FEDERATED BOND FUND
(formerly, Fortress Bond Fund)
(A PORTFOLIO OF INVESTMENT SERIES FUNDS, INC.)
Class A Shares, Class B Shares, Class C Shares
SUPPLEMENT TO PROSPECTUS DATED DECEMBER 31, 1995
1.Please delete ``Acceptable Investments'' on pages 8 and 9 and `Corporate
Debt Obligations,'' up to the credit rating chart, on page 9 and replace
them with the following:
ACCEPTABLE INVESTMENTS
The Fund invests primarily in a professionally managed, diversified
portfolio of bonds. Under normal circumstances, at least 65% of the
Fund's net assets will be invested in such bonds and, in addition, at
least 65% of the Fund's net assets will be invested in investment
grade securities, including repurchase agreements collateralized by
such investment grade securities. Investment grade securities are
generally described as securities that are rated in one of the top
four ratings categories by a nationally recognized statistical rating
organization (`NRSRO''), such as Moody's Investors Service, Inc.
(`Moody's), Standard & Poor's Ratings Group (``S&P''), or Fitch
Investors Service, Inc. (`Fitch'') or that are unrated but determined
by the Fund's investment adviser to be of comparable quality.
Securities rated `BBB'' by S&P or Fitch, or ``Baa'' by Moody's, while
still in one of the top four ratings categories, have speculative
characteristics. Permitted investments include:
domestic or foreign corporate debt obligations;
obligations of the United States;
notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as Federal Home Loan Banks, Federal National
Mortgage Association, Government National Mortgage Association, Farm
Credit System (including the National Bank for Cooperatives and Banks
for Cooperatives), Tennessee Valley Authority, Export-Import Bank of
the United States, Commodity Credit Corporation, Federal Financing
Bank, Student Loan Marketing Association, Federal Home Loan Mortgage
Corporation, or National Credit Union Administration;
taxable municipal debt obligations (as a matter of operating policy,
the lowest rated municipal debt obligations in which the Fund will
invest will be rated BBB or better by an NRSRO, or which are of
comparable quality in the judgment of the Fund's investment adviser);
asset-backed securities;
commercial paper that matures in 270 days or less and is rated A-1 or
A-2 by S&P, P-1 or P-2 by Moody's, or F-1 or F-2 by Fitch;
time and savings deposits (including certificates of deposit) in
commercial or savings banks whose accounts are insured by the Bank
Insurance Fund (`BIF''), or in institutions whose accounts are
insured by the Savings Association Insurance Fund (`SAIF''),
including certificates of deposit issued by, and other time deposits
in, foreign
branches of BIF-insured banks which, if negotiable, either mature in
six months or less or if not negotiable, either mature in ninety days
or less, or may be withdrawn upon notice not exceeding ninety days;
bankers' acceptances issued by a BIF-insured bank, or issued by the
bank's Edge Act subsidiary and guaranteed by the bank, with remaining
maturities of nine months or less. The total acceptances of any bank
held by the Fund cannot exceed 0.25% of such bank's total deposits
according to the bank's last published statement of condition
preceding the date of acceptance;
preferred stock and other equity-related securities which generally
have bond-like attributes, including zero coupon and/or convertible
securities;
convertible securities, irrespective of their ratings;
other securities which are deemed by the Fund's investment adviser,
Federated Advisers (the `Adviser''), to be consistent with the Fund's
investment objective; and
repurchase agreements collateralized by acceptable investments.
CORPORATE DEBT OBLIGATIONS. Although the corporate debt obligations
in which the Fund will invest primarily are rated as investment grade
by an NRSRO, or of comparable quality in the judgment of the
investment adviser, the Fund may invest not more than 35% of its net
assets in corporate debt obligations that are not investment grade,
but are rated in any category below BBB or Baa or are of comparable
quality in the judgment of the Adviser (i.e., `junk bonds'').
Corporate debt obligations that are below investment grade are high-
yield, high-risk securities, typically subject to greater market
fluctuations and greater risk of loss of income and principal due to
an issuer's default. To a greater extent than investment grade
securities, lower rated securities tend to reflect short-term
corporate, economic, and market developments, as well as investor
perceptions of the issuer's credit quality. In addition, lower rated
securities may be more difficult to dispose of or to value than higher
rated, lower-yielding securities. Changes in economic conditions or
other circumstances are more likely to lead to weakened capacity to
make principal and interest payments with respect to these securities
than for higher rated securities.
January 27, 1997
FEDERATED INVESTORS
Federated Investors
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the Fund
and is a subsidiary of Federated Investors.
Cusip 461444507
Cusip 461444606
Cusip 461444705
G01271-06 (1/97)
FEDERATED BOND FUND
(formerly, Fortress Bond Fund)
(A PORTFOLIO OF INVESTMENT SERIES FUNDS, INC.)
Class F Shares
SUPPLEMENT TO PROSPECTUS DATED DECEMBER 31, 1995
1.Please delete ``Acceptable Investments'' on pages 4 and 5 and `Corporate
Debt Obligations,'' up to the credit rating chart, on page 5 and replace
them with the following:
ACCEPTABLE INVESTMENTS
The Fund invests primarily in a professionally managed, diversified
portfolio of bonds. Under normal circumstances, at least 65% of the
Fund's net assets will be invested in such bonds and, in addition, at
least 65% of the Fund's net assets will be invested in investment
grade securities, including repurchase agreements collateralized by
such investment grade securities. Investment grade securities are
generally described as securities that are rated in one of the top
four ratings categories by a nationally recognized statistical rating
organization (`NRSRO''), such as Moody's Investors Service, Inc.
(`Moody's), Standard & Poor's Ratings Group (``S&P''), or Fitch
Investors Service, Inc. (`Fitch'') or that are unrated but determined
by the Fund's investment adviser to be of comparable quality.
Securities rated `BBB'' by S&P or Fitch, or ``Baa'' by Moody's, while
still in one of the top four ratings categories, have speculative
characteristics. Permitted investments include:
domestic or foreign corporate debt obligations;
obligations of the United States;
notes, bonds, and discount notes of U.S. government agencies or
instrumentalities, such as Federal Home Loan Banks, Federal National
Mortgage Association, Government National Mortgage Association, Farm
Credit System (including the National Bank for Cooperatives and Banks
for Cooperatives), Tennessee Valley Authority, Export-Import Bank of
the United States, Commodity Credit Corporation, Federal Financing
Bank, Student Loan Marketing Association, Federal Home Loan Mortgage
Corporation, or National Credit Union Administration;
taxable municipal debt obligations (as a matter of operating policy,
the lowest rated municipal debt obligations in which the Fund will
invest will be rated BBB or better by an NRSRO, or which are of
comparable quality in the judgment of the Fund's investment adviser);
asset-backed securities;
commercial paper that matures in 270 days or less and is rated A-1 or
A-2 by S&P, P-1 or P-2 by Moody's, or F-1 or F-2 by Fitch;
time and savings deposits (including certificates of deposit) in
commercial or savings banks whose accounts are insured by the Bank
Insurance Fund (`BIF''), or in institutions whose accounts are
insured by the Savings Association Insurance Fund (`SAIF''),
including certificates of deposit issued by, and other time deposits
in, foreign branches of BIF-insured banks which, if negotiable, either
mature in six months or less or if not negotiable, either mature in
ninety days or less, or may be withdrawn upon notice not exceeding
ninety days;
bankers' acceptances issued by a BIF-insured bank, or issued by the
bank's Edge Act subsidiary and guaranteed by the bank, with remaining
maturities of nine months or less. The total acceptances of any bank
held by the Fund cannot exceed 0.25% of such bank's total deposits
according to the bank's last published statement of condition
preceding the date of acceptance;
preferred stock and other equity-related securities which generally
have bond-like attributes, including zero coupon and/or convertible
securities;
convertible securities, irrespective of their ratings;
other securities which are deemed by the Fund's investment adviser,
Federated Advisers (the `Adviser''), to be consistent with the Fund's
investment objective; and
repurchase agreements collateralized by acceptable investments.
CORPORATE DEBT OBLIGATIONS. Although the corporate debt obligations
in which the Fund will invest primarily are rated as investment grade
by an NRSRO, or of comparable quality in the judgment of the
investment adviser, the Fund may invest not more than 35% of its net
assets in corporate debt obligations that are not investment grade,
but are rated in any category below BBB or Baa or are of comparable
quality in the judgment of the Adviser (i.e., `junk bonds'').
Corporate debt obligations that are below investment grade are high-
yield, high-risk securities, typically subject to greater market
fluctuations and greater risk of loss of income and principal due to
an issuer's default. To a greater extent than investment grade
securities, lower rated securities tend to reflect short-term
corporate, economic, and market developments, as well as investor
perceptions of the issuer's credit quality. In addition, lower rated
securities may be more difficult to dispose of or to value than higher
rated, lower-yielding securities. Changes in economic conditions or
other circumstances are more likely to lead to weakened capacity to
make principal and interest payments with respect to these securities
than for higher rated securities.
January 27, 1997
FEDERATED INVESTORS
Federated Investors
Pittsburgh, PA 15222-3779
Federated Securities Corp. is the distributor of the Fund
and is a subsidiary of Federated Investors.
Cusip 461444309
G01271-07 (1/97)
