FEDERATED CALIFORNIA MUNICIPAL INCOME FUND
(A Portfolio of Municipal Securities Income Trust)
CLASS A SHARES
CLASS B SHARES
SUPPLEMENT TO PROSPECTUS DATED OCTOBER 31, 1998.
Please delete the "Summary of Fund Expenses" which appears on page 1 of the
current prospectus and replace with the following Summary of Fund Expenses
Table:
<TABLE>
<CAPTION>
SUMMARY OF FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES CLASS CLASS
A B
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases(as a percentage of offering 4.50% None
price)
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage None None
of offering price)
Contingent Deferred Sales Charge (as a percentage of original purchase None 5.50%
price or redemption proceeds, as applicable)1
Redemption Fee (as a percentage of amount redeemed, if applicable) None None
Exchange Fee None None
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF PROJECTED AVERAGE NET ASSETS)2
Management Fee (after waiver)3 0.00% 0.00%
12b-1 Fee4 0.00% 0.75%
Total Other Expenses (after reimbursement)5 0.50% 0.50%
Shareholder Services Fee 0.25% 0.25%
Total Operating Expenses (after waiver/reimbursement)6 7 0.50% 1.25%
</TABLE>
1 The contingent deferred sales charge is 5.50% in the first year, declining
to 1.00% in the sixth year, and 0.00% thereafter. (For more information,
see "Contingent Deferred Sales Charge.")
2 Total operating expenses are estimated based on average expenses expected
to be incurred during the period ending August31, 1999. During the course
of this period, expenses may be more or less than the average amount shown.
3 The management fee has been reduced to reflect the voluntary waiver. The
adviser can terminate this voluntary waiver at any time at its sole
discretion. The maximum management fee is 0.40%.
4 The Class A Shares have no present intention of paying or accruing the
12b-1 fee during the fiscal year ending August31, 1999. If the Class A
Shares were paying or accruing the 12b-1 fee, Class A Shares would be able
to pay up to 0.25% of their average daily net assets. "See Trust
Information."
5 Total other operating expenses are anticipated to be reduced to reflect the
voluntary reimbursement of other operating expenses by the Adviser. The
Adviser can terminate this voluntary reimbursement of other operating
expenses at any time at its sole discretion. Total other operating expenses
for Class A Shares and Class B Shares are anticipated to be 0.97% and
0.97%, respectively, absent the voluntary reimbursement of certain other
operating expenses.
6 Total operating expenses for Class A and B Shares are estimated to be 1.62%
and 2.12%, respectively, for the fiscal year ending August 31, 1999 absent
the voluntary waivers by the Adviser and Distributor and voluntary
reimbursement of other operating expenses by the Adviser. Total operating
expenses for Class A and B Shares were 0.69% and 1.40%, respectively, for
the fiscal year ended August 31, 1998. Total operating expenses for Class A
and B Shares for the fiscal year ended August 31, 1998 would have been
2.11% and 2.56%, respectively, absent the voluntary waivers by the Adviser
and Distributor and voluntary reimbursement of other operating expenses by
the Adviser.
7 Class B Shares convert to Class A Shares (which pay lower ongoing expenses)
approximately eight years after purchase.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Class A and ClassB Shares of
the fund will bear, either directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Investing In The Fund" and
"Trust Information." Wire-transferred redemptions of less than $5,000 may be
subject to additional fees.
EXAMPLE CLASS CLASS
A B
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return;
(2)redemption at the end of each time period and
(3) payment of the maximum sales charge.
1 YEAR $50 $70
3 YEARS $60 $84
5 YEARS $72 $93
10 YEARS $105 $151
You would pay the following expenses on the
same investment, assuming no redemption.
1 YEAR $13
3 YEARS $40
5 YEARS $69
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown. This
example is based on estimated data for the Class A and Class B Shares fiscal
years ending August 31, 1999.
January 20, 1999
CUSIP 625922109
CUSIP 625922828
G01056-08 (1/99)
