc. 80,463
---------------------------------------------------------------------------------
300 Waverly, Inc. 11,925
---------------------------------------------------------------------------------
3,800 (a)Western Publishing Group, Inc. 31,113
---------------------------------------------------------------------------------
4,800 (a)Westwood One, Inc. 75,600
---------------------------------------------------------------------------------
3,000 Wiley (John) & Sons, Inc., Class A 89,250
---------------------------------------------------------------------------------
2,100 (a)Young Broadcasting, Inc., Class A 64,050
--------------------------------------------------------------------------------- --------------
Total 6,139,076
--------------------------------------------------------------------------------- --------------
ELECTRONIC TECHNOLOGY--10.4%
---------------------------------------------------------------------------------
1,400 (a)3D Systems Corp. 23,975
---------------------------------------------------------------------------------
3,600 AAR Corp. 63,900
---------------------------------------------------------------------------------
1,400 (a)ADFlex Solutions, Inc. 37,100
---------------------------------------------------------------------------------
5,922 (a)AST Research, Inc. 52,558
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
3,400 (a)Actel Corp. 39,950
---------------------------------------------------------------------------------
700 (a)Active Voice Corp. 18,375
---------------------------------------------------------------------------------
2,300 (a)Alantec Corp. 82,225
---------------------------------------------------------------------------------
3,100 Alliant Techsystems, Inc. 144,150
---------------------------------------------------------------------------------
1,400 (a)Alpha Industries, Inc. 21,700
---------------------------------------------------------------------------------
1,800 (a)Altron, Inc. 51,750
---------------------------------------------------------------------------------
1,700 Analogic Corp. 31,875
---------------------------------------------------------------------------------
3,300 (a)Antec Corp. 40,837
---------------------------------------------------------------------------------
3,000 (a)Apertus Technologies, Inc. 31,875
---------------------------------------------------------------------------------
2,700 (a)Applied Digital Access, Inc. 32,400
---------------------------------------------------------------------------------
2,000 (a)Applied Innovation, Inc. 19,250
---------------------------------------------------------------------------------
5,000 (a)Applied Magnetics Corp. 76,875
---------------------------------------------------------------------------------
4,600 (a)Aspect Telecommunications Corp. 158,125
---------------------------------------------------------------------------------
1,100 (a)Asyst Technologies, Inc. 46,200
---------------------------------------------------------------------------------
3,800 Augat, Inc. $ 59,850
---------------------------------------------------------------------------------
5,300 (a)Auspex Systems, Inc. 74,862
---------------------------------------------------------------------------------
4,100 Aviall, Inc. 34,337
---------------------------------------------------------------------------------
4,600 (a)Avid Technology, Inc. 201,250
---------------------------------------------------------------------------------
3,600 BE Aerospace, Inc. 28,350
---------------------------------------------------------------------------------
4,279 (a)BancTec, Inc. 80,231
---------------------------------------------------------------------------------
3,800 (a)Banyan Systems, Inc. 29,687
---------------------------------------------------------------------------------
3,700 (a)Black Box Corp. 60,125
---------------------------------------------------------------------------------
1,100 (a)Boca Research, Inc. 27,775
---------------------------------------------------------------------------------
3,900 (a)Bolt Beranek & Newman, Inc. 120,412
---------------------------------------------------------------------------------
4,300 (a)Boston Technology, Inc. 59,125
---------------------------------------------------------------------------------
1,400 (a)Brite Voice Systems, Inc. 23,275
---------------------------------------------------------------------------------
2,900 (a)Broadband Technologies, Inc. 50,750
---------------------------------------------------------------------------------
3,300 (a)Brooktree Corp. 39,600
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
3,250 (a)Burr Brown Corp. 105,625
---------------------------------------------------------------------------------
2,100 (a)C-COR Electronics, Inc. 48,300
---------------------------------------------------------------------------------
3,500 (a)C-Cube Microsystems, Inc. 241,937
---------------------------------------------------------------------------------
700 CTS Corp. 23,275
---------------------------------------------------------------------------------
2,900 (a)Caere Corp. 22,837
---------------------------------------------------------------------------------
3,600 (a)California Microwave 79,200
---------------------------------------------------------------------------------
1,795 (a)Cellular Technical Services, Inc. 30,515
---------------------------------------------------------------------------------
3,900 (a)Chips & Technologies, Inc. 34,125
---------------------------------------------------------------------------------
2,300 (a)Cidco, Inc. 68,137
---------------------------------------------------------------------------------
3,400 (a)Cognex Corp. 203,150
---------------------------------------------------------------------------------
1,800 (a)Coherent Communications Systems Corp. 36,928
---------------------------------------------------------------------------------
2,400 Coherent, Inc. 67,800
---------------------------------------------------------------------------------
2,000 Cohu, Inc. 61,500
---------------------------------------------------------------------------------
3,300 (a)Colonial Data Technologies Corp. $ 45,375
---------------------------------------------------------------------------------
1,500 Communications System, Inc. 23,250
---------------------------------------------------------------------------------
3,300 (a)Compression Labs, Inc. 25,987
---------------------------------------------------------------------------------
5,100 (a)Computer Network Technology 33,150
---------------------------------------------------------------------------------
5,400 (a)Computer Products, Inc. 62,775
---------------------------------------------------------------------------------
4,500 (a)Comverse Technology, Inc. 102,375
---------------------------------------------------------------------------------
11,800 Conner Peripherals, Inc. 212,400
---------------------------------------------------------------------------------
4,400 (a)CopyTele, Inc. 36,850
---------------------------------------------------------------------------------
5,600 (a)Cray Research, Inc. 116,200
---------------------------------------------------------------------------------
4,850 (a)Credence Systems Corp. 181,269
---------------------------------------------------------------------------------
2,100 (a)Cree Research, Inc. 51,581
---------------------------------------------------------------------------------
1,700 (a)CrossComm Corp. 19,125
---------------------------------------------------------------------------------
800 Cubic Corp. 18,200
---------------------------------------------------------------------------------
600 Curtiss Wright Corp. 26,475
---------------------------------------------------------------------------------
4,300 (a)Cyrix Corp. 137,600
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
1,650 (a)D H Technology, Inc. 32,587
---------------------------------------------------------------------------------
1,700 (a)DSP Communications, Inc. 61,625
---------------------------------------------------------------------------------
1,700 (a)DSP Group, Inc. 27,625
---------------------------------------------------------------------------------
4,900 Dallas Semiconductor Corp. 104,125
---------------------------------------------------------------------------------
2,400 Daniel Industries, Inc. 31,800
---------------------------------------------------------------------------------
8,400 (a)Data General Corp. 96,600
---------------------------------------------------------------------------------
1,300 (a)Dialogic Corp. 37,700
---------------------------------------------------------------------------------
2,700 (a)Digi International, Inc. 72,225
---------------------------------------------------------------------------------
1,000 (a)Digital Link Corp. 15,875
---------------------------------------------------------------------------------
3,000 (a)Digtial Microwave Corp. 32,250
---------------------------------------------------------------------------------
1,600 (a)Dionex Corp. 86,400
---------------------------------------------------------------------------------
1,800 (a)Dovatron International, Inc. 55,350
---------------------------------------------------------------------------------
4,000 (a)Dynatech Corp. $ 60,000
---------------------------------------------------------------------------------
1,800 (a)EIS International, Inc. 33,300
---------------------------------------------------------------------------------
1,800 (a)Electro Scientific Industries, Inc. 55,800
---------------------------------------------------------------------------------
2,000 (a)Electroglas, Inc. 140,500
---------------------------------------------------------------------------------
2,600 (a)Electronics for Imaging, Inc. 213,850
---------------------------------------------------------------------------------
700 (a)Eltron International, Inc. 22,750
---------------------------------------------------------------------------------
1,200 (a)Emulex Corp. 19,350
---------------------------------------------------------------------------------
1,200 (a)Encad, Inc. 18,600
---------------------------------------------------------------------------------
1,500 (a)Esterline Technologies Corp. 34,687
---------------------------------------------------------------------------------
1,900 (a)Evans & Sutherland Computer Co. 39,900
---------------------------------------------------------------------------------
4,900 (a)Exabyte Corp. 63,394
---------------------------------------------------------------------------------
2,050 (a)Exar Corp. 48,687
---------------------------------------------------------------------------------
9,600 (a)Executone Information Systems, Inc. 24,600
---------------------------------------------------------------------------------
1,800 (a)FORE Systems, Inc. 95,400
---------------------------------------------------------------------------------
4,000 (a)FSI International, Inc. 95,000
---------------------------------------------------------------------------------
2,900 (a)Filenet Corp. 131,587
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
1,700 (a)Fusion Systems Corp. 47,600
---------------------------------------------------------------------------------
1,100 (a)GTI Corp. 18,700
---------------------------------------------------------------------------------
900 (a)Gasonics International Corp. 29,700
---------------------------------------------------------------------------------
5,800 GenCorp, Inc. 60,900
---------------------------------------------------------------------------------
4,400 (a)GenRad, Inc. 38,500
---------------------------------------------------------------------------------
4,600 (a)General DataComm Industries, Inc. 70,150
---------------------------------------------------------------------------------
3,700 (a)Genius, Inc. 29,600
---------------------------------------------------------------------------------
8,900 Geotek Industries, Inc. 73,425
---------------------------------------------------------------------------------
4,000 Gerber Scientific, Inc. 67,500
---------------------------------------------------------------------------------
3,200 (a)Global Village Communications 54,400
---------------------------------------------------------------------------------
1,700 (a)HADCO Corp. 47,600
---------------------------------------------------------------------------------
825 Hach Co. $ 12,478
---------------------------------------------------------------------------------
1,500 Harmon Industries, Inc. 22,125
---------------------------------------------------------------------------------
1,600 Helix Technology Corp. 60,000
---------------------------------------------------------------------------------
1,200 (a)Hutchinson Technology, Inc. 75,900
---------------------------------------------------------------------------------
800 (a)IPC Information Systems, Inc. 12,000
---------------------------------------------------------------------------------
1,500 (a)In Focus Systems, Inc. 49,312
---------------------------------------------------------------------------------
2,150 (a)Integrated Circuit System, Inc. 29,159
---------------------------------------------------------------------------------
2,700 (a)Integrated Process Equipment Corp. 100,237
---------------------------------------------------------------------------------
3,200 (a)Integrated Silicon Solution, Inc. 100,200
---------------------------------------------------------------------------------
1,400 (a)Inter-Tel, Inc. 20,825
---------------------------------------------------------------------------------
9,900 (a)Interdigital Communications Corp. 72,394
---------------------------------------------------------------------------------
8,800 (a)Intergraph Corp. 106,700
---------------------------------------------------------------------------------
5,000 (a)International Rectifier Corp. 225,625
---------------------------------------------------------------------------------
3,500 (a)Intervoice, Inc. 63,875
---------------------------------------------------------------------------------
4,200 (a)Iomega Corp. 100,012
---------------------------------------------------------------------------------
3,300 (a)Irvine Sensors Corp. 21,450
---------------------------------------------------------------------------------
2,300 (a)Itron, Inc. 66,700
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
1,100 John Fluke Manufacturing, Co. 40,562
---------------------------------------------------------------------------------
1,500 (a)Key Tronic Corp. 15,562
---------------------------------------------------------------------------------
1,000 (a)Kronos, Inc. 46,000
---------------------------------------------------------------------------------
4,300 (a)Kulicke & Soffa Industries 150,500
---------------------------------------------------------------------------------
6,400 (a)LTX Corp. 79,200
---------------------------------------------------------------------------------
4,250 (a)Lattice Semiconductor Corp. 166,812
---------------------------------------------------------------------------------
2,800 (a)Level One Communications, Inc. 63,000
---------------------------------------------------------------------------------
2,600 Logicon, Inc. 59,475
---------------------------------------------------------------------------------
1,000 MTS Systems Corp. 28,250
---------------------------------------------------------------------------------
1,600 (a)Manugistics Group, Inc. 27,600
---------------------------------------------------------------------------------
1,800 (a)Mattson Technology, Inc. $ 39,600
---------------------------------------------------------------------------------
11,800 (a)Maxtor Corp. 59,000
---------------------------------------------------------------------------------
2,700 Measurex Corp. 83,025
---------------------------------------------------------------------------------
800 (a)Merix Corp. 29,600
---------------------------------------------------------------------------------
4,600 Methode Electronics, Inc., Class A 105,800
---------------------------------------------------------------------------------
2,600 (a)Metricom, Inc. 43,225
---------------------------------------------------------------------------------
3,900 (a)Michaels Stores, Inc. 53,138
---------------------------------------------------------------------------------
1,200 (a)Micrel, Inc. 27,300
---------------------------------------------------------------------------------
2,700 (a)Micro Linear Corp. 41,513
---------------------------------------------------------------------------------
1,800 (a)MicroTouch Systems, Inc. 26,100
---------------------------------------------------------------------------------
2,900 (a)Microcom, Inc. 63,438
---------------------------------------------------------------------------------
1,000 (a)Microdyne Corp. 27,750
---------------------------------------------------------------------------------
1,800 (a)Micron Electronics, Inc. 37,350
---------------------------------------------------------------------------------
1,000 (a)Microtec Research, Inc. 13,938
---------------------------------------------------------------------------------
900 (a)Microtest, Inc. 13,950
---------------------------------------------------------------------------------
2,900 Mylex Corp. 54,013
---------------------------------------------------------------------------------
3,000 National Computer Systems, Inc. 57,000
---------------------------------------------------------------------------------
2,500 (a)Network Computing Devices 15,625
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
3,900 (a)Network Equipment Technologies, Inc. 127,238
---------------------------------------------------------------------------------
4,200 (a)Network General Corp. 174,300
---------------------------------------------------------------------------------
2,200 (a)Network Peripherals, Inc. 23,100
---------------------------------------------------------------------------------
1,700 (a)Norand Corp. 28,900
---------------------------------------------------------------------------------
3,700 (a)OEA, Inc. 100,825
---------------------------------------------------------------------------------
9,600 (a)OIS Optical Imaging Systems, Inc. 32,400
---------------------------------------------------------------------------------
1,100 (a)Oak Technology, Inc. 60,225
---------------------------------------------------------------------------------
4,940 (a)Octel Communications Corp. 168,578
---------------------------------------------------------------------------------
1,500 (a)Opti, Inc. 15,000
---------------------------------------------------------------------------------
1,800 (a)Optical Data Systems, Inc. $ 53,775
---------------------------------------------------------------------------------
4,900 (a)Orbital Sciences Corp. 69,825
---------------------------------------------------------------------------------
1,300 (a)Ortel Corp. 13,325
---------------------------------------------------------------------------------
2,400 (a)P-COM, Inc. 41,400
---------------------------------------------------------------------------------
1,200 (a)PRI Automation, Inc. 44,400
---------------------------------------------------------------------------------
2,100 (a)PSC, Inc. 21,525
---------------------------------------------------------------------------------
2,300 (a)Pairgain Technologies, Inc. 98,325
---------------------------------------------------------------------------------
600 (a)Panda Project, Inc. 14,250
---------------------------------------------------------------------------------
2,000 Park Electrochemical Corp. 62,500
---------------------------------------------------------------------------------
3,500 (a)PictureTel Corp. 231,000
---------------------------------------------------------------------------------
1,500 (a)Planar Systems, Inc. 26,063
---------------------------------------------------------------------------------
1,800 (a)Plantronics, Inc. 60,075
---------------------------------------------------------------------------------
1,200 (a)Premisys Communications, Inc. 107,400
---------------------------------------------------------------------------------
700 (a)Printronix, Inc. 13,300
---------------------------------------------------------------------------------
1,400 (a)Proxima Corp. 27,125
---------------------------------------------------------------------------------
2,600 (a)Quickturn Design Systems, Inc. 26,975
---------------------------------------------------------------------------------
3,800 (a)Radius, Inc. 15,675
---------------------------------------------------------------------------------
2,400 (a)Robotic Vision System, Inc. 54,900
---------------------------------------------------------------------------------
4,100 (a)Rohr, Inc. 60,988
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
10,300 (a)S3, Inc. 176,388
---------------------------------------------------------------------------------
6,100 (a)SCI Systems, Inc. 214,263
---------------------------------------------------------------------------------
600 (a)SDL, Inc. 15,300
---------------------------------------------------------------------------------
1,800 (a)Sanmina Corp. 97,200
---------------------------------------------------------------------------------
1,350 (a)Semitool, Inc. 21,938
---------------------------------------------------------------------------------
1,800 (a)Sequa Corp., Class A 46,350
---------------------------------------------------------------------------------
7,100 (a)Sequent Computer System, Inc. 123,363
---------------------------------------------------------------------------------
2,100 (a)Shiva Corp. 126,000
---------------------------------------------------------------------------------
5,600 (a)Sierra Semiconductor Corp. $ 100,100
---------------------------------------------------------------------------------
2,200 (a)Siliconix, Inc. 64,075
---------------------------------------------------------------------------------
600 (a)Simula, Inc. 13,125
---------------------------------------------------------------------------------
600 (a)Special Devices, Inc. 9,750
---------------------------------------------------------------------------------
1,600 (a)Spectrian Corp. 34,800
---------------------------------------------------------------------------------
4,400 (a)Stac Electronics 55,550
---------------------------------------------------------------------------------
3,000 (a)Standard Microsystems Corp. 58,875
---------------------------------------------------------------------------------
5,300 (a)Stratus Computer, Inc. 164,963
---------------------------------------------------------------------------------
2,000 (a)SubMicron Systems, Inc. 22,000
---------------------------------------------------------------------------------
1,400 (a)Summa Four, Inc. 19,250
---------------------------------------------------------------------------------
2,200 (a)SyQuest Technology, Inc. 22,000
---------------------------------------------------------------------------------
3,300 (a)Symmetricom, Inc. 61,256
---------------------------------------------------------------------------------
1,500 (a)TCSI Corp. 22,500
---------------------------------------------------------------------------------
1,200 (a)TSX Corp. 24,000
---------------------------------------------------------------------------------
1,500 (a)Tech-Sym Corp. 44,438
---------------------------------------------------------------------------------
1,400 (a)Tekelec, Inc. 20,300
---------------------------------------------------------------------------------
3,500 (a)Telular Corp. 48,563
---------------------------------------------------------------------------------
3,500 Telxon Corp. 80,938
---------------------------------------------------------------------------------
3,600 (a)Thermedics, Inc. 66,150
---------------------------------------------------------------------------------
2,150 (a)Thermotrex Corp. 77,131
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ELECTRONIC TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
3,800 Thiokol Corp. 131,575
---------------------------------------------------------------------------------
1,500 (a)Three-Five Systems, Inc. 27,188
---------------------------------------------------------------------------------
2,600 (a)Tracor, Inc. 41,600
---------------------------------------------------------------------------------
2,300 (a)Trident Microsystems, Inc. 69,575
---------------------------------------------------------------------------------
3,800 (a)Trimble Navigation Ltd. 75,050
---------------------------------------------------------------------------------
3,100 (a)Tseng Laboratories, Inc. 25,963
---------------------------------------------------------------------------------
2,200 (a)Ultratech Stepper, Inc. 88,000
---------------------------------------------------------------------------------
2,100 (a)Unitrode Corp. $ 56,438
---------------------------------------------------------------------------------
5,100 (a)Verifone, Inc. 137,700
---------------------------------------------------------------------------------
3,000 (a)Vitesse Semiconductor Corp. 35,250
---------------------------------------------------------------------------------
7,600 (a)Wang Laboratories, Inc. 126,350
---------------------------------------------------------------------------------
1,600 Watkins Johnson Co. 77,000
---------------------------------------------------------------------------------
1,100 (a)WavePhore, Inc. 15,950
---------------------------------------------------------------------------------
1,900 (a)Whittaker Corp. 37,763
---------------------------------------------------------------------------------
1,100 Wireless Telecom Group, Inc. 20,075
---------------------------------------------------------------------------------
6,400 (a)Wyman Gordon Co. 81,600
---------------------------------------------------------------------------------
3,000 Xircom, Inc. 27,375
---------------------------------------------------------------------------------
1,200 (a)Xylogics, Inc. 82,950
---------------------------------------------------------------------------------
4,300 Zilog, Inc. 152,650
--------------------------------------------------------------------------------- --------------
Total 13,789,660
--------------------------------------------------------------------------------- --------------
ENERGY MINERALS--1.5%
---------------------------------------------------------------------------------
1,900 (a)Addington Resources, Inc. 23,750
---------------------------------------------------------------------------------
1,500 Ashland Coal, Inc. 35,625
---------------------------------------------------------------------------------
5,570 (a)Barrett Resources 129,502
---------------------------------------------------------------------------------
2,200 (a)Belden & Blake Corp. 31,934
---------------------------------------------------------------------------------
5,600 (a)Benton Oil & Gas Co. 67,900
---------------------------------------------------------------------------------
3,500 Berry Petroleum Co., Class A 35,875
---------------------------------------------------------------------------------
4,100 (a)Box Energy Corp., Class B 38,950
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
---------------------------------------------------------------------------------
2,900 (a)Brown Tom, Inc. 32,262
---------------------------------------------------------------------------------
5,100 Cabot Oil & Gas Corp., Class A 68,212
---------------------------------------------------------------------------------
1,000 (a)Cairn Energy USA, Inc. 12,000
---------------------------------------------------------------------------------
1,100 (a)Chesapeake Energy Corp. 32,175
---------------------------------------------------------------------------------
5,200 (a)Coda Energy, Inc. 39,000
---------------------------------------------------------------------------------
3,000 Cross Timbers Oil Co. 43,500
---------------------------------------------------------------------------------
1,500 (a)Crown Center Petroleum Corp., Class A $ 22,500
---------------------------------------------------------------------------------
5,000 Devon Energy Corp. 108,750
---------------------------------------------------------------------------------
1,300 (a)Flores & Rucks, Inc. 16,900
---------------------------------------------------------------------------------
1,500 (a)Getty Petroleum Corp. 19,875
---------------------------------------------------------------------------------
6,600 (a)Global Natural Resources, Inc. 66,000
---------------------------------------------------------------------------------
2,400 (a)H.S. Resources, Inc. 33,300
---------------------------------------------------------------------------------
11,500 (a)Harken Energy Corp. 20,125
---------------------------------------------------------------------------------
700 Holly Corp. 15,225
---------------------------------------------------------------------------------
700 (a)Hondo Oil & Gas Co. 10,325
---------------------------------------------------------------------------------
2,200 KCS Energy, Inc. 25,025
---------------------------------------------------------------------------------
1,800 (a)Louis Dreyfus Natural Gas Corp. 25,200
---------------------------------------------------------------------------------
14,400 (a)Mesa, Inc. 61,200
---------------------------------------------------------------------------------
3,800 (a)Newfield Exploration Co. 112,100
---------------------------------------------------------------------------------
1,800 (a)Nuevo Energy Co. 39,825
---------------------------------------------------------------------------------
7,900 Parker & Parsley Petroleum Co. 146,150
---------------------------------------------------------------------------------
3,000 Phoenix Resource Cos., Inc. 53,250
---------------------------------------------------------------------------------
3,400 (a)Plains Resources, Inc. 23,163
---------------------------------------------------------------------------------
7,100 Quaker State Corp. 93,188
---------------------------------------------------------------------------------
5,900 Snyder Oil Corp. 60,475
---------------------------------------------------------------------------------
2,000 St. Mary Land & Exploration Co. 26,750
---------------------------------------------------------------------------------
2,000 (a)Stone Energy Corp. 22,750
---------------------------------------------------------------------------------
1,800 (a)Tatham Offshore, Inc. 2,925
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
ENERGY MINERALS--CONTINUED
---------------------------------------------------------------------------------
5,500 (a)Tesoro Petroleum Corp. 43,313
---------------------------------------------------------------------------------
3,100 (a)Texas Meridian Resources Co. 33,713
---------------------------------------------------------------------------------
2,200 (a)Tide West Oil Co. 25,300
---------------------------------------------------------------------------------
5,909 (a)United Meridian Corp. 99,714
---------------------------------------------------------------------------------
2,600 Vintage Petroleum, Inc. 52,325
---------------------------------------------------------------------------------
6,100 (a)Wainoco Oil Corp. $ 19,825
---------------------------------------------------------------------------------
2,000 Wiser Oil Co. 22,000
---------------------------------------------------------------------------------
3,400 Zeigler Coal Holding Co. 39,950
--------------------------------------------------------------------------------- --------------
Total 1,931,826
--------------------------------------------------------------------------------- --------------
FINANCE--20.6%
---------------------------------------------------------------------------------
1,430 1st Source Corp. 32,890
---------------------------------------------------------------------------------
8,500 (a)20th Century Industries 141,313
---------------------------------------------------------------------------------
300 (a)AMERCO 5,325
---------------------------------------------------------------------------------
1,600 Aaron Rents, Inc. 28,400
---------------------------------------------------------------------------------
2,800 (a)Acceptance Insurance Cos., Inc. 42,000
---------------------------------------------------------------------------------
3,100 Acordia, Inc. 85,250
---------------------------------------------------------------------------------
2,700 Albank Financial Corp. 77,962
---------------------------------------------------------------------------------
2,700 Alex Brown, Inc. 131,962
---------------------------------------------------------------------------------
2,700 Alexander Haagen Properties, Inc. 29,700
---------------------------------------------------------------------------------
800 (a)Alexander's, Inc. 50,000
---------------------------------------------------------------------------------
4,500 Alfa Corp. 46,125
---------------------------------------------------------------------------------
3,000 Allied Capital Commercial 52,875
---------------------------------------------------------------------------------
1,300 Allied Group, Inc. 42,250
---------------------------------------------------------------------------------
2,300 AmVestors Financial Corp. 25,875
---------------------------------------------------------------------------------
1,950 Amcore Financial, Inc. 43,875
---------------------------------------------------------------------------------
1,747 American Annuity Group, Inc. 18,780
---------------------------------------------------------------------------------
4,300 American Bankers Insurance Group, Inc. 154,262
---------------------------------------------------------------------------------
2,400 American Federal Bank, FSB SC 35,400
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
500 American Financial Enterprises 11,750
---------------------------------------------------------------------------------
4,200 American Health Properties, Inc. 86,625
---------------------------------------------------------------------------------
1,900 American Heritage Life Investments 36,575
---------------------------------------------------------------------------------
1,800 (a)American Travellers Corp. 40,275
---------------------------------------------------------------------------------
6,500 (a)Americredit Corp. $ 79,625
---------------------------------------------------------------------------------
1,100 Amfed Financial, Inc. 32,175
---------------------------------------------------------------------------------
900 Amli Residential Properties Trust 17,325
---------------------------------------------------------------------------------
1,250 Anchor Bancorp Wisconsin, Inc. 41,562
---------------------------------------------------------------------------------
2,300 Apartment Investment & Management Co., Class A 46,287
---------------------------------------------------------------------------------
4,000 Argonaut Group, Inc. 118,000
---------------------------------------------------------------------------------
3,512 Associated Banc Corp. 132,578
---------------------------------------------------------------------------------
2,300 Associated Estates Realty Corp. 47,150
---------------------------------------------------------------------------------
2,400 (a)Astoria Financial Corp. 102,900
---------------------------------------------------------------------------------
6,400 Avalon Properties, Inc. 124,800
---------------------------------------------------------------------------------
1,700 Avemco Corp. 28,687
---------------------------------------------------------------------------------
1,600 BHC Financial, Inc. 29,000
---------------------------------------------------------------------------------
824 (a)BOK Financial Corp. 16,892
---------------------------------------------------------------------------------
2,500 BRE Properties, Inc., Class A 80,000
---------------------------------------------------------------------------------
1,000 BSB Bancorp, Inc. 33,750
---------------------------------------------------------------------------------
861 BT Financial Corp. 30,996
---------------------------------------------------------------------------------
2,800 Baldwin & Lyons, Inc., Class B 41,825
---------------------------------------------------------------------------------
1,980 Bancorpsouth, Inc. 91,575
---------------------------------------------------------------------------------
1,350 Bank Granite Corp. 35,100
---------------------------------------------------------------------------------
800 Bank of New Hampshire Corp. 28,800
---------------------------------------------------------------------------------
2,212 Bankers Corp. 37,327
---------------------------------------------------------------------------------
900 Bankers First Corp. 25,200
---------------------------------------------------------------------------------
1,500 Banknorth Group, Inc. 47,625
---------------------------------------------------------------------------------
2,600 Bay Apartment Communities, Inc. 53,625
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
1,300 (a)Bay Ridge Bancorp, Inc. 27,787
---------------------------------------------------------------------------------
1,500 Bay View Capital Corp. 39,750
---------------------------------------------------------------------------------
4,300 Beacon Properties Corp. 93,525
---------------------------------------------------------------------------------
2,000 Bell Bancorp, Inc. $ 58,500
---------------------------------------------------------------------------------
2,400 Berkley, W. R. Corp. 103,800
---------------------------------------------------------------------------------
5,700 Berkshire Realty, Inc. 54,150
---------------------------------------------------------------------------------
2,400 Blanch, E. W. Holdings, Inc. 46,200
---------------------------------------------------------------------------------
1,200 Boston Bancorp 44,100
---------------------------------------------------------------------------------
1,900 Bradley Real Estate, Inc. 27,312
---------------------------------------------------------------------------------
1,250 Brenton Bank, Inc. 24,219
---------------------------------------------------------------------------------
2,600 (a)Brooklyn Bancorp, Inc. 102,375
---------------------------------------------------------------------------------
3,800 Burnham Pacific Properties, Inc. 42,750
---------------------------------------------------------------------------------
4,500 CBL & Associates Properties, Inc. 95,625
---------------------------------------------------------------------------------
1,800 CBT Corp., KY 38,250
---------------------------------------------------------------------------------
3,350 CCB Financial Corp. 165,825
---------------------------------------------------------------------------------
2,500 CMAC Investment Corp. 118,750
---------------------------------------------------------------------------------
3,574 CNB Bancshares, Inc. 95,610
---------------------------------------------------------------------------------
1,100 CPB, Inc. 34,375
---------------------------------------------------------------------------------
2,900 CRI Liquidating REIT 10,150
---------------------------------------------------------------------------------
2,600 (a)CSF Holdings, Inc. 101,400
---------------------------------------------------------------------------------
9,100 CWM Mortgage Holdings, Inc. 133,087
---------------------------------------------------------------------------------
2,300 (a)Cali Realty Corp. 44,850
---------------------------------------------------------------------------------
2,200 California Bancshares, Inc. 52,800
---------------------------------------------------------------------------------
11,100 (a)California Federal Bank Los Angeles 163,725
---------------------------------------------------------------------------------
3,300 Camden Property Trust 68,475
---------------------------------------------------------------------------------
2,000 Capital Guaranty Corp. 44,250
---------------------------------------------------------------------------------
2,700 Capital Re Corp. 76,275
---------------------------------------------------------------------------------
900 Capitol American Financial Corp. 17,662
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
1,100 Capitol Transamerica Corp. 22,000
---------------------------------------------------------------------------------
3,400 Capstead Management Corp. 111,350
---------------------------------------------------------------------------------
2,500 (a)Capsure Holdings Corp. $ 34,062
---------------------------------------------------------------------------------
3,000 Carr Realty Corp. 57,000
---------------------------------------------------------------------------------
16,400 (a)Catellus Development Corp. 90,200
---------------------------------------------------------------------------------
2,900 Center Financial Corp. 52,200
---------------------------------------------------------------------------------
2,000 CenterPoint Properties Corp. 45,250
---------------------------------------------------------------------------------
5,100 Centura Banks, Inc. 172,125
---------------------------------------------------------------------------------
5,050 Charter One Financial, Inc. 143,294
---------------------------------------------------------------------------------
1,300 Chateau Properties, Inc. 27,625
---------------------------------------------------------------------------------
2,000 Chelsea GCA Realty, Inc. 55,500
---------------------------------------------------------------------------------
2,093 Chemical Financial Corp. 80,580
---------------------------------------------------------------------------------
1,600 Chittenden Corp. 43,600
---------------------------------------------------------------------------------
1,100 Citfed Bancorp, Inc. 36,575
---------------------------------------------------------------------------------
2,700 Citizens Bancorp 89,775
---------------------------------------------------------------------------------
700 (a)Citizens Bancshares, Inc. 25,200
---------------------------------------------------------------------------------
2,400 Citizens Banking Corp. 72,600
---------------------------------------------------------------------------------
1,600 Citizens Corp. 29,000
---------------------------------------------------------------------------------
2,200 (a)Citizens, Inc., Class A 20,350
---------------------------------------------------------------------------------
8,600 City National Corp. 113,950
---------------------------------------------------------------------------------
4,200 (a)Coast Savings Financial, Inc. 110,775
---------------------------------------------------------------------------------
1,700 Cole Taylor Financial Group, Inc. 44,200
---------------------------------------------------------------------------------
4,550 Collective Bancorp, Inc. 107,494
---------------------------------------------------------------------------------
2,400 Colonial BancGroup, Inc. 69,300
---------------------------------------------------------------------------------
2,800 Colonial Properties Trust 70,000
---------------------------------------------------------------------------------
800 (a)Columbia First Federal Savings 47,150
---------------------------------------------------------------------------------
2,600 Columbus Realty Trust 46,800
---------------------------------------------------------------------------------
2,360 Commerce Bancorp, Inc. 54,575
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
8,500 Commerce Group, Inc. 173,187
---------------------------------------------------------------------------------
2,900 (a)Commercial Federal Corp. $ 95,337
---------------------------------------------------------------------------------
2,600 Commercial Net Lease Realty 33,150
---------------------------------------------------------------------------------
900 Commonwealth Savings Bank 21,487
---------------------------------------------------------------------------------
2,300 Community First Bankshares, Inc. 46,575
---------------------------------------------------------------------------------
5,000 Cousins Properties, Inc. 86,875
---------------------------------------------------------------------------------
5,200 Crawford & Co., Class B 80,600
---------------------------------------------------------------------------------
4,500 Crescent Real Estate Equities, Inc. 144,000
---------------------------------------------------------------------------------
6,000 Criimi Mae, Inc. 51,000
---------------------------------------------------------------------------------
1,100 (a)Crop Growers Corp. 14,300
---------------------------------------------------------------------------------
4,800 Crown American Realty Trust 36,600
---------------------------------------------------------------------------------
2,520 Cullen Frost Bankers, Inc. 128,520
---------------------------------------------------------------------------------
3,500 (a)Danielson Holding Corp. 24,937
---------------------------------------------------------------------------------
9,900 DeBartolo Realty Corp. 128,700
---------------------------------------------------------------------------------
1,300 (a)Delphi Financial Group, Inc., Class A 26,162
---------------------------------------------------------------------------------
4,400 Deposit Guaranty Corp. 195,800
---------------------------------------------------------------------------------
3,600 Developers Diversified Realty 102,600
---------------------------------------------------------------------------------
2,100 Downey Financial Corp. 42,787
---------------------------------------------------------------------------------
5,400 Duke Realty Investments, Inc. 165,375
---------------------------------------------------------------------------------
800 EMC Insurance Group, Inc. 10,400
---------------------------------------------------------------------------------
1,700 Eaton Vance Corp. 62,050
---------------------------------------------------------------------------------
1,550 (a)Electro Rent Corp. 29,450
---------------------------------------------------------------------------------
2,700 Enhance Financial Services Group, Inc. 55,012
---------------------------------------------------------------------------------
3,400 Equity Inns, Inc. 39,950
---------------------------------------------------------------------------------
1,400 Essex Property Trust, Inc. 25,550
---------------------------------------------------------------------------------
3,600 Evans Withycombe Residential, Inc. 67,950
---------------------------------------------------------------------------------
2,900 Excel Realty Trust, Inc. 54,737
---------------------------------------------------------------------------------
2,600 Executive Risk, Inc. 57,200
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
882 F & M Bancorp $ 22,491
---------------------------------------------------------------------------------
1,200 F & M Bancorporation, Inc. 29,100
---------------------------------------------------------------------------------
3,655 F & M National Corp. 65,333
---------------------------------------------------------------------------------
1,300 FFY Financial Corp. 28,275
---------------------------------------------------------------------------------
1,880 FNB Corp. 39,480
---------------------------------------------------------------------------------
2,700 Factory Stores of America, Inc. 51,975
---------------------------------------------------------------------------------
800 Farmers Capital Bank Corp. 29,600
---------------------------------------------------------------------------------
7,100 Federal Realty Investment Trust 143,775
---------------------------------------------------------------------------------
1,700 (a)FelCor Suite Hotels, Inc. 49,087
---------------------------------------------------------------------------------
2,075 Fidelity National Financial, Inc. 32,941
---------------------------------------------------------------------------------
5,800 Financial Security Assurance Holdings Ltd. 150,800
---------------------------------------------------------------------------------
1,480 Financial Trust Corp. 45,140
---------------------------------------------------------------------------------
3,150 FirsTier Financial, Inc. 134,072
---------------------------------------------------------------------------------
2,100 First American Financial Corp. 49,087
---------------------------------------------------------------------------------
2,100 First Citizens Bancshares, Inc., Class A 110,775
---------------------------------------------------------------------------------
2,600 First Commerce Bancshares, Inc., Class A 49,400
---------------------------------------------------------------------------------
5,362 First Commercial Corp. 160,860
---------------------------------------------------------------------------------
5,000 First Commmonwealth Financial Corp. 82,500
---------------------------------------------------------------------------------
1,400 First Federal Savings Bank of Colorado 52,850
---------------------------------------------------------------------------------
2,716 First Financial Bancorp 90,986
---------------------------------------------------------------------------------
1,100 First Financial Bankshares, Inc. 33,550
---------------------------------------------------------------------------------
1,150 First Financial Corp. 35,362
---------------------------------------------------------------------------------
6,600 First Financial Corp. Wisconsin 141,075
---------------------------------------------------------------------------------
1,100 First Financial Holdings, Inc. 20,350
---------------------------------------------------------------------------------
1,166 First Indiana Corp. 29,150
---------------------------------------------------------------------------------
3,700 First Industrial Realty Trust 75,387
---------------------------------------------------------------------------------
1,200 First Merchants Corp. 30,900
---------------------------------------------------------------------------------
3,904 First Michigan Bank Corp. $ 105,408
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
2,400 First Midwest Bancorp, Inc. 67,200
---------------------------------------------------------------------------------
3,250 First National Bancorp 90,594
---------------------------------------------------------------------------------
49 First Union Corp. 2,432
---------------------------------------------------------------------------------
4,100 First Union Real Estate Equity 29,212
---------------------------------------------------------------------------------
900 First United Bancshares 36,000
---------------------------------------------------------------------------------
1,135 First Western Bancorp, Inc. 37,739
---------------------------------------------------------------------------------
3,400 FirstBank Puerto Rico 65,875
---------------------------------------------------------------------------------
2,100 (a)FirstFed Financial Corp. 32,550
---------------------------------------------------------------------------------
3,350 FirstFed Michigan Corp. 113,062
---------------------------------------------------------------------------------
2,000 Firstbank Illinois Co. 59,000
---------------------------------------------------------------------------------
7,500 Firstmerit Corp. 202,500
---------------------------------------------------------------------------------
2,000 Foremost Corp. 91,000
---------------------------------------------------------------------------------
900 Forest City Enterprises, Inc., Class A 33,300
---------------------------------------------------------------------------------
2,550 Fort Wayne National Corp. 79,687
---------------------------------------------------------------------------------
2,910 Fremont General Corp. 84,390
---------------------------------------------------------------------------------
1,905 Frontier Insurance Group, Inc. 54,531
---------------------------------------------------------------------------------
6,192 Fulton Financial Corp. 134,676
---------------------------------------------------------------------------------
1,700 (a)Fund American Enterprises, Inc. 117,300
---------------------------------------------------------------------------------
2,400 Gables Residential Trust 51,600
---------------------------------------------------------------------------------
4,302 Gainsco, Inc. 37,105
---------------------------------------------------------------------------------
3,100 Gallagher (Arthur J.) & Co. 109,662
---------------------------------------------------------------------------------
300 (a)General Acceptance Corp. 7,950
---------------------------------------------------------------------------------
5,500 General Growth Properties, Inc. 110,687
---------------------------------------------------------------------------------
9,140 (a)Glendale Federal Bank 146,240
---------------------------------------------------------------------------------
4,900 Glimcher Realty Trust 88,200
---------------------------------------------------------------------------------
3,500 Great Financial Corp. 71,750
---------------------------------------------------------------------------------
3,000 (a)Greater New York Savings Bank $ 36,000
---------------------------------------------------------------------------------
1,200 (a)Gryphon Holdings, Inc. 18,750
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
3,100 Guaranty National Corp. 44,175
---------------------------------------------------------------------------------
1,900 (a)HCC Insurance Holdings, Inc. 66,025
---------------------------------------------------------------------------------
4,072 HGI Realty, Inc. 90,093
---------------------------------------------------------------------------------
1,600 Hancock Holding Co. 57,200
---------------------------------------------------------------------------------
1,400 Harleysville Group, Inc. 38,500
---------------------------------------------------------------------------------
1,355 Harleysville National Corp. 35,569
---------------------------------------------------------------------------------
600 Harris Savings Bank, PA 11,400
---------------------------------------------------------------------------------
3,000 Hawkeye Bancorporation 72,375
---------------------------------------------------------------------------------
2,600 Health Care REIT, Inc. 48,750
---------------------------------------------------------------------------------
2,900 Healthcare Realty Trust, Inc. 58,362
---------------------------------------------------------------------------------
1,100 Heritage Financial Services, Inc. 20,625
---------------------------------------------------------------------------------
4,200 Highwoods Properties, Inc. 111,825
---------------------------------------------------------------------------------
3,300 Hilb Rogal & Hamilton Co. 45,375
---------------------------------------------------------------------------------
2,700 Home Beneficial Corp., Class B 65,475
---------------------------------------------------------------------------------
5,527 Home Financial Corp. 84,287
---------------------------------------------------------------------------------
1,300 Homeland Bankshares Corp. 36,075
---------------------------------------------------------------------------------
5,000 Horace Mann Educators Corp. 133,125
---------------------------------------------------------------------------------
2,915 Hubco, Inc. 58,300
---------------------------------------------------------------------------------
2,600 IBS Financial Corp. 41,600
---------------------------------------------------------------------------------
5,800 IRT Property Co. 55,100
---------------------------------------------------------------------------------
1,700 ISB Financial Corp. 28,475
---------------------------------------------------------------------------------
2,106 (a)Imperial Bancorp 46,858
---------------------------------------------------------------------------------
2,025 (a)Imperial Credit Industries, Inc. 29,362
---------------------------------------------------------------------------------
2,200 Independent Insurance Group, Inc. 56,925
---------------------------------------------------------------------------------
2,300 (a)Insignia Financial Group, Inc., Class A 62,100
---------------------------------------------------------------------------------
3,200 Integon Corp. $ 52,400
---------------------------------------------------------------------------------
1,800 Inter Regional Financial Group, Inc. 63,225
---------------------------------------------------------------------------------
800 Intercontinental Bank 23,500
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
1,800 (a)Interpool, Inc. 28,800
---------------------------------------------------------------------------------
800 (a)Investment Technology Group, Inc. 7,400
---------------------------------------------------------------------------------
3,200 Irvine Apartment Communities, Inc. 57,200
---------------------------------------------------------------------------------
700 Irwin Financial Corp. 26,600
---------------------------------------------------------------------------------
2,200 JDN Realty Corp. 44,825
---------------------------------------------------------------------------------
2,900 JP Realty, Inc. 59,450
---------------------------------------------------------------------------------
1,900 JSB Financial, Inc. 58,900
---------------------------------------------------------------------------------
1,100 Jefferies Group, Inc. 43,175
---------------------------------------------------------------------------------
3,400 Jefferson Bankshares, Inc. 75,225
---------------------------------------------------------------------------------
5,700 John Alden Financial Corp. 118,275
---------------------------------------------------------------------------------
700 Kansas City Life Insurance Co. 35,700
---------------------------------------------------------------------------------
5,266 Keystone Financial, Inc. 173,778
---------------------------------------------------------------------------------
4,000 (a)Koger Equity, Inc. 38,500
---------------------------------------------------------------------------------
2,300 Kranzco Realty Trust 35,075
---------------------------------------------------------------------------------
4,000 LTC Properties, Inc. 58,000
---------------------------------------------------------------------------------
2,000 Lawyers Title Corp. 32,750
---------------------------------------------------------------------------------
2,200 Leader Financial Corp. 78,375
---------------------------------------------------------------------------------
3,075 Legg Mason, Inc. 88,406
---------------------------------------------------------------------------------
1,200 Liberty Bancorp, Inc.-Oklahoma 43,500
---------------------------------------------------------------------------------
3,400 Liberty Corp. 113,900
---------------------------------------------------------------------------------
600 (a)Liberty Financial Cos., Inc. 16,650
---------------------------------------------------------------------------------
4,800 Liberty Property Trust 97,200
---------------------------------------------------------------------------------
2,500 Life Bancorp, Inc. 38,750
---------------------------------------------------------------------------------
4,100 Life Partners Group, Inc. 74,312
---------------------------------------------------------------------------------
2,000 Life Re Corp. $ 41,500
---------------------------------------------------------------------------------
3,500 (a)Life USA Holdings, Inc. 27,125
---------------------------------------------------------------------------------
6,000 Long Island Bancorp, Inc. 137,250
---------------------------------------------------------------------------------
2,000 Loyola Capital Corp. 71,000
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
1,145 MAF Bancorp, Inc. 28,339
---------------------------------------------------------------------------------
1,796 (a)MAIC Holdings, Inc. 54,778
---------------------------------------------------------------------------------
2,600 MGI Properties, Inc. 40,300
---------------------------------------------------------------------------------
1,600 MLF Bancorp, Inc. 36,000
---------------------------------------------------------------------------------
1,800 MMI Companies, Inc. 40,275
---------------------------------------------------------------------------------
1,600 Macerich Co. (The) 32,200
---------------------------------------------------------------------------------
1,600 Magna Bancorp 46,600
---------------------------------------------------------------------------------
6,200 Magna Group, Inc. 152,675
---------------------------------------------------------------------------------
5,500 Manufactured Home Communities, Inc. 90,750
---------------------------------------------------------------------------------
1,600 Mark Centers Trust 17,200
---------------------------------------------------------------------------------
2,850 Mark Twain Bancshares, Inc. 100,463
---------------------------------------------------------------------------------
900 (a)Markel Corp. 67,050
---------------------------------------------------------------------------------
700 Maryland Federal Bancorp, Inc. 20,650
---------------------------------------------------------------------------------
2,000 McDonald & Co. Investors, Inc. 35,750
---------------------------------------------------------------------------------
1,500 McGrath Rentcorp. 26,250
---------------------------------------------------------------------------------
4,100 (a)Mego Financial Corp. 43,563
---------------------------------------------------------------------------------
800 Merchants Bank New York 24,400
---------------------------------------------------------------------------------
6,400 Merry Land and Investment Co. 134,400
---------------------------------------------------------------------------------
700 Metrobank 18,463
---------------------------------------------------------------------------------
1,200 Michigan Financial Corp. 30,900
---------------------------------------------------------------------------------
3,825 Mid Am, Inc. 62,634
---------------------------------------------------------------------------------
1,496 Mid American Bancorp 25,619
---------------------------------------------------------------------------------
2,400 Mid-American Apartment Communities, Inc. 55,200
---------------------------------------------------------------------------------
300 Midland Co. $ 14,550
---------------------------------------------------------------------------------
3,200 Mills Corp. 54,800
---------------------------------------------------------------------------------
2,550 Money Stores, Inc. 102,000
---------------------------------------------------------------------------------
3,375 Morgan Keegan, Inc. 36,703
---------------------------------------------------------------------------------
1,400 N.S. Bancorp, Inc. 50,575
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
3,900 NAC Re Corp. 136,988
---------------------------------------------------------------------------------
1,832 NBT Bancorp, Inc. 29,770
---------------------------------------------------------------------------------
2,600 (a)National Auto Credit, Inc. 42,250
---------------------------------------------------------------------------------
900 National Bancorp Alaska, Inc. 55,800
---------------------------------------------------------------------------------
800 National City Bancshares, Inc. 37,000
---------------------------------------------------------------------------------
4,050 National Community Bancorp 103,275
---------------------------------------------------------------------------------
2,400 National Golf Properties, Inc. 51,900
---------------------------------------------------------------------------------
3,200 National Health Investors, Inc. 96,000
---------------------------------------------------------------------------------
1,499 National Penn Bancshares, Inc. 39,359
---------------------------------------------------------------------------------
3,800 National Re Holdings Corp. 127,775
---------------------------------------------------------------------------------
500 (a)National Western Life Insurance Co., Class A 27,563
---------------------------------------------------------------------------------
4,300 Nationwide Health Properties, Inc. 176,838
---------------------------------------------------------------------------------
1,200 (a)Navigators Group, Inc. 22,500
---------------------------------------------------------------------------------
2,774 New York Bancorp, Inc. 55,827
---------------------------------------------------------------------------------
3,400 North American Mortgage Co. 70,125
---------------------------------------------------------------------------------
5,400 North Fork Bancorp, Inc. 118,125
---------------------------------------------------------------------------------
1,114 North Side Savings Bank 32,585
---------------------------------------------------------------------------------
3,496 Norwest Corp. 103,132
---------------------------------------------------------------------------------
1,200 Nymagic, Inc. 19,200
---------------------------------------------------------------------------------
3,600 Oasis Residential, Inc. 78,300
---------------------------------------------------------------------------------
3,800 (a)Olympic Financial Ltd. 69,350
---------------------------------------------------------------------------------
1,400 Omega Financial Corp. 42,000
---------------------------------------------------------------------------------
3,539 Omega Healthcare Investors $ 89,802
---------------------------------------------------------------------------------
3,195 Onbancorp, Inc. 95,051
---------------------------------------------------------------------------------
3,380 One Valley Bancorp West Virginia, Inc. 112,385
---------------------------------------------------------------------------------
3,156 Orion Capital Corp. 129,396
---------------------------------------------------------------------------------
1,100 (a)Oxford Resources Corp., Class A 28,875
---------------------------------------------------------------------------------
3,800 PHH Corp. 166,250
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
2,000 PXRE Corp. 51,000
---------------------------------------------------------------------------------
3,300 Paragon Group, Inc. 56,925
---------------------------------------------------------------------------------
1,000 Park National Corp. 45,250
---------------------------------------------------------------------------------
4,600 Penncorp Financial Group, Inc. 109,825
---------------------------------------------------------------------------------
1,700 Pennsylvania Real Estate Investment Trust 34,213
---------------------------------------------------------------------------------
1,565 People First Corp. 34,234
---------------------------------------------------------------------------------
1,900 Peoples Bank Bridgeport 37,525
---------------------------------------------------------------------------------
3,600 Peoples Heritage Financial Group 68,400
---------------------------------------------------------------------------------
1,750 Pikeville National Corp. 34,125
---------------------------------------------------------------------------------
700 Pinnacle Banc Group, Inc. 21,613
---------------------------------------------------------------------------------
4,800 Pioneer Group, Inc. 126,000
---------------------------------------------------------------------------------
3,900 Piper Jaffray Cos., Inc. 46,313
---------------------------------------------------------------------------------
1,100 Poe & Brown, Inc. 26,813
---------------------------------------------------------------------------------
4,000 Post Properties, Inc. 120,000
---------------------------------------------------------------------------------
7,620 (a)Premier Bancorp, Inc. 159,068
---------------------------------------------------------------------------------
5,200 Presidential Life Corp. 49,400
---------------------------------------------------------------------------------
6,100 (a)Price Enterprises, Inc. 88,450
---------------------------------------------------------------------------------
1,900 Price REIT, Inc. 55,575
---------------------------------------------------------------------------------
2,000 Prime Residential, Inc. 35,000
---------------------------------------------------------------------------------
6,500 Protective Life Corp. 185,250
---------------------------------------------------------------------------------
1,900 Provident Bancorp, Inc. 80,275
---------------------------------------------------------------------------------
1,375 Provident Bankshares Corp. $ 41,938
---------------------------------------------------------------------------------
1,150 Queens County Bancorp, Inc. 46,000
---------------------------------------------------------------------------------
3,132 Quick & Reilly Group, Inc. 74,385
---------------------------------------------------------------------------------
2,800 RCSB Financial, Inc. 62,300
---------------------------------------------------------------------------------
5,500 RFS Hotel Investors, Inc. 83,188
---------------------------------------------------------------------------------
1,300 RLI Corp. 30,388
---------------------------------------------------------------------------------
2,800 ROC Communities, Inc. 63,000
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
6,400 RPS Realty Trust 27,200
---------------------------------------------------------------------------------
700 RS Financial Corp. 27,125
---------------------------------------------------------------------------------
2,950 Raymond James Financial, Inc. 63,425
---------------------------------------------------------------------------------
2,100 Real Estate Investment Trust of California 35,963
---------------------------------------------------------------------------------
4,400 Realty Income Corp. 86,350
---------------------------------------------------------------------------------
1,500 Regency Realty Corp. 25,500
---------------------------------------------------------------------------------
950 (a)Regional Acceptance Corp. 9,738
---------------------------------------------------------------------------------
3,800 Reinsurance Group of America 130,625
---------------------------------------------------------------------------------
2,200 Reliance Bancorp, Inc. 31,900
---------------------------------------------------------------------------------
9,200 Reliance Group Holdings, Inc. 67,850
---------------------------------------------------------------------------------
3,474 Republic Bancorp, Inc. 44,294
---------------------------------------------------------------------------------
1,956 (a)Resource Bancshares Mortgage Group, Inc. 30,318
---------------------------------------------------------------------------------
4,500 Resource Mortgage Capital, Inc. 84,938
---------------------------------------------------------------------------------
4,600 (a)Riggs National Corp. 60,375
---------------------------------------------------------------------------------
1,800 River Forest Bancorp 41,400
---------------------------------------------------------------------------------
8,600 (a)Rockefeller Center Properties, Inc. 66,650
---------------------------------------------------------------------------------
8,850 Rollins Truck Leasing Corp. 85,181
---------------------------------------------------------------------------------
7,913 Roosevelt Financial Group, Inc. 127,597
---------------------------------------------------------------------------------
2,600 S & T Bancorp, Inc. 66,300
---------------------------------------------------------------------------------
1,800 SFFED Corp. 54,900
---------------------------------------------------------------------------------
2,700 Saul Centers, Inc. $ 38,813
---------------------------------------------------------------------------------
800 Scor U.S. Corp. 12,300
---------------------------------------------------------------------------------
2,300 (a)Security Capital Corp. 125,925
---------------------------------------------------------------------------------
1,900 Security Connecticut Corp. 49,400
---------------------------------------------------------------------------------
3,200 Selective Insurance Group, Inc. 119,200
---------------------------------------------------------------------------------
1,900 (a)Silicon Valley Bancshares 36,575
---------------------------------------------------------------------------------
2,000 Smith (Charles E.) Residential Realty, Inc. 46,500
---------------------------------------------------------------------------------
4,200 South West Property Trust, Inc. 50,925
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
9,532 Sovereign Bancorp, Inc. 94,129
---------------------------------------------------------------------------------
6,400 Spieker Properties, Inc. 155,200
---------------------------------------------------------------------------------
1,400 (a)St. Francis Capital Corp. 32,200
---------------------------------------------------------------------------------
4,144 St. Paul Bancorp, Inc. 99,974
---------------------------------------------------------------------------------
4,200 (a)Standard Financial, Inc. 57,750
---------------------------------------------------------------------------------
900 State Auto Financial Corp. 19,800
---------------------------------------------------------------------------------
1,250 Stewart Information Services Corp. 25,781
---------------------------------------------------------------------------------
7,200 Storage Equities, Inc. 132,300
---------------------------------------------------------------------------------
1,900 (a)Storage Trust Realty 37,288
---------------------------------------------------------------------------------
900 Student Loan Corp. 28,350
---------------------------------------------------------------------------------
900 Suffolk Bancorp 31,500
---------------------------------------------------------------------------------
600 Sumitomo Bank California 13,650
---------------------------------------------------------------------------------
7,520 Summit Bancorporation 213,380
---------------------------------------------------------------------------------
3,700 Summit Properties, Inc. 68,450
---------------------------------------------------------------------------------
2,100 Sun Communities, Inc. 52,238
---------------------------------------------------------------------------------
2,325 Susquehanna Bankshares, Inc. 66,844
---------------------------------------------------------------------------------
2,000 (a)T R Financial Corp. 49,500
---------------------------------------------------------------------------------
1,200 (a)TFC Enterprises, Inc. 12,600
---------------------------------------------------------------------------------
1,200 Tanger Factory Outlet Centers, Inc. 28,200
---------------------------------------------------------------------------------
6,900 Taubman Centers, Inc. $ 66,413
---------------------------------------------------------------------------------
3,600 The Trust Company of New Jersey 47,700
---------------------------------------------------------------------------------
2,700 Thornburg Mortgage Asset Co. 40,163
---------------------------------------------------------------------------------
750 Tompkins County Trust Co. 25,500
---------------------------------------------------------------------------------
3,500 Town & Country Trust 44,625
---------------------------------------------------------------------------------
2,500 Trans Financial Bancorp, Inc. 42,500
---------------------------------------------------------------------------------
1,600 (a)Transnational Re Corp., Class A 35,800
---------------------------------------------------------------------------------
1,400 Trenwick Group, Inc. 70,000
---------------------------------------------------------------------------------
2,400 Trinet Corporate Realty Trust, Inc. 64,200
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
3,978 Trustco Bank Corp. 85,527
---------------------------------------------------------------------------------
6,000 Trustmark Corp. 117,000
---------------------------------------------------------------------------------
2,400 Tucker Properties Corp. 22,200
---------------------------------------------------------------------------------
2,200 U.S. Trust Corp. 106,700
---------------------------------------------------------------------------------
3,590 UMB Financial Corp. 153,473
---------------------------------------------------------------------------------
3,300 (a)UST Corp. 44,963
---------------------------------------------------------------------------------
2,700 United Bankshares, Inc. 81,000
---------------------------------------------------------------------------------
3,300 United Carolina Bancshares 118,800
---------------------------------------------------------------------------------
5,180 United Companies Financial Corp. 146,335
---------------------------------------------------------------------------------
300 United Countrys Bancorporation 63,300
---------------------------------------------------------------------------------
11,600 United Dominion Realty Trust, Inc. 159,500
---------------------------------------------------------------------------------
1,100 United Fire & Casualty Co. 38,225
---------------------------------------------------------------------------------
6,500 (a)United Insurance Cos., Inc. 110,500
---------------------------------------------------------------------------------
2,000 Universal Health Realty Trust, Inc. 33,250
---------------------------------------------------------------------------------
3,000 Urban Shopping Centers, Inc. 63,750
---------------------------------------------------------------------------------
1,200 Usbancorp, Inc. 38,700
---------------------------------------------------------------------------------
8,000 Valley National Bancorp 195,000
---------------------------------------------------------------------------------
1,900 Vallicorp Holdings, Inc. 24,700
---------------------------------------------------------------------------------
1,100 Vermont Financial Services Corp. $ 34,925
---------------------------------------------------------------------------------
2,500 Vesta Insurance Group, Inc. 100,938
---------------------------------------------------------------------------------
1,200 Victoria Bankshares, Inc. 34,500
---------------------------------------------------------------------------------
3,100 Walden Residential Properties, Inc. 56,963
---------------------------------------------------------------------------------
2,300 Washington National Corp. 52,325
---------------------------------------------------------------------------------
7,100 Washington Real Estate Investment Trust 105,613
---------------------------------------------------------------------------------
1,577 (a)Waterhouse Investment Services, Inc. 31,146
---------------------------------------------------------------------------------
3,900 Webb (Del) Corp. 80,925
---------------------------------------------------------------------------------
1,240 Webster Financial Corp. Waterbury 31,620
---------------------------------------------------------------------------------
1,700 Weeks Corp. 39,100
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCE--CONTINUED
---------------------------------------------------------------------------------
3,850 Wellsford Residential Properties 76,038
---------------------------------------------------------------------------------
1,600 Wesbanco, Inc. 46,400
---------------------------------------------------------------------------------
2,000 WestAmerica Bancorporation 80,000
---------------------------------------------------------------------------------
2,048 Westcorp, Inc. 34,304
---------------------------------------------------------------------------------
3,800 Western Investment Real Estate Trust 42,275
---------------------------------------------------------------------------------
7,300 Western National Corp. 100,375
---------------------------------------------------------------------------------
1,200 (a)White River Corp. 41,700
---------------------------------------------------------------------------------
3,325 Whitney Holding Corp. 103,075
---------------------------------------------------------------------------------
600 Winthrop Resources Corp. 10,050
---------------------------------------------------------------------------------
4,200 World Acceptance Corp. 54,600
---------------------------------------------------------------------------------
2,400 Zenith National Insurance Corp. 55,800
---------------------------------------------------------------------------------
3,300 Zions Bancorp 228,525
--------------------------------------------------------------------------------- --------------
Total 27,312,457
--------------------------------------------------------------------------------- --------------
HEALTH SERVICES--3.5%
---------------------------------------------------------------------------------
1,500 (a)Access Health, Inc. 46,687
---------------------------------------------------------------------------------
900 (a)Advantage Health Corp. 30,600
---------------------------------------------------------------------------------
4,800 (a)AmeriSource Health Corp., Class A 130,800
---------------------------------------------------------------------------------
300 (a)American HomePatient, Inc. $ 7,275
---------------------------------------------------------------------------------
3,000 (a)American Medical Response 86,625
---------------------------------------------------------------------------------
2,100 (a)Apogee, Inc. 18,375
---------------------------------------------------------------------------------
6,300 (a)Applied Bioscience International, Inc. 40,162
---------------------------------------------------------------------------------
9,921 (a)Apria Healthcare Group, Inc. 214,542
---------------------------------------------------------------------------------
1,200 (a)Arbor Health Care Co. 20,400
---------------------------------------------------------------------------------
1,800 Bindley Western Industries, Inc. 28,125
---------------------------------------------------------------------------------
800 (a)Champion Healthcare Corp. 5,450
---------------------------------------------------------------------------------
6,400 (a)Charter Medical Corp. 115,200
---------------------------------------------------------------------------------
1,100 (a)ClinTrials, Inc. 22,275
---------------------------------------------------------------------------------
3,000 (a)Coastal Physician Group, Inc. 39,375
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
HEALTH SERVICES--CONTINUED
---------------------------------------------------------------------------------
4,300 (a)Community Health Systems, Inc. 136,525
---------------------------------------------------------------------------------
9,800 (a)Community Psychiatric Centers 106,575
---------------------------------------------------------------------------------
8,900 (a)Coram Healthcare Corp. 35,600
---------------------------------------------------------------------------------
7,200 (a)Coventry Corp. 141,300
---------------------------------------------------------------------------------
900 (a)CyCare System, Inc. 27,900
---------------------------------------------------------------------------------
1,400 (a)EmCare Holdings, Inc. 32,200
---------------------------------------------------------------------------------
5,200 (a)Forum Group, Inc. 38,675
---------------------------------------------------------------------------------
3,694 (a)Foxmeyer Health Corp. 84,038
---------------------------------------------------------------------------------
1,800 (a)GMIS, Inc. 20,700
---------------------------------------------------------------------------------
3,300 (a)Genesis Health Ventures, Inc. 95,287
---------------------------------------------------------------------------------
4,762 (a)GranCare, Inc. 69,644
---------------------------------------------------------------------------------
2,400 (a)Gulf South Medical Supplies, Inc. 49,800
---------------------------------------------------------------------------------
500 (a)HCIA, Inc. 13,625
---------------------------------------------------------------------------------
1,750 (a)Health Management Systems, Inc. 56,000
---------------------------------------------------------------------------------
1,800 (a)Health Management, Inc. 20,475
---------------------------------------------------------------------------------
1,100 (a)HealthWise of America, Inc. 32,450
---------------------------------------------------------------------------------
10,908 (a)Horizon/CMS Healthcare Corp. $ 220,887
---------------------------------------------------------------------------------
2,300 (a)Inphynet Medical Management, Inc. 41,400
---------------------------------------------------------------------------------
4,400 Integrated Health Services, Inc. 100,650
---------------------------------------------------------------------------------
500 Labone, Inc. 5,750
---------------------------------------------------------------------------------
6,100 (a)Lincare Holdings, Inc. 151,738
---------------------------------------------------------------------------------
3,700 (a)Living Centers of America, Inc. 95,738
---------------------------------------------------------------------------------
4,600 (a)Mariner Health Group, Inc. 44,850
---------------------------------------------------------------------------------
3,900 (a)Maxicare Health Plans, Inc. 67,763
---------------------------------------------------------------------------------
1,800 (a)Medic Computer Systems, Inc. 95,850
---------------------------------------------------------------------------------
2,000 (a)Multicare Cos., Inc. 37,500
---------------------------------------------------------------------------------
14,700 (a)NovaCare, Inc. 91,875
---------------------------------------------------------------------------------
4,300 Omnicare, Inc. 155,875
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
HEALTH SERVICES--CONTINUED
---------------------------------------------------------------------------------
9,100 (a)Ornda Healthcorp 160,388
---------------------------------------------------------------------------------
900 (a)Orthodontic Centers of America, Inc. 28,800
---------------------------------------------------------------------------------
6,175 Owens & Minor, Inc. 73,328
---------------------------------------------------------------------------------
1,000 (a)PHP Healthcare Corp. 42,375
---------------------------------------------------------------------------------
1,900 (a)Pacific Physician Services, Inc. 30,163
---------------------------------------------------------------------------------
2,500 (a)Patterson Dental Co. 62,500
---------------------------------------------------------------------------------
1,000 (a)Phamis, Inc. 25,250
---------------------------------------------------------------------------------
2,400 (a)Pharmaceutical Marketing Services 27,600
---------------------------------------------------------------------------------
7,575 (a)Phycor, Inc. 278,381
---------------------------------------------------------------------------------
3,000 (a)Physician Computer Network, Inc. 20,625
---------------------------------------------------------------------------------
1,900 (a)Physician Reliance Network, Inc. 63,175
---------------------------------------------------------------------------------
3,500 (a)Physician Sales & Service, Inc. 56,875
---------------------------------------------------------------------------------
1,500 (a)Physicians Health Services, Inc., Class A 49,875
---------------------------------------------------------------------------------
3,500 (a)Quantum Health Research, Inc. 37,188
---------------------------------------------------------------------------------
2,600 (a)Regency Health Services, Inc. 24,375
---------------------------------------------------------------------------------
2,200 (a)Renal Treatment Centers, Inc. $ 79,200
---------------------------------------------------------------------------------
800 (a)Res-Care, Inc. 13,200
---------------------------------------------------------------------------------
1,700 (a)RightCHOICE Managed Care, Inc., Class A 21,675
---------------------------------------------------------------------------------
2,000 (a)Rotech Medical Corp. 45,500
---------------------------------------------------------------------------------
1,000 Seafield Capital Corp. 35,500
---------------------------------------------------------------------------------
2,500 (a)Sierra Health Services, Inc. 71,563
---------------------------------------------------------------------------------
1,200 (a)Sullivan Dental Products, Inc. 11,700
---------------------------------------------------------------------------------
900 (a)Summit Care Corp. 18,675
---------------------------------------------------------------------------------
8,024 (a)Sun Healthcare Group, Inc. 95,285
---------------------------------------------------------------------------------
1,500 (a)Synetic, Inc. 34,875
---------------------------------------------------------------------------------
4,900 (a)Systemed, Inc. 30,013
---------------------------------------------------------------------------------
1,600 (a)TheraTx, Inc. 18,000
---------------------------------------------------------------------------------
7,200 (a)Unilab Corp. 22,500
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
HEALTH SERVICES--CONTINUED
---------------------------------------------------------------------------------
1,300 (a)United American Healthcare Corp. 14,300
---------------------------------------------------------------------------------
550 United Wisconsin Services, Inc. 13,681
---------------------------------------------------------------------------------
3,100 (a)Universal Health Services, Inc., Class B 116,250
---------------------------------------------------------------------------------
600 (a)Vitalink Pharmacy Services, Inc. 10,800
---------------------------------------------------------------------------------
4,850 (a)Vivra, Inc. 160,050
---------------------------------------------------------------------------------
1,200 (a)Wellcare Management Group, Inc. 28,800
--------------------------------------------------------------------------------- --------------
Total 4,699,026
--------------------------------------------------------------------------------- --------------
HEALTH TECHNOLOGY--5.2%
---------------------------------------------------------------------------------
3,000 A. L. Pharma, Inc., Class A 72,000
---------------------------------------------------------------------------------
3,666 ADAC Laboratories 43,534
---------------------------------------------------------------------------------
6,000 (a)AMSCO International, Inc. 96,000
---------------------------------------------------------------------------------
3,600 ATS Medical, Inc. 28,350
---------------------------------------------------------------------------------
4,900 (a)Acuson Corp. 56,962
---------------------------------------------------------------------------------
1,200 (a)Advanced Magnetics, Inc. 32,400
---------------------------------------------------------------------------------
3,000 (a)Advanced Technology Labs, Inc. $ 54,000
---------------------------------------------------------------------------------
7,200 (a)Advanced Tissue Sciences, Inc., Class A 64,800
---------------------------------------------------------------------------------
2,100 (a)Agouron Pharmaceuticals, Inc. 54,600
---------------------------------------------------------------------------------
5,500 (a)Alliance Pharmaceutical Corp. 66,000
---------------------------------------------------------------------------------
4,200 (a)Amylin Pharmaceuticals, Inc. 30,975
---------------------------------------------------------------------------------
1,200 (a)Aphton Corp. 11,400
---------------------------------------------------------------------------------
5,500 (a)Athena Neurosciences, Inc. 51,562
---------------------------------------------------------------------------------
6,000 Ballard Medical Products 103,500
---------------------------------------------------------------------------------
700 (a)Barr Laboratories, Inc. 15,225
---------------------------------------------------------------------------------
1,300 (a)Bio Rad Laboratories, Inc., Class A 49,400
---------------------------------------------------------------------------------
9,700 (a)Bio-Technology General Corp. 31,525
---------------------------------------------------------------------------------
7,200 (a)Biocontrol Technology, Inc. 45,675
---------------------------------------------------------------------------------
1,300 Biocraft Laboratories, Inc. 20,150
---------------------------------------------------------------------------------
2,800 (a)CNS, Inc. 29,400
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
1,600 (a)CONMED Corp. 56,000
---------------------------------------------------------------------------------
1,600 (a)Carrington Laboratories, Inc. 30,000
---------------------------------------------------------------------------------
5,100 Carter Wallace, Inc. 53,550
---------------------------------------------------------------------------------
3,200 (a)Cellpro, Inc. 37,200
---------------------------------------------------------------------------------
5,100 (a)Cephalon, Inc. 153,000
---------------------------------------------------------------------------------
2,800 (a)Circon Corp. 63,700
---------------------------------------------------------------------------------
2,100 Collagen Corp. 37,800
---------------------------------------------------------------------------------
5,600 (a)Columbia Laboratories, Inc. 38,150
---------------------------------------------------------------------------------
1,751 (a)Copley Pharmaceutical 28,235
---------------------------------------------------------------------------------
4,300 (a)Cor Therapeutics, Inc. 44,612
---------------------------------------------------------------------------------
3,100 (a)Cygnus, Inc. 50,762
---------------------------------------------------------------------------------
4,300 (a)Cytel Corp. 22,037
---------------------------------------------------------------------------------
7,200 (a)Cytogen Corp. 25,650
---------------------------------------------------------------------------------
3,500 (a)Daig Corp. $ 77,875
---------------------------------------------------------------------------------
3,100 (a)Datascope Corp. 73,625
---------------------------------------------------------------------------------
2,400 Diagnostic Products Corp. 88,800
---------------------------------------------------------------------------------
2,900 (a)Dura Pharmaceuticals, Inc. 84,825
---------------------------------------------------------------------------------
2,100 (a)Duramed Pharmaceuticals, Inc. 32,550
---------------------------------------------------------------------------------
2,400 (a)EP Technologies, Inc. 29,700
---------------------------------------------------------------------------------
1,900 (a)Empi, Inc. 42,275
---------------------------------------------------------------------------------
4,070 (a)Enzo Biochem, Inc. 64,611
---------------------------------------------------------------------------------
2,700 (a)Epitope, Inc. 37,125
---------------------------------------------------------------------------------
1,800 (a)Fresenius USA, Inc. 29,475
---------------------------------------------------------------------------------
5,100 (a)Gilead Sciences, Inc. 99,450
---------------------------------------------------------------------------------
5,100 (a)Haemonetics Corp. 96,262
---------------------------------------------------------------------------------
491 (a)Healthdyne Technologies, Inc. 5,278
---------------------------------------------------------------------------------
2,600 (a)Heart Technology, Inc. 74,100
---------------------------------------------------------------------------------
1,900 (a)Human Genome Sciences, Inc. 37,287
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
1,800 (a)I-Stat Corp. 55,800
---------------------------------------------------------------------------------
6,547 ICN Pharmaceuticals, Inc. 134,213
---------------------------------------------------------------------------------
5,600 (a)ICOS Corp. 32,200
---------------------------------------------------------------------------------
7,100 (a)IDEXX Laboratories, Inc. 289,325
---------------------------------------------------------------------------------
1,600 (a)IGI, Inc. 17,400
---------------------------------------------------------------------------------
3,700 (a)Immulogic Pharmaceutical Corp. 43,475
---------------------------------------------------------------------------------
4,000 (a)Immunex Corp. 51,000
---------------------------------------------------------------------------------
1,900 (a)InControl, Inc. 33,250
---------------------------------------------------------------------------------
1,300 (a)Inbrand Corp. 18,200
---------------------------------------------------------------------------------
1,200 (a)Incyte Pharmaceuticals, Inc. 24,900
---------------------------------------------------------------------------------
5,800 (a)Interneuron Pharmaceuticals 86,275
---------------------------------------------------------------------------------
5,400 Invacare Corp. 136,350
---------------------------------------------------------------------------------
4,300 (a)Isis Pharmaceuticals, Inc. $ 43,537
---------------------------------------------------------------------------------
4,000 (a)Isolyser Co., Inc. 71,500
---------------------------------------------------------------------------------
3,400 Kinetic Concepts, Inc. 37,825
---------------------------------------------------------------------------------
1,500 Life Technologies, Inc. 36,750
---------------------------------------------------------------------------------
2,992 (a)Ligand Pharmaceuticals, Inc., Class B 23,562
---------------------------------------------------------------------------------
6,100 (a)Liposome Co., Inc. 93,788
---------------------------------------------------------------------------------
800 (a)Lunar Corp. 29,800
---------------------------------------------------------------------------------
1,800 (a)Matrix Pharmaceuticals, Inc. 26,100
---------------------------------------------------------------------------------
1,500 (a)Maxxim Medical, Inc. 20,813
---------------------------------------------------------------------------------
2,500 (a)Medco Research, Inc. 29,375
---------------------------------------------------------------------------------
2,300 (a)MediSense, Inc. 49,163
---------------------------------------------------------------------------------
2,200 (a)Medimmune, Inc. 23,925
---------------------------------------------------------------------------------
5,000 Mentor Corp. 110,000
---------------------------------------------------------------------------------
6,076 (a)Nellcor, Inc. 349,370
---------------------------------------------------------------------------------
1,400 (a)NeoPath, Inc. 31,500
---------------------------------------------------------------------------------
1,500 (a)Neurogen Corp. 33,375
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
4,400 (a)Nexstar Pharmaceuticals, Inc. 49,500
---------------------------------------------------------------------------------
3,700 (a)North American Biologicals, Inc. 29,600
---------------------------------------------------------------------------------
1,400 (a)Northfield Laboratories, Inc. 19,600
---------------------------------------------------------------------------------
3,200 (a)Noven Pharmaceuticals, Inc. 32,800
---------------------------------------------------------------------------------
2,500 (a)Organogenesis, Inc. 46,875
---------------------------------------------------------------------------------
1,800 (a)Ostex International, Inc. 36,000
---------------------------------------------------------------------------------
1,350 (a)PDT, Inc. 51,975
---------------------------------------------------------------------------------
3,800 (a)Pharmaceutical Resources, Inc. 31,350
---------------------------------------------------------------------------------
2,900 (a)Protein Design Laboratories, Inc. 48,575
---------------------------------------------------------------------------------
1,300 (a)Pure Pacific, Inc. 9,913
---------------------------------------------------------------------------------
1,200 (a)Quintiles Transnational Corp. 77,100
---------------------------------------------------------------------------------
3,400 (a)Regeneron Pharmaceuticals, Inc. $ 43,775
---------------------------------------------------------------------------------
2,100 (a)Research Industries Corp. 57,750
---------------------------------------------------------------------------------
3,500 (a)Resound Corp. 27,563
---------------------------------------------------------------------------------
3,100 (a)Respironics, Inc. 67,425
---------------------------------------------------------------------------------
1,400 (a)Rexall Sundown, Inc. 21,000
---------------------------------------------------------------------------------
2,500 (a)Roberts Pharmaceutical Corp. 48,438
---------------------------------------------------------------------------------
1,600 (a)Safeskin Corp. 28,800
---------------------------------------------------------------------------------
3,000 (a)SciClone Pharmaceuticals, Inc. 20,625
---------------------------------------------------------------------------------
8,000 (a)Scios Nova, Inc. 29,000
---------------------------------------------------------------------------------
4,300 (a)Sepracor, Inc. 72,563
---------------------------------------------------------------------------------
3,900 (a)Sequus Pharmaceuticals, Inc. 46,800
---------------------------------------------------------------------------------
3,900 (a)Sofamor Danek Group, Inc. 95,550
---------------------------------------------------------------------------------
3,700 (a)Somatogen, Inc. 57,813
---------------------------------------------------------------------------------
2,400 SpaceLabs Medical, Inc. 61,800
---------------------------------------------------------------------------------
2,900 (a)Staar Surgical Co. 30,813
---------------------------------------------------------------------------------
4,000 (a)Steris Corp. 135,000
---------------------------------------------------------------------------------
3,800 (a)Summit Technology, Inc. 169,100
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
HEALTH TECHNOLOGY--CONTINUED
---------------------------------------------------------------------------------
3,700 (a)Sunrise Medical, Inc. 67,063
---------------------------------------------------------------------------------
700 (a)Systemix, Inc. 9,800
---------------------------------------------------------------------------------
1,100 (a)Target Therapeutics, Inc. 85,250
---------------------------------------------------------------------------------
2,100 (a)Techne Corp. 44,888
---------------------------------------------------------------------------------
3,300 (a)Technological Medical Products, Inc. 62,700
---------------------------------------------------------------------------------
2,000 (a)Theratech, Inc. 37,500
---------------------------------------------------------------------------------
7,800 (a)U.S. Bioscience, Inc. 34,613
---------------------------------------------------------------------------------
3,200 (a)Uromed Corp. 34,000
---------------------------------------------------------------------------------
2,200 (a)Utah Medical Products, Inc. 30,250
---------------------------------------------------------------------------------
1,900 (a)VISX, Inc. 42,750
---------------------------------------------------------------------------------
4,600 (a)Ventritex, Inc. $ 90,275
---------------------------------------------------------------------------------
3,300 (a)Vertex Pharmaceuticals, Inc. 54,450
---------------------------------------------------------------------------------
1,300 Vital Signs, Inc. 23,725
---------------------------------------------------------------------------------
2,700 (a)Vivus, Inc. 54,675
---------------------------------------------------------------------------------
6,826 (a)Watson Pharmaceuticals, Inc. 305,464
---------------------------------------------------------------------------------
2,800 West Co., Inc. 69,300
---------------------------------------------------------------------------------
7,800 (a)Work Recovery, Inc. 10,238
--------------------------------------------------------------------------------- --------------
Total 6,908,207
--------------------------------------------------------------------------------- --------------
INDUSTRIAL SERVICES--2.9%
---------------------------------------------------------------------------------
4,200 (a)Air and Water Technology Corp., Class A 21,000
---------------------------------------------------------------------------------
5,900 (a)Allied Waste Industries, Inc. 49,412
---------------------------------------------------------------------------------
8,800 (a)Allwaste, Inc. 42,900
---------------------------------------------------------------------------------
800 (a)American Buildings Co. 20,200
---------------------------------------------------------------------------------
6,081 (a)BJ Services Co. 142,903
---------------------------------------------------------------------------------
1,400 Butler Manufacturing Co. 41,300
---------------------------------------------------------------------------------
5,400 Camco International, Inc. 123,525
---------------------------------------------------------------------------------
1,700 (a)Corrpro Cos., Inc. 9,562
---------------------------------------------------------------------------------
3,700 Dames & Moore, Inc. 50,412
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--CONTINUED
---------------------------------------------------------------------------------
3,500 (a)Destec Energy, Inc. 49,437
---------------------------------------------------------------------------------
1,400 (a)Dual Drilling Co. 13,650
---------------------------------------------------------------------------------
2,000 (a)Energy Ventures, Inc. 38,000
---------------------------------------------------------------------------------
4,700 (a)EnviroSource, Inc. 12,337
---------------------------------------------------------------------------------
900 (a)Global Industries Ltd. 23,625
---------------------------------------------------------------------------------
1,700 Granite Construction, Inc. 48,237
---------------------------------------------------------------------------------
5,600 Helmerich & Payne, Inc. 144,900
---------------------------------------------------------------------------------
3,000 (a)Hornbeck Offshore Services, Inc. 43,875
---------------------------------------------------------------------------------
800 (a)Horsehead Resource Development, Inc. 4,100
---------------------------------------------------------------------------------
3,800 (a)Input/Output, Inc. $ 142,025
---------------------------------------------------------------------------------
4,701 (a)Insituform Technologies, Inc., Class A 58,761
---------------------------------------------------------------------------------
7,200 (a)International Technology Corp. 19,800
---------------------------------------------------------------------------------
4,700 (a)Jacobs Engineering Group, Inc. 102,812
---------------------------------------------------------------------------------
2,100 (a)Kasler Holding Corp. 12,075
---------------------------------------------------------------------------------
5,200 (a)Kenetech Corp. 16,900
---------------------------------------------------------------------------------
3,740 Laidlaw, Inc., Class B 33,660
---------------------------------------------------------------------------------
1,900 Landauer, Inc. 37,287
---------------------------------------------------------------------------------
3,300 (a)Landmark Graphics Corp. 71,775
---------------------------------------------------------------------------------
1,500 Lufkin Industries, Inc. 27,750
---------------------------------------------------------------------------------
7,400 (a)Marine Drilling Cos., Inc. 27,750
---------------------------------------------------------------------------------
1,500 (a)Mastec, Inc. 17,813
---------------------------------------------------------------------------------
4,900 (a)Mid-American Waste Systems, Inc. 20,825
---------------------------------------------------------------------------------
2,500 (a)Molten Metal Technology 96,250
---------------------------------------------------------------------------------
6,900 (a)Morrison Knudsen Corp. 44,850
---------------------------------------------------------------------------------
18,900 (a)Nabors Industries, Inc. 163,013
---------------------------------------------------------------------------------
2,300 (a)Newpark Resources, Inc. 36,513
---------------------------------------------------------------------------------
15,800 (a)Noble Drilling Corp. 110,600
---------------------------------------------------------------------------------
4,300 (a)OHM Corp. 34,938
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--CONTINUED
---------------------------------------------------------------------------------
5,200 (a)Oceaneering International, Inc. 49,400
---------------------------------------------------------------------------------
4,400 (a)Offshore Logistics, Inc. 54,450
---------------------------------------------------------------------------------
12,500 (a)Parker Drilling Co. 65,625
---------------------------------------------------------------------------------
3,000 (a)Pool Energy Services Co. 27,750
---------------------------------------------------------------------------------
5,300 (a)Pride Petroleum Services, Inc. 46,375
---------------------------------------------------------------------------------
1,000 (a)Prins Recycling Corp. 9,000
---------------------------------------------------------------------------------
1,800 Production Operations Corp. 54,000
---------------------------------------------------------------------------------
1,300 (a)RPC Energy Services, Inc. 10,075
---------------------------------------------------------------------------------
13,400 (a)Reading & Bates Corp. $ 154,100
---------------------------------------------------------------------------------
3,400 (a)Republic Waste Industries, Inc. 73,100
---------------------------------------------------------------------------------
13,600 (a)Rollins Environmental Services, Inc. 45,900
---------------------------------------------------------------------------------
19,000 (a)Rowan Companies, Inc. 125,875
---------------------------------------------------------------------------------
3,700 (a)Sanifill, Inc. 116,550
---------------------------------------------------------------------------------
900 (a)Seacor Holdings, Inc. 21,825
---------------------------------------------------------------------------------
2,100 (a)Seitel, Inc. 54,338
---------------------------------------------------------------------------------
400 Sevenson Environmental Services 7,100
---------------------------------------------------------------------------------
2,700 (a)Sithe Energies, Inc. 19,238
---------------------------------------------------------------------------------
8,200 (a)Smith International, Inc. 131,200
---------------------------------------------------------------------------------
2,100 Stone & Webster, Inc. 70,613
---------------------------------------------------------------------------------
2,025 (a)Tetra Tech, Inc. 44,044
---------------------------------------------------------------------------------
2,800 (a)Tetra Technologies, Inc. 37,100
---------------------------------------------------------------------------------
400 (a)Thermo Ecotek Corp. 5,500
---------------------------------------------------------------------------------
900 (a)Thermo Process Systems, Inc. 9,788
---------------------------------------------------------------------------------
850 Thermo Remediation, Inc. 12,113
---------------------------------------------------------------------------------
800 Trigen Energy Corp. 14,000
---------------------------------------------------------------------------------
4,200 (a)Tuboscope Vetco International Corp. 24,675
---------------------------------------------------------------------------------
9,108 (a)USA Waste Services, Inc. 191,268
---------------------------------------------------------------------------------
3,000 (a)United Waste Systems, Inc. 118,500
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
INDUSTRIAL SERVICES--CONTINUED
---------------------------------------------------------------------------------
3,900 (a)Varco International, Inc. 35,588
---------------------------------------------------------------------------------
11,339 (a)Weatherford International, Inc. 273,553
---------------------------------------------------------------------------------
2,100 (a)Western Waste Industries 41,475
--------------------------------------------------------------------------------- --------------
Total 3,898,890
--------------------------------------------------------------------------------- --------------
MISCELLANEOUS--0.1%
---------------------------------------------------------------------------------
324 Lynx Therapeutic, Inc. 65
---------------------------------------------------------------------------------
1,600 (a)MedPartners, Inc. 44,800
---------------------------------------------------------------------------------
2,000 (a)NumereX Corp., Class A $ 11,500
---------------------------------------------------------------------------------
1,200 (a)UniHolding Corp. 5,400
--------------------------------------------------------------------------------- --------------
Total 61,765
--------------------------------------------------------------------------------- --------------
NON-ENERGY MINERALS--2.3%
---------------------------------------------------------------------------------
4,600 (a)AK Steel Holding Corp. 142,600
---------------------------------------------------------------------------------
3,800 AMCOL International Corp. 64,125
---------------------------------------------------------------------------------
2,600 (a)Acme Metals, Inc. 39,325
---------------------------------------------------------------------------------
11,000 (a)Amax Gold, Inc. 61,875
---------------------------------------------------------------------------------
700 Ameron, Inc. 23,975
---------------------------------------------------------------------------------
18,300 (a)Armco, Inc. 112,087
---------------------------------------------------------------------------------
6,400 Birmingham Steel Corp. 97,600
---------------------------------------------------------------------------------
3,600 Brush Wellman, Inc. 60,300
---------------------------------------------------------------------------------
4,300 CalMat Co. 72,562
---------------------------------------------------------------------------------
3,600 Carpenter Technology Corp. 136,350
---------------------------------------------------------------------------------
2,900 (a)CasTech Aluminum Group, Inc. 40,600
---------------------------------------------------------------------------------
2,800 (a)Centex Construction Products, Inc. 35,350
---------------------------------------------------------------------------------
1,300 Chaparral Steel Co. 12,837
---------------------------------------------------------------------------------
2,700 Cleveland Cliffs, Inc. 100,912
---------------------------------------------------------------------------------
3,500 Coeur d'Alene Mines Corp. 59,062
---------------------------------------------------------------------------------
3,000 (a)Dravo Corp. 37,125
---------------------------------------------------------------------------------
2,000 (a)Elcor Corp. 42,000
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
NON-ENERGY MINERALS--CONTINUED
---------------------------------------------------------------------------------
1,500 FMC Gold Co. 5,812
---------------------------------------------------------------------------------
1,900 (a)Fibreboard Corp. 45,600
---------------------------------------------------------------------------------
4,059 (a)FirstMiss Gold, Inc. 73,062
---------------------------------------------------------------------------------
1,700 Florida Rock Industries, Inc. 45,900
---------------------------------------------------------------------------------
2,800 (a)Geneva Steel Co., Class A 20,300
---------------------------------------------------------------------------------
2,200 (a)Giant Cement Holding, Inc. 20,625
---------------------------------------------------------------------------------
10,800 (a)Hecla Mining Co. $ 79,650
---------------------------------------------------------------------------------
2,300 Imco Recycling, Inc. 49,450
---------------------------------------------------------------------------------
4,000 J&L Specialty Steel, Inc. 65,500
---------------------------------------------------------------------------------
1,800 (a)Kaiser Aluminum Corp. 20,250
---------------------------------------------------------------------------------
2,700 Lone Star Industries, Inc. 61,763
---------------------------------------------------------------------------------
4,000 (a)Lone Star Technologies, Inc. 35,000
---------------------------------------------------------------------------------
3,300 Lukens, Inc. 101,475
---------------------------------------------------------------------------------
10,400 (a)Magma Copper Co. 174,200
---------------------------------------------------------------------------------
1,300 (a)Maxxam, Inc. 48,100
---------------------------------------------------------------------------------
3,600 Medusa Corp. 90,000
---------------------------------------------------------------------------------
5,100 Minerals Technologies, Inc. 203,363
---------------------------------------------------------------------------------
4,800 (a)National Steel Corp., Class B 63,600
---------------------------------------------------------------------------------
4,500 (a)Northwestern Steel & Wire Co. 33,750
---------------------------------------------------------------------------------
3,700 Oregon Steel Mills 52,725
---------------------------------------------------------------------------------
900 Puerto Rican Cement Co., Inc. 29,588
---------------------------------------------------------------------------------
3,000 Quanex Corp. 59,250
---------------------------------------------------------------------------------
1,800 Republic Gypsum Co. 21,150
---------------------------------------------------------------------------------
2,300 Rouge Steel Co., Class A 50,025
---------------------------------------------------------------------------------
2,800 (a)Royal Gold, Inc. 22,400
---------------------------------------------------------------------------------
800 Schnitzer Steel Industries, Inc., Class A 21,200
---------------------------------------------------------------------------------
3,900 (a)Southdown, Inc. 63,375
---------------------------------------------------------------------------------
3,300 (a)Stillwater Mining Co. 55,688
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
NON-ENERGY MINERALS--CONTINUED
---------------------------------------------------------------------------------
43,400 (a)Sunshine Mining Co. 70,525
---------------------------------------------------------------------------------
2,100 Texas Industries, Inc. 110,513
---------------------------------------------------------------------------------
900 (a)Tremont Corp. 17,663
---------------------------------------------------------------------------------
2,400 Universal Forest Products, Inc. 22,800
---------------------------------------------------------------------------------
1,300 (a)WCI Steel, Inc. 6,175
---------------------------------------------------------------------------------
4,900 (a)WHX Corp. $ 50,838
---------------------------------------------------------------------------------
8,400 (a)Weirton Steel Corp. 37,800
--------------------------------------------------------------------------------- --------------
Total 3,067,800
--------------------------------------------------------------------------------- --------------
PROCESS INDUSTRIES--3.8%
---------------------------------------------------------------------------------
903 AEP Industries, Inc. 20,317
---------------------------------------------------------------------------------
5,600 Albany International Corp., Class A 116,200
---------------------------------------------------------------------------------
800 Alico, Inc. 14,000
---------------------------------------------------------------------------------
500 American Filtrona Corp. 15,875
---------------------------------------------------------------------------------
1,200 American Maize Products Co., Class A 47,550
---------------------------------------------------------------------------------
4,000 Aptargroup, Inc. 137,000
---------------------------------------------------------------------------------
2,800 BMC Industries, Inc. 108,150
---------------------------------------------------------------------------------
1,000 Blessings Corp. 11,750
---------------------------------------------------------------------------------
1,200 Brady (W.H.) Co. 87,000
---------------------------------------------------------------------------------
14,600 (a)Burlington Industries, Inc. 162,425
---------------------------------------------------------------------------------
1,400 (a)Bush Boake Allen, Inc. 38,325
---------------------------------------------------------------------------------
6,800 (a)Calgene, Inc. 43,350
---------------------------------------------------------------------------------
6,400 Calgon Carbon Corp. 72,800
---------------------------------------------------------------------------------
1,400 Cambrex Corp. 53,375
---------------------------------------------------------------------------------
4,700 Caraustar Industries, Inc. 88,125
---------------------------------------------------------------------------------
1,900 Chemed Corp. 66,500
---------------------------------------------------------------------------------
5,300 Chesapeake Corp. 162,312
---------------------------------------------------------------------------------
5,500 (a)Cone Mills Corp. 59,812
---------------------------------------------------------------------------------
3,000 (a)Cytec Industries, Inc. 164,250
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
---------------------------------------------------------------------------------
1,300 Dekalb Genetics Corp., Class B 55,575
---------------------------------------------------------------------------------
2,200 Delta & Pine Land Co. 85,250
---------------------------------------------------------------------------------
3,700 Delta Woodside Industries, Inc. 24,050
---------------------------------------------------------------------------------
5,500 Dexter Corp. 131,313
---------------------------------------------------------------------------------
5,200 Donaldson Company, Inc. $ 126,750
---------------------------------------------------------------------------------
2,000 (a)Embrace Systems Corp. 1,000
---------------------------------------------------------------------------------
1,700 (a)Energy Conversion Devices, Inc. 28,900
---------------------------------------------------------------------------------
1,000 Fab Industries, Inc. 29,250
---------------------------------------------------------------------------------
2,000 (a)Fieldcrest Cannon, Inc. 38,500
---------------------------------------------------------------------------------
4,600 First Mississippi Corp. 94,300
---------------------------------------------------------------------------------
3,300 (a)Foamex International, Inc. 24,750
---------------------------------------------------------------------------------
3,100 Fuller (H.B.) Co. 97,650
---------------------------------------------------------------------------------
2,000 Furon Co. 31,000
---------------------------------------------------------------------------------
2,600 (a)Galey & Lord, Inc. 32,500
---------------------------------------------------------------------------------
12,100 (a)Gaylord Container Corp. 92,262
---------------------------------------------------------------------------------
1,500 (a)Gelman Sciences, Inc. 32,062
---------------------------------------------------------------------------------
5,800 Geon Co. 144,275
---------------------------------------------------------------------------------
3,200 Greif Brothers Corp., Class A 80,400
---------------------------------------------------------------------------------
1,700 Guardsman Products, Inc. 19,337
---------------------------------------------------------------------------------
2,500 Guilford Mills, Inc. 55,312
---------------------------------------------------------------------------------
2,463 (a)Intermagnetics General Corp. 44,334
---------------------------------------------------------------------------------
1,700 (a)International Imaging Materials, Inc. 42,925
---------------------------------------------------------------------------------
3,200 (a)Ionics, Inc. 130,400
---------------------------------------------------------------------------------
7,600 Lawter International, Inc. 80,750
---------------------------------------------------------------------------------
1,400 Learonal 31,850
---------------------------------------------------------------------------------
1,350 Lesco, Inc. 18,562
---------------------------------------------------------------------------------
4,250 Lilly Industrial, Inc., Class A 54,188
---------------------------------------------------------------------------------
1,100 Liqui Box Corp. 29,975
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
---------------------------------------------------------------------------------
3,900 (a)Lydall, Inc. 88,725
---------------------------------------------------------------------------------
500 MacDermid, Inc. 25,000
---------------------------------------------------------------------------------
3,400 (a)Material Sciences Corp. 56,525
---------------------------------------------------------------------------------
2,200 (a)McWhorter Technologies, Inc. $ 33,000
---------------------------------------------------------------------------------
2,100 (a)Mercer International, Inc. 48,300
---------------------------------------------------------------------------------
2,000 Midwest Grain Products, Inc. 23,000
---------------------------------------------------------------------------------
1,300 Mine Safety Appliances Co. 65,975
---------------------------------------------------------------------------------
4,600 Mississippi Chemical Corp. 110,975
---------------------------------------------------------------------------------
1,640 Mosinee Paper Corp. 40,180
---------------------------------------------------------------------------------
2,900 (a)Mycogen Corp. 38,788
---------------------------------------------------------------------------------
900 NCH, Corp. 48,938
---------------------------------------------------------------------------------
2,600 O'Sullivan Corp. 28,600
---------------------------------------------------------------------------------
2,800 OM Group, Inc. 81,200
---------------------------------------------------------------------------------
1,300 Oil-Dri Corp. of America 18,363
---------------------------------------------------------------------------------
2,150 (a)Osmonics, Inc. 36,550
---------------------------------------------------------------------------------
3,946 (a)Paxar Corp. 49,818
---------------------------------------------------------------------------------
1,200 Penwest Ltd. 30,600
---------------------------------------------------------------------------------
1,100 Petrolite Corp. 25,850
---------------------------------------------------------------------------------
1,500 (a)Photronic Labs, Inc. 44,250
---------------------------------------------------------------------------------
2,500 Pittway Corp., Class A 149,688
---------------------------------------------------------------------------------
3,000 Pope & Talbot, Inc. 40,500
---------------------------------------------------------------------------------
2,100 Pratt & Lambert, Inc. 44,363
---------------------------------------------------------------------------------
2,000 Quaker Chemical Corp. 32,000
---------------------------------------------------------------------------------
4,200 (a)Rexene Corp. 38,325
---------------------------------------------------------------------------------
6,800 Rock-Tenn Co. 110,500
---------------------------------------------------------------------------------
1,600 (a)Rogers Corp. 36,000
---------------------------------------------------------------------------------
1,600 Sealright Co., Inc. 18,000
---------------------------------------------------------------------------------
3,500 (a)Shorewood Packaging Corp. 58,625
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
---------------------------------------------------------------------------------
5,200 Spartech Corp. 31,850
---------------------------------------------------------------------------------
1,600 Stepen Chemical Co. 25,200
---------------------------------------------------------------------------------
8,700 (a)Sterling Chemicals, Inc. $ 69,600
---------------------------------------------------------------------------------
2,000 (a)Stimsonite Corp. 18,125
---------------------------------------------------------------------------------
2,000 Tejon Ranch Co. 27,500
---------------------------------------------------------------------------------
1,200 Tuscarora, Inc. 30,000
---------------------------------------------------------------------------------
2,500 (a)U.S. Can Corp. 30,625
---------------------------------------------------------------------------------
5,400 (a)Uniroyal Chemical Corp. 41,175
---------------------------------------------------------------------------------
700 (a)Vallen Corp. 14,175
---------------------------------------------------------------------------------
5,100 Wausau Paper Mills Co. 124,950
---------------------------------------------------------------------------------
4,200 (a)WestPoint Stevens, Inc. 88,725
--------------------------------------------------------------------------------- --------------
Total 5,051,099
--------------------------------------------------------------------------------- --------------
PRODUCER MANUFACTURING--6.0%
---------------------------------------------------------------------------------
1,800 (a)ABC Rail Products Corp. 40,050
---------------------------------------------------------------------------------
2,400 (a)ABT Building Products Corp. 30,900
---------------------------------------------------------------------------------
2,600 (a)ACX Technologies, Inc. 40,300
---------------------------------------------------------------------------------
1,400 Acme Cleveland Corp. 30,625
---------------------------------------------------------------------------------
1,100 (a)Acme Electric Co. 9,487
---------------------------------------------------------------------------------
1,800 Alamo Group, Inc. 30,825
---------------------------------------------------------------------------------
5,900 Allen Group, Inc. 144,550
---------------------------------------------------------------------------------
2,000 Allied Products 42,000
---------------------------------------------------------------------------------
1,700 (a)Alltrista Corp. 31,875
---------------------------------------------------------------------------------
1,900 Amcast Industrial Corp. 32,300
---------------------------------------------------------------------------------
1,800 (a)American Superconductor Corp. 18,900
---------------------------------------------------------------------------------
7,500 Ametek, Inc. 132,187
---------------------------------------------------------------------------------
5,400 (a)Ampal-American Israel Corp., Class A 30,375
---------------------------------------------------------------------------------
1,100 Amtrol, Inc. 16,775
---------------------------------------------------------------------------------
2,500 Applied Power, Inc., Class A 75,937
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
---------------------------------------------------------------------------------
5,000 Arvin Industries, Inc. 88,750
---------------------------------------------------------------------------------
1,700 (a)Astec Industries, Inc. $ 20,187
---------------------------------------------------------------------------------
10,200 (a)Aura System, Inc. 51,000
---------------------------------------------------------------------------------
1,600 (a)Avondale Industries, Inc. 24,000
---------------------------------------------------------------------------------
5,500 BW/IP Holding, Inc. 92,125
---------------------------------------------------------------------------------
4,710 Baldor Electric Co. 113,040
---------------------------------------------------------------------------------
5,300 Belden, Inc. 127,862
---------------------------------------------------------------------------------
1,100 Blount, Inc., Class A 47,712
---------------------------------------------------------------------------------
5,200 Borg-Warner Automotive, Inc. 153,400
---------------------------------------------------------------------------------
2,900 Breed Technologies, Inc. 54,012
---------------------------------------------------------------------------------
1,800 Brenco, Inc. 20,925
---------------------------------------------------------------------------------
3,800 (a)CMI Corp. 18,525
---------------------------------------------------------------------------------
2,200 (a)Cable Design Technologies, Class A 72,050
---------------------------------------------------------------------------------
2,200 Cascade Corp. 30,250
---------------------------------------------------------------------------------
900 (a)Central Sprinkler Corp. 29,700
---------------------------------------------------------------------------------
900 Charter Power Systems, Inc. 22,500
---------------------------------------------------------------------------------
2,300 (a)Chase Brass Industries, Inc. 30,187
---------------------------------------------------------------------------------
1,000 (a)Cherry Corp., Class B 13,125
---------------------------------------------------------------------------------
600 (a)Christiana Companies, Inc. 15,825
---------------------------------------------------------------------------------
1,100 (a)Citation Corp. 20,625
---------------------------------------------------------------------------------
15,900 (a)Collins & Aikman Corp. 127,200
---------------------------------------------------------------------------------
3,500 Commercial Intertech Corp. 59,062
---------------------------------------------------------------------------------
2,700 Commercial Metals Corp. 69,525
---------------------------------------------------------------------------------
2,300 Commonwealth Aluminum Corp. 37,087
---------------------------------------------------------------------------------
1,100 DT Industries, Inc. 14,575
---------------------------------------------------------------------------------
2,100 (a)Detroit Diesel Corp. 37,275
---------------------------------------------------------------------------------
1,000 Donnely Corp. 14,250
---------------------------------------------------------------------------------
1,000 (a)Durakon Industries, Inc. 12,500
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
---------------------------------------------------------------------------------
4,300 Duriron, Inc. $ 115,025
---------------------------------------------------------------------------------
1,200 (a)Easco, Inc. 9,000
---------------------------------------------------------------------------------
2,000 Excel Industries, Inc. 24,000
---------------------------------------------------------------------------------
1,400 (a)Exide Electronics Group, Inc. 28,700
---------------------------------------------------------------------------------
1,400 (a)Falcon Building Products, Inc. 12,600
---------------------------------------------------------------------------------
7,900 Federal-Mogul Corp. 141,212
---------------------------------------------------------------------------------
4,100 (a)Figgie International Holdings, Inc., Class A 49,200
---------------------------------------------------------------------------------
3,200 Flow International Corp. 35,600
---------------------------------------------------------------------------------
1,100 Franklin Electronics, Inc. 34,650
---------------------------------------------------------------------------------
3,600 (a)Fruehauf Trailer Corp. 6,300
---------------------------------------------------------------------------------
1,400 General Binding Corp. 26,950
---------------------------------------------------------------------------------
3,200 (a)Gentex Corp. 71,200
---------------------------------------------------------------------------------
600 (a)Gibraltar Steel Corp. 7,050
---------------------------------------------------------------------------------
7,700 Giddings & Lewis, Inc. 124,162
---------------------------------------------------------------------------------
800 Gleason Corp. 25,500
---------------------------------------------------------------------------------
1,550 Gorman Rupp Co. 22,281
---------------------------------------------------------------------------------
4,800 Goulds Pumps, Inc. 114,000
---------------------------------------------------------------------------------
1,850 Graco, Inc. 62,206
---------------------------------------------------------------------------------
2,500 (a)Great American Management & Investment, Inc. 91,250
---------------------------------------------------------------------------------
1,200 Greenbrier Cos., Inc. 13,050
---------------------------------------------------------------------------------
3,600 Greenfield Industries, Inc. 108,000
---------------------------------------------------------------------------------
6,900 (a)Griffon Corp. 57,787
---------------------------------------------------------------------------------
3,200 Handy & Harman 45,200
---------------------------------------------------------------------------------
2,100 Hayes Wheels International, Inc. 55,125
---------------------------------------------------------------------------------
1,700 (a)Holophane Corp. 45,900
---------------------------------------------------------------------------------
2,500 Hunt Manufacturers Co. 43,750
---------------------------------------------------------------------------------
1,300 Huntco, Inc., Class A 16,900
---------------------------------------------------------------------------------
2,800 (a)ICC Technologies, Inc. $ 33,250
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
---------------------------------------------------------------------------------
4,300 IDEX Corp. 162,325
---------------------------------------------------------------------------------
3,800 (a)IMO Industries, Inc. 22,325
---------------------------------------------------------------------------------
5,100 (a)INDRESCO, Inc. 87,337
---------------------------------------------------------------------------------
2,200 (a)Insilco Corp. 73,425
---------------------------------------------------------------------------------
4,100 Interface, Inc. 62,012
---------------------------------------------------------------------------------
4,100 (a)Intermet Corp. 47,662
---------------------------------------------------------------------------------
600 International Aluminum Corp. 18,225
---------------------------------------------------------------------------------
2,800 JLG Industries, Inc. 65,800
---------------------------------------------------------------------------------
2,562 (a)Jason, Inc. 16,653
---------------------------------------------------------------------------------
2,200 (a)Johnstown America Industries, Inc. 10,175
---------------------------------------------------------------------------------
4,200 Juno Lighting, Inc. 60,900
---------------------------------------------------------------------------------
4,100 Kaman Corp., Class A 44,075
---------------------------------------------------------------------------------
3,700 Kaydon Corp. 106,837
---------------------------------------------------------------------------------
3,800 Kimball International, Inc., Class B 96,900
---------------------------------------------------------------------------------
1,000 Kyser Industrial Corp. 23,375
---------------------------------------------------------------------------------
1,000 (a)Lindsay Manufacturing Co. 35,250
---------------------------------------------------------------------------------
2,800 (a)Littlefuse, Inc. 91,000
---------------------------------------------------------------------------------
700 (a)MICROS Systems Corp. 26,075
---------------------------------------------------------------------------------
1,300 MK Rail Corp. 9,263
---------------------------------------------------------------------------------
4,400 Magnetek, Inc. 43,450
---------------------------------------------------------------------------------
1,700 Manitowoc, Inc. 48,238
---------------------------------------------------------------------------------
7,000 Mascotech, Inc. 71,750
---------------------------------------------------------------------------------
3,000 Masland Corp. 42,000
---------------------------------------------------------------------------------
5,600 Miller Herman, Inc. 165,900
---------------------------------------------------------------------------------
600 (a)Miller Industries, Inc. 12,150
---------------------------------------------------------------------------------
3,800 (a)Mueller Industries, Inc. 89,300
---------------------------------------------------------------------------------
1,700 NACCO Industries, Inc., Class A $ 97,325
---------------------------------------------------------------------------------
1,100 (a)NCI Building System, Inc. 25,575
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
---------------------------------------------------------------------------------
1,500 NN Ball & Roller, Inc. 31,125
---------------------------------------------------------------------------------
1,400 Nashua Corp. 17,675
---------------------------------------------------------------------------------
2,800 (a)Nortek, Inc. 22,400
---------------------------------------------------------------------------------
4,800 (a)Nu-Kote Holdings, Inc., Class A 99,600
---------------------------------------------------------------------------------
3,900 (a)Oak Industries, Inc. 81,413
---------------------------------------------------------------------------------
6,100 (a)Omega Environmental, Inc. 24,400
---------------------------------------------------------------------------------
1,800 OshKosh Truck Corp., Class B 25,650
---------------------------------------------------------------------------------
2,500 Pacific Scientific Co. 52,813
---------------------------------------------------------------------------------
1,900 (a)Park Ohio Industries, Inc. 26,125
---------------------------------------------------------------------------------
200 Penn Engineering & Manufacturing Corp. 16,800
---------------------------------------------------------------------------------
2,700 Ply Gem Industries, Inc. 46,575
---------------------------------------------------------------------------------
4,550 Precision Castparts Corp. 162,663
---------------------------------------------------------------------------------
1,207 (a)Raymond Corp. 24,140
---------------------------------------------------------------------------------
3,900 Regal Beloit Corp. 70,200
---------------------------------------------------------------------------------
1,500 (a)Reliance Steel & Aluminum Co. 24,938
---------------------------------------------------------------------------------
800 Robbins & Myers, Inc. 26,800
---------------------------------------------------------------------------------
3,300 Roper Industries, Inc. 119,625
---------------------------------------------------------------------------------
1,100 (a)SPS Technologies, Inc. 42,900
---------------------------------------------------------------------------------
2,000 Scotsman Industries, Inc. 32,500
---------------------------------------------------------------------------------
1,200 (a)Shiloh Industries, Inc. 13,050
---------------------------------------------------------------------------------
3,600 Simpson Industries, Inc. 30,150
---------------------------------------------------------------------------------
800 (a)Simpson Manufacturing Co., Inc. 11,900
---------------------------------------------------------------------------------
2,000 Smith (A.O.) Corp. 41,500
---------------------------------------------------------------------------------
2,400 (a)Spartan Motors, Inc. 23,100
---------------------------------------------------------------------------------
3,700 (a)Specialty Equipment Cos., Inc. 39,313
---------------------------------------------------------------------------------
3,725 Standard Products Co. $ 57,738
---------------------------------------------------------------------------------
2,800 Standex International Corp. 91,700
---------------------------------------------------------------------------------
1,600 Steel Technologies, Inc. 15,400
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
---------------------------------------------------------------------------------
1,700 Synalloy Corp. 34,850
---------------------------------------------------------------------------------
3,300 TJ International, Inc. 57,131
---------------------------------------------------------------------------------
3,900 Teleflex, Inc. 165,263
---------------------------------------------------------------------------------
2,000 Tennant Co. 49,500
---------------------------------------------------------------------------------
1,800 (a)Thermo Fibertek, Inc. 28,350
---------------------------------------------------------------------------------
1,200 (a)Thermo Power Corp. 17,250
---------------------------------------------------------------------------------
2,300 Thomas Industries, Inc. 50,888
---------------------------------------------------------------------------------
3,000 Titan Wheel International, Inc. 43,500
---------------------------------------------------------------------------------
6,100 (a)Top Source Technologies, Inc. 44,606
---------------------------------------------------------------------------------
1,475 (a)Transpro, Inc. 16,225
---------------------------------------------------------------------------------
1,200 Tredegar Industries, Inc. 34,950
---------------------------------------------------------------------------------
3,300 (a)Triangle Pacific Corp. 52,388
---------------------------------------------------------------------------------
5,540 Triarc Companies, Inc., Class A 52,630
---------------------------------------------------------------------------------
4,300 (a)U.S. Filter Corp. 99,975
---------------------------------------------------------------------------------
4,900 UNR Industries, Inc. 41,038
---------------------------------------------------------------------------------
1,500 (a)Ultralife Batteries, Inc. 30,375
---------------------------------------------------------------------------------
800 (a)Union Switch & Signal, Inc. 4,800
---------------------------------------------------------------------------------
1,700 Valmont Industries, Inc. 41,650
---------------------------------------------------------------------------------
1,215 Varlen Corp. 32,501
---------------------------------------------------------------------------------
4,250 Wabash National Corp. 107,844
---------------------------------------------------------------------------------
1,900 Walbro Corp. 37,050
---------------------------------------------------------------------------------
4,600 Watts Industries, Inc., Class A 94,875
---------------------------------------------------------------------------------
3,000 (a)Wolverine Tube, Inc. 106,875
---------------------------------------------------------------------------------
2,300 Woodhead Industries, Inc. 32,775
---------------------------------------------------------------------------------
2,000 Zebra Technologies Co., Class A $ 119,000
---------------------------------------------------------------------------------
3,600 Zero Corp. 54,900
---------------------------------------------------------------------------------
2,800 Zurn Industries, Inc. 70,000
--------------------------------------------------------------------------------- --------------
Total 7,992,892
--------------------------------------------------------------------------------- --------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
RETAIL TRADE--4.4%
---------------------------------------------------------------------------------
700 (a)American Eagle Outfitters, Inc. 6,825
---------------------------------------------------------------------------------
5,200 (a)Ann Taylor Stores Corp. 57,200
---------------------------------------------------------------------------------
3,250 Arbor Drugs, Inc. 59,312
---------------------------------------------------------------------------------
2,050 (a)BMC West Corp. 28,700
---------------------------------------------------------------------------------
1,900 (a)Baby Superstore, Inc. 89,775
---------------------------------------------------------------------------------
2,500 Baker (J.), Inc. 14,375
---------------------------------------------------------------------------------
3,947 (a)Benson Eyecare Corp. 37,003
---------------------------------------------------------------------------------
7,100 (a)Best Products Co., Inc. 35,056
---------------------------------------------------------------------------------
3,000 Big B, Inc. 44,250
---------------------------------------------------------------------------------
1,800 Blair Corp. 53,100
---------------------------------------------------------------------------------
1,100 (a)Boise Cascade Office Products Corp. 39,737
---------------------------------------------------------------------------------
8,300 (a)Bombay Co., Inc. 48,762
---------------------------------------------------------------------------------
1,200 (a)Bon-Ton Stores, Inc. 7,800
---------------------------------------------------------------------------------
2,300 (a)Books-A-Million, Inc. 29,037
---------------------------------------------------------------------------------
8,400 (a)Borders Group, Inc. 143,850
---------------------------------------------------------------------------------
400 (a)Buckle, Inc. 6,500
---------------------------------------------------------------------------------
600 (a)CDW Computer Centers, Inc. 29,100
---------------------------------------------------------------------------------
10,400 CML Group, Inc. 59,800
---------------------------------------------------------------------------------
3,100 CPI Corp. 56,575
---------------------------------------------------------------------------------
3,800 (a)Caldor Corp. 18,525
---------------------------------------------------------------------------------
3,700 (a)Carson Pirie Scott & Co. 62,437
---------------------------------------------------------------------------------
5,100 Casey's General Stores, Inc. 117,300
---------------------------------------------------------------------------------
6,400 Cash America International, Inc. $ 32,800
---------------------------------------------------------------------------------
5,300 Cato Corp., Class A 32,462
---------------------------------------------------------------------------------
800 (a)Central Tractor Farm & Country, Inc. 5,400
---------------------------------------------------------------------------------
21,000 Charming Shoppes, Inc. 60,375
---------------------------------------------------------------------------------
2,900 (a)Chronimed, Inc. 44,225
---------------------------------------------------------------------------------
5,400 (a)Circle K Corp. 111,375
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
---------------------------------------------------------------------------------
2,700 Claire's Stores, Inc. 52,987
---------------------------------------------------------------------------------
4,600 (a)CompUSA, Inc. 175,950
---------------------------------------------------------------------------------
2,900 (a)Compucom System, Inc. 19,575
---------------------------------------------------------------------------------
300 Dart Group Corp., Class A 27,375
---------------------------------------------------------------------------------
1,200 Delchamps, Inc. 21,300
---------------------------------------------------------------------------------
3,550 (a)Designs, Inc. 24,462
---------------------------------------------------------------------------------
1,100 (a)Discount Auto Parts, Inc. 29,425
---------------------------------------------------------------------------------
11,000 (a)Discovery Zone, Inc. 38,156
---------------------------------------------------------------------------------
3,600 (a)Dress Barn, Inc. 35,100
---------------------------------------------------------------------------------
4,400 Duty Free International, Inc. 62,700
---------------------------------------------------------------------------------
4,300 (a)Eagle Hardware & Garden, Inc. 32,787
---------------------------------------------------------------------------------
3,800 Edison Brothers Stores, Inc. 13,775
---------------------------------------------------------------------------------
3,900 (a)Egghead, Inc. 26,812
---------------------------------------------------------------------------------
3,300 (a)Express Scripts, Inc., Class A 125,400
---------------------------------------------------------------------------------
3,200 (a)Fabri-Centers of America, Class A 47,600
---------------------------------------------------------------------------------
8,800 Family Dollar Stores, Inc. 134,200
---------------------------------------------------------------------------------
3,300 Fays, Inc. 26,400
---------------------------------------------------------------------------------
10,300 Fingerhut Companies, Inc. 140,337
---------------------------------------------------------------------------------
2,700 (a)Friedmans, Inc., Class A 54,675
---------------------------------------------------------------------------------
4,530 (a)General Host Corp. 22,084
---------------------------------------------------------------------------------
1,648 Genovese Drug Stores, Inc., Class A 16,274
---------------------------------------------------------------------------------
1,400 (a)Goody's Family Clothing, Inc. $ 14,175
---------------------------------------------------------------------------------
4,800 Hancock Fabrics, Inc. 42,000
---------------------------------------------------------------------------------
10,000 (a)Hanover Direct, Inc. 16,875
---------------------------------------------------------------------------------
2,250 Haverty Furniture Cos., Inc. 31,219
---------------------------------------------------------------------------------
7,100 Hechinger Co., Class A 31,062
---------------------------------------------------------------------------------
2,153 (a)Hills Stores Co. 16,147
---------------------------------------------------------------------------------
4,500 (a)Hollywood Entertainment Corp. 120,375
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
---------------------------------------------------------------------------------
12,200 (a)Home Shopping Network, Inc. 99,125
---------------------------------------------------------------------------------
2,200 (a)Inacom Corp. 22,000
---------------------------------------------------------------------------------
1,600 Ingles Markets, Inc., Class A 16,200
---------------------------------------------------------------------------------
6,300 Intelligent Electronics, Inc. 48,037
---------------------------------------------------------------------------------
2,200 (a)Jenny Craig, Inc. 20,350
---------------------------------------------------------------------------------
3,700 Lands' End, Inc. 55,500
---------------------------------------------------------------------------------
2,500 (a)Lechters, Inc. 23,125
---------------------------------------------------------------------------------
6,700 (a)Levitz Furniture, Inc. 20,100
---------------------------------------------------------------------------------
1,100 Lillian Vernon Corp. 14,712
---------------------------------------------------------------------------------
3,500 Longs Drug Stores Corp. 140,000
---------------------------------------------------------------------------------
5,700 (a)MacFrugal's Bargains CloseOuts, Inc. 67,688
---------------------------------------------------------------------------------
1,400 Medicine Shoppe International, Inc. 60,200
---------------------------------------------------------------------------------
1,350 (a)Mens Wearhouse, Inc. 52,650
---------------------------------------------------------------------------------
6,000 (a)Meyer (Fred), Inc. 111,750
---------------------------------------------------------------------------------
3,250 (a)Microage, Inc. 27,219
---------------------------------------------------------------------------------
1,102 (a)Monro Muffler Brake, Inc. 16,255
---------------------------------------------------------------------------------
900 (a)Movie Gallery, Inc. 34,650
---------------------------------------------------------------------------------
7,700 (a)Musicland Stores, Inc. 50,050
---------------------------------------------------------------------------------
2,600 (a)National Media Corp. 39,000
---------------------------------------------------------------------------------
3,700 Neiman-Marcus Group, Inc. 63,363
---------------------------------------------------------------------------------
2,600 New Engineers Business Service, Inc. $ 50,050
---------------------------------------------------------------------------------
700 (a)O'Reilly Automotive, Inc. 22,925
---------------------------------------------------------------------------------
9,000 (a)Payless Cashway, Inc., Class A 51,750
---------------------------------------------------------------------------------
2,400 (a)Penn Traffic Co. 26,100
---------------------------------------------------------------------------------
1,900 (a)Petco Animal Supplies, Inc. 53,200
---------------------------------------------------------------------------------
4,700 Petrie Stores Corp. 13,513
---------------------------------------------------------------------------------
8,895 Pier 1 Imports, Inc. 85,614
---------------------------------------------------------------------------------
1,800 (a)Proffitts, Inc. 42,075
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
---------------------------------------------------------------------------------
750 Quality Food Centers, Inc. 15,012
---------------------------------------------------------------------------------
1,500 (a)Regis Corp. Minnesota 34,125
---------------------------------------------------------------------------------
1,800 (a)Renters Choice, Inc. 30,150
---------------------------------------------------------------------------------
1,700 (a)Rex Stores Corp. 28,900
---------------------------------------------------------------------------------
5,500 Ross Stores, Inc. 86,281
---------------------------------------------------------------------------------
5,400 Ruddick Corp. 68,850
---------------------------------------------------------------------------------
22,400 (a)Service Merchandise, Inc. 120,400
---------------------------------------------------------------------------------
3,900 Shopko Stores, Inc. 41,925
---------------------------------------------------------------------------------
2,300 Smart & Final, Inc. 43,125
---------------------------------------------------------------------------------
4,100 Smith's Food & Drug Centers, Inc., Class B 93,788
---------------------------------------------------------------------------------
2,100 (a)Sportmart, Inc. 16,013
---------------------------------------------------------------------------------
4,450 (a)Sports & Recreation, Inc. 32,819
---------------------------------------------------------------------------------
3,300 (a)Sports Authority, Inc. 71,775
---------------------------------------------------------------------------------
1,950 (a)Stein Mart, Inc. 21,450
---------------------------------------------------------------------------------
1,736 Strawbridge & Clothier, Inc., Class A 32,984
---------------------------------------------------------------------------------
3,100 Sun Television & Appliances 17,050
---------------------------------------------------------------------------------
11,800 (a)Sunglass Hut International, Inc. 321,550
---------------------------------------------------------------------------------
900 (a)Syms Corp. 6,413
---------------------------------------------------------------------------------
3,000 (a)The Good Guys, Inc. 31,125
---------------------------------------------------------------------------------
3,000 Tiffany & Co. $ 130,875
---------------------------------------------------------------------------------
1,200 (a)Today's Man, Inc. 5,400
---------------------------------------------------------------------------------
1,000 (a)Tractor Supply Co. 15,750
---------------------------------------------------------------------------------
500 (a)Trak Auto Corp. 7,500
---------------------------------------------------------------------------------
900 (a)Urban Outfitters, Inc. 19,575
---------------------------------------------------------------------------------
2,600 (a)Value City Department Stores, Inc. 15,600
---------------------------------------------------------------------------------
6,300 (a)Valuevision International, Inc., Class A 33,075
---------------------------------------------------------------------------------
3,900 (a)Venture Stores, Inc. 14,625
---------------------------------------------------------------------------------
7,500 (a)Waban, Inc. 117,188
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
RETAIL TRADE--CONTINUED
---------------------------------------------------------------------------------
600 (a)West Marine, Inc. 18,300
---------------------------------------------------------------------------------
3,100 Whole Foods Market, Inc. 37,975
---------------------------------------------------------------------------------
4,200 (a)Williams-Sonoma, Inc. 72,975
---------------------------------------------------------------------------------
7,000 (a)Zale Corp. 103,250
--------------------------------------------------------------------------------- --------------
Total 5,763,907
--------------------------------------------------------------------------------- --------------
TECHNOLOGY SERVICES--4.4%
---------------------------------------------------------------------------------
3,800 (a)Acxiom Corp. 114,000
---------------------------------------------------------------------------------
1,456 Adobe System, Inc. 82,992
---------------------------------------------------------------------------------
1,800 (a)Affiliated Computer Services, Inc., Class A 60,300
---------------------------------------------------------------------------------
900 (a)Alternative Resources Corp. 27,900
---------------------------------------------------------------------------------
4,200 (a)AmeriData Technologies, Inc. 45,150
---------------------------------------------------------------------------------
6,000 (a)American Management System, Inc 173,250
---------------------------------------------------------------------------------
1,600 Analysts International Corp. 47,400
---------------------------------------------------------------------------------
1,100 (a)Applix, Inc. 30,525
---------------------------------------------------------------------------------
3,200 (a)Artisoft, Inc. 29,600
---------------------------------------------------------------------------------
1,200 (a)Aspen Technologies, Inc. 33,000
---------------------------------------------------------------------------------
2,600 (a)Atria Software, Inc. 92,950
---------------------------------------------------------------------------------
1,567 (a)Bell Industries, Inc. 32,907
---------------------------------------------------------------------------------
3,700 (a)Bisys Group, Inc. $ 103,600
---------------------------------------------------------------------------------
1,750 (a)Boole & Babbage, Inc. 62,562
---------------------------------------------------------------------------------
6,200 (a)Borland International, Inc. 84,475
---------------------------------------------------------------------------------
1,800 (a)Broadway & Seymour, Inc. 29,250
---------------------------------------------------------------------------------
1,400 (a)Business Records Corporation Holdings Co. 51,800
---------------------------------------------------------------------------------
1,900 (a)Cambridge Technology Partners, Inc. 107,825
---------------------------------------------------------------------------------
1,200 (a)Cellstar Corp. 33,300
---------------------------------------------------------------------------------
8,800 (a)Cheyenne Software, Inc. 183,700
---------------------------------------------------------------------------------
1,800 (a)Computer Horizons Corp. 46,800
---------------------------------------------------------------------------------
800 Computer Language Research, Inc. 9,200
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
TECHNOLOGY SERVICES--CONTINUED
---------------------------------------------------------------------------------
2,000 Computer Task Group, Inc. 34,500
---------------------------------------------------------------------------------
10,900 (a)Computervision Corp. 128,075
---------------------------------------------------------------------------------
4,300 (a)Continuum, Inc. 169,312
---------------------------------------------------------------------------------
2,600 (a)Control Data Systems, Inc. 34,450
---------------------------------------------------------------------------------
2,000 (a)Davidson & Associates, Inc. 71,000
---------------------------------------------------------------------------------
800 (a)EPIC Design Technology, Inc. 36,800
---------------------------------------------------------------------------------
950 (a)Edmark Corp. 40,850
---------------------------------------------------------------------------------
1,400 (a)Excalibur Technologies Corp. 22,050
---------------------------------------------------------------------------------
1,000 (a)Expert Software, Inc. 20,750
---------------------------------------------------------------------------------
4,200 (a)FTP Software, Inc. 113,400
---------------------------------------------------------------------------------
700 (a)Firefox Communications, Inc. 12,075
---------------------------------------------------------------------------------
595 First Data Corp., Class 39,325
---------------------------------------------------------------------------------
2,900 (a)General Magic, Inc. 36,612
---------------------------------------------------------------------------------
1,600 (a)Gupta Corp. 11,600
---------------------------------------------------------------------------------
1,600 Henry Jack & Associates, Inc. 34,800
---------------------------------------------------------------------------------
2,700 (a)Hogan Systems, Inc. 23,962
---------------------------------------------------------------------------------
1,800 (a)Hyperion Software Corp. 88,650
---------------------------------------------------------------------------------
6,000 (a)Information Resources, Inc. $ 65,250
---------------------------------------------------------------------------------
1,600 (a)Inso Corp. 57,200
---------------------------------------------------------------------------------
1,200 (a)Integrated Silicon Systems 35,250
---------------------------------------------------------------------------------
1,300 (a)Integrated Systems, Inc. 45,500
---------------------------------------------------------------------------------
3,300 (a)Intersolv, Inc. 51,975
---------------------------------------------------------------------------------
3,600 (a)Keane, Inc. 97,200
---------------------------------------------------------------------------------
2,600 (a)Kent Electronics Corp. 126,750
---------------------------------------------------------------------------------
3,000 MacNeal Schwendler Corp. 45,750
---------------------------------------------------------------------------------
6,500 (a)Macromedia, Inc. 240,500
---------------------------------------------------------------------------------
800 (a)Mapinfo Corp. 16,100
---------------------------------------------------------------------------------
2,100 (a)Marcam Corp. 31,500
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
TECHNOLOGY SERVICES--CONTINUED
---------------------------------------------------------------------------------
3,900 (a)Marshall Industries 137,475
---------------------------------------------------------------------------------
2,400 (a)McAfee Associates, Inc. 139,800
---------------------------------------------------------------------------------
2,800 (a)Mercury Interactive Corp. 57,400
---------------------------------------------------------------------------------
5,700 (a)Merisel, Inc. 33,488
---------------------------------------------------------------------------------
1,900 (a)Minnesota Educational Computing Corp. 58,900
---------------------------------------------------------------------------------
4,900 National Data Corp. 129,850
---------------------------------------------------------------------------------
800 (a)National Instruments Corp. 15,000
---------------------------------------------------------------------------------
6,500 (a)Netmanage, Inc. 132,438
---------------------------------------------------------------------------------
600 (a)Open Environment Corp. 5,850
---------------------------------------------------------------------------------
1,000 (a)Orbit Semiconductor, Inc. 11,250
---------------------------------------------------------------------------------
1,600 (a)Peak Technologies Group, Inc. 40,400
---------------------------------------------------------------------------------
2,700 (a)Phoenix Technology, Ltd. 31,388
---------------------------------------------------------------------------------
5,025 Pioneer Standard Electronics, Inc. 69,722
---------------------------------------------------------------------------------
2,900 (a)Platinum Software Corp. 19,213
---------------------------------------------------------------------------------
6,798 (a)Platinum Technology, Inc. 124,064
---------------------------------------------------------------------------------
1,200 (a)Progress Software Corp. 78,600
---------------------------------------------------------------------------------
5,000 (a)Quarterdeck Office Systems $ 106,875
---------------------------------------------------------------------------------
1,400 (a)Quickresponse Services, Inc. 35,000
---------------------------------------------------------------------------------
3,200 (a)Racotek, Inc. 19,600
---------------------------------------------------------------------------------
2,700 (a)Rational Software Corp. 42,188
---------------------------------------------------------------------------------
700 (a)Remedy Corp. 30,100
---------------------------------------------------------------------------------
2,850 (a)Safeguard Scientifics, Inc. 128,250
---------------------------------------------------------------------------------
3,500 (a)Santa Cruz Operation, Inc. 20,563
---------------------------------------------------------------------------------
1,800 (a)Security Dynamics Technologies, Inc. 56,700
---------------------------------------------------------------------------------
900 (a)Softdesk, Inc. 20,925
---------------------------------------------------------------------------------
4,100 (a)Softkey International, Inc. 129,150
---------------------------------------------------------------------------------
1,500 (a)Software Artistry, Inc. 24,750
---------------------------------------------------------------------------------
6,700 (a)Structural Dynamics Research Corp. 122,275
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
TECHNOLOGY SERVICES--CONTINUED
---------------------------------------------------------------------------------
4,100 System Software Association 126,588
---------------------------------------------------------------------------------
2,900 (a)Systems & Computer Technology Corp. 51,838
---------------------------------------------------------------------------------
2,000 (a)Systemsoft Corp. 28,750
---------------------------------------------------------------------------------
500 (a)TGV Software, Inc. 4,500
---------------------------------------------------------------------------------
7,600 (a)Tech Data Corp. 92,150
---------------------------------------------------------------------------------
3,300 (a)Tivoli Systems, Inc. 106,013
---------------------------------------------------------------------------------
3,700 (a)Triad Systems Corp. 20,350
---------------------------------------------------------------------------------
1,200 (a)Veritas Software Corp. 38,700
---------------------------------------------------------------------------------
3,600 (a)Viewlogic Systems, Inc. 35,100
---------------------------------------------------------------------------------
1,900 (a)Wall Data, Inc. 30,875
---------------------------------------------------------------------------------
1,100 (a)Wind River Systems, Inc. 29,700
---------------------------------------------------------------------------------
1,800 (a)Wonderware Corp. 57,150
---------------------------------------------------------------------------------
2,800 Wyle Labs 119,350
---------------------------------------------------------------------------------
1,000 (a)XcelleNet, Inc. 17,250
--------------------------------------------------------------------------------- --------------
Total 5,793,200
--------------------------------------------------------------------------------- --------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
TRANSPORTATION--1.8%
---------------------------------------------------------------------------------
4,700 Airborne Freight Corp. $ 123,375
---------------------------------------------------------------------------------
3,500 Airlines Express International Corp. 72,625
---------------------------------------------------------------------------------
3,000 (a)Alaska Air Group, Inc. 44,625
---------------------------------------------------------------------------------
8,502 (a)America West Airlines, Inc., Class B 115,840
---------------------------------------------------------------------------------
3,100 American Classic Voyages 37,200
---------------------------------------------------------------------------------
4,700 (a)American Freightways Corp. 59,925
---------------------------------------------------------------------------------
6,100 American President Cos., Ltd. 147,925
---------------------------------------------------------------------------------
700 (a)Amtran, Inc. 7,700
---------------------------------------------------------------------------------
4,400 Arnold Industries, Inc. 71,500
---------------------------------------------------------------------------------
800 (a)Celadon Group, Inc. 8,400
---------------------------------------------------------------------------------
5,300 Comair Holdings, Inc. 148,731
---------------------------------------------------------------------------------
3,500 (a)Continental Airlines, Inc., Class B 124,687
---------------------------------------------------------------------------------
700 (a)Covenant Transport, Inc. , Class A 8,925
---------------------------------------------------------------------------------
2,700 Expeditors International Washington, Inc. 70,875
---------------------------------------------------------------------------------
800 Florida East Coast, Inc. 53,500
---------------------------------------------------------------------------------
3,332 (a)Fritz Companies, Inc. 116,620
---------------------------------------------------------------------------------
1,682 Frozen Food Express Industries, Inc. 14,928
---------------------------------------------------------------------------------
2,700 Harper Group 48,600
---------------------------------------------------------------------------------
1,557 (a)Heartland Express, Inc. 42,234
---------------------------------------------------------------------------------
5,200 Hunt (J.B.) Transportation Services, Inc. 80,600
---------------------------------------------------------------------------------
900 International Shipholding Corp. 21,487
---------------------------------------------------------------------------------
6,300 (a)Kirby Corp. 103,950
---------------------------------------------------------------------------------
500 (a)Knight Transportation, Inc. 6,875
---------------------------------------------------------------------------------
2,900 (a)Landstar System, Inc. 76,125
---------------------------------------------------------------------------------
2,000 (a)M.S. Carriers, Inc. 31,000
---------------------------------------------------------------------------------
6,100 (a)Mesa Airlines, Inc. 57,950
---------------------------------------------------------------------------------
6,300 (a)OMI Corp. 36,225
---------------------------------------------------------------------------------
1,000 (a)Old Dominion Freight Lines, Inc. $ 10,000
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
TRANSPORTATION--CONTINUED
---------------------------------------------------------------------------------
6,500 Overseas Shipholding Group, Inc. 110,500
---------------------------------------------------------------------------------
1,500 (a)Railtex, Inc. 31,125
---------------------------------------------------------------------------------
1,700 SkyWest, Inc. 29,113
---------------------------------------------------------------------------------
2,600 (a)Swift Transportation Co. 42,900
---------------------------------------------------------------------------------
4,950 TNT Freightways Corp. 89,100
---------------------------------------------------------------------------------
3,400 Tower Air Corp., Inc. 25,075
---------------------------------------------------------------------------------
600 (a)US Xpress Enterprises, Inc., Class A 5,100
---------------------------------------------------------------------------------
1,000 (a)USA Truck, Inc. 11,750
---------------------------------------------------------------------------------
14,000 (a)USAir Group, Inc. 190,750
---------------------------------------------------------------------------------
3,200 Werner Enterprises, Inc. 60,000
---------------------------------------------------------------------------------
3,600 Worldcorp, Inc. 31,500
---------------------------------------------------------------------------------
4,800 (a)Yellow Corp. 63,000
--------------------------------------------------------------------------------- --------------
Total 2,432,340
--------------------------------------------------------------------------------- --------------
UTILITIES--5.2%
---------------------------------------------------------------------------------
3,400 (a)American Mobile Satellite Corp. 69,700
---------------------------------------------------------------------------------
800 (a)American Paging, Inc. 6,100
---------------------------------------------------------------------------------
1,500 Aquarion Co. 35,250
---------------------------------------------------------------------------------
1,200 Aquila Gas Pipeline Co. 13,200
---------------------------------------------------------------------------------
4,846 (a)Arch Communications Group, Inc. 131,448
---------------------------------------------------------------------------------
3,700 (a)Associated Group, Inc., Class A 68,450
---------------------------------------------------------------------------------
3,450 Atmos Energy Corp. 62,962
---------------------------------------------------------------------------------
3,000 Bay State Gas Co. 75,000
---------------------------------------------------------------------------------
3,200 Black Hills Corp. 80,400
---------------------------------------------------------------------------------
4,500 (a)C-Tec Corp. 94,500
---------------------------------------------------------------------------------
2,800 CFW Communications Co. 50,750
---------------------------------------------------------------------------------
1,400 California Water Service Corp. 46,550
---------------------------------------------------------------------------------
2,000 Cascade Natural Gas Corp. $ 29,750
---------------------------------------------------------------------------------
2,200 (a)Cellular Communications International, Inc. 76,450
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
UTILITIES--CONTINUED
---------------------------------------------------------------------------------
2,200 (a)Cellular Communications of Puerto Rico, Inc. 63,594
---------------------------------------------------------------------------------
2,305 (a)Centennial Cellular Corp., Class A 42,066
---------------------------------------------------------------------------------
3,900 Central Hudson Gas & Electric Service 119,437
---------------------------------------------------------------------------------
5,000 Central LA Electric Co. 134,375
---------------------------------------------------------------------------------
7,300 Central Maine Power Co. 101,287
---------------------------------------------------------------------------------
2,650 Central VT Public Service Corp. 35,775
---------------------------------------------------------------------------------
2,900 Cilcorp, Inc. 113,100
---------------------------------------------------------------------------------
14,630 (a)Citizens Utilities Co., Class B 162,759
---------------------------------------------------------------------------------
1,900 Colonial Gas Co. 38,475
---------------------------------------------------------------------------------
2,000 Commonwealth Energy System 84,750
---------------------------------------------------------------------------------
2,700 (a)Comnet Cellular, Inc. 67,837
---------------------------------------------------------------------------------
2,000 Connecticut Energy Corp. 38,750
---------------------------------------------------------------------------------
2,200 Connecticut Natural Gas Corp. 48,950
---------------------------------------------------------------------------------
1,500 Consumers Water Co. 26,625
---------------------------------------------------------------------------------
3,700 (a)Dial Page, Inc. 54,575
---------------------------------------------------------------------------------
1,500 E Town 41,250
---------------------------------------------------------------------------------
4,500 Eastern Enterprises 134,437
---------------------------------------------------------------------------------
4,600 Eastern Utilities Association 108,100
---------------------------------------------------------------------------------
3,400 Empire Distribution Electric Co. 62,475
---------------------------------------------------------------------------------
2,200 Energen Corp. 49,775
---------------------------------------------------------------------------------
1,100 Green Mountain Power Corp. 29,975
---------------------------------------------------------------------------------
1,200 Hickory Tech Corp. 37,200
---------------------------------------------------------------------------------
6,500 IES Industries, Inc. 173,062
---------------------------------------------------------------------------------
1,500 IWC Resources Corp. 28,500
---------------------------------------------------------------------------------
1,400 (a)Incomnet, Inc. 5,425
---------------------------------------------------------------------------------
4,450 Indiana Energy, Inc. $ 94,006
---------------------------------------------------------------------------------
1,100 (a)Intercel, Inc. 20,075
---------------------------------------------------------------------------------
6,833 (a)International Cabletel, Inc. 181,074
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
UTILITIES--CONTINUED
---------------------------------------------------------------------------------
2,200 Interstate Power Co. 63,800
---------------------------------------------------------------------------------
4,401 K N Energy, Inc. 112,776
---------------------------------------------------------------------------------
7,900 (a)Kelley Oil & Gas Corp. 19,750
---------------------------------------------------------------------------------
3,900 Laclede Gas Co. 79,462
---------------------------------------------------------------------------------
6,800 Lincoln Telecommunications Co. 117,300
---------------------------------------------------------------------------------
6,450 MDU Resources Group, Inc. 136,256
---------------------------------------------------------------------------------
2,400 Madison Gas & Electric Co. 79,200
---------------------------------------------------------------------------------
1,700 (a)MetroCall, Inc. 42,500
---------------------------------------------------------------------------------
1,400 NETCOM On-line Communication Services, Inc. 81,550
---------------------------------------------------------------------------------
1,800 NUI Corp. 29,475
---------------------------------------------------------------------------------
4,000 New Jersey Resources Corp. 100,000
---------------------------------------------------------------------------------
1,400 North Carolina Natural Gas 31,325
---------------------------------------------------------------------------------
3,300 Northwest Natural Gas Co. 105,600
---------------------------------------------------------------------------------
1,700 Northwestern Public Service Co. 45,050
---------------------------------------------------------------------------------
6,100 Oneok, Inc. 148,688
---------------------------------------------------------------------------------
3,100 Orange & Rockland Utilities, Inc. 108,888
---------------------------------------------------------------------------------
2,500 Otter Tail Power Co. 85,625
---------------------------------------------------------------------------------
1,100 (a)Palmer Wireless, Inc. 25,025
---------------------------------------------------------------------------------
1,300 Pennsylvania Enterprises 45,175
---------------------------------------------------------------------------------
2,300 Philadelphia Suburban Corp. 44,275
---------------------------------------------------------------------------------
6,400 Piedmont Natural Gas, Inc. 140,800
---------------------------------------------------------------------------------
2,525 (a)PriceCellular Corp., Class A 32,825
---------------------------------------------------------------------------------
1,200 (a)ProNet, Inc. 30,600
---------------------------------------------------------------------------------
9,400 (a)Public Service Co. New Mexico 157,450
---------------------------------------------------------------------------------
4,200 Public Service Co. North Carolina, Inc. $ 66,150
---------------------------------------------------------------------------------
500 SJW Corp. 17,563
---------------------------------------------------------------------------------
7,500 (a)Seagull Energy Corp. 128,438
---------------------------------------------------------------------------------
6,700 Sierra Pacific Resources 156,613
---------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
UTILITIES--CONTINUED
---------------------------------------------------------------------------------
2,424 South Jersey Industries, Inc. 49,692
---------------------------------------------------------------------------------
2,496 Southeastern Michigan Gas Energy 41,184
---------------------------------------------------------------------------------
1,800 Southern CA Water Co. 33,975
---------------------------------------------------------------------------------
3,500 Southern Indiana Gas & Electric Co. 118,125
---------------------------------------------------------------------------------
1,311 (a)Southern Union Co. 26,712
---------------------------------------------------------------------------------
5,300 Southwest Gas Corp. 80,163
---------------------------------------------------------------------------------
5,700 Southwestern Energy Co. 71,250
---------------------------------------------------------------------------------
900 St. Joseph Light & Power Co. 28,350
---------------------------------------------------------------------------------
1,000 (a)T-Netix, Inc. 13,000
---------------------------------------------------------------------------------
2,400 TNP Enterprises, Inc. 43,500
---------------------------------------------------------------------------------
2,160 (a)Tejas Gas Corp. 101,250
---------------------------------------------------------------------------------
2,700 (a)Tejas Power Corp., Class A 22,950
---------------------------------------------------------------------------------
900 (a)Transaction Network Services, Inc. 21,150
---------------------------------------------------------------------------------
36,100 (a)Tucson Electric Power Co. 108,300
---------------------------------------------------------------------------------
2,900 (a)U.S. Long Distance Corp. 37,338
---------------------------------------------------------------------------------
7,400 UGI Corp. 155,400
---------------------------------------------------------------------------------
2,100 USX-Delhi Group 18,638
---------------------------------------------------------------------------------
2,800 United Cities Gas Co. 47,600
---------------------------------------------------------------------------------
3,200 United Illuminating Co. 121,600
---------------------------------------------------------------------------------
5,336 United Water Resources, Inc. 67,367
---------------------------------------------------------------------------------
3,800 WICOR, Inc. 112,575
---------------------------------------------------------------------------------
5,400 WPS Resources Corp. 168,075
---------------------------------------------------------------------------------
5,400 Washington Energy Co. 99,225
---------------------------------------------------------------------------------
3,600 Western Gas Resources, Inc. $ 56,250
---------------------------------------------------------------------------------
700 (a)Xpedite Systems, Inc. 9,275
---------------------------------------------------------------------------------
2,300 Yankee Energy Systems, Inc. 49,164
--------------------------------------------------------------------------------- --------------
Total 6,872,486
--------------------------------------------------------------------------------- --------------
TOTAL COMMON STOCKS (IDENTIFIED COST $106,451,661) 115,378,743
--------------------------------------------------------------------------------- --------------
</TABLE>
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- --------------------------------------------------------------------------------- --------------
COMMON STOCKS--CONTINUED
- ------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--0.4%
- ------------------------------------------------------------------------------------------------
$ 500,000 United States Treasury Bill, 12/14/1995 (AT AMORTIZED COST) 497,010
--------------------------------------------------------------------------------- --------------
(B) REPURCHASE AGREEMENT--13.4%
- ------------------------------------------------------------------------------------------------
17,780,000 J.P. Morgan & Co., Inc., 5.90%, dated 10/31/1995, due 11/1/1995 (AT AMORTIZED
COST) 17,780,000
--------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $124,728,671)(C) $ 133,655,753
--------------------------------------------------------------------------------- --------------
</TABLE>
* The Fund purchases stock futures contracts to efficiently manage cash flows
resulting from shareholder purchases and redemptions, dividend and capital
gain payments to shareholders and corporate actions while maintaining
exposure to the stock market and minimizing trading costs. The total market
value of open futures contracts is $17,102,750 at October 31, 1995, which
represents 12.9% of net assets. Taking into consideration these open futures
contracts, the Fund's effective, total exposure to stocks is 100.1%.
(a) Non-income producing security.
(b) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations. The investments in the repurchase agreement is through
participation in a joint accounts with other Federated funds.
(c) The cost of investments for federal tax purposes amounts to $124,764,786.
The unrealized appreciation of investments on a federal tax basis amounts
to $8,890,967 which is comprised of $19,044,898 appreciation and
$10,153,931 depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($132,399,160) at October 31, 1995.
The following acronyms are used throughout this portfolio:
BIG--Bond Investors Guaranty
LYNX--Liquid Yield Note Exchangeable
LYONs--Liquid Yield Option Notes
REIT--Real Estate Investment Trust
TRANs--Tax and Revenue Anticipation Notes
(See Notes which are an integral part of the Financial Statements)
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in repurchase agreements, at amortized cost $ 17,780,000
- ---------------------------------------------------------------------------------
Investments in securities, at value 115,875,753
- --------------------------------------------------------------------------------- --------------
Total investments, at amortized cost and value
(identified cost $124,728,671 and tax cost $124,764,786) $ 133,655,753
- -------------------------------------------------------------------------------------------------
Income receivable 93,673
- -------------------------------------------------------------------------------------------------
Receivable for investments sold 7,552
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 496,588
- -------------------------------------------------------------------------------------------------
Deferred expenses 1,938
- ------------------------------------------------------------------------------------------------- --------------
Total assets 134,255,504
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 7,962
- ---------------------------------------------------------------------------------
Payable for shares redeemed 1,032,656
- ---------------------------------------------------------------------------------
Payable to bank 683,247
- ---------------------------------------------------------------------------------
Payable for daily variation margin 75,800
- ---------------------------------------------------------------------------------
Accrued expenses 56,679
- --------------------------------------------------------------------------------- --------------
Total liabilities 1,856,344
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 9,932,028 shares outstanding $ 132,399,160
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------
Paid in capital $ 116,301,221
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and futures contracts 8,037,689
- -------------------------------------------------------------------------------------------------
Accumulated net realized gain on investments and futures contracts 7,953,218
- -------------------------------------------------------------------------------------------------
Undistributed net investment income 107,032
- ------------------------------------------------------------------------------------------------- --------------
Total Net Assets $ 132,399,160
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
$132,399,160 / 9,932,028 shares outstanding $13.33
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Dividends $ 1,426,226
- ----------------------------------------------------------------------------------------------------
Interest 685,365
- ---------------------------------------------------------------------------------------------------- ------------
Total income 2,111,591
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Management fee $ 540,284
- -----------------------------------------------------------------------------------------
Custodian fees 105,212
- -----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 72,573
- -----------------------------------------------------------------------------------------
Directors'/Trustees' fees 2,465
- -----------------------------------------------------------------------------------------
Auditing fees 14,000
- -----------------------------------------------------------------------------------------
Legal fees 3,832
- -----------------------------------------------------------------------------------------
Portfolio accounting fees 25,448
- -----------------------------------------------------------------------------------------
Shareholder services fee 22,753
- -----------------------------------------------------------------------------------------
Share registration costs 32,099
- -----------------------------------------------------------------------------------------
Printing and postage 34,544
- -----------------------------------------------------------------------------------------
Insurance premiums 4,680
- -----------------------------------------------------------------------------------------
Taxes 719
- -----------------------------------------------------------------------------------------
Miscellaneous 8,904
- ----------------------------------------------------------------------------------------- ---------
Total expenses 867,513
- -----------------------------------------------------------------------------------------
Waivers--
- -----------------------------------------------------------------------------------------
Waiver of management fee (56,620)
- ----------------------------------------------------------------------------------------- ---------
Net expenses 810,893
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income 1,300,698
- ---------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FUTURES CONTRACTS:
- ----------------------------------------------------------------------------------------------------
Net realized gain on investments and futures contracts 8,050,853
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments and futures contracts 6,189,544
- ---------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments and futures contracts 14,240,397
- ---------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 15,541,095
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
1995 1994
INCREASE (DECREASE) IN NET ASSETS:
<S> <C> <C>
- ---------------------------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------------------------
Net investment income $ 1,300,698 $ 862,785
- ---------------------------------------------------------------------------------
Net realized gain (loss) on investments and futures contracts ($7,103,741 net
gain and $588,669 net gain, respectively, as computed for federal tax purposes) 8,050,853 687,062
- ---------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments and futures
contracts 6,189,544 (2,252,508)
- --------------------------------------------------------------------------------- -------------- --------------
Change in net assets resulting from operations 15,541,095 (702,661)
- --------------------------------------------------------------------------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------------------------
Distributions from net investment income (1,244,470) (841,410)
- ---------------------------------------------------------------------------------
Distributions from net realized gain on investment transactions and futures
contracts (588,727) (5,087,293)
- --------------------------------------------------------------------------------- -------------- --------------
Change in net assets resulting from distributions to shareholders (1,833,197) (5,928,703)
- --------------------------------------------------------------------------------- -------------- --------------
SHARE TRANSACTIONS--
- ---------------------------------------------------------------------------------
Proceeds from sale of shares 111,108,338 72,777,271
- ---------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 639,919 1,600,835
- ---------------------------------------------------------------------------------
Cost of shares redeemed (91,497,761) (45,444,941)
- --------------------------------------------------------------------------------- -------------- --------------
Change in net assets resulting from share transactions 20,250,496 28,933,165
- --------------------------------------------------------------------------------- -------------- --------------
Change in net assets 33,958,394 22,301,801
- ---------------------------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------------------------
Beginning of period 98,440,766 76,138,965
- --------------------------------------------------------------------------------- -------------- --------------
End of period (including undistributed net investment income of $107,032 and
$50,804, respectively) $ 132,399,160 $ 98,440,766
- --------------------------------------------------------------------------------- -------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MINI-CAP FUND
(FORMERLY, MINI-CAP FUND)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
(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 are only those of Federated Mini-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 Mini-Cap Fund to Federated Mini-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.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
the prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
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 over a period of five years from
the Fund's commencement date.
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock futures contract with a broker, the Fund
is required to deposit in a segregated account an amount of cash or U.S.
government securities. Futures contracts are valued daily and unrealized
gains or losses are recorded in a "variation margin" account. Daily the
Fund receives from or pays to the broker a specified amount of cash based
upon changes in the variation margin account. When a contract is closed,
the Fund recognizes a realized gain or loss.
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities. For the period ended October 31, 1995, the Fund
had realized gains of $2,026,701 on future contracts. At October 31, 1995,
the Fund had outstanding futures contracts as set forth below:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CONTRACTS TO APPRECIATION
DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
<C> <S> <C> <C>
- --------------------------------------------------------------------------------------
December 1995 48 Russell 2000 Index Futures Long $ (516,005)
December 1995 104 S&P 400 Index Futures Long $ (373,388)
-----------------
Net Unrealized Depreciation on Futures Contracts $ (889,393)
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(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 shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED
OCTOBER 31,
<S> <C> <C>
1995 1994
Shares sold 8,827,567 6,201,460
- ---------------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 52,957 138,183
- ---------------------------------------------------------------------------------------
Shares redeemed (7,400,092) (3,900,247)
- --------------------------------------------------------------------------------------- ----------- -----------
Net change resulting from share transactions 1,480,432 2,439,396
- --------------------------------------------------------------------------------------- ----------- -----------
</TABLE>
(4) INVESTMENT ADVISORY 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 .50 of 1% of the
Fund's average daily net assets. Under the terms of a sub-management contract
between the Manager and the Trust Division of ANB Investment Management and
Trust Company (the "Sub-Manager"), the Sub-Manager receives an annual fee from
the Manager equal to .065 of 1% of the Fund's average daily net assets. 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.
SHAREHOLDER SERVICES FEE--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 daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ") serves as transfer and dividend disbursing agent for the Fund.
This fee is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records
for which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $22,217 were borne initially
by the Manager. The Fund has agreed to reimburse the Manager for the
organizational expenses at an annual rate of .005 of 1% of average daily net
assets until expenses initially borne are fully reimbursed or the expiration of
five years after the Fund's effective date, whichever occurs earlier. For the
period ended October 31, 1995, the Fund paid $4,937 pursuant to this agreement.
GENERAL--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, 1995, were as follows:
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
PURCHASES $ 57,513,220
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 40,535,593
- --------------------------------------------------------------------------------------------------- -------------
</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 Mini-Cap Fund (a portfolio of
Federated Index Trust) as of October 31, 1995, 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, 1995, 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 Mini-Cap Fund of Federated Index Trust at October 31, 1995, 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 8, 1995
ADDRESSES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Federated Mini-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 8600
Trust Company Boston, Massachusetts 02266-8600
- -----------------------------------------------------------------------------------------------------------------------
Transfer Agent and Dividend Disbursing Agent
Federated Services Company P.O. Box 8600
Boston, Massachusetts 02266-8600
- -----------------------------------------------------------------------------------------------------------------------
Independent Auditors
Ernst & Young LLP One Oxford Centre
Pittsburgh, Pennsylvania 15219
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
FEDERATED MINI-CAP FUND
(A PORTFOLIO OF FEDERATED INDEX TRUST)
PROSPECTUS
An No-Load, Open-End, Diversified
Management Investment Company
Prospectus dated December 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
[LOGO]
Cusip 31420E304
2062305A (12/95)
FEDERATED MAX-CAP FUND
(A PORTFOLIO OF FEDERATED INDEX TRUST)
INSTITUTIONAL SHARES
INSTITUTIONAL SERVICE SHARES
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 Statement of
Additional Information should be read with the respective prospectus for
Institutional Shares and Institutional Service Shares dated December 31,
1995. This Statement is not a prospectus itself. You may request a copy of
a prospectus or a paper copy of this Statement of Additional Information,
if you have received it electronically, free of charge by calling 1-800-
235-4669.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated December 31, 1995
Federated Securities Corp.
Distributor
A subsidiary of Federated Investors
GENERAL INFORMATION ABOUT THE FUND1
INVESTMENT OBJECTIVE AND POLICIES1
Types of Investments 1
When-Issued and Delayed Delivery
Transactions 3
Lending of Portfolio Securities 3
Reverse Repurchase Agreements 3
Portfolio Turnover 3
Investment Limitations 3
FEDERATED INDEX TRUST MANAGEMENT 6
Fund Ownership 10
Trustees Compensation 11
Trustee Liability 11
MANAGEMENT SERVICES 12
Managers to the Fund 12
Management Fees 12
Other Related Services 12
BROKERAGE TRANSACTIONS 12
OTHER SERVICES 13
Custodian and Portfolio
Recordkeeper 13
Transfer Agent 13
Independent Auditors 13
PURCHASING SHARES 13
Distribution Plan (Institutional
Service Shares)
and Shareholder Services
Agreement 13
Conversion to Federal Funds 14
DETERMINING NET ASSET VALUE 14
Determining Market Value of
Securities 14
REDEEMING SHARES 14
Redemption in Kind 14
MASSACHUSETTS PARTNERSHIP LAW 14
TAX STATUS 15
The Fund's Tax Status 15
Shareholders' Tax Status 15
Capital Gains 15
TOTAL RETURN 15
YIELD 16
PERFORMANCE COMPARISONS 16
ABOUT FEDERATED INVESTORS 17
STANDARD & POOR'S RATINGS GROUP 17
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. On December 5, 1994, the
Trustees changed the name of the Fund from the Max-Cap Fund to the Federated
Max-Cap Fund. 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 associations
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
oprime 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:
othe full faith and credit of the U.S. Treasury;
othe issuer's right to borrow from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
othe 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 The Farm Credit System, including the National Bank for
Cooperatives,
Farm Credit Banks, and Banks for Cooperatives;
o Federal Home Loan Banks;
o Farmers Home Administration; and
oFederal 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 or yield for the Fund. 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 on the Fund`s records 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, 1995 and October 31, 1994, the portfolio turnover rate for the Fund was
57% and 2%, 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 of the
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.
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.
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 Fund's 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.
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 association 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 are listed with their addresses, birthdates, present
positions with Federated Index Trust, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director, Trustee, or Managing General Partner of
the Funds. Mr. Donahue is the father of J. Christopher Donahue, Executive
Vice President.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President and Trustee
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Administrative Services, Federated
Services Company, and Federated Shareholder Services; President or Executive
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.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's Hospital
of Pittsburgh; Director, Trustee, or Managing General Partner of the Funds;
formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
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
Birthdate: July 4, 1918
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.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical
Center; formerly, Hematologist, Oncologist, and Internist, Presbyterian and
Montefiore Hospitals; Director, Trustee, or Managing General Partner of the
Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and 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
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
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.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee,
or Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director, Trustee or Managing General Partner of the
Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Management
Center; Director, Trustee, or Managing General Partner of the Funds;
President Emeritus, University of Pittsburgh; founding Chairman, National
Advisory Council for Environmental Policy and Technology and Federal
Emergency Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-profit
entities; Director, Trustee, or Managing General Partner of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the Funds;
staff member, Federated Securities Corp. and Federated Administrative
Services.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice
President, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., Federated Global Research Corp. and Passport
Research, Ltd.; Executive Vice President and Director, Federated Securities
Corp.; Trustee, Federated Services Company; Chairman, Treasurer, and Trustee,
Federated Administrative Services; Trustee or Director of some of the Funds;
Executive Vice President and Treasurer of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of
the Funds; Director or Trustee of some of the Funds.
David M. Taylor *
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., and Passport Research, Ltd.; Vice President,
Federated Shareholder Services; Senior Vice President, Federated
Administrative Services; Treasurer of some of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, General Counsel, and Trustee,
Federated Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated Global
Research Corp.; Trustee, Federated Services Company; Executive Vice
President, Secretary, and Trustee, Federated Administrative Services;
President and Trustee, Federated Shareholder Services; Director, Federated
Securities Corp.; Executive 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.
@ Member of the Executive Committee. The Executive Committee of the
Trustees handles the responsibilities of the Trustees between meetings
of the Trustees.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management Series;
Arrow Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated
ARMs Fund; Federated Equity Funds; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond Fund; Federated
U.S. Government Securities Fund: 1-3 Years; Federated U.S. Government
Securities Fund: 3-5 Years; 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;
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; Money Market Management, Inc.; Money Market
Obligations Trust; Money Market Trust; Municipal Securities Income Trust;
Newpoint Funds; 111 Corcoran Funds; Peachtree Funds; The Planters Funds;
RIMCO Monument Funds; The Shawmut Funds; 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; The
Virtus Funds; World Investment Series, Inc.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding shares.
As of December 4, 1995, the following shareholders of record owned 5% or
more of the Institutional Shares of the Fund: Charles Schwab & Co. Inc.,
San Francisco, CA, owned approximately 6,818,944 shares (14.19%); University
Bank & Trust Co., Palo Alto, CA, owned approximately 2,805,511 shares
(5.84%); and Mitra & Co., Milwaukee, WI, owned approximately 5,568,028 shares
(11.59%).
As of December 4, 1995, the following shareholders of record owned 5% or
more of the Institutional Service Shares of the Fund: Dai-Ichi Kangyo Bank
of CA, Los Angeles, CA, owned approximately 253,789 shares (10.56%); Alltel
Corp. Thrift Plan, San Francisco, CA, owned approximately 640,221 shares
(26.63%); Chemical Bank as Trustee For Defined Contribution Plans, New York,
NY, owned approximately 139,412 shares (5.80%); Univest & Company, Souderton,
PA, owned approximately 148,760 shares (6.19%); and SANBARCO, Santa Barbara,
CA, owned approximately 306,042 shares (12.73%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $ -0- $-0- for the Trust and
Chairman and Trustee 68 other investment companies in the Fund
Complex
J. Christopher Donahue $ -0- $-0- for the Trust and
Exec. Vice. Pres and Trustee 14 other investment companies in the Fund
Complex
Thomas G. Bigley $ -0- $20,688 for the Trust and
Trustee 49 other investment companies in the Fund Complex
John T. Conroy, Jr. $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
William J. Copeland $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
James E. Dowd $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D. $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Edward L. Flaherty, Jr. $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Peter E. Madden $1,340 $90,563 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Gregor F. Meyer $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
John E. Murray, Jr. $2,531 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Wesley W. Posvar $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Marjorie P. Smuts$1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
*Information is furnished for the fiscal year ended October 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised of
three portfolios.
+The information is provided for the last calendar year.
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 First Chicago Investment
Management Company. First Chicago Investment Management Company is a wholly-
owned subsidiary of First National Bank of Chicago, which in turn, is a
wholly-owned subsidiary of First Chicago Corporation. The sub-manager's
directors are Alan F. Delp, J. Stephen Baine, Thomas P. Michaels,
David P. Bogler, Stephen P. Manus, Neil R. Wright, Terrall J. Janeway 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, 1995, 1994 and 1993, the manager
earned $1,727,669, $1,287,529 and $1,062,278, respectively, of which,
$433,282, $289,795 and $321,440, 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.
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: advice as to the advisability of
investing in securities; security analysis and reports;
economic studies; industry studies; receipt of quotations for portfolio
evaluations; and similar services. Research services provided by
brokers and dealers may be used by the managers or their affiliates in
advising the Fund 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. 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. During the fiscal years
ended October 31, 1995, 1994 and 1993, the Fund paid total brokerage
commissions of $35,334, $20,905 and $16,910, respectively.
Although investment decisions for the Fund are made independently from those
of the other accounts managed by the managers, investments of the type the
Fund may make may also be made by those other accounts. When the Fund and one
or more other accounts managed by the managers are prepared to invest in, or
desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the
managers to be equitable to each. In some cases, this procedure may adversely
affect the price paid or received by the Fund or the size of the position
obtained or disposed of by the Fund. In other cases, however, it is believed
that coordination and the ability to participate in volume transactions will
be to the benefit of the Fund.
OTHER SERVICES
CUSTODIAN AND PORTFOLIO RECORDKEEPER
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for
the securities and cash of the Fund. Federated Services Company, Boston,
Massachusetts, provides certain accounting and recordkeeping services with
respect to the Funds's portfolio investments.
TRANSFER AGENT
As transfer agent, Federated Services Company maintains all necessary
shareholder records. For its services, the transfer agent receives a fee
based on the size, type and number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITORS
The independent auditors for the Fund are Ernst & Young LLP, Pittsburgh,
Pennsylvania.
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) AND SHAREHOLDER SERVICES
AGREEMENT
These arrangements permit the payment of fees to financial institutions,
the distributor, and Federated Shareholder Services, to stimulate
distribution activities and 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, marketing efforts; 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.
By adopting the Distribution Plan, (Institutional Service Shares) 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 pursuing its
investment objectives. By identifying potential investors whose needs are
served by the Fund's objectives, and properly servicing these accounts, it
may be possible to curb sharp fluctuations in rates of redemption s and
sales.
Other benefits, which may be realized under either arrangement, may
include: (1) providing personal services to shareholders; (2) investing
shareholder assets with a minimum of delay and administrative detail; (3)
enhancing shareholder recordkeeping systems; and (4) responding promptly to
shareholders' requests and inquiries concerning their accounts.
For the fiscal year ended October 31, 1995, the Fund paid shareholder
services fees in the amount of $1,383,122, all of which was waived, for
Institutional Shares.
For the fiscal year ended October 31, 1995, payment in the amount of $67,923,
of which $56,603 was waived, was made pursuant to the the Distribution Plan
for Insitutional Service Shares. In addition, the Fund paid shareholder
services fees in the amount of $56,603 for Institutional Service Shares.
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 values of the Fund's portfolio securities are determined as
follows:
ofor equity securities, according to the last sale price on a national
securities exchange, if available;
oin the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices;
ofor 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 remaining maturities of 60 days or less at the time of
purchase, at amortized cost; or
ofor 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.
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 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:
oderive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
oderive less than 30% of its gross income from the sale of securities held
less than three months;
oinvest in securities within certain statutory limits; and
odistribute 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 and five-year periods ended October 31, 1995 was 26% and 16.86%,
respectively.
The Fund's average annual total return for Institutional Service Shares
for the one-year period ended October 31, 1995 and for the period from August
30, 1993 (date of initial public investment) to October 31, 1995 was 25.52%
and 13.73%, 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, 1995, were
2.60% and 2.29%, 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:
oportfolio quality;
oaverage portfolio maturity;
otype of instruments in which the portfolio is invested;
ochanges in interest rates and market value of portfolio securities;
ochanges in Fund expenses;
othe relative amount of Fund cash flow; and
ovarious 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.
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:
oLIPPER 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.
oDOW 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.
oSTANDARD & 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.
oMORNINGSTAR, 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.
ABOUT FEDERATED INVESTORS
Federated Investors is dedicated to meeting investor needs which is reflected
in its investment decision making-structured, straightforward, and
consistent. This has resulted in a history of competitive performance with a
range of competitive investment products that have gained the confidence of
thousands of clients and their customers.
The company's disciplined security selection process is firmly rooted in
sound methodologies backed by fundamental and technical research. Investment
decisions are made and executed by teams of portfolio managers, analysts, and
traders dedicated to specific market sectors.
In the equity sector, Federated Investors has more than 25 years' experience.
As of December 31, 1994, Federated Investors managed 15 equity funds totaling
approximately $4 billion in assets across growth, value, equity income,
international, index and sector (i.e. utility) styles. Federated Investor's
value-oriented management style combines quantitative and qualitative
analysis and features a structured, computer-assisted composite modeling
system that was developed in the 1970s.
J. Thomas Madden, Executive Vice President, oversees Federated Investors'
equity and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated Investors' domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated Investors' international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial
goals through mutual funds. These investors, as well as businesses and
institutions, have entrusted over $2 trillion to the more than 5,500 funds
available.*
Federated Investors, through its subsidiaries, distributes mutual funds for a
variety of investment applications. Specific markets include:
INSTITUTIONAL CLIENTS
Federated Investors meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of applications, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional
clients include corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisors. The marketing effort to these institutional clients is headed by
John B. Fisher, President, Institutional Sales Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than 1,500
banks and trust organizations. Virtually all of the trust divisions of the
top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage firms
nationwide--including 200 New York Stock Exchange firms--supported by more
wholesalers than any other mutual fund distributor. The marketing effort to
these firms is headed by James F. Getz, President, Broker/Dealer Division.
*source: Investment Company Institute
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.
Cusip 31420E106
Cusip 31420E403
0032104B (12/95)
FEDERATED 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, 1995. This Statement is not a
prospectus itself. You may request a copy of a prospectus or a paper copy
of this Statement of Additional Information, if you have received it
electronically, free of charge by calling 1-800-235-4669.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated December 31, 1995
FEDERATED SECURITIES CORP.
DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
GENERAL INFORMATION ABOUT THE FUND1
INVESTMENT OBJECTIVE AND POLICIES1
Types of Investments 1
When-Issued and Delayed Delivery
Transactions 3
Lending of Portfolio Securities 3
Reverse Repurchase Agreements 3
Portfolio Turnover 3
Investment Limitations 3
FEDERATED INDEX TRUST MANAGEMENT 6
Fund Ownership 10
Trustees Compensation 11
Trustee Liability 11
MANAGEMENT SERVICES 12
Managers to the Fund 12
Management Fees 12
Other Related Services 12
BROKERAGE TRANSACTIONS 12
OTHER SERVICES 13
Custodian and Portfolio Recordkeeper
13
Transfer Agent 13
Independent Auditors 13
SHAREHOLDER SERVICES AGREEMENT 13
PURCHASING SHARES 13
Conversion to Federal Funds 13
Exchanging Securities for Fund
Shares 13
DETERMINING NET ASSET VALUE 14
Determining Market Value of
Securities 14
REDEEMING SHARES 14
Redemption in Kind 14
MASSACHUSETTS PARTNERSHIP LAW 15
TAX STATUS 15
The Fund's Tax Status 15
Shareholders' Tax Status 15
TOTAL RETURN 15
YIELD 16
PERFORMANCE COMPARISONS 16
ABOUT FEDERATED INVESTORS 17
STANDARD & POOR'S RATINGS GROUP 17
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. On December 5, 1994, the Trustees
changed the name of the Fund from the Mid-Cap Fund to the Federated Mid-Cap
Fund.
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 associations 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
oprime 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:
othe full faith and credit of the U.S. Treasury;
othe issuer's right to borrow from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
othe 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 The Farm Credit System, including the National Bank for
Cooperatives,
Farm Credit Banks, and Banks for Cooperatives;
o Federal Home Loan Banks;
o Farmers Home Administration; and
oFederal 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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. 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 on the Fund`s records 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 securities are marked to
market daily and are 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, 1995 and October 31, 1994, the portfolio turnover rate for the Fund was
26% and 30%, respectively.
INVESTMENT LIMITATIONS
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities. However, the Fund may
purchase stock index futures contracts and put options on stock indices
and stock index futures contracts to the extent that not more than 5% of
the Fund's total assets are required as initial margin deposit for
futures contracts and not more than 20% of the Fund's total net assets
are invested in futures contracts and options at any time.
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 and put options on stock index futures contracts, 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
up to one-third of the value of its total assets. This shall not prevent
the Fund from purchasing or holding U.S. government obligations, money
market instruments, bonds, debentures, notes, certificates of
indebtedness or other debt securities, entering into repurchase
agreements, or engaging in other transactions where permitted by the
Fund's investment objective and policies and the Declaration of Trust of
the 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.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities, except that the Fund may
borrow money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amounts
borrowed. The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather 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 securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of its total assets are outstanding. During
the period any reverse repurchase agreements are outstanding, but only to
the extent necessary to assure completion of the reverse repurchase
agreements, the Fund will restrict the purchase of portfolio instruments
to money market instruments maturing on or before the expiration date of
the reverse repurchase agreements.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may pledge assets having
a market value not exceeding the lesser of the dollar amounts borrowed or
10% of the value of total assets at the time of the borrowing.
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 any 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, including partnership
interests in real estate, although it may invest in securities of
companies whose business involves the purchase or sale of real estate or
in securities which are secured by real estate or interests in real
estate.
INVESTING IN RESTRICTED SECURITIES
To comply with requirements of a particular state, the Fund will limit
its investment in restricted securities to 5% of the value of its total
assets in securities subject to restrictions on resale under the Security
Exchange Act of 1933.
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.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
operating history, including the operation of any predecessor.
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 if the
Officers and Trustees of the Trust or the Fund's manager or sub-manager
owning individually more than 1/2 of 1% of the issuer's securities
together own more than 5% of the issuer's securities.
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, stock indices and stock index futures contracts, 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 and not more than 20% of the Fund's total net
assets are invested in put options and future contracts at any time.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although it may purchase
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.
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.
FEDERATED INDEX TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates, present
positions with Federated Index Trust, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director, Trustee, or Managing General Partner of
the Funds. Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President and Trustee
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp. and Federated Global Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Executive 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.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's Hospital
of Pittsburgh; Director, Trustee, or Managing General Partner of the Funds;
formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
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
Birthdate: July 4, 1918
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.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical Center;
formerly, Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Director, Trustee, or Managing General Partner of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and 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
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
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.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or
Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director, Trustee or Managing General Partner of the
Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Management
Center; Director, Trustee, or Managing General Partner of the Funds; President
Emeritus, University of Pittsburgh; founding Chairman, National Advisory
Council for Environmental Policy and Technology and Federal Emergency
Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-profit
entities; Director, Trustee, or Managing General Partner of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the Funds;
staff member, Federated Securities Corp. and Federated Administrative
Services.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research, Ltd.;
Executive Vice President and Director, Federated Securities Corp.; Trustee,
Federated Services Company; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; Executive
Vice President and Treasurer of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of
the Funds; Director or Trustee of some of the Funds.
David M. Taylor *
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., and Passport Research, Ltd.; Vice President,
Federated Shareholder Services; Senior Vice President, Federated
Administrative Services; Treasurer of some of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, General Counsel, and Trustee,
Federated Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated Global
Research Corp.; Trustee, Federated Services Company; Executive Vice President,
Secretary, and Trustee, Federated Administrative Services; President and
Trustee, Federated Shareholder Services; Director, Federated Securities Corp.;
Executive 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.
@ Member of the Executive Committee. The Executive Committee of the
Trustees handles the responsibilities of the Trustees between meetings
of the Trustees.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management Series;
Arrow Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated
ARMs Fund; Federated Equity Funds; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 3-5 Years; 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; 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; Money Market Management, Inc.; Money Market Obligations Trust; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The Shawmut
Funds; 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; The Virtus Funds; World Investment Series, Inc.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding
shares.
As of December 4, 1995, the following shareholders of record owned 5% or
more of the outstanding shares of the Fund: Dai-Ichi Kangyo Bank of CA, Los
Angeles, CA, owned approximately 380,662 shares (7.61%); Charles Schwab & Co.
Inc., San Francisco, CA, owned approximately 420,108 shares (8.40%); CENTBANK
& Co., Monroe, LA, owned approximately 354,297 shares (7.08%); Covie & Co.,
Chicago, IL, owned approximately 260,161 shares (5.20%); FIRNATICIA, Iowa
City, IA, owned approximately 342,120 shares, (6.84%); SANBARCO, Santa
Barbara, CA, owned approximately 289,351 shares (5.78%); and Mitra & Co.,
Milwaukee, WI, owned approximately 335,456 shares (6.70%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $ -0- $-0- for the Trust and
Chairman and Trustee 68 other investment companies in the Fund
Complex
J. Christopher Donahue $ -0- $-0- for the Trust and
Exec. Vice. Pres and Trustee 14 other investment companies in the Fund
Complex
Thomas G. Bigley $ -0- $20,688 for the Trust and
Trustee 49 other investment companies in the Fund Complex
John T. Conroy, Jr. $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
William J. Copeland $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
James E. Dowd $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D. $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Edward L. Flaherty, Jr. $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Peter E. Madden $1,340 $90,563 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Gregor F. Meyer $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
John E. Murray, Jr. $2,531 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Wesley W. Posvar $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Marjorie P. Smuts$1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
*Information is furnished for the fiscal year ended October 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised of
three portfolios.
+The information is provided for the last calendar year.
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 First Chicago Investment
Management Company. First Chicago Investment Management Company is a wholly-
owned subsidiary of First National Bank of Chicago, which in turn, is a
wholly-owned subsidiary of First Chicago Corporation. The sub-manager's
directors are Alan F. Delp, J. Stephen Baine, Thomas P. Michaels,
David P. Bogler, Stephen P. Manus, Neil R. Wright, Terrall J. Janeway 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,
which will be paid by the manager, as described in the prospectus.
For the fiscal years ended October 31, 1995, 1994 and 1993, the manager
earned $208,809, $115,033 and $34,031, respectively, of which $106,606,
$115,033 and $34,031 was voluntarily waived in 1995, 1994 and 1993,
respectively, because of 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 expense
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.
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: advice as to the advisability of
investing in securities; security analysis and reports; economic
studies; industry studies; receipt of quotations for portfolio evaluations;
and similar services. Research services provided by brokers and dealers
may be used by the managers or their affiliates in advising the Fund 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. 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. During
the fiscal years ended October 31, 1995, 1994 and 1993, the Fund paid total
brokerage commissions of $45,385, $54,595 and $2,222, respectively.
Although investment decisions for the Fund are made independently from those
of the other accounts managed by the managers, investments of the type the
Fund may make may also be made by those other accounts. When the Fund and one
or more other accounts managed by the managers are prepared to invest in, or
desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the managers
to be equitable to each. In some cases, this procedure may adversely affect
the price paid or received by the Fund or the size of the position obtained or
disposed of by the Fund. In other cases, however, it is believed that
coordination and the ability to participate in volume transactions will be to
the benefit of the Fund.
OTHER SERVICES
CUSTODIAN AND PORTFOLIO RECORDKEEPER
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for
the securities and cash of the Fund. Federated Services Company, Boston,
Massachusetts, provides certain accounting and recordkeeping services with
respect to the Funds's portfolio investments.
TRANSFER AGENT
As transfer agent, Federated Services Company maintains all necessary
shareholder records. For its services, the transfer agent receives a fee
based on the size, type and number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITORS
The independent auditors for the Fund are Ernst & Young LLP, Pittsburgh,
Pennsylvania.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, to financial institutions to cause services to be provided
which are necessary for the maintenance of shareholder accounts and to
encourage personal services 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. By adopting the Shareholder
Services Agreement, the Trustees expects that the Fund will benefit by: (1)
providing personal services to shareholders; (2) investing shareholder assets
with a minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders' requests
and inquiries concerning their accounts.
For the fiscal year ended October 31, 1995, the Fund incurred shareholder
services fees in the amount of $130,516, of which $107,993 was waived.
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 of the Fund is explained in the prospectus under "Investing in
the Fund."
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. State Street Bank acts as
the shareholder's agent in depositing checks and converting them to federal
funds.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange securities they already own for Fund shares, or they
may exchange a combination of securities and cash for Fund shares. Any
securities to be exchanged must meet the investment objective and policies of
the Fund, must have a readily ascertainable market value, must be liquid, and
must not be subject to restrictions on resale. An investor should forward the
securities in negotiable form with an authorized letter of transmittal to
Federated Securities Corp. The Fund will notify the investor of its acceptance
and valuation of the securities within five business days of their receipt by
State Street Bank.
The Fund values such securities in the same manner as the Fund values its
assets. The basis of the exchange will depend upon the net asset value of Fund
shares on the day the securities are valued. One share of the Fund will be
issued for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be considered
in valuing the securities. All interest, dividends, subscription, conversion,
or other rights attached to the securities become the property of the Fund,
along with the securities.
TAX CONSEQUENCES
Exercise of this exchange privilege is treated as a sale for federal
income tax purposes. Depending upon the cost basis of the securities
exchanged for Fund shares, a gain or loss may be realized by the
investor.
DETERMINING NET ASSET VALUE
Net asset value generally changes each day. The days on which net asset
value is calculated by the Fund are described in the prospectus.
DETERMINING MARKET VALUE OF SECURITIES
Market 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 remaining maturities of 60 days or less at the time of
purchase, at amortized cost; or
ofor 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 and options on stocks,
stock indices and stock index futures contracts 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 prospectus under "Redeeming 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
with securities from the Fund's portfolio.
Such securities will be valued with the same valuation techniques employed
in determining net asset value, and the securities will be selected 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 will redeem shares for any one shareholder in
cash up to the lesser of $250,000 or 1% of the Fund's net asset value during
any 90-day period.
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 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:
oderive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
oderive less than 30% of its gross income from the sale of securities held
less than three months;
oinvest in securities within certain statutory limits; and
odistribute 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
Shareholders will pay federal tax at capital gains rates on long-term
capital gains distributed to them regardless of how long they have held
the Fund shares.
TOTAL RETURN
The Fund's average annual total return for the one-year period ended
October 31, 1995 and for the period from November 5, 1992 (start of
performance) to October 31, 1995, was 20.12% and 12.97% , respectively.
The average annual total return for the Trust 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 Fund's SEC yield for the thirty-day period ended October 31, 1995 was
1.65%
The yield for the Fund is determined each day 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
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:
oportfolio quality;
oaverage portfolio maturity;
otype of instruments in which the portfolio is invested;
ochanges in interest rates and market value of portfolio securities;
ochanges in Fund expenses;
othe relative amount of Fund cash flow; and
ovarious other factors.
The Fund's performance 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.
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 RUSSELL 2000 SMALL STOCK INDEX--is a broadly diversified index consisting
of approximately 2,000 small capitalization common stocks that can be used
to compare to the total returns of funds whose portfolios are invested
primarily in small capitalization common stocks.
o STANDARD & POOR'S DAILY STOCK PRICE INDEXES OF 500 AND 400 COMMON STOCKS-
-are composite indexes of common stocks in industry, transportation, and
financial and public utility companies that 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 indexes assume reinvestments of
all dividends paid by stocks listed on its indexes. Taxes due on any of
these distributions are not included, nor are brokerage or other fees
calculated in Standard & Poor's figures.
o WILSHIRE 5000 EQUITY INDEXES--consists of nearly 5,000 common equity
securities, covering all stocks in the U.S. for which daily pricing is
available, and can be used to compare to the total returns of funds whose
portfolios are invested primarily in common stocks.
oMORNINGSTAR, 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 the Fund may quote total
returns which are calculated on non-standardized base periods. These total
returns also represent the historic change in the value of an investment in
the Fund based on quarterly reinvestment of dividends over a specified period
of time.
ABOUT FEDERATED INVESTORS
Federated Investors is dedicated to meeting investor needs which is reflected
in its investment decision making-structured, straightforward, and consistent.
This has resulted in a history of competitive performance with a range of
competitive investment products that have gained the confidence of thousands
of clients and their customers.
The company's disciplined security selection process is firmly rooted in sound
methodologies backed by fundamental and technical research. Investment
decisions are made and executed by teams of portfolio managers, analysts, and
traders dedicated to specific market sectors.
In the equity sector, Federated Investors has more than 25 years' experience.
As of December 31, 1994, Federated Investors managed 15 equity funds totaling
approximately $4 billion in assets across growth, value, equity income,
international, index and sector (i.e. utility) styles. Federated Investor's
value-oriented management style combines quantitative and qualitative analysis
and features a structured, computer-assisted composite modeling system that
was developed in the 1970s.
J. Thomas Madden, Executive Vice President, oversees Federated Investors'
equity and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated Investors' domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated Investors' international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $2 trillion to the more than 5,500 funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds for a
variety of investment applications. Specific markets include:
INSTITUTIONAL CLIENTS
Federated Investors meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of applications, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional
clients include corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisors. The marketing effort to these institutional clients is headed by
John B. Fisher, President, Institutional Sales Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than 1,500
banks and trust organizations. Virtually all of the trust divisions of the
top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage firms
nationwide--including 200 New York Stock Exchange firms--supported by more
wholesalers than any other mutual fund distributor. The marketing effort to
these firms is headed by James F. Getz, President, Broker/Dealer Division.
*source: Investment Company Institute
STANDARD & POOR'S RATINGS GROUP
"Standard and Poor's," "S&P ," "S&P MidCap 400 Index," and "Standard & Poor's
MidCap 400 Index" are trademarks of Standard & Poor's Ratings Group ("S&P")
and have been licensed for use by Federated Securities Corp. The Fund is not
sponsored, endorsed, sold or promoted by S&P and S&P makes no representation
regarding the advisability of investing in the Fund.
FEDERATED MINI-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, 1995. This Statement is not a
prospectus itself. You may request a copy of a prospectus or a paper copy
of this Statement of Additional Information, if you have received it
electronically, free of charge by calling 1-800-235-4669.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated December 31, 1995
FEDERATED SECURITIES CORP.
Cusip 31420E205
2062304A (1DISTRIBUTOR
A SUBSIDIARY OF FEDERATED INVESTORS
GENERAL INFORMATION ABOUT THE FUND1
INVESTMENT OBJECTIVE AND POLICIES1
Types of Investments 1
When-Issued and Delayed Delivery
Transactions 3
Lending of Portfolio Securities 3
Reverse Repurchase Agreements 3
Portfolio Turnover 3
Investment Limitations 3
FEDERATED INDEX TRUST MANAGEMENT 6
Fund Ownership 10
Trustees Compensation 11
Trustee Liability 11
MANAGEMENT SERVICES 12
Managers to the Fund 12
Management Fees 12
Other Related Services 12
BROKERAGE TRANSACTIONS 12
OTHER SERVICES 13
Custodian and Portfolio
Recordkeeper 13
Transfer Agent 13
Independent Auditors 13
SHAREHOLDER SERVICES AGREEMENT 13
PURCHASING SHARES 13
Conversion to Federal Funds 13
Exchanging Securities for Fund
Shares 13
DETERMINING NET ASSET VALUE 14
Determining Market Value of
Securities 14
REDEEMING SHARES 14
Redemption in Kind 14
MASSACHUSETTS PARTNERSHIP LAW 15
TAX STATUS 15
The Fund's Tax Status 15
Shareholders' Tax Status 15
TOTAL RETURN 15
YIELD 15
PERFORMANCE COMPARISONS 16
ABOUT FEDERATED INVESTORS 16
FRANK RUSSELL COMPANY 17
GENERAL INFORMATION ABOUT THE FUND
Federated Mini-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. On December 5, 1994, the
Trustees changed the name of the Fund from the Mini-Cap Fund to the Federated
Mini-Cap 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 the
approximately 2,000 publicly traded common stocks that are ranked in terms of
capitalization below the top 1,000 stocks that comprise the large and mid-
range capitalization sector of the United States equity market. These stocks
are included in the Russell 2000 Small Stock Index (the "Index"), an index of
small capitalization stocks.
The Fund is neither affiliated with nor sponsored by the Frank Russell
Company. Frank Russell's only relationship to the Fund is the licensing of the
use of the Index. Frank Russell Company is the owner of the trademarks and
copyrights relating to the Index.
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 associations 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
oprime 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:
othe full faith and credit of the U.S. Treasury;
othe issuer's right to borrow from the U.S. Treasury;
othe discretionary authority of the U.S. government to purchase certain
obligations of agencies or instrumentalities; or
othe 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 The Farm Credit System, including the National Bank for
Cooperatives,
Farm Credit Banks, and Banks for Cooperatives;
oFederal Home Loan Banks;
oFarmers Home Administration; and
oFederal 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 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 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 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.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
These transactions are made to secure what is considered to be an
advantageous price or yield for the Fund. 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 on the Fund`s records 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 securities are marked to market daily
and are 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, 1995 and October 31, 1994, the portfolio turnover rate for the Fund was
42% and 32%, respectively.
INVESTMENT LIMITATIONS
INVESTING IN COMMODITIES
The Fund will not purchase or sell commodities. However, the Fund may
purchase stock index futures contracts and put options on stock indices
and stock index futures contracts to the extent that not more than 5% of
the Fund's total assets are required as initial margin deposit for
futures contracts and not more than 20% of the Fund's total net assets
are invested in futures and options at any time.
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 and put options on stock index futures contracts, 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
up to one-third of the value of its total assets. This shall not prevent
the Fund from purchasing or holding U.S. government obligations, money
market instruments, bonds, debentures, notes, certificates of
indebtedness or other debt securities, entering into repurchase
agreements, or engaging in other transactions where permitted by the
Fund's investment objective and policies and the Declaration of Trust of
the 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.
ISSUING SENIOR SECURITIES AND BORROWING MONEY
The Fund will not issue senior securities, except that the Fund may
borrow money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amounts
borrowed. The Fund will not borrow money or engage in reverse repurchase
agreements for investment leverage, but rather 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 securities is deemed to be inconvenient or
disadvantageous. The Fund will not purchase any securities while
borrowings in excess of 5% of its total assets are outstanding. During
the period any reverse repurchase agreements are outstanding, but only to
the extent necessary to assure completion of the reverse repurchase
agreements, the Fund will restrict the purchase of portfolio instruments
to money market instruments maturing on or before the expiration date of
the reverse repurchase agreements.
PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate any assets except to
secure permitted borrowings. In those cases, it may pledge assets having
a market value not exceeding the lesser of the dollar amounts borrowed or
10% of the value of total assets at the time of the borrowing.
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 any 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, including partnership
interests in real estate, although it may invest in securities of
companies whose business involves the purchase or sale of real estate or
in securities which are secured by real estate or interests in real
estate.
INVESTING IN RESTRICTED SECURITIES
To comply with requirements of a particular state, the Fund will limit
its investment in restricted securities to 5% of the value of its total
assets in securities subject to restrictions on resale under the Security
Act of 1933.
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.
INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of the value of its total assets in
securities of issuers which have records of less than three years of
operating history, including the operation of any predecessor.
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 if the
Officers and Trustees of the Trust or the Fund's manager or sub-manager
owning individually more than 1/2 of 1% of the issuer's securities
together own more than 5% of the issuer's securities.
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, stock indices and stock index futures contracts, 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 and not more than 20% of the Fund's total net
assets are invested in put options and future contracts at any time.
INVESTING IN MINERALS
The Fund will not purchase interests in oil, gas, or other mineral
exploration or development programs or leases, although it may purchase
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.
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 does not expect to borrow money or pledge securities in excess of 5%
of the value of its net assets during the coming fiscal year.
FEDERATED INDEX TRUST MANAGEMENT
Officers and Trustees are listed with their addresses, birthdates, present
positions with Federated Index Trust, and principal occupations.
John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA
Birthdate: July 28, 1924
Chairman and Trustee
Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated Research
Corp. and Federated Global Research Corp.; Chairman, Passport Research, Ltd.;
Chief Executive Officer and Director, Trustee, or Managing General Partner of
the Funds. Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President and Trustee
President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated Research
Corp. and Federated Global Research Corp.; President, Passport Research, Ltd.;
Trustee, Federated Administrative Services, Federated Services Company, and
Federated Shareholder Services; President or Executive 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.
Thomas G. Bigley
28th Floor, One Oxford Centre
Pittsburgh, PA
Birthdate: February 3, 1934
Trustee
Director, Oberg Manufacturing Co.; Chairman of the Board, Children's Hospital
of Pittsburgh; Director, Trustee, or Managing General Partner of the Funds;
formerly, Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL
Birthdate: June 23, 1937
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
Birthdate: July 4, 1918
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.
James E. Dowd
571 Hayward Mill Road
Concord, MA
Birthdate: May 18, 1922
Trustee
Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director,
Trustee, or Managing General Partner of the Funds.
Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA
Birthdate: October 11, 1932
Trustee
Professor of Medicine and Member, Board of Trustees, University of
Pittsburgh; Medical Director, University of Pittsburgh Medical Center -
Downtown; Member, Board of Directors, University of Pittsburgh Medical Center;
formerly, Hematologist, Oncologist, and Internist, Presbyterian and Montefiore
Hospitals; Director, Trustee, or Managing General Partner of the Funds.
Edward L. Flaherty, Jr.@
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: June 18, 1924
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and 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
70 Westcliff Road
Westin, MA
Birthdate: March 16, 1942
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.
Gregor F. Meyer
Henny, Kochuba, Meyer and Flaherty
Two Gateway Center - Suite 674
Pittsburgh, PA
Birthdate: October 6, 1926
Trustee
Attorney-at-law; Shareholder, Henny, Kochuba, Meyer and Flaherty; Chairman,
Meritcare, Inc.; Director, Eat'N Park Restaurants, Inc.; Director, Trustee, or
Managing General Partner of the Funds.
John E. Murray, Jr., J.D., S.J.D.
President, Duquesne University
Pittsburgh, PA
Birthdate: December 20, 1932
Trustee
President, Law Professor, Duquesne University; Consulting Partner, Mollica,
Murray and Hogue; Director, Trustee or Managing General Partner of the
Funds.
Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA
Birthdate: September 14, 1925
Trustee
Professor, International Politics and Management Consultant; Trustee,
Carnegie Endowment for International Peace, RAND Corporation, Online Computer
Library Center, Inc., and U.S. Space Foundation; Chairman, Czecho Management
Center; Director, Trustee, or Managing General Partner of the Funds; President
Emeritus, University of Pittsburgh; founding Chairman, National Advisory
Council for Environmental Policy and Technology and Federal Emergency
Management Advisory Board.
Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA
Birthdate: June 21, 1935
Trustee
Public relations/marketing consultant; Conference Coordinator, Non-profit
entities; Director, Trustee, or Managing General Partner of the Funds.
Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 2, 1929
President
Trustee, Federated Investors; President and/or Trustee of some of the Funds;
staff member, Federated Securities Corp. and Federated Administrative
Services.
Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
Executive Vice President
Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp. and Passport Research, Ltd.;
Executive Vice President and Director, Federated Securities Corp.; Trustee,
Federated Services Company; Chairman, Treasurer, and Trustee, Federated
Administrative Services; Trustee or Director of some of the Funds; Executive
Vice President and Treasurer of the Funds.
Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1923
Vice President
Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of
the Funds; Director or Trustee of some of the Funds.
David M. Taylor *
Federated Investors Tower
Pittsburgh, PA
Birthdate: January 13, 1947
Treasurer
Senior Vice President, Controller, and Trustee, Federated Investors;
Controller, Federated Advisers, Federated Management, Federated Research,
Federated Research Corp., and Passport Research, Ltd.; Vice President,
Federated Shareholder Services; Senior Vice President, Federated
Administrative Services; Treasurer of some of the Funds.
John W. McGonigle
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 26, 1938
Executive Vice President and Secretary
Executive Vice President, Secretary, General Counsel, and Trustee,
Federated Investors; Trustee, Federated Advisers, Federated Management, and
Federated Research; Director, Federated Research Corp. and Federated Global
Research Corp.; Trustee, Federated Services Company; Executive Vice President,
Secretary, and Trustee, Federated Administrative Services; President and
Trustee, Federated Shareholder Services; Director, Federated Securities Corp.;
Executive 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.
@ Member of the Executive Committee. The Executive Committee of the
Trustees handles the responsibilities of the Trustees between meetings
of the Trustees.
As used in the table above, "The Funds" and "Funds" mean the following
investment companies: American Leaders Fund, Inc.; Annuity Management Series;
Arrow Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated
ARMs Fund; Federated Equity Funds; Federated Exchange Fund, Ltd.; Federated
GNMA Trust; Federated Government Trust; Federated High Yield Trust; Federated
Income Securities Trust; Federated Income Trust; Federated Index Trust;
Federated Institutional Trust; Federated Master Trust; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock Trust; Federated Tax-Free Trust; Federated
Total Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 3-5 Years; 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; 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; Money Market Management, Inc.; Money Market Obligations Trust; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds; 111 Corcoran
Funds; Peachtree Funds; The Planters Funds; RIMCO Monument Funds; The Shawmut
Funds; 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; The Virtus Funds; World Investment Series, Inc.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's outstanding shares.
As of December 4, 1995, the following shareholders of record owned 5% or
more of the outstanding shares of the Fund: Charles Schwab & Co. Inc. , San
Francisco, CA, owned approximately 550,210 shares (5.37%); and Mitra & Co.,
Milwaukee, WI, owned approximately 715,381 shares (6.98%).
TRUSTEES COMPENSATION
AGGREGATE
NAME , COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX +
John F. Donahue $ -0- $-0- for the Trust and
Chairman and Trustee 68 other investment companies in the Fund
Complex
J. Christopher Donahue $ -0- $-0- for the Trust and
Exec. Vice. Pres and Trustee 14 other investment companies in the Fund
Complex
Thomas G. Bigley $ -0- $20,688 for the Trust and
Trustee 49 other investment companies in the Fund Complex
John T. Conroy, Jr. $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
William J. Copeland $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
James E. Dowd $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Lawrence D. Ellis, M.D. $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Edward L. Flaherty, Jr. $1,717 $117,202 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Peter E. Madden $1,340 $90,563 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Gregor F. Meyer $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
John E. Murray, Jr. $2,531 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Wesley W. Posvar $1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
Marjorie P. Smuts$1,573 $106,460 for the Trust and
Trustee 64 other investment companies in the Fund Complex
*Information is furnished for the fiscal year ended October 31, 1995.
#The aggregate compensation is provided for the Trust which is comprised of
three portfolios.
+The information is provided for the last calendar year.
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 First Chicago Investment
Management Company. First Chicago Investment Management Company is a wholly-
owned subsidiary of First National Bank of Chicago, which in turn, is a
wholly-owned subsidiary of First Chicago Corporation. The sub-manager's
directors are Alan F. Delp, J. Stephen Baine, Thomas P. Michaels,
David P. Bogler, Stephen P. Manus, Neil R. Wright, Terrall J. Janeway 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 contracts.
MANAGEMENT FEES
For their management services, Federated Management receives an annual fee as
described in the prospectus. ANB receives an annual fee for its services,
which will be paid by the manager, as described in the prospectus.
For the fiscal years ended October 31, 1995, 1994 and 1993, the manager
earned $540,284, $439,054 and $230,734, respectively, of which $56,620,
$96,021 and $230,734, respectively, was voluntarily waived.
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 expense
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.
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: advice as to the advisability of
investing in securities; security analysis and reports; economic
studies; industry studies; receipt of quotations for portfolio evaluations;
and similar services. Research services provided by brokers and
dealers may be used by the managers or their affiliates in advising the Fund
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. 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. During the fiscal years ended October 31, 1995, 1994 and 1993, the
Fund paid total brokerage commissions of $165,266, $144,520 and $165,152,
respectively.
Although investment decisions for the Fund are made independently from
those of the other accounts managed by the managers, investments of the type
the Fund may make may also be made by those other accounts. When the Fund and
one or more other accounts managed by the managers are prepared to invest in,
or desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by the managers
to be equitable to each. In some cases, this procedure may adversely affect
the price paid or received by the Fund or the size of the position obtained or
disposed of by the Fund. In other cases, however, it is believed that
coordination and the ability to participate in volume transactions will be to
the benefit of the Fund.
OTHER SERVICES
CUSTODIAN AND PORTFOLIO RECORDKEEPER
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for
the securities and cash of the Fund. Federated Services Company, Boston,
Massachusetts, provides certain accounting and recordkeeping services with
respect to the Funds's portfolio investments.
TRANSFER AGENT
As transfer agent, Federated Services Company maintains all necessary
shareholder records. For its services, the transfer agent receives a fee
based on the size, type and number of accounts and transactions made by
shareholders.
INDEPENDENT AUDITORS
The independent auditors for the Fund are Ernst & Young LLP, Pittsburgh,
Pennsylvania.
SHAREHOLDER SERVICES AGREEMENT
This arrangement permits the payment of fees to Federated Shareholder Services
and, indirectly, to financial institutions to cause services to be provided
which are necessary for the maintenance of shareholder accounts and to
encourage personal services 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. By adopting the Shareholder
Services Agreement, the Trustees expect that the Fund will benefit by: (1)
providing personal services to shareholders; (2) investing shareholder assets
with a minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders' requests
and inquiries concerning their accounts.
For the fiscal year ended October 31, 1995, the Fund paid shareholder services
fees in the amount of $22,753, none of which was waived.
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 of the Fund is explained in the prospectus under "Investing in the
Fund."
CONVERSION TO FEDERAL FUNDS
It is the Fund's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. State Street Bank acts as
the shareholder's agent in depositing checks and converting them to federal
funds.
EXCHANGING SECURITIES FOR FUND SHARES
Investors may exchange securities they already own for Fund shares, or they
may exchange a combination of securities and cash for Fund shares. Any
securities to be exchanged must meet the investment objective and policies of
the Fund, must have a readily ascertainable market value, must be liquid, and
must not be subject to restrictions on resale. An investor should forward the
securities in negotiable form with an authorized letter of transmittal to
Federated Securities Corp. The Fund will notify the investor of its acceptance
and valuation of the securities within five business days of their receipt by
State Street Bank.
The Fund values such securities in the same manner as the Fund values its
assets. The basis of the exchange will depend upon the net asset value of Fund
shares on the day the securities are valued. One share of the Fund will be
issued for each equivalent amount of securities accepted.
Any interest earned on the securities prior to the exchange will be considered
in valuing the securities. All interest, dividends, subscription, conversion,
or other rights attached to the securities become the property of the Fund,
along with the securities.
TAX CONSEQUENCES
Exercise of this exchange privilege is treated as a sale for federal
income tax purposes. Depending upon the cost basis of the securities
exchanged for Fund shares, a gain or loss may be realized by the
investor.
DETERMINING NET ASSET VALUE
Net asset value generally changes each day. The days on which net asset value
is calculated by the Fund are described in the prospectus.
DETERMINING MARKET VALUE OF SECURITIES
Market values of the Fund's portfolio securities are determined as follows:
ofor equity securities, according to the last sale price on a national
securities exchange, if available;
oin the absence of recorded sales for equity securities, according to the
mean between the last closing bid and asked prices;
ofor 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 remaining maturities of 60 days or less at the time of
purchase, at amortized cost; or
ofor 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 and options on stocks, stock
indices and stock index futures contracts 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 prospectus under "Redeeming 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
with securities from the Fund's portfolio.
Such securities will be valued with the same valuation techniques employed in
determining net asset value, and the securities will be selected 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 will redeem shares for any one shareholder in
cash up to the lesser of $250,000 or 1% of the Fund's net asset value during
any 90-day period.
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 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:
oderive at least 90% of its gross income from dividends, interest, and gains
from the sale of securities;
oderive less than 30% of its gross income from the sale of securities held
less than three months;
oinvest in securities within certain statutory limits; and
odistribute 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
Shareholders will pay federal tax at capital gains rates on long-term
capital gains distributed to them regardless of how long they have held
the Fund shares.
TOTAL RETURN
The Fund's average annual total return for the one-year period ended
October 31, 1995 and for the period from August 11, 1992 (Start of
Performance) to October 31, 1995 was 16.44% and 13.06%, respectively.
The average annual total return for the Trust 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 Fund's SEC yield for the thirty-day period ended October 31, 1995 was
1.70%.
The yield for the Fund is determined each day 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:
oportfolio quality;
oaverage portfolio maturity;
otype of instruments in which the portfolio is invested;
ochanges in interest rates and market value of portfolio securities;
ochanges in Fund expenses;
othe relative amount of Fund cash flow; and
ovarious other factors.
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:
oLIPPER 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.
oRUSSELL 2000 INDEX--is a broadly diversified index consisting of
approximately 2,000 small capitalization common stocks that can be used to
compare to the total returns of funds whose portfolios are invested
primarily in small capitalization common stocks.
oSTANDARD & POOR'S DAILY STOCK PRICE INDEX OF 500 COMMON STOCKS--is a
composite index of common stocks in industry, transportation, and financial
and public utility companies that 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.
oWILSHIRE 5000 EQUITY INDEXES--consists of nearly 5,000 common equity
securities, covering all stocks in the U.S. for which daily pricing is
available, and can be used to compare to the total returns of funds whose
portfolios are invested primarily in common stocks.
oMORNINGSTAR, 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 the Fund 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 the Fund based
on quarterly reinvestment of dividends over a specified period of time.
ABOUT FEDERATED INVESTORS
Federated Investors is dedicated to meeting investor needs which is reflected
in its investment decision making-structured, straightforward, and consistent.
This has resulted in a history of competitive performance with a range of
competitive investment products that have gained the confidence of thousands
of clients and their customers.
The company's disciplined security selection process is firmly rooted in sound
methodologies backed by fundamental and technical research. Investment
decisions are made and executed by teams of portfolio managers, analysts, and
traders dedicated to specific market sectors.
In the equity sector, Federated Investors has more than 25 years' experience.
As of December 31, 1994, Federated Investors managed 15 equity funds totaling
approximately $4 billion in assets across growth, value, equity income,
international, index and sector (i.e. utility) styles. Federated Investor's
value-oriented management style combines quantitative and qualitative analysis
and features a structured, computer-assisted composite modeling system that
was developed in the 1970s.
J. Thomas Madden, Executive Vice President, oversees Federated Investors'
equity and high yield corporate bond management while William D. Dawson,
Executive Vice President, oversees Federated Investors' domestic fixed income
management. Henry A. Frantzen, Executive Vice President, oversees the
management of Federated Investors' international portfolios.
MUTUAL FUND MARKET
Twenty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $2 trillion to the more than 5,500 funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds for a
variety of investment applications. Specific markets include:
INSTITUTIONAL CLIENTS
Federated Investors meets the needs of more than 4,000 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of applications, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional
clients include corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisors. The marketing effort to these institutional clients is headed by
John B. Fisher, President, Institutional Sales Division.
TRUST ORGANIZATIONS
Other institutional clients include close relationships with more than 1,500
banks and trust organizations. Virtually all of the trust divisions of the
top 100 bank holding companies use Federated funds in their clients'
portfolios. The marketing effort to trust clients is headed by Mark R.
Gensheimer, Executive Vice President, Bank Marketing & Sales.
BROKER/DEALERS AND BANK BROKER/DEALER SUBSIDIARIES
Federated funds are available to consumers through major brokerage firms
nationwide--including 200 New York Stock Exchange firms--supported by more
wholesalers than any other mutual fund distributor. The marketing effort to
these firms is headed by James F. Getz, President, Broker/Dealer Division.
*source: Investment Company Institute
FRANK RUSSELL COMPANY
Frank Russell Company reserves the right, at any time and without notice, to
alter, amend, terminate or in any way change its Index. Frank Russell Company
has no obligation to take the needs of any particular fund or its participants
or any other product or person into consideration in determining, composing or
calculating the index.
Frank Russell Company's publication of the Index in no way suggests or implies
an opinion by Frank Russell Company as to the attractiveness or
appropriateness of investment in any or all securities upon which the Index is
based. FRANK RUSSELL COMPANY MAKES NO REPRESENTATION, WARRANTY, OR GUARANTEE
AS TO THE ACCURACY, COMPLETENESS, RELIABILITY, OR OTHERWISE OF THE INDEX OR
ANY DATA INCLUDED IN THE INDEX. FRANK RUSSELL COMPANY MAKES NO REPRESENTATION
OR WARRANTY REGARDING THE USE OR THE RESULTS OF USE, OF THE INDEX OR ANY DATA
INCLUDED THEREIN, OR ANY SECURITY (OR COMBINATION THEREOF) COMPRISING THE
INDEX. FRANK RUSSELL COMPANY MAKES NO OTHER EXPRESS OR IMPLIED WARRANTY, AND
EXPRESSLY DISCLAIMS ANY WARRANTY, OF ANY KIND, INCLUDING, WITHOUT MEANS OF
LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE WITH RESPECT TO THE INDEX OR ANY DATA OR ANY SECURITY (OR COMBINATION
THEREOF) INCLUDED THEREIN.
PART C.OTHER INFORMATION
Item 24. Financial Statements and Exhibits:
(a) Financial Statements (Filed in Part A)
(b) Exhibits:
(1)Conformed copy of Declaration of Trust of the Registrant, as
amended; (10)
(i) Conformed copy of Amendment No. 2 to the Declaration of
Trust dated January 30, 1992; (10)
(ii) Conformed copy of Amendment No. 3 to the Declaration of
Trust dated June 18, 1992; (10)
(iii) Conformed copy of Amendment No. 4 to the Declaration of
Trust dated June 3, 1993; (10)
(iv) Conformed copy of Amendment No. 6 to the Declaration of
Trust dated November 18, 1994 (11);
(v) Conformed copy of Amendment No. 7 to the Declaration of
Cusip 31420E304
2062305A (12/95)
Trust dated December 5, 1994 (11);
(2)Copy of By-Laws of the Registrant as amended (5);
(i) Copy of Amendment No. 2 to the By-Laws of the Registrant
dated February 2, 1987 (6);
(3)Not applicable;
(4)(i) Copy of Specimen Certificate for Shares of Beneficial
Interest of the Federated Mid-Cap and Federated Mini-Cap
Funds (11);
(ii) Copy of Specimen Certificates for Shares of Beneficial
Interest of the Institutional Service and Institutional
Service Shares of the Federated Max-Cap Fund (11);
(5)Conformed copy of Investment Advisory Contract of the
Registrant; (10)
(i) Conformed copy of Sub-Management Contract for the Federated
Max-Cap Fund and Federated Mid-Cap and Federated Mini-Cap
Funds; (10)
+ All exhibits have been filed electronically.
5.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 2 on Form N-1A filed September 12, 1991. (File Nos. 33-33852
and 811-6061)
6.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 4 on Form N-1A filed May 8, 1992 (File Nos. 33-33852 and
811-6061)
7.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed December 24, 1992. (File Nos. 33-33852
and 811-6061)
10.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed December 29, 1993. (File Nos. 33-33852
and 811-6061)
11.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 on Form N-1A filed December 29, 1994. (File Nos. 33-
33852 and 811-6061)
(6)Conformed copy of Distributor's Contract; (10)
(i) Conformed copy of Exhibit D to Distributor's Contract; (10)
(ii) The Registrant hereby incorporates the conformed copy of
the specimen Mutual Funds Sales and Service Agreement; Mutual
Funds Service Agreement and Plan Trustee/Mutual Funds Service
Agreement from Item 24(b)6 of the Cash Trust Series II
Registration Statement on Form N-1A, filed with the Commission
on July 24, 1995. (File Nos. 33-38550 and 811-6269)
(7)Not applicable;
(8) Conformed copy of Custodian Contract of the Registrant; +
(9)(i)Conformed copy of Agreement for Fund Accounting, Shareholder
Recordkeeping, and Custody Services Procurement; +
(ii)Conformed copy of Shareholder Services Agreement; +
(iii) The responses described in Item 24(b)6 are hereby
incorporated by reference.
(10)Copy of the Opinion and Consent of Counsel as to legality of
shares being registered; +
(11)Conformed copy of Consent of Independent Auditors; +
(12)Not applicable;
(13)Conformed copy of Initial Capital Understanding (3);
(14)Not applicable;
(15) (i) Conformed copy of Rule 12b-1 Plan (10);
(ii) The responses described in Item 24(b)6 are hereby
incorprated by reference.
(16)Schedules for Computation of Trust Performance Data (7);
(17)Copy of Financial Data Schedules; +
(18)Conformed copy of Power of Attorney; +
Item 25. Persons Controlled by or Under Common Control with Registrant:
None
Item 26. Number of Holders of Securities:
Shares of Beneficial Interest Number of Record Holders
(No par value) as of December 4, 1995
--
Federated Max-Cap Fund
Institutional Shares 2,447
Institutional Service Shares 125
Federated Mid-Cap Fund 488
Federated Mini-Cap Fund 1,408
Item 27. Indemnification: (3)
3.Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 2 on Form N-1A dated June 29, 1990. (File No. 33-33852)
7.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 on Form N-1A filed December 24, 1992. (File No. 33-33852)
10.Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 9 on Form N-1A filed December 29, 1993. (File Nos. 33-33852
and 811-6061)
Item 28. Business and Other Connections of Investment Adviser:
(a)For a description of the other business of the investment
adviser, see the section entitled "Federated Index Trust
Information - Management of the Trust" in Part A. The
affiliations with the Registrant of four of the Trustees and
one of the Officers of the manager are included in Part B of
this Registration Statement under "Federated Index Trust
Management." The remaining Trustee of the manager, his
position with the manager, and, in parentheses, his principal
occupation is: Mark D. Olson (Partner, Wilson, Halbrook, &
Bayard), 107 W. Market Street, Georgetown, Delaware 19947.
The remaining Officers of the investment adviser are: William
D. Dawson, Henry A. Frantzen, J. Thomas Madden and Mark L.
Mallon, Executive Vice Presidents; Henry J. Gailliot, Senior
Vice President-Economist; Peter R. Anderson Drew J. Collins,
Jonathan C. Conley and J. Alan Minteer, Senior Vice Presidents;
J. Scott Albrecht, Joseph M. Balestrino, Randall A. Bauer,
David A. Briggs, Kenneth J. Cody, Deborah A. Cunningham,
Michael P. Donnelly, Linda A. Duessel, Mark E. Durbiano,
Kathleen M. Foody-Malus, Thomas M. Franks, Edward C.
Gonzales,Timothy E. Keefe, Stephen A. Keen, Mark S. Kopinski,
Jeff A. Kozemchak, Marian R. Marinack, Susan M. Nason, Mary Jo
Ochson, Robert J. Ostrowski, Frederick L. Plautz, Jr., Charles
A. Ritter, James D. Roberge, Frank Semack, William F. Stotz,
Sandra L. Weber and Christopher H. Wiles, Vice Presidents;
Thomas R. Donahue, Treasurer, and Stephen A. Keen, Secretary.
The business address of each of the Officers of the investment
adviser is Federated Investors Tower, Pittsburgh, PA 15222-
3779. These individuals are also officers of a majority of the
investment advisers to the Funds listed in Part B of this
Registration Statement.
ANB Investment Management and Trust Co. ("ANB") is the Sub-
Manager to the Trust. 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 First Chicago Investment Management
Company, 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, as of September 30, 1995, has placed
approximately $20.6 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 331 nationwide non-financial institutional
clients invest. In total, ANB manages 77 commingled/common
trust funds.
The executive 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 The
Directors of ANB are Alan F. Delp, J. Stephen Baine, Thomas P.
Michaels, David P. Bolger, Stephen P. Manus, Neil R. Wright,
Terrall J. Janeway and P. James Kartalia. The business address
of ANB and each of the above officers and Directors is 33 North
LaSalle Street, Chicago, Illinois 60690.
Item 29.Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the
Registrant, also acts as principal underwriter for the
following open-end investment companies: American Leaders Fund,
Inc.; Annuity Management Series; Arrow Funds; Automated
Government Money Trust; BayFunds; The Biltmore Funds; The
Biltmore Municipal Funds; Blanchard Funds; Blanchard Precious
Metals, Inc.; Cash Trust Series, Inc.; Cash Trust Series II; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash
Trust; Federated ARMs Fund; Federated Equity Funds; Federated
Exchange Fund, Ltd.; Federated GNMA Trust; Federated Government
Trust; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated
Institutional Trust; Federated Master Trust; Federated
Municipal Trust; Federated Short-Term Municipal Trust;
Federated Short-Term U.S. Government Trust; Federated Stock
Trust; Federated Tax-Free Trust; Federated Total Return Series,
Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated
U.S. Government Securities Fund: 3-5 Years;First Priority
Funds; First Union Funds; Fixed Income Securities, Inc.;
Fortress Adjustable Rate U.S. Government Fund, Inc.; Fortress
Municipal Income Fund, Inc.; Fortress Utility Fund, Inc.;
Fountain Square Funds; Fund for U.S. Government Securities,
Inc.; Government Income Securities, Inc.; High Yield Cash
Trust; Independence One Mutual Funds; 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 Utility Fund, Inc.;
Liquid Cash Trust; Managed Series Trust; Marshall Funds, Inc.;
Money Market Management, Inc.; Money Market Obligations Trust;
Money Market Trust; The Monitor Funds; Municipal Securities
Income Trust; Newpoint Funds; 111 Corcoran Funds; Peachtree
Funds; The Planters Funds; RIMCO Monument Funds; The Shawmut
Funds; SouthTrust Vulcan Funds; Star Funds; The Starburst
Funds; The Starburst Funds II; Stock and Bond Fund, Inc.;
Sunburst Funds; Targeted Duration Trust; Tax-Free Instruments
Trust; Tower Mutual Funds; 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; The Virtus Funds; Vision Fiduciary Funds, Inc.;
Vision Group of Funds, Inc.; and World Investment Series, Inc.
Federated Securities Corp. also acts as principal underwriter
for the following closed-end investment company: Liberty Term
Trust, Inc.- 1999.
(b)
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary, and Asst.
Treasurer, Federated
Securities Corp.
Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
John W. McGonigle Director, Federated Executive Vice
Federated Investors Tower Securities Corp. President and
Pittsburgh, PA 15222-3779 Secretary
John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark R. Gensheimer Executive Vice President of --
Federated Investors Tower Bank/Trust, Federated
Pittsburgh, PA 15222-3779 Securities Corp.
Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp
Pittsburgh, PA 15222-3779
John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securites Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Laura M. Deger Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael D. Fitzgerald Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Scott A. Hutton Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
H. Joeseph Kenedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William E. Kugler Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Steven A. La Versa Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Michael P. O'Brien Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert D. Oehlschlager Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
John C. Shelar, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Jamie M. Teschner Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Charlene H. Jennings Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
J. Timothy Radcliff Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Thomas R. Donahue Asstistant Secretary, --
Federated Investors Tower Assistant Treasurer,
Pittsburgh, PA 15222-3779 Federated Securities Corp.
Joseph M. Huber Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
David M. Taylor Assistant Secretary, Treasurer
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779
Item 31.Management Services: Not applicable.
Item 32.Undertakings:
Registrant hereby undertakes to comply with the provisions of
Section 16 (c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.
Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED INDEX TRUST has
duly caused this Amendment to its Registration Statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the City of
Pittsburgh and Commonwealth of Pennsylvania, on the 28th day of December,
1995.
FEDERATED INDEX TRUST
BY: /s/Melissa A. Moore
Melissa A. Moore, Assistant Secretary
Attorney in Fact for John F. Donahue
December 28, 1995
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following person in the capacity and on the date indicated:
NAME TITLE DATE
By:/s/Melissa A. Moore
Melissa A. Moore Attorney In Fact December 28, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Glen R. Johnson* President
J. Christopher Donahue* Executive Vice President
and Trustee
David M. Taylor* Treasurer
(Principal Financial and
Accounting Officer)
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
Exhibit 11 under Form N-1A
Exhibit 23 under Item 601/Reg. S-K
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Financial
Highlights" and "Independent Auditors" and to the use of our report dated
December 8, 1995, in Post-Effective Amendment Number 11 to the Registration
Statement (Form N-1A No. 33-33852) and the related Prospectuses of Federated
Max-Cap Fund, Federated Mid-Cap Fund, and Federated Mini-Cap Fund, portfolios of
Federated Index Trust, dated December 31, 1995.
By:/s/ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
EXHIBT 8 UNDER FORM N-1A
EXHIBIT 10 UNDER ITEM 601/REG. S-K
CUSTODIAN CONTRACT
BETWEEN
FEDERATED INVESTMENT COMPANIES
AND
STATE STREET BANK AND TRUST COMPANY
AND
FEDERATED SERVICES COMPANY
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It......1
2. Duties of the Custodian With Respect to Property of the Funds Held by the
Custodian..................................................2
2.1 Holding Securities....................................2
2.2 Delivery of Securities................................2
2.3 Registration of Securities............................5
2.4 Bank Accounts.........................................6
2.5 Payments for Shares...................................7
2.6 Availability of Federal Funds.........................7
2.7 Collection of Income..................................7
2.8 Payment of Fund Moneys................................8
2.9 Liability for Payment in Advance of Receipt of Securities Purchased.
9
2.10 Payments for Repurchases or Redemptions of Shares of a Fund 9
2.11 Appointment of Agents................................10
2.12 Deposit of Fund Assets in Securities System..........10
2.13 Segregated Account...................................12
2.14 Joint Repurchase Agreements..........................13
2.15 Ownership Certificates for Tax Purposes..............13
2.16 Proxies..............................................13
2.17 Communications Relating to Fund Portfolio Securities.13
2.18 Proper Instructions..................................14
2.19 Actions Permitted Without Express Authority..........14
2.20 Evidence of Authority................................15
2.21 Notice to Trust by Custodian Regarding Cash Movement.15
3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.............15
4. Records ..................................................16
5. Opinion of Funds' Independent Public Accountants/Auditors.16
6. Reports to Trust by Independent Public Accountants/Auditors17
7. Compensation of Custodian.................................17
8. Responsibility of Custodian...............................17
9. Effective Period, Termination and Amendment...............19
10. Successor Custodian.......................................20
11. Interpretive and Additional Provisions....................21
12. Massachusetts Law to Apply................................22
13. Notices ..................................................22
14. Counterparts..............................................22
15. Limitations of Liability..................................22
CUSTODIAN CONTRACT
This Contract between those INVESTMENT COMPANIES listed on Exhibit 1, as it
may be amended from time to time, (the "Trust"), which may be Massachusetts
business trusts or Maryland corporations or have such other form of
organization as may be indicated, on behalf of the portfolios (hereinafter
collectively called the "Funds" and individually referred to as a "Fund") of
the Trust, having its principal place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania, 15222-3779, and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, having its principal place of business
at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian", and FEDERATED SERVICES COMPANY, a Delaware business trust
company, having its principal place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania, 15222-3779, hereinafter called ("Company").
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the assets of
each of the Funds of the Trust. Except as otherwise expressly provided
herein, the securities and other assets of each of the Funds shall be
segregated from the assets of each of the other Funds and from all other
persons and entities. The Trust will deliver to the Custodian all
securities and cash owned by the Funds and all payments of income,
payments of principal or capital distributions received by them with
respect to all securities owned by the Funds from time to time, and the
cash consideration received by them for shares ("Shares") of beneficial
interest/capital stock of the Funds as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of the
Funds held or received by the Funds and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.18), the Custodian shall from time to time employ one or more sub-
custodians upon the terms specified in the Proper Instructions, provided
that the Custodian shall have no more or less responsibility or liability
to the Trust or any of the Funds on account of any actions or omissions
of any sub-custodian so employed than any such sub-custodian has to the
Custodian.
2. Duties of the Custodian With Respect to Property of the Funds Held by the
Custodian
2.1Holding Securities. The Custodian shall hold and physically
segregate for the account of each Fund all non-cash property,
including all securities owned by each Fund, other than securities
which are maintained pursuant to Section 2.12 in a clearing agency
which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury, collectively
referred to herein as "Securities System", or securities which are
subject to a joint repurchase agreement with affiliated funds
pursuant to Section 2.14. The Custodian shall maintain records of
all receipts, deliveries and locations of such securities, together
with a current inventory thereof, and shall conduct periodic physical
inspections of certificates representing stocks, bonds and other
securities held by it under this Contract in such manner as the
Custodian shall determine from time to time to be advisable in order
to verify the accuracy of such inventory. With respect to securities
held by any agent appointed pursuant to Section 2.11 hereof, and with
respect to securities held by any sub-custodian appointed pursuant to
Section 1 hereof, the Custodian may rely upon certificates from such
agent as to the holdings of such agent and from such sub-custodian as
to the holdings of such sub-custodian, it being understood that such
reliance in no way relieves the Custodian of its responsibilities
under this Contract. The Custodian will promptly report to the Trust
the results of such inspections, indicating any shortages or
discrepancies uncovered thereby, and take appropriate action to
remedy any such shortages or discrepancies.
2.2Delivery of Securities. The Custodian shall release and deliver
securities owned by a Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
(1) Upon sale of such securities for the account of a Fund and
receipt of payment therefor;
(2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Trust;
(3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
(4) To the depository agent in connection with tender or other
similar offers for portfolio securities of a Fund, in accordance
with the provisions of Section 2.17 hereof;
(5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
(6) To the issuer thereof, or its agent, for transfer into the name
of a Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or nominee name of any
sub-custodian appointed pursuant to Section 1; or for exchange
for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be
delivered to the Custodian;
(7) Upon the sale of such securities for the account of a Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery custom"; provided
that in any such case, the Custodian shall have no responsibility
or liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities except
as may arise from the Custodian's own failure to act in
accordance with the standard of reasonable care or any higher
standard of care imposed upon the Custodian by any applicable law
or regulation if such above-stated standard of reasonable care
were not part of this Contract;
(8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
(9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
(10) For delivery in connection with any loans of portfolio
securities of a Fund, but only against receipt of adequate
collateral in the form of (a) cash, in an amount specified by the
Trust, (b) certificated securities of a description specified by
the Trust, registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof or in
proper form for transfer, or (c) securities of a description
specified by the Trust, transferred through a Securities System
in accordance with Section 2.12 hereof;
(11) For delivery as security in connection with any borrowings
requiring a pledge of assets by a Fund, but only against receipt
of amounts borrowed, except that in cases where additional
collateral is required to secure a borrowing already made,
further securities may be released for the purpose;
(12) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934, as amended,
(the "Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of The Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions for a Fund;
(13) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transaction for a Fund;
(14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for a Fund, for delivery to such Transfer Agent or to the
holders of shares in connection with distributions in kind, in
satisfaction of requests by holders of Shares for repurchase or
redemption; and
(15) For any other proper corporate purpose, but only upon receipt
of, in addition to Proper Instructions, a certified copy of a
resolution of the Executive Committee of the Trust on behalf of a
Fund signed by an officer of the Trust and certified by its
Secretary or an Assistant Secretary, specifying the securities to
be delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other
than bearer securities) shall be registered in the name of a
particular Fund or in the name of any nominee of the Fund or of any
nominee of the Custodian which nominee shall be assigned exclusively
to the Fund, unless the Trust has authorized in writing the
appointment of a nominee to be used in common with other registered
investment companies affiliated with the Fund, or in the name or
nominee name of any agent appointed pursuant to Section 2.11 or in
the name or nominee name of any sub-custodian appointed pursuant to
Section 1. All securities accepted by the Custodian on behalf of a
Fund under the terms of this Contract shall be in "street name" or
other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts in the name of each Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts, subject to the
provisions hereof, all cash received by it from or for the account of
each Fund, other than cash maintained in a joint repurchase account
with other affiliated funds pursuant to Section 2.14 of this Contract
or by a particular Fund in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act of 1940,
as amended, (the "1940 Act"). Funds held by the Custodian for a Fund
may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies
as it may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to
act as a custodian under the 1940 Act and that each such bank or
trust company and the funds to be deposited with each such bank or
trust company shall be approved by vote of a majority of the Board of
Trustees/Directors ("Board") of the Trust. Such funds shall be
deposited by the Custodian in its capacity as Custodian for the Fund
and shall be withdrawable by the Custodian only in that capacity. If
requested by the Trust, the Custodian shall furnish the Trust, not
later than twenty (20) days after the last business day of each
month, an internal reconciliation of the closing balance as of that
day in all accounts described in this section to the balance shown on
the daily cash report for that day rendered to the Trust.
2.5Payments for Shares. The Custodian shall make such arrangements with
the Transfer Agent of each Fund, as will enable the Custodian to
receive the cash consideration due to each Fund and will deposit into
each Fund's account such payments as are received from the Transfer
Agent. The Custodian will provide timely notification to the Trust
and the Transfer Agent of any receipt by it of payments for Shares of
the respective Fund.
2.6Availability of Federal Funds. Upon mutual agreement between the
Trust and the Custodian, the Custodian shall make federal funds
available to the Funds as of specified times agreed upon from time to
time by the Trust and the Custodian in the amount of checks, clearing
house funds, and other non-federal funds received in payment for
Shares of the Funds which are deposited into the Funds' accounts.
2.7Collection of Income.
(1) The Custodian shall collect on a timely basis all income and
other payments with respect to registered securities held
hereunder to which each Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall collect
on a timely basis all income and other payments with respect to
bearer securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and
shall credit such income, as collected, to each Fund's custodian
account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become
due and shall collect interest when due on securities held
hereunder. The collection of income due the Funds on securities
loaned pursuant to the provisions of Section 2.2 (10) shall be
the responsibility of the Trust. The Custodian will have no duty
or responsibility in connection therewith, other than to provide
the Trust with such information or data as may be necessary to
assist the Trust in arranging for the timely delivery to the
Custodian of the income to which each Fund is properly entitled.
(2) The Custodian shall promptly notify the Trust whenever income due
on securities is not collected in due course and will provide the
Trust with monthly reports of the status of past due income
unless the parties otherwise agree.
2.8Payment of Fund Moneys. Upon receipt of Proper Instructions, which
may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out moneys of each Fund in the
following cases only:
(1) Upon the purchase of securities, futures contracts or options on
futures contracts for the account of a Fund but only (a) against
the delivery of such securities, or evidence of title to futures
contracts, to the Custodian (or any bank, banking firm or trust
company doing business in the United States or abroad which is
qualified under the 1940 Act to act as a custodian and has been
designated by the Custodian as its agent for this purpose)
registered in the name of the Fund or in the name of a nominee of
the Custodian referred to in Section 2.3 hereof or in proper form
for transfer, (b) in the case of a purchase effected through a
Securities System, in accordance with the conditions set forth in
Section 2.12 hereof or (c) in the case of repurchase agreements
entered into between the Trust and any other party, (i) against
delivery of the securities either in certificate form or through
an entry crediting the Custodian's account at the Federal Reserve
Bank with such securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from the
Fund;
(2) In connection with conversion, exchange or surrender of
securities owned by a Fund as set forth in Section 2.2 hereof;
(3) For the redemption or repurchase of Shares of a Fund issued by
the Trust as set forth in Section 2.10 hereof;
(4) For the payment of any expense or liability incurred by a Fund,
including but not limited to the following payments for the
account of the Fund: interest; taxes; management, accounting,
transfer agent and legal fees; and operating expenses of the
Fund, whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
(5) For the payment of any dividends on Shares of a Fund declared
pursuant to the governing documents of the Trust;
(6) For payment of the amount of dividends received in respect of
securities sold short;
(7) For any other proper purpose, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution
of the Executive Committee of the Trust on behalf of a Fund
signed by an officer of the Trust and certified by its Secretary
or an Assistant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.
2.9Liability for Payment in Advance of Receipt of Securities Purchased.
In any and every case where payment for purchase of securities for
the account of a Fund is made by the Custodian in advance of receipt
of the securities purchased, in the absence of specific written
instructions from the Trust to so pay in advance, the Custodian shall
be absolutely liable to the Fund for such securities to the same
extent as if the securities had been received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of a Fund. From
such funds as may be available for the purpose of repurchasing or
redeeming Shares of a Fund, but subject to the limitations of the
Declaration of Trust/Articles of Incorporation and any applicable
votes of the Board of the Trust pursuant thereto, the Custodian
shall, upon receipt of instructions from the Transfer Agent, make
funds available for payment to holders of shares of such Fund who
have delivered to the Transfer Agent a request for redemption or
repurchase of their shares including without limitation through bank
drafts, automated clearinghouse facilities, or by other means. In
connection with the redemption or repurchase of Shares of the Funds,
the Custodian is authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders.
2.11 Appointment of Agents. The Custodian may at any time or times in
its discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act and any
applicable state law or regulation, to act as a custodian, as its
agent to carry out such of the provisions of this Section 2 as the
Custodian may from time to time direct; provided, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities System. The Custodian may
deposit and/or maintain securities owned by the Funds in a clearing
agency registered with the Securities and Exchange Commission ("SEC")
under Section 17A of the Exchange Act, which acts as a securities
depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "Securities System" in accordance with
applicable Federal Reserve Board and SEC rules and regulations, if
any, and subject to the following provisions:
(1) The Custodian may keep securities of each Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
(2) The records of the Custodian with respect to securities of the
Funds which are maintained in a Securities System shall identify
by book-entry those securities belonging to each Fund;
(3) The Custodian shall pay for securities purchased for the account
of each Fund upon (i) receipt of advice from the Securities
System that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian
to reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account of a
Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian
to reflect such transfer and payment for the account of the Fund.
Copies of all advices from the Securities System of transfers of
securities for the account of a Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be provided to the
Trust at its request. Upon request, the Custodian shall furnish
the Trust confirmation of each transfer to or from the account of
a Fund in the form of a written advice or notice and shall
furnish to the Trust copies of daily transaction sheets
reflecting each day's transactions in the Securities System for
the account of a Fund.
(4) The Custodian shall provide the Trust with any report obtained by
the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
(5) The Custodian shall have received the initial certificate,
required by Section 9 hereof;
(6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to
a Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Trust, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that a Fund has not been made whole for any such loss or
damage.
(7) The authorization contained in this Section 2.12 shall not
relieve the Custodian from using reasonable care and diligence in
making use of any Securities System.
2.13 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts
for and on behalf of each Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained
in an account by the Custodian pursuant to Section 2.12 hereof, (i)
in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the Exchange Act
and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any
registered national securities exchange (or the Commodity Futures
Trading Commission or any registered contract market), or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions for a Fund, (ii) for
purpose of segregating cash or government securities in connection
with options purchased, sold or written for a Fund or commodity
futures contracts or options thereon purchased or sold for a Fund,
(iii) for the purpose of compliance by the Trust or a Fund with the
procedures required by any release or releases of the SEC relating to
the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in
the case of clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board or of the
Executive Committee signed by an officer of the Trust and certified
by the Secretary or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring such purposes to
be proper corporate purposes.
2.14 Joint Repurchase Agreements. Upon the receipt of Proper
Instructions, the Custodian shall deposit and/or maintain any assets
of a Fund and any affiliated funds which are subject to joint
repurchase transactions in an account established solely for such
transactions for the Fund and its affiliated funds. For purposes of
this Section 2.14, "affiliated funds" shall include all investment
companies and their portfolios for which subsidiaries or affiliates
of Federated Investors serve as investment advisers, distributors or
administrators in accordance with applicable exemptive orders from
the SEC. The requirements of segregation set forth in Section 2.1
shall be deemed to be waived with respect to such assets.
2.15 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of income
or other payments with respect to securities of a Fund held by it and
in connection with transfers of securities.
2.16 Proxies. The Custodian shall, with respect to the securities held
hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in
the name of a Fund or a nominee of a Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Trust such proxies, all proxy
soliciting materials and all notices relating to such securities.
2.17 Communications Relating to Fund Portfolio Securities. The Custodian
shall transmit promptly to the Trust all written information
(including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund and
the maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the securities being held
for the Fund. With respect to tender or exchange offers, the
Custodian shall transmit promptly to the Trust all written
information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or his agents)
making the tender or exchange offer. If the Trust desires to take
action with respect to any tender offer, exchange offer or any other
similar transaction, the Trust shall notify the Custodian in writing
at least three business days prior to the date on which the Custodian
is to take such action. However, the Custodian shall nevertheless
exercise its best efforts to take such action in the event that
notification is received three business days or less prior to the
date on which action is required.
2.18 Proper Instructions. Proper Instructions as used throughout this
Section 2 means a writing signed or initialed by one or more person
or persons as the Board shall have from time to time authorized.
Each such writing shall set forth the specific transaction or type of
transaction involved. Oral instructions will be deemed to be Proper
Instructions if (a) the Custodian reasonably believes them to have
been given by a person previously authorized in Proper Instructions
to give such instructions with respect to the transaction involved,
and (b) the Trust promptly causes such oral instructions to be
confirmed in writing. Upon receipt of a certificate of the Secretary
or an Assistant Secretary as to the authorization by the Board of the
Trust accompanied by a detailed description of procedures approved by
the Board, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided
that the Board and the Custodian are satisfied that such procedures
afford adequate safeguards for a Fund's assets.
2.19 Actions Permitted Without Express Authority. The Custodian may in
its discretion, without express authority from the Trust:
(1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Contract, provided that all such payments shall be accounted
for to the Trust in such form that it may be allocated to the
affected Fund;
(2) surrender securities in temporary form for securities in
definitive form;
(3) endorse for collection, in the name of a Fund, checks, drafts and
other negotiable instruments; and
(4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of each Fund
except as otherwise directed by the Trust.
2.20 Evidence of Authority. The Custodian shall be protected in acting
upon any instructions, notice, request, consent, certificate or other
instrument or paper reasonably believed by it to be genuine and to
have been properly executed on behalf of a Fund. The Custodian may
receive and accept a certified copy of a vote of the Board of the
Trust as conclusive evidence (a) of the authority of any person to
act in accordance with such vote or (b) of any determination of or
any action by the Board pursuant to the Declaration of Trust/Articles
of Incorporation as described in such vote, and such vote may be
considered as in full force and effect until receipt by the Custodian
of written notice to the contrary.
2.21 Notice to Trust by Custodian Regarding Cash Movement. The Custodian
will provide timely notification to the Trust of any receipt of cash,
income or payments to the Trust and the release of cash or payment by
the Trust.
3. Duties of Custodian With Respect to the Books of Account and Calculation
of Net Asset Value and Net Income.
The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Board of the Trust to keep the
books of account of each Fund and/or compute the net asset value per
share of the outstanding Shares of each Fund or, if directed in writing
to do so by the Trust, shall itself keep such books of account and/or
compute such net asset value per share. If so directed, the Custodian
shall also calculate daily the net income of a Fund as described in the
Fund's currently effective prospectus and Statement of Additional
Information ("Prospectus") and shall advise the Trust and the Transfer
Agent daily of the total amounts of such net income and, if instructed in
writing by an officer of the Trust to do so, shall advise the Transfer
Agent periodically of the division of such net income among its various
components. The calculations of the net asset value per share and the
daily income of a Fund shall be made at the time or times described from
time to time in the Fund's currently effective Prospectus.
4. Records.
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will
meet the obligations of the Trust and the Funds under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2
thereunder, and specifically including identified cost records used for
tax purposes. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the Custodian be
open for inspection by duly authorized officers, employees or agents of
the Trust and employees and agents of the SEC. In the event of
termination of this Contract, the Custodian will deliver all such records
to the Trust, to a successor Custodian, or to such other person as the
Trust may direct. The Custodian shall supply daily to the Trust a
tabulation of securities owned by a Fund and held by the Custodian and
shall, when requested to do so by the Trust and for such compensation as
shall be agreed upon between the Trust and the Custodian, include
certificate numbers in such tabulations.
5. Opinion of Funds' Independent Public Accountants/Auditors.
The Custodian shall take all reasonable action, as the Trust may from
time to time request, to obtain from year to year favorable opinions from
each Fund's independent public accountants/auditors with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement, periodic reports, or any other reports to the SEC
and with respect to any other requirements of such Commission.
6. Reports to Trust by Independent Public Accountants/Auditors.
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent public
accountants/auditors for each Fund on the accounting system, internal
accounting control and procedures for safeguarding securities, futures
contracts and options on futures contracts, including securities
deposited and/or maintained in a Securities System, relating to the
services provided by the Custodian for the Fund under this Contract; such
reports shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Trust, to provide reasonable assurance that
any material inadequacies would be disclosed by such examination and, if
there are no such inadequacies, the reports shall so state.
7. Compensation of Custodian.
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time
between Company and the Custodian.
8. Responsibility of Custodian.
The Custodian shall be held to a standard of reasonable care in carrying
out the provisions of this Contract; provided, however, that the
Custodian shall be held to any higher standard of care which would be
imposed upon the Custodian by any applicable law or regulation if such
above stated standard of reasonable care was not part of this Contract.
The Custodian shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for the Trust) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice, provided that such action is not in violation of applicable
federal or state laws or regulations, and is in good faith and without
negligence. Subject to the limitations set forth in Section 15 hereof,
the Custodian shall be kept indemnified by the Trust but only from the
assets of the Fund involved in the issue at hand and be without liability
for any action taken or thing done by it in carrying out the terms and
provisions of this Contract in accordance with the above standards.
In order that the indemnification provisions contained in this Section 8
shall apply, however, it is understood that if in any case the Trust may
be asked to indemnify or save the Custodian harmless, the Trust shall be
fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Custodian
will use all reasonable care to identify and notify the Trust promptly
concerning any situation which presents or appears likely to present the
probability of such a claim for indemnification. The Trust shall have
the option to defend the Custodian against any claim which may be the
subject of this indemnification, and in the event that the Trust so
elects it will so notify the Custodian and thereupon the Trust shall take
over complete defense of the claim, and the Custodian shall in such
situation initiate no further legal or other expenses for which it shall
seek indemnification under this Section. The Custodian shall in no case
confess any claim or make any compromise in any case in which the Trust
will be asked to indemnify the Custodian except with the Trust's prior
written consent.
Notwithstanding the foregoing, the responsibility of the Custodian with
respect to redemptions effected by check shall be in accordance with a
separate Agreement entered into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action
may, in the reasonable opinion of the Custodian, result in the Custodian
or its nominee assigned to a Fund being liable for the payment of money
or incurring liability of some other form, the Custodian may request the
Trust, as a prerequisite to requiring the Custodian to take such action,
to provide indemnity to the Custodian in an amount and form satisfactory
to the Custodian.
Subject to the limitations set forth in Section 15 hereof, the Trust
agrees to indemnify and hold harmless the Custodian and its nominee from
and against all taxes, charges, expenses, assessments, claims and
liabilities (including counsel fees) (referred to herein as authorized
charges) incurred or assessed against it or its nominee in connection
with the performance of this Contract, except such as may arise from it
or its nominee's own failure to act in accordance with the standard of
reasonable care or any higher standard of care which would be imposed
upon the Custodian by any applicable law or regulation if such above-
stated standard of reasonable care were not part of this Contract. To
secure any authorized charges and any advances of cash or securities made
by the Custodian to or for the benefit of a Fund for any purpose which
results in the Fund incurring an overdraft at the end of any business day
or for extraordinary or emergency purposes during any business day, the
Trust hereby grants to the Custodian a security interest in and pledges
to the Custodian securities held for the Fund by the Custodian, in an
amount not to exceed 10 percent of the Fund's gross assets, the specific
securities to be designated in writing from time to time by the Trust or
the Fund's investment adviser. Should the Trust fail to make such
designation, or should it instruct the Custodian to make advances
exceeding the percentage amount set forth above and should the Custodian
do so, the Trust hereby agrees that the Custodian shall have a security
interest in all securities or other property purchased for a Fund with
the advances by the Custodian, which securities or property shall be
deemed to be pledged to the Custodian, and the written instructions of
the Trust instructing their purchase shall be considered the requisite
description and designation of the property so pledged for purposes of
the requirements of the Uniform Commercial Code. Should the Trust fail
to cause a Fund to repay promptly any authorized charges or advances of
cash or securities, subject to the provision of the second paragraph of
this Section 8 regarding indemnification, the Custodian shall be entitled
to use available cash and to dispose of pledged securities and property
as is necessary to repay any such advances.
9. Effective Period, Termination and Amendment.
This Contract shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or
mailed, postage prepaid to the other party, such termination to take
effect not sooner than sixty (60) days after the date of such delivery or
mailing; provided, however that the Custodian shall not act under Section
2.12 hereof in the absence of receipt of an initial certificate of the
Secretary or an Assistant Secretary that the Board of the Trust has
approved the initial use of a particular Securities System as required in
each case by Rule 17f-4 under the 1940 Act; provided further, however,
that the Trust shall not amend or terminate this Contract in
contravention of any applicable federal or state regulations, or any
provision of the Declaration of Trust/Articles of Incorporation, and
further provided, that the Trust may at any time by action of its Board
(i) substitute another bank or trust company for the Custodian by giving
notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or
receiver for the Custodian by the appropriate banking regulatory agency
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction.
Upon termination of the Contract, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and
shall likewise reimburse the Custodian for its costs, expenses and
disbursements.
10. Successor Custodian.
If a successor custodian shall be appointed by the Board of the Trust,
the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form
for transfer, all securities then held by it hereunder for each Fund and
shall transfer to separate accounts of the successor custodian all of
each Fund's securities held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall,
in like manner, upon receipt of a certified copy of a vote of the Board
of the Trust, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board shall have been delivered to the
Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank
or trust company, which is a "bank" as defined in the 1940 Act, (delete
"doing business ... Massachusetts" unless SSBT is the Custodian) doing
business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $100,000,000, all securities, funds
and other properties held by the Custodian and all instruments held by
the Custodian relative thereto and all other property held by it under
this Contract for each Fund and to transfer to separate accounts of such
successor custodian all of each Fund's securities held in any Securities
System. Thereafter, such bank or trust company shall be the successor of
the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred
to or of the Board to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other
properties and the provisions of this Contract relating to the duties and
obligations of the Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions.
In connection with the operation of this Contract, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or
in addition to the provisions of this Contract as may in their joint
opinion be consistent with the general tenor of this Contract. Any such
interpretive or additional provisions shall be in a writing signed by
both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Declaration of
Trust/Articles of Incorporation. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to
be an amendment of this Contract.
12.Massachusetts Law to Apply.
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
13. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the
Custodian at address for SSBT only: 225 Franklin Street, Boston,
Massachusetts, 02110, or to such other address as the Trust or the
Custodian may hereafter specify, shall be deemed to have been properly
delivered or given hereunder to the respective address.
14. Counterparts.
This Contract may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
15. Limitations of Liability.
The Custodian is expressly put on notice of the limitation of liability
as set forth in Article XI of the Declaration of Trust of those Trusts
which are business trusts and agrees that the obligations and liabilities
assumed by the Trust and any Fund pursuant to this Contract, including,
without limitation, any obligation or liability to indemnify the
Custodian pursuant to Section 8 hereof, shall be limited in any case to
the relevant Fund and its assets and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the relevant
Fund, from any other Fund or its shareholders or from the Trustees,
Officers, employees or agents of the Trust, or any of them. In addition,
in connection with the discharge and satisfaction of any claim made by
the Custodian against the Trust, for whatever reasons, involving more
than one Fund, the Trust shall have the exclusive right to determine the
appropriate allocations of liability for any such claim between or among
the Funds.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed effective as of the 1st day of December, 1993.
ATTEST: INVESTMENT COMPANIES
/s/John G. McGonigle By /s/John G. Donahue
--------- ----------
John G. McGonigle John F. Donahue
Secretary Chairman
ATTEST: STATE STREET BANK AND TRUST
COMPANY
/s/ Ed McKenzie By /s/ F. J. Sidoti, Jr.
-------------- -------------
(Assistant) Secretary Typed Name: Frank J. Sidoti, Jr.
Typed Name: Ed McKenzie Title: Vice President
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By /s/ James J. Dolan
------ ------------
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
CONTRACT
DATE INVESTMENT COMPANY
Exhibit 9(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
FOR
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of December 1, 1994, by and between those investment
companies listed on Exhibit 1 as may be amended from time to time, having
their principal office and place of business at Federated Investors Tower,
Pittsburgh, PA 15222-3779 (the "Trust"), on behalf of the portfolios
(individually referred to herein as a "Fund" and collectively as "Funds") of
the Trust, and FEDERATED SERVICES COMPANY, a Delaware business trust, having
its principal office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 (the "Company").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
with authorized and issued shares of capital stock or beneficial interest
("Shares"); and
WHEREAS, the Trust may desire to retain the Company to provide certain
pricing, accounting and recordkeeping services for each of the Funds,
including any classes of shares issued by any Fund ("Classes") if so indicated
on Exhibit 1, and the Company is willing to furnish such services; and
WHEREAS, the Trust may desire to appoint the Company as its transfer agent,
dividend disbursing agent if so indicated on Exhibit 1, and agent in
connection with certain other activities, and the Company desires to accept
such appointment; and
WHEREAS, the Trust may desire to appoint the Company as its agent to
select, negotiate and subcontract for custodian services from an approved list
of qualified banks if so indicated on Exhibit 1, and the Company desires to
accept such appointment; and
WHEREAS, from time to time the Trust may desire and may instruct the
Company to subcontract for the performance of certain of its duties and
responsibilities hereunder to State Street Bank and Trust Company or another
agent (the "Agent"); and
WHEREAS, the words Trust and Fund may be used interchangeably for those
investment companies consisting of only one portfolio;
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree
as follows:
SECTION ONE: FUND ACCOUNTING.
ARTICLE 1. APPOINTMENT.
The Trust hereby appoints the Company to provide certain pricing and
accounting services to the Funds, and/or the Classes, for the period and on
the terms set forth in this Agreement. The Company accepts such appointment
and agrees to furnish the services herein set forth in return for the
compensation as provided in Article 3 of this Section.
ARTICLE 2. THE COMPANY'S DUTIES.
Subject to the supervision and control of the Trust's Board of Trustees or
Directors ("Board"), the Company will assist the Trust with regard to fund
accounting for the Trust, and/or the Funds, and/or the Classes, and in
connection therewith undertakes to perform the following specific services;
A. Value the assets of the Funds using: primarily, market quotations,
including the use of matrix pricing, supplied by the independent pricing
services selected by the Company in consultation with the adviser, or
sources selected by the adviser, and reviewed by the board; secondarily,
if a designated pricing service does not provide a price for a security
which the Company believes should be available by market quotation, the
Company may obtain a price by calling brokers designated by the
investment adviser of the fund holding the security, or if the adviser
does not supply the names of such brokers, the Company will attempt on
its own to find brokers to price those securities; thirdly, for
securities for which no market price is available, the Pricing Committee
of the Board will determine a fair value in good faith. Consistent with
Rule 2a-4 of the 40 Act, estimates may be used where necessary or
appropriate. The Company's obligations with regard to the prices
received from outside pricing services and designated brokers or other
outside sources, is to exercise reasonable care in the supervision of
the pricing agent. The Company is not the guarantor of the securities
prices received from such agents and the Company is not liable to the
Fund for potential errors in valuing a Fund's assets or calculating the
net asset value per share of such Fund or Class when the calculations
are based upon such prices. All of the above sources of prices used as
described are deemed by the Company to be authorized sources of security
prices. The Company provides daily to the adviser the securities prices
used in calculating the net asset value of the fund, for its use in
preparing exception reports for those prices on which the adviser has
comment. Further, upon receipt of the exception reports generated by the
adviser, the Company diligently pursues communication regarding
exception reports with the designated pricing agents.
B. Determine the net asset value per share of each Fund and/or Class, at
the time and in the manner from time to time determined by the Board and
as set forth in the Prospectus and Statement of Additional Information
("Prospectus") of each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate capital gains or losses of each of the Funds resulting from
sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and financial
records of the Trust, including for each Fund, and/or Class, as required
under Section 31(a) of the 1940 Act and the Rules thereunder in
connection with the services provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records to be maintained by Rule 31a-1 under the 1940 Act in connection
with the services provided by the Company. The Company further agrees
that all such records it maintains for the Trust are the property of the
Trust and further agrees to surrender promptly to the Trust such records
upon the Trust's request;
G. At the request of the Trust, prepare various reports or other financial
documents required by federal, state and other applicable laws and
regulations; and
H. Such other similar services as may be reasonably requested by the Trust.
ARTICLE 3. COMPENSATION AND ALLOCATION OF EXPENSES.
A. The Funds will compensate the Company for its services rendered pursuant
to Section One of this Agreement in accordance with the fees agreed upon
from time to time between the parties hereto. Such fees do not include
out-of-pocket disbursements of the Company for which the Funds shall
reimburse the Company upon receipt of a separate invoice. Out-of-pocket
disbursements shall include, but shall not be limited to, the items
agreed upon between the parties from time to time.
B. The Fund and/or the Class, and not the Company, shall bear the cost of:
custodial expenses; membership dues in the Investment Company Institute
or any similar organization; transfer agency expenses; investment
advisory expenses; costs of printing and mailing stock certificates,
Prospectuses, reports and notices; administrative expenses; interest on
borrowed money; brokerage commissions; taxes and fees payable to
federal, state and other governmental agencies; fees of Trustees or
Directors of the Trust; independent auditors expenses; Federated
Administrative Services and/or Federated Administrative Services, Inc.
legal and audit department expenses billed to Federated Services Company
for work performed related to the Trust, the Funds, or the Classes; law
firm expenses; or other expenses not specified in this Article 3 which
may be properly payable by the Funds and/or classes.
C. The compensation and out-of-pocket expenses shall be accrued by the Fund
and shall be paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Trust and/or the Funds and a duly authorized officer of
the Company.
E. The fee for the period from the effective date of this Agreement with
respect to a Fund or a Class to the end of the initial month shall be
prorated according to the proportion that such period bears to the full
month period. Upon any termination of this Agreement before the end of
any month, the fee for such period shall be prorated according to the
proportion which such period bears to the full month period. For
purposes of determining fees payable to the Company, the value of the
Fund's net assets shall be computed at the time and in the manner
specified in the Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time subcontract
to, employ or associate with itself such person or persons as the
Company may believe to be particularly suited to assist it in performing
services under this Section One. Such person or persons may be third-
party service providers, or they may be officers and employees who are
employed by both the Company and the Funds. The compensation of such
person or persons shall be paid by the Company and no obligation shall
be incurred on behalf of the Trust, the Funds, or the Classes in such
respect.
SECTION TWO: SHAREHOLDER RECORDKEEPING.
ARTICLE 4. TERMS OF APPOINTMENT.
Subject to the terms and conditions set forth in this Agreement, the Trust
hereby appoints the Company to act as, and the Company agrees to act as,
transfer agent and dividend disbursing agent for each Fund's Shares, and agent
in connection with any accumulation, open-account or similar plans provided to
the shareholders of any Fund ("Shareholder(s)"), including without limitation
any periodic investment plan or periodic withdrawal program.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed
to be Proper Instructions if (a) the Company reasonably believes them to have
been given by a person previously authorized in Proper Instructions to give
such instructions with respect to the transaction involved, and (b) the Trust,
or the Fund, and the Company promptly cause such oral instructions to be
confirmed in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
Trust, or the Fund, and the Company are satisfied that such procedures afford
adequate safeguards for the Fund's assets. Proper Instructions may only be
amended in writing.
ARTICLE 5. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with Proper
Instructions as may be provided from time to time by the Trust as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase of
shares and promptly deliver payment and appropriate documentation
therefore to the custodian of the relevant Fund, (the "Custodian").
The Company shall notify the Fund and the Custodian on a daily
basis of the total amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of Shares of each Fund and/or Class and hold
such Shares in the appropriate Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or its
agent requests a certificate, the Company, as Transfer Agent, shall
countersign and mail by first class mail, a certificate to the
Shareholder at its address as set forth on the transfer books of
the Funds, and/or Classes, subject to any Proper Instructions
regarding the delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any reason,
the Company shall debit the Share account of the Shareholder by the
number of Shares that had been credited to its account upon receipt
of the check or other order, promptly mail a debit advice to the
Shareholder, and notify the Fund and/or Class of its action. In the
event that the amount paid for such Shares exceeds proceeds of the
redemption of such Shares plus the amount of any dividends paid
with respect to such Shares, the Fund and/the Class or its
distributor will reimburse the Company on the amount of such
excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Funds in accordance with the provisions of
its governing document and the then-current Prospectus of the Fund.
The Company shall prepare and mail or credit income, capital gain,
or any other payments to Shareholders. As the Dividend Disbursing
Agent, the Company shall, on or before the payment date of any such
distribution, notify the Custodian of the estimated amount required
to pay any portion of said distribution which is payable in cash
and request the Custodian to make available sufficient funds for
the cash amount to be paid out. The Company shall reconcile the
amounts so requested and the amounts actually received with the
Custodian on a daily basis. If a Shareholder is entitled to receive
additional Shares by virtue of any such distribution or dividend,
appropriate credits shall be made to the Shareholder's account, for
certificated Funds and/or Classes, delivered where requested; and
(2) The Company shall maintain records of account for each Fund and
Class and advise the Trust, each Fund and Class and its
Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set forth
in Proper Instructions, deliver the appropriate instructions
therefor to the Custodian. The Company shall notify the Funds on a
daily basis of the total amount of redemption requests processed
and monies paid to the Company by the Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds from the
Custodian with respect to any redemption, the Company shall pay or
cause to be paid the redemption proceeds in the manner instructed
by the redeeming Shareholders, pursuant to procedures described in
the then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other request for
redemption does not comply with the procedures for redemption
approved by the Fund, the Company shall promptly notify the
Shareholder of such fact, together with the reason therefor, and
shall effect such redemption at the price applicable to the date
and time of receipt of documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual basis
and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund,
and/or Class, and maintain pursuant to applicable rules of the
Securities and Exchange Commission ("SEC") a record of the total
number of Shares of the Fund and/or Class which are authorized,
based upon data provided to it by the Fund, and issued and
outstanding. The Company shall also provide the Fund on a regular
basis or upon reasonable request with the total number of Shares
which are authorized and issued and outstanding, but shall have no
obligation when recording the issuance of Shares, except as
otherwise set forth herein, to monitor the issuance of such Shares
or to take cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole responsibility of
the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Trust or the Fund to include a record for each Shareholder's
account of the following:
(a) Name, address and tax identification number (and whether such
number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is
required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance
of the account;
(g) Certificate numbers and denominations for any Shareholder
holding certificates;
(h) Any information required in order for the Company to perform
the calculations contemplated or required by this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such record
retention shall be at the expense of the Company, and such records
may be inspected by the Fund at reasonable times. The Company may,
at its option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the Company's
files, records and documents created and maintained by the Company
pursuant to this Agreement, which are no longer needed by the
Company in performance of its services or for its protection. If
not so turned over to the Fund, such records and documents will be
retained by the Company for six years from the year of creation,
during the first two of which such documents will be in readily
accessible form. At the end of the six year period, such records
and documents will either be turned over to the Fund or destroyed
in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the following
information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and outstanding in each
state for "blue sky" purposes as determined according to
Proper Instructions delivered from time to time by the Fund to
the Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to distribution agreements,
allocations of sales loads, redemption fees, or other
transaction- or sales-related payments;
(f) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Shareholders, such notices for reporting
dividends and distributions paid as are required to be so filed and
mailed and shall withhold such sums as are required to be withheld
under applicable federal and state income tax laws, rules and
regulations.
(3) In addition to and not in lieu of the services set forth above, the
Company shall:
(a) Perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan or
periodic withdrawal program), including but not limited to:
maintaining all Shareholder accounts, mailing Shareholder
reports and Prospectuses to current Shareholders, withholding
taxes on accounts subject to back-up or other withholding
(including non-resident alien accounts), preparing and filing
reports on U.S. Treasury Department Form 1099 and other
appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of
Shares and other conformable transactions in Shareholder
accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information;
and
(b) provide a system which will enable the Fund to monitor the
total number of Shares of each Fund and/or Class sold in each
state ("blue sky reporting"). The Fund shall by Proper
Instructions (i) identify to the Company those transactions
and assets to be treated as exempt from the blue sky reporting
for each state and (ii) verify the classification of
transactions for each state on the system prior to activation
and thereafter monitor the daily activity for each state. The
responsibility of the Company for each Fund's and/or Class's
state blue sky registration status is limited solely to the
recording of the initial classification of transactions or
accounts with regard to blue sky compliance and the reporting
of such transactions and accounts to the Fund as provided
above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders relating
to their Share accounts and such other correspondence as may from
time to time be addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists, mail proxy
cards and other material supplied to it by the Fund in connection
with Shareholder Meetings of each Fund; receive, examine and
tabulate returned proxies, and certify the vote of the
Shareholders;
(3) The Company shall establish and maintain facilities and procedures
for safekeeping of stock certificates, check forms and facsimile
signature imprinting devices, if any; and for the preparation or
use, and for keeping account of, such certificates, forms and
devices.
ARTICLE 6. DUTIES OF THE TRUST.
A. Compliance
The Trust or Fund assume full responsibility for the preparation,
contents and distribution of their own and/or their classes' Prospectus
and for complying with all applicable requirements of the Securities Act
of 1933, as amended (the "1933 Act"), the 1940 Act and any laws, rules
and regulations of government authorities having jurisdiction.
B. Share Certificates
The Trust shall supply the Company with a sufficient supply of blank
Share certificates and from time to time shall renew such supply upon
request of the Company. Such blank Share certificates shall be properly
signed, manually or by facsimile, if authorized by the Trust and shall
bear the seal of the Trust or facsimile thereof; and notwithstanding the
death, resignation or removal of any officer of the Trust authorized to
sign certificates, the Company may continue to countersign certificates
which bear the manual or facsimile signature of such officer until
otherwise directed by the Trust.
C. Distributions
The Fund shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
ARTICLE 7. COMPENSATION AND EXPENSES.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Trust and/or the Fund agree to pay the Company an annual
maintenance fee for each Shareholder account as agreed upon between the
parties and as may be added to or amended from time to time. Such fees
may be changed from time to time subject to written agreement between
the Trust and the Company. Pursuant to information in the Fund
Prospectus or other information or instructions from the Fund, the
Company may sub-divide any Fund into Classes or other sub-components for
recordkeeping purposes. The Company will charge the Fund the same fees
for each such Class or sub-component the same as if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the Trust and/or
Fund agree to reimburse the Company for out-of-pocket expenses or
advances incurred by the Company for the items agreed upon between the
parties, as may be added to or amended from time to time. In addition,
any other expenses incurred by the Company at the request or with the
consent of the Trust and/or the Fund, will be reimbursed by the
appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the Fund
and shall be paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Trust and/or the Funds and a duly authorized officer of
the Company.
ARTICLE 8. ASSIGNMENT OF SHAREHOLDER RECORDKEEPING.
Except as provided below, no right or obligation under this Section Two may
be assigned by either party without the written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. The Company may without further consent on the part of the Trust
subcontract for the performance hereof with (A) State Street Bank and
its subsidiary, Boston Financial Data Services, Inc., a Massachusetts
Trust ("BFDS"), which is duly registered as a transfer agent pursuant to
Section 17A(c)(1) of the Securities Exchange Act of 1934, as amended, or
any succeeding statute ("Section 17A(c)(1)"), or (B) a BFDS subsidiary
duly registered as a transfer agent pursuant to Section 17A(c)(1), or
(C) a BFDS affiliate, or (D) such other provider of services duly
registered as a transfer agent under Section 17A(c)(1) as Company shall
select; provided, however, that the Company shall be as fully
responsible to the Trust for the acts and omissions of any subcontractor
as it is for its own acts and omissions; or
C. The Company shall upon instruction from the Trust subcontract for the
performance hereof with an Agent selected by the Trust, other than BFDS
or a provider of services selected by Company, as described in (2)
above; provided, however, that the Company shall in no way be
responsible to the Trust for the acts and omissions of the Agent.
SECTION THREE: CUSTODY SERVICES PROCUREMENT.
ARTICLE 9. APPOINTMENT.
The Trust hereby appoints Company as its agent to evaluate and obtain
custody services from a financial institution that (i) meets the criteria
established in Section 17(f) of the 1940 Act and (ii) has been approved by the
Board as eligible for selection by the Company as a custodian (the "Eligible
Custodian"). The Company accepts such appointment.
ARTICLE 10. THE COMPANY AND ITS DUTIES.
Subject to the review, supervision and control of the Board, the Company
shall:
A. evaluate the nature and the quality of the custodial services provided
by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the Trust as
Custodian of the Trust's assets substantially on the terms set forth as
the form of agreement in Exhibit 2;
C. negotiate and enter into agreements with the Custodians for the benefit
of the Trust, with the Trust as a party to each such agreement. The
Company shall not be a party to any agreement with any such Custodian;
D. establish procedures to monitor the nature and the quality of the
services provided by the Custodians;
E. continuously monitor the nature and the quality of services provided by
the Custodians; and
F. periodically provide to the Trust (i) written reports on the activities
and services of the Custodians; (ii) the nature and amount of
disbursement made on account of the Trust with respect to each custodial
agreement; and (iii) such other information as the Board shall
reasonably request to enable it to fulfill its duties and obligations
under Sections 17(f) and 36(b) of the 1940 Act and other duties and
obligations thereof.
ARTICLE 11. FEES AND EXPENSES.
A. Annual Fee
For the performance by the Company pursuant to Section Three of this
Agreement, the Trust and/or the Fund agree to pay the Company an annual
fee as agreed upon between the parties.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Trust and/or
Fund agree to reimburse the Company for out-of-pocket expenses or
advances incurred by the Company for the items agreed upon between the
parties, as may be added to or amended from time to time. In addition,
any other expenses incurred by the Company at the request or with the
consent of the Trust and/or the Fund, will be reimbursed by the
appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the Fund
and shall be paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Trust and/or the Funds and a duly authorized officer of
the Company.
ARTICLE 12. REPRESENTATIONS.
The Company represents and warrants that it has obtained all required
approvals from all government or regulatory authorities necessary to enter
into this arrangement and to provide the services contemplated in Section
Three of this Agreement.
SECTION FOUR: GENERAL PROVISIONS.
ARTICLE 13. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
the Trust shall file with the Company the following documents:
(1) A copy of the Charter and By-Laws of the Trust and all amendments
thereto;
(2) A copy of the resolution of the Board of the Trust authorizing this
Agreement;
(3) Specimens of all forms of outstanding Share certificates of the
Trust or the Funds in the forms approved by the Board of the Trust
with a certificate of the Secretary of the Trust as to such
approval;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following documents:
(1) Each resolution of the Board of the Trust authorizing the original
issuance of each Fund's, and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to the
sale of Shares of any Fund, and/or Class;
(3) A certified copy of each amendment to the governing document and
the By-Laws of the Trust;
(4) Certified copies of each vote of the Board authorizing officers to
give Proper Instructions to the Custodian and agents for fund
accountant, custody services procurement, and shareholder
recordkeeping or transfer agency services;
(5) Specimens of all new Share certificates representing Shares of any
Fund, accompanied by Board resolutions approving such forms;
(6) Such other certificates, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the proper
performance of its duties; and
(7) Revisions to the Prospectus of each Fund.
ARTICLE 14. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Trust that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State of
Delaware.
(3) It is empowered under applicable laws and by its charter and by-
laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to authorize it
to enter into and perform its obligations under this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
(6) It is in compliance with federal securities law requirements and in
good standing as a transfer agent.
B. Representations and Warranties of the Trust
The Trust represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and in good
standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Charter and By-
Laws to enter into and perform its obligations under this
Agreement;
(3) All corporate proceedings required by said Charter and By-Laws have
been taken to authorize it to enter into and perform its
obligations under this Agreement;
(4) The Trust is an open-end investment company registered under the
1940 Act; and
(5) A registration statement under the 1933 Act will be effective, and
appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of each Fund being
offered for sale.
ARTICLE 15. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
The Company shall be held to a standard of reasonable care in carrying
out the provisions of this Contract. The Company shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for the
Trust) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice, provided that such
action is not in violation of applicable federal or state laws or
regulations, and is in good faith and without negligence.
B. Indemnification by Trust
The Company shall not be responsible for and the Trust or Fund shall
indemnify and hold the Company, including its officers, directors,
shareholders and their agents employees and affiliates, harmless against
any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-adviser or
other party contracted by or approved by the Trust or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper form
which
(a) are received by the Company or its agents or subcontractors
and furnished to it by or on behalf of the Fund, its
Shareholders or investors regarding the purchase, redemption
or transfer of Shares and Shareholder account information;
(b) are received by the Company from independent pricing services
or sources for use in valuing the assets of the Funds; or
(c) are received by the Company or its agents or subcontractors
from Advisers, Sub-advisers or other third parties contracted
by or approved by the Trust of Fund for use in the performance
of services under this Agreement;
(d) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the Trust.
(3) The reliance on, or the carrying out by the Company or its agents
or subcontractors of Proper Instructions of the Trust or the Fund.
(4) The offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws
or regulations of any state that such Shares be registered in such
state or in violation of any stop order or other determination or
ruling by any federal agency or any state with respect to the offer
or sale of such Shares in such state.
Provided, however, that the Company shall not be protected by this
Article 15.A. from liability for any act or omission resulting from
the Company's willful misfeasance, bad faith, negligence or
reckless disregard of its duties of failure to meet the standard of
care set forth in 15.A. above.
C. Reliance
At any time the Company may apply to any officer of the Trust or Fund
for instructions, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the
Company under this Agreement, and the Company and its agents or
subcontractors shall not be liable and shall be indemnified by the Trust
or the appropriate Fund for any action reasonably taken or omitted by it
in reliance upon such instructions or upon the opinion of such counsel
provided such action is not in violation of applicable federal or state
laws or regulations. The Company, its agents and subcontractors shall be
protected and indemnified in recognizing stock certificates which are
reasonably believed to bear the proper manual or facsimile signatures of
the officers of the Trust or the Fund, and the proper countersignature
of any former transfer agent or registrar, or of a co-transfer agent or
co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 15 shall apply, upon the assertion of a claim for which either
party may be required to indemnify the other, the party seeking
indemnification shall promptly notify the other party of such assertion,
and shall keep the other party advised with respect to all developments
concerning such claim. The party who may be required to indemnify shall
have the option to participate with the party seeking indemnification in
the defense of such claim. The party seeking indemnification shall in no
case confess any claim or make any compromise in any case in which the
other party may be required to indemnify it except with the other
party's prior written consent.
ARTICLE 16. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other. Should the Trust exercise its rights
to terminate, all out-of-pocket expenses associated with the movement of
records and materials will be borne by the Trust or the appropriate Fund.
Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of
Article 15 shall survive the termination of this Agreement.
ARTICLE 17. AMENDMENT.
This Agreement may be amended or modified by a written agreement executed
by both parties.
ARTICLE 18. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall
be annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision
of the Charter. No interpretive or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this Agreement.
ARTICLE 19. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts
ARTICLE 20. NOTICES.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the Company at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to such
other address as the Trust or the Company may hereafter specify, shall be
deemed to have been properly delivered or given hereunder to the respective
address.
ARTICLE 21. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 22. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust and signed by an authorized officer of the Trust, acting
as such, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Trustees or
Shareholders of the Trust, but bind only the appropriate property of the Fund,
or Class, as provided in the Declaration of Trust.
ARTICLE 23. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Company and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
and the obligations of this Agreement are not binding upon any of the Trustees
or Shareholders of the Company, but bind only the property of the Company as
provided in the Declaration of Trust.
ARTICLE 24. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be assignable
with respect to the Trust or the Funds by either of the parties hereto except
by the specific written consent of the other party.
ARTICLE 25. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
ARTICLE 26. SUCCESSOR AGENT.
If a successor agent for the Trust shall be appointed by the Trust, the
Company shall upon termination of this Agreement deliver to such successor
agent at the office of the Company all properties of the Trust held by it
hereunder. If no such successor agent shall be appointed, the Company shall at
its office upon receipt of Proper Instructions deliver such properties in
accordance with such instructions.
In the event that no written order designating a successor agent or Proper
Instructions shall have been delivered to the Company on or before the date
when such termination shall become effective, then the Company shall have the
right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all properties held by the Company under this Agreement.
Thereafter, such bank or trust company shall be the successor of the Company
under this Agreement.
ARTICLE 27. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to the Fund as a result of work stoppage,
power or other mechanical failure, natural disaster, governmental action,
communication disruption or other impossibility of performance.
ARTICLE 28. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign to a
successor all of or a substantial portion of its business, or to a party
controlling, controlled by, or under common control with such party. Nothing
in this Article 28 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
ARTICLE 29. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: INVESTMENT COMPANIES
(LISTED ON EXHIBIT 1)
/s/ John W. McGonigle By: /s/ John F. Donahue
------- -- ---
John W. McGonigle John F. Donahue
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
/s/ Jeannette Fisher-Garber By: /s/ James J. Dolan
- -----
Jeannette Fisher-Garber James J. Dolan
Secretary President
EXHIBIT 1
EXHIBIT 9 (II) TO FORM N-1A
EXHIBIT 10 TO ITEM 601/REG. S-K
SHAREHOLDER SERVICES AGREEMENT
AGREEMENT made as of the first day of March, 1994, by and between those
investment companies listed on Exhibit 1, as may be amended from time to time,
having their principal office and place of business at Federated Investors
Tower, Pittsburgh, PA 15222-3779 and who have approved a Shareholder Services
Plan (the "Plan") and this form of Agreement (individually referred to herein as
a "Fund" and collectively as "Funds") and Federated Shareholder Services, a
Delaware business trust, having its principal office and place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 ("FSS").
1. The Funds hereby appoint FSS to render or cause to be rendered
personal services to shareholders of the Funds and/or the maintenance of
accounts of shareholders of the Funds ("Services"). In addition to providing
Services directly to shareholders of the Funds, FSS is hereby appointed the
Funds' agent to select, negotiate and subcontract for the performance of
Services. FSS hereby accepts such appointments. FSS agrees to provide or cause
to be provided Services which, in its best judgment (subject to supervision and
control of the Funds' Boards of Trustees or Directors, as applicable), are
necessary or desirable for shareholders of the Funds. FSS further agrees to
provide the Funds, upon request, a written description of the Services which FSS
is providing hereunder.
2. During the term of this Agreement, each Fund will pay FSS and FSS
agrees to accept as full compensation for its services rendered hereunder a fee
at an annual rate, calculated daily and payable monthly, up to 0.25% of 1% of
average net assets of each Fund.
For the payment period in which this Agreement becomes effective or
terminates with respect to any Fund, there shall be an appropriate proration of
the monthly fee on the basis of the number of days that this Agreement is in
effect with respect to such Fund during the month. To enable the Funds to
comply with an applicable exemptive order, FSS represents that the fees received
pursuant to this Agreement will be disclosed to and authorized by any person or
entity receiving Services, and will not result in an excessive fee to FSS.
3. This Agreement shall continue in effect for one year from the date of
its execution, and thereafter for successive periods of one year only if the
form of this Agreement is approved at least annually by the Board of each Fund,
including a majority of the members of the Board of the Fund who are not
interested persons of the Fund and have no direct or indirect financial interest
in the operation of the Funds' Plan or in any related documents to the Plan
("Independent Board Members") cast in person at a meeting called for that
purpose.
4. Notwithstanding paragraph 3, this Agreement may be terminated as
follows:
(a) at any time, without the payment of any penalty, by the vote of a
majority of the Independent Board Members of any Fund or by a vote of a
majority of the outstanding voting securities of any Fund as defined in
the Investment Company Act of 1940 on sixty (60) days' written notice to
the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as
defined in the Investment Company Act of 1940; and
-2-
(c) by any party to the Agreement without cause by giving the other
party at least sixty (60) days' written notice of its intention to
terminate.
5. FSS agrees to obtain any taxpayer identification number certification
from each shareholder of the Funds to which it provides Services that is
required under Section 3406 of the Internal Revenue Code, and any applicable
Treasury regulations, and to provide each Fund or its designee with timely
written notice of any failure to obtain such taxpayer identification number
certification in order to enable the implementation of any required backup
withholding.
6. FSS shall not be liable for any error of judgment or mistake of law or
for any loss suffered by any Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad faith
or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
FSS shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for such Fund) on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice. Any person, even
though also an officer, trustee, partner, employee or agent of FSS, who may be
or become a member of such Fund's Board, officer, employee or agent of any Fund,
shall be deemed, when rendering services to such Fund or acting on any business
of such Fund (other than services or business in connection with the duties of
FSS hereunder) to be rendering such services to or acting solely for such Fund
and not as an officer, trustee, partner, employee or agent or one under the
control or direction of FSS even though paid by FSS.
This Section 6 shall survive termination of this Agreement.
-3-
7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or termination is
sought.
8. FSS is expressly put on notice of the limitation of liability as set
forth in the Declaration of Trust of each Fund that is a Massachusetts business
trust and agrees that the obligations assumed by each such Fund pursuant to this
Agreement shall be limited in any case to such Fund and its assets and that FSS
shall not seek satisfaction of any such obligations from the shareholders of
such Fund, the Trustees, Officers, Employees or Agents of such Fund, or any of
them.
9. The execution and delivery of this Agreement have been authorized by
the Trustees of FSS and signed by an authorized officer of FSS, acting as such,
and neither such authorization by such Trustees nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or shareholders of FSS, but
bind only the trust property of FSS as provided in the Declaration of Trust of
FSS.
10. Notices of any kind to be given hereunder shall be in writing
(including facsimile communication) and shall be duly given if delivered to any
Fund and to such Fund at the following address: Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President and if delivered to FSS at
Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention: President.
11. This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
-4-
whether oral or written. If any provision of this Agreement shall be held or
made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by Pennsylvania law; provided,
however, that nothing herein shall be construed in a manner inconsistent with
the Investment Company Act of 1940 or any rule or regulation promulgated by the
Securities and Exchange Commission thereunder.
12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the same
instrument.
13. This Agreement shall not be assigned by any party without the prior
written consent of FSS in the case of assignment by any Fund, or of the Funds in
the case of assignment by FSS, except that any party may assign to a successor
all of or a substantial portion of its business to a party controlling,
controlled by, or under common control with such party. Nothing in this Section
14 shall prevent FSS from delegating its responsibilities to another entity to
the extent provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Investment Companies (listed
on Exhibit 1)
-5-
By: /s/ John F. Donahue
John F. Donahue
Chairman
Attest: /s/ John W. McGonigle
John W. McGonigle
Federated Shareholder Services
By: /s/ James J. Dolan
Title: President
Attest: /s/ John W. McGonigle
John W. McGonigle
EXHIBIT 1
TO
SHAREHOLDER SERVICES AGREEMENT
-6-
FEDERATED INDEX TRUST
Max-Cap Fund
Institutional Shares
Institutional Service Shares
Mid-Cap Fund
Mini-Cap Fund
Exhibit 10 under Form N-1A
Exhibit 5 under Item 601/Reg. S-K
HOUSTON, HOUSTON & DONNELLY
ATTORNEYS AT LAW
2510 CENTRE CITY TOWER
PITTSBURGH, PA 15222
December 13, 1990
Federated Index Trust
Federated Investors Tower
Pittsburgh, PA 15222-3779
Gentlemen:
You have requested our opinion for use in conjunction with a Rule 24f-2
Notice for Federated Index Trust ("Trust") to be filed in respect of shares of
the Trust ("Shares") sold for the fiscal year ended October 31, 1990, pursuant
to the Trust's registration statement filed with the Securities and Exchange
Commission ("SEC") under the Securities Act of 1933 (File No. 33-33852)
("Registration Statement").
In its Registration Statement, the Trust elected to register an indefinite
number of Shares pursuant to the provisions of SEC Rule 24f-2.
We have reviewed the amended Registration Statement of the Trust and such
other documents and records deemed relevant. On the basis of the foregoing, it
is our opinion that the Shares sold for the fiscal year ended October 31, 1990,
registration of which the Rule 24f-2 Notice makes definite in number, were
legally issued, fully paid and non-assessable.
We consent to your filing this opinion as an Exhibit to the Rule 24f-2
Notice referred to above, the Registration Statement of the Trust and to any
application or registration statement filed under the Securities Laws of any of
the States of the United States.
Very truly yours,
HOUSTON, HOUSTON & DONNELLY
By /s/ Thomas J. Donnelly
Exhibit 18 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of
FEDERATED INDEX TRUST and the Deputy
General Counsel of Federated Investors, and each of them, their true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for them and in their names, place and stead, in any and all capacities, to sign
any and all documents to be filed with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, by means of the Securities and Exchange
Commission's electronic disclosure system known as EDGAR; and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to sign and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as each of them might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue thereof.
SIGNATURES TITLE DATE
/S/ John F. Donahue Chairman December 1, 1995
John F. Donahue (Chief Executive Officer)
/s/ Glen R. Johnson President December 1, 1995
Glen R. Johnson
/s/ J. Christopher Donahue Executive Vice PresidentDecember 1, 1995
J. Christopher Donahue
/s/ David M. Taylor Treasurer December 1, 1995
David M. Taylor (Principal Financial
and Accounting Officer)
/s/ Thomas G. Bigley Trustee December 1, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. Trustee December 1, 1995
John T. Conroy, Jr.
SIGNATURES TITLE DATE
/s/ William J. Copeland Trustee December 1, 1995
William J. Copeland
/s/ James E. Dowd Trustee December 1, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee December 1, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee December 1, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee December 1, 1995
Peter E. Madden
/s/ Gregor F. Meyer Trustee December 1, 1995
Gregor F. Meyer
/s/ John E. Murray, Jr. Trustee December 1, 1995
John E. Murray, Jr.
/s/ Wesley W. Posvar Trustee December 1, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee December 1, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 1st day of December, 1995
/s/ Marie M. Hamm
Notarial Seal
Marie M. Hamm, Notary Public
Plum Boro, Allegheny County
My Commission Expires Sept. 16, 1996
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> Federated Index Trust
Federated Max-Cap Fund
Institutional Shares
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Oct-31-1995
<PERIOD-END> Oct-31-1995
<INVESTMENTS-AT-COST> 656,671,159
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 679,237,383
<DIVIDEND-INCOME> 12,163,449
<INTEREST-INCOME> 6,393,059
<OTHER-INCOME> 0
<EXPENSES-NET> 1,877,285
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<DISTRIBUTIONS-OF-GAINS> 729,209
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<NET-CHANGE-IN-ASSETS> 262,000,094
<ACCUMULATED-NII-PRIOR> 961,205
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<OVERDISTRIB-NII-PRIOR> 0
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<AVERAGE-NET-ASSETS> 574,852,100
<PER-SHARE-NAV-BEGIN> 12.020
<PER-SHARE-NII> 0.380
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</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 012
<NAME> Federated Index Trust
Federated Max-Cap Fund
Institutional Service Shares
<PERIOD-TYPE> 12-Mos
<FISCAL-YEAR-END> Oct-31-1995
<PERIOD-END> Oct-31-1995
<INVESTMENTS-AT-COST> 656,671,159
<INVESTMENTS-AT-VALUE> 709,515,657
<RECEIVABLES> 7,031,586
<ASSETS-OTHER> 250
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 716,547,493
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 2,115,042
<TOTAL-LIABILITIES> 2,115,042
<SENIOR-EQUITY> 0
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<SHARES-COMMON-STOCK> 2,390,704
<SHARES-COMMON-PRIOR> 716,899
<ACCUMULATED-NII-CURRENT> 3,063,488
<OVERDISTRIBUTION-NII> 0
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 35,195,068
<DIVIDEND-INCOME> 12,163,449
<INTEREST-INCOME> 6,393,059
<OTHER-INCOME> 0
<EXPENSES-NET> 1,877,285
<NET-INVESTMENT-INCOME> 16,679,223
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<APPREC-INCREASE-CURRENT> 21,104,700
<NET-CHANGE-FROM-OPS> 137,571,580
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 505,602
<DISTRIBUTIONS-OF-GAINS> 14,188
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,368,216
<NUMBER-OF-SHARES-REDEEMED> 730,897
<SHARES-REINVESTED> 36,486
<NET-CHANGE-IN-ASSETS> 262,000,094
<ACCUMULATED-NII-PRIOR> 961,205
<ACCUMULATED-GAINS-PRIOR> 352,786
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<PER-SHARE-NAV-BEGIN> 12.020
<PER-SHARE-NII> 0.330
<PER-SHARE-GAIN-APPREC> 2.690
<PER-SHARE-DIVIDEND> 0.300
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<EXPENSE-RATIO> 0.61
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<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 03
<NAME> Federated Index Trust
Federated Mid-Cap Fund
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Oct-31-1995
<PERIOD-END> Oct-31-1995
<INVESTMENTS-AT-COST> 54,766,099
<INVESTMENTS-AT-VALUE> 60,141,786
<RECEIVABLES> 2,902,249
<ASSETS-OTHER> 11,117
<OTHER-ITEMS-ASSETS> 0
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<PAYABLE-FOR-SECURITIES> 221,962
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 253,587
<TOTAL-LIABILITIES> 475,549
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 53,646,360
<SHARES-COMMON-STOCK> 4,895,491
<SHARES-COMMON-PRIOR> 3,992,004
<ACCUMULATED-NII-CURRENT> 147,273
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3,618,287
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,167,683
<NET-ASSETS> 62,579,603
<DIVIDEND-INCOME> 921,677
<INTEREST-INCOME> 380,122
<OTHER-INCOME> 0
<EXPENSES-NET> 314,302
<NET-INVESTMENT-INCOME> 987,497
<REALIZED-GAINS-CURRENT> 3,630,556
<APPREC-INCREASE-CURRENT> 5,366,839
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 893,649
<DISTRIBUTIONS-OF-GAINS> 778,952
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<NUMBER-OF-SHARES-SOLD> 4,033,313
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<SHARES-REINVESTED> 78,357
<NET-CHANGE-IN-ASSETS> 18,568,017
<ACCUMULATED-NII-PRIOR> 53,425
<ACCUMULATED-GAINS-PRIOR> 766,683
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<GROSS-EXPENSE> 528,901
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<PER-SHARE-NII> 0.220
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</TABLE>
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 02
<NAME> Federated Index Trust
Federated Mini-Cap Fund
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Oct-31-1995
<PERIOD-END> Oct-31-1995
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<DIVIDEND-INCOME> 1,426,226
<INTEREST-INCOME> 685,365
<OTHER-INCOME> 0
<EXPENSES-NET> 810,893
<NET-INVESTMENT-INCOME> 1,300,698
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</TABLE>
