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Previous: INVESTMENT SERIES FUNDS INC, 497, 2000-06-29 |
Next: VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST, NSAR-A, 2000-06-29 |
Federated Investors
World-Class Investment Manager
J. Christopher Donahue
President
Federated Bond Fund
Dear Shareholder:
Federated Bond Fund was created in 1987, and I am pleased to present its 13th Semi-Annual Report. This report covers the first half of the fund's fiscal year which is the six-month period from November 1, 1999 through April 30, 2000. It begins with a discussion with the fund's portfolio manager, Joseph Balestrino, Senior Vice President of Federated Investment Management Company. Following his discussion, detailing both the U.S. bond market and recent activity in the fund's portfolio, are three additional items of shareholder interest. First is a series of graphs showing the fund's long-term investment performance. Second is a complete listing of the fund's holdings, and third is the publication of the fund's financial statements.
Federated Bond Fund continued to produce a strong income stream for investors. However, due to a rising interest rate environment that was very difficult for bonds in all sectors, total return for this fund was slightly negative. Individual share class total return performance, including income dividends, follows.1
|
|
|
Total Return |
|
Income |
|
Net Asset Value Change |
|
Class A Shares |
|
(0.27%) |
|
$0.35 |
|
$9.11 to $8.74 = (4.06%) |
|
Class B Shares |
|
(0.54%) |
|
$0.31 |
|
$9.12 to $8.76 = (3.95%) |
|
Class C Shares |
|
(0.54%) |
|
$0.31 |
|
$9.12 to $8.76 = (3.95%) |
|
Class F Shares |
|
(0.16%) |
|
$0.35 |
|
$9.12 to $8.76 = (3.95%) |
1 Performance quoted is based on net asset value, reflects past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Total returns for the period based on offering price (i.e., less any applicable sales charge) for Class A, B, C, and F Shares were (4.77%), (5.82%), (1.50%), and (2.09%), respectively.
The fund's portfolio of corporate bonds reflects an emphasis on diversification and quality. On April 30, 2000, the $932 million portfolio comprised more than 150 individual bond issues, and the majority of the fund's assets were invested in investment-grade bonds. Approximately 28% of the fund's assets were invested in high-yield bonds, which, as Joe notes, have provided above-average income distribution for shareholders and enhanced price appreciation in this economic climate.2 The fund's average duration range was four to eight years.
Thank you for participating in Federated Bond Fund. Remember, it is easy to increase your participation in the performance potential of a diversified bond portfolio by reinvesting your monthly earnings automatically in additional fund shares.
As always, we welcome your comments, questions and suggestions.
Sincerely,
John Christopher Donahue
J. Christopher Donahue
President
June 15, 2000
2 Lower rated bonds involve a higher degree of risk than investment-grade bonds in return for higher yield potential.
Joseph Balestrino
Senior Vice President
Federated Investment Management Company
The corporate bond market over the six-month reporting period experienced the negative effects of both rising interest rates and general stock market volatility. In addition, the U.S. Treasury announced and executed its plan to repurchase high-coupon, long-maturity Treasury bonds. In this environment, pure Treasury securities outperformed most other fixed-income sectors, including both high-quality and high-yield corporate securities. The result was a very modest positive return in the high-quality bond arena and a negative return in the high-yield corporate bond arena.
The fund's Class A, B, C, and F Shares produced total returns of (0.27%), (0.54%), (0.54%), and (0.16%), respectively, for the six-month period ended April 30, 2000, based on net asset value.1 This compares with a 0.57% total return for the average corporate bond fund as measured by the Lipper Corporate BBB-Rated Bond Funds Average.2
1 Performance quoted is based on net asset value, reflects past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Total returns for the period based on offering price (i.e., less any applicable sales charge) for Class A, B, C, and F Shares were (4.77%), (5.82%), (1.50%), and (2.09%), respectively.
2 Lipper figures represent the average of the total returns reported by all of the mutual funds designated by Lipper Analytical Services, Inc. as falling into the respective categories indicated. These figures do not reflect sales charges.
Slight adjustments were made to both the fund's duration and quality. The duration was reduced 0.4 years, which occurred closer to the end of the six-month period, to capture the positive effects of the general interest rate decline over the first quarter of 2000. The quality composition was adjusted by increasing the fund's high-yield position (currently 28%), as this market had significantly underperformed higher quality securities. In a fairly strong economic environment, it would not be a surprise to see high-yield securities outperform over the coming months. Also, the high-yield allocation has continued to enhance the fund's income distributions, which were increased during the past six months.
On April 30, 2000, the fund's 30-day distribution rate, based on net asset value, was 7.97% for Class A Shares (7.61% based on offering price) compared to the 10-year Treasury rate, which was 6.22% on that same day. The fund's 30-day distribution rates for Class B, C, and F Shares were 7.18%, 7.18% and 7.95%, respectively, based on net asset value.3 The fund's 30-day Securities and Exchange Commission (SEC) yields for Class A, B, C, and F Shares were 8.25%, 7.41%, 7.41%, and 8.22%, respectively.4
The top ten holdings were as follows:
|
Name |
|
Percentage of |
|
Continental Cablevision, 9.50% due 08/01/2013 |
|
1.32% |
|
Olympic Financial Ltd., 11.50% due 03/15/2007 |
|
1.27% |
|
Geico Corp., 9.15% due 09/15/2021 |
|
1.24% |
|
Anixter Intl., Inc., 8.00% due 09/15/2003 |
|
1.23% |
|
International Speedway, 7.875% due 10/15/2004 |
|
1.21% |
|
Shopko Stores, 9.25% due 03/15/2022 |
|
1.20% |
|
Fidelity Investments, 7.57% due 06/15/2029 |
|
1.20% |
|
Inco Ltd., 9.60% due 06/15/2022 |
|
1.18% |
|
Regional Diversified Funding, 9.25% due 03/15/2030 |
|
1.17% |
|
Unisys Corp., 11.75% due 10/15/2004 |
|
1.15% |
|
TOTAL |
|
12.17% |
The fund's allocation by quality was:
|
|
|
Percentage of |
|
AAA |
|
7.76% |
|
AA |
|
5.96% |
|
A |
|
20.83% |
|
BBB |
|
36.19% |
|
BB |
|
5.12% |
|
B |
|
24.14% |
3 The 30-day distribution rate reflects actual distributions made to shareholders. It is calculated by dividing the monthly annualized dividend plus short-term capital gains, if any, by the average 30-day offering price. The 30-day distribution rate based on offering price for Class F Shares was 7.88%.
4 The 30-day SEC yield is calculated by dividing the investment income per share for the prior 30 days by the maximum offering price per share on that date. The figure is compounded and annualized. The fund's 30-day SEC yields for Class A Shares and Class F Shares based on offering price were 7.87% and 8.13%, respectively.
The percentage breakdown of assets in the fund is as follows:
|
High quality corporate bonds |
|
65.8% |
|
High yield corporate bonds |
|
28.4% |
|
U.S. government securities |
|
0.6% |
|
Other |
|
5.2% |
Generally speaking, stock market anxiety typically creates increased demand for fixed-income securities, particularly higher quality bonds. In addition, given that the corporate bond market has just gone through a period of relative underperformance, investors who have placed less emphasis on stocks could look to the corporate bond market as a means of decreasing portfolio volatility and increasing overall income potential. Also, within the context of an overall growing economy, corporate bonds may well represent an investment sector positioned to benefit from both bond demand and favorable economic fundamentals.
Federated's outlook on bonds has become more positive, recommending that investors add to the overall fixed-income position within a diversified portfolio. There is a growing belief that the Federal Reserve Board's interest rate hikes to date are having the desired effect of slowing the economy to a more sustainable pace without excessive inflation. In addition, the relative value of the mortgage and corporate bond sectors has increased given the significant outperformance of pure U.S. Treasurys thus far in the year 2000. Thus, it is anticipated that returns could improve for most bond sectors going forward.
If you had made an initial investment of $13,000 in the Class F Shares of Federated Bond Fund on 5/20/87, reinvested your dividends and capital gains, and did not redeem any shares, your account would have been worth $36,422 on 4/30/00. You would have earned an 8.28%1 average annual total return for the investment life span.
One key to investing wisely is to reinvest all distributions in fund shares. This increases the number of shares on which you can earn future dividends, and you gain the benefit of compounding.
As of 3/31/00, Class A Shares' 1-year and since inception (6/28/95) average annual total returns were (5.20%) and 4.80%, respectively. Class B Shares' 1-year and since inception (6/28/95) average annual total returns were (6.53%) and 4.68%, respectively. Class C Shares' 1-year and since inception (6/28/95) average annual total returns were (2.37%) and 5.04%, respectively. Class F Shares' 1-year, 5-year, and 10-year average annual total returns were (2.62%), 6.64%, and 9.87%, respectively.2
[Graphic Representation Omitted - See Appendix]
1 Total return represents the change in the value of an investment after reinvesting all income and capital gains, and takes into account the 1.00% sales charge and the 1.00% contingent deferred sales charge for Class F Shares. Data quoted represents past performance and does not guarantee future results. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost.
2 The total returns stated take into account all applicable sales charges. The maximum sales charges and contingent deferred sales charges for the fund are as follows: Class A Shares, 4.50% sales charge; Class B Shares, 5.50% contingent deferred sales charge; Class C Shares, 1.00% contingent deferred sales charge; Class F Shares, 1.00% sales charge and 1.00% contingent deferred sales charge.
$1,000 initial investment and subsequent investments of $1,000 each year for 12 years (reinvesting all dividends and capital gains) grew to $22,616.
With this approach, the key is consistency.
If you had started investing $1,000 annually in the Class F Shares of Federated Bond Fund on 5/20/87, reinvested your dividends and capital gains, and did not redeem any shares, you would have invested only $13,000, but your account would have reached a total value of $22,6161 by 4/30/00. You would have earned an average annual total return of 7.73%.
A practical investment plan helps you pursue a high level of income through high quality bonds. Through systematic investing, you buy shares on a regular basis and reinvest all earnings. An investment plan can work for you when you invest only $1,000 annually. You can take it one step at a time. Put time, money, and compounding to work.
[Graphic Representation Omitted - See Appendix]
1 This chart assumes that the subsequent annual investments are made on the last day of each anniversary month. No method of investing can guarantee a profit or protect against loss in down markets.
John and Joan Wicker are a fictional couple who, like many other shareholders, look for high monthly income opportunities.
John is an attorney in his late forties with an established client base. Joan is a school teacher. On April 30, 1990, the Wickers invested $20,000 in the Class F Shares of Federated Bond Fund.
As this chart shows, their original $20,000 investment has grown to $50,272. This represents a 9.66% average annual total return. For John and Joan, that means extra money to supplement their daughter's college tuition.
[Graphic Representation Omitted - See Appendix]
This hypothetical scenario is provided for illustrative purposes only and does not represent the result obtained by any particular shareholder. Past performance does not guarantee future results.
APRIL 30, 2000 (UNAUDITED)
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--66.5% |
|
|
|
|
|
|
|
Air Transportation--1.5% |
|
|
|
|
$ |
298,124 |
|
Continental Airlines, Inc., Pass Thru Cert., Series 1992-2C1, 7.73%, 3/15/2011 |
|
$ |
285,248 |
|
|
7,410,418 |
|
Continental Airlines, Inc., Pass Thru Cert., Series 1997-4B, 6.90%, 1/2/2017 |
|
|
6,710,504 |
|
|
6,000,000 |
|
Delta Air Lines, Inc., Note, 8.30%, 12/15/2029 |
|
|
5,415,660 |
|
|
1,995,000 |
|
Southwest Airlines Co., Deb., 7.375%, 3/1/2027 |
|
|
1,927,030 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
14,338,442 |
|
|
||||||
|
|
|
|
Automotive--1.5% |
|
|
|
|
|
8,275,000 |
|
Arvin Industries, Inc., 9.50%, 2/1/2027 |
|
|
7,815,820 |
|
|
2,100,000 |
|
General Motors Corp., Medium Term Note, 9.45%, 11/1/2011 |
|
|
2,323,524 |
|
|
4,350,000 |
|
Hertz Corp., Sr. Note, 7.00%, 1/15/2028 |
|
|
3,780,542 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
13,919,886 |
|
|
||||||
|
|
|
|
Banking--5.5% |
|
|
|
|
|
4,750,000 |
|
ABN-AMRO Bank NV, Chicago, Sub. Deb., 7.30%, 12/1/2026 |
|
|
4,439,778 |
|
|
6,200,000 |
|
Barclays North America, Deb., 9.75%, 5/15/2021 |
|
|
6,601,388 |
|
|
6,175,000 |
|
City National Bank, Sub. Note, 6.375%, 1/15/2008 |
|
|
5,380,444 |
|
|
2,750,000 |
|
Crestar Financial Corp., Sub. Note, 8.75%, 11/15/2004 |
|
|
2,849,137 |
|
|
3,800,000 |
1, 2 |
Den Danske Bank Group, Note, 7.40%, 6/15/2010 |
|
|
3,731,980 |
|
|
5,740,000 |
|
FirstBank Puerto Rico, Sub. Note, 7.625%, 12/20/2005 |
|
|
5,302,842 |
|
|
8,600,000 |
|
National Bank of Canada, Montreal, Sub. Note, 8.125%, 8/15/2004 |
|
|
8,731,666 |
|
|
11,000,000 |
1, 2 |
Regional Diversified Funding, 9.25%, 3/15/2030 |
|
|
10,913,991 |
|
|
3,800,000 |
1, 2 |
Swedbank, Sub. Note, 7.50%, 11/29/2049 |
|
|
3,511,751 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
51,462,977 |
|
|
||||||
|
|
|
|
Beverage & Tobacco--0.2% |
|
|
|
|
|
1,825,000 |
|
Anheuser-Busch Cos., Inc., Note, 7.10%, 6/15/2007 |
|
|
1,775,980 |
|
|
||||||
|
|
|
|
Cable Television--2.3% |
|
|
|
|
|
4,500,000 |
|
CF Cable TV, Inc., Sr. Note, 9.125%, 7/15/2007 |
|
|
4,700,655 |
|
|
4,500,000 |
|
Comcast Corp., Note, 8.50%, 5/1/2027 |
|
|
4,678,740 |
|
|
11,290,000 |
|
Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 |
|
|
12,308,358 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
21,687,753 |
|
|
||||||
|
|
|
|
Chemicals & Plastics--0.4% |
|
|
|
|
|
6,250,000 |
1, 2 |
Fertinitro Finance, Company Guarantee, 8.29%, 4/1/2020 |
|
|
3,804,781 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Ecological Services & Equipment--1.5% |
|
|
|
|
$ |
7,750,000 |
|
USA Waste Services, Inc., Sr. Note, 7.125%, 10/1/2007 |
|
$ |
6,644,230 |
|
|
8,210,000 |
|
WMX Technologies, Inc., Deb., 8.75%, 5/1/2018 |
|
|
7,233,338 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
13,877,568 |
|
|
||||||
|
|
|
|
Education--1.1% |
|
|
|
|
|
11,075,000 |
|
Boston University, 7.625%, 7/15/2097 |
|
|
9,986,770 |
|
|
||||||
|
|
|
|
Electronics--1.2% |
|
|
|
|
|
11,950,000 |
|
Anixter International, Inc., Company Guarantee, 8.00%, 9/15/2003 |
|
|
11,437,225 |
|
|
||||||
|
|
|
|
Finance - Automotive--0.1% |
|
|
|
|
|
385,000 |
|
Ford Motor Credit Co., Note, 7.00%, 9/25/2001 |
|
|
383,033 |
|
|
300,000 |
|
Ford Motor Credit Co., Note, 7.57%, 5/16/2005 |
|
|
293,568 |
|
|
700,000 |
|
General Motors Acceptance Corp., Medium Term Note, 6.75%, 6/10/2002 |
|
|
690,459 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
1,367,060 |
|
|
||||||
|
|
|
|
Financial Intermediaries--7.1% |
|
|
|
|
|
8,500,000 |
|
Amvescap PLC, Sr. Note, 6.60%, 5/15/2005 |
|
|
7,965,520 |
|
|
1,000,000 |
|
Capital One Financial Corp., Note, 7.125%, 8/1/2008 |
|
|
898,710 |
|
|
11,800,000 |
1, 2 |
Fidelity Investments, Bond, 7.57%, 6/15/2029 |
|
|
11,190,294 |
|
|
2,425,000 |
|
Lehman Brothers Holdings, Inc., Note, 7.00%, 5/15/2003 |
|
|
2,366,048 |
|
|
7,325,000 |
|
Lehman Brothers, Inc., Sr. Sub. Note, 7.375%, 1/15/2007 |
|
|
6,998,452 |
|
|
7,000,000 |
|
Marsh & McLennan Cos., Inc., Sr. Note, 7.125%, 6/15/2009 |
|
|
6,639,710 |
|
|
425,000 |
|
Merrill Lynch & Co., Inc., Sr. Note, 7.15%, 7/30/2012 |
|
|
391,973 |
|
|
3,967,000 |
|
Olympic Financial Ltd., Sr. Note, 11.50%, 3/15/2007 |
|
|
4,397,062 |
|
|
10,585,000 |
|
Olympic Financial Ltd., Unit, 11.50%, 3/15/2007 |
|
|
11,876,370 |
|
|
10,250,000 |
|
PaineWebber Group, Inc., Note, 7.625%, 12/1/2009 |
|
|
9,742,010 |
|
|
3,483,697 |
1, 2 |
World Financial, Pass Thru Cert., Series 96 WFP-B, 6.91%, 9/1/2013 |
|
|
3,286,049 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
65,752,198 |
|
|
||||||
|
|
|
|
Food & Drug Retailers--1.1% |
|
|
|
|
|
2,500,000 |
|
Kroger Co., Inc., Company Guarantee, 7.25%, 6/1/2009 |
|
|
2,302,650 |
|
|
25,000 |
|
McDonald's Corp., Note, 6.75%, 2/15/2003 |
|
|
24,609 |
|
|
8,065,000 |
|
Meyer (Fred), Inc., Company Guarantee, 7.45%, 3/1/2008 |
|
|
7,628,361 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
9,955,620 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Forest Products--2.5% |
|
|
|
|
$ |
6,000,000 |
|
Donohue Forest Products, 7.625%, 5/15/2007 |
|
$ |
5,921,700 |
|
|
1,270,000 |
|
Fort James Corp., Deb., 8.375%, 11/15/2001 |
|
|
1,283,741 |
|
|
3,800,000 |
|
Fort James Corp., Sr. Note, 6.234%, 3/15/2001 |
|
|
3,778,986 |
|
|
2,850,000 |
|
Pope & Talbot, Inc., 8.375%, 6/1/2013 |
|
|
2,563,005 |
|
|
8,850,000 |
|
Quno Corp., Sr. Note, 9.125%, 5/15/2005 |
|
|
9,292,766 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
22,840,198 |
|
|
||||||
|
|
|
|
Health Care--0.7% |
|
|
|
|
|
300,000 |
|
Columbia/HCA Healthcare Corp., Note, 6.87%, 9/15/2003 |
|
|
280,956 |
|
|
3,200,000 |
|
Tenet Healthcare Corp., Sr. Note, 8.00%, 1/15/2005 |
|
|
3,072,000 |
|
|
3,000,000 |
|
Tenet Healthcare Corp., Sr. Sub. Note, 8.125%, 12/1/2008 |
|
|
2,805,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
6,157,956 |
|
|
||||||
|
|
|
|
Insurance--8.4% |
|
|
|
|
|
450,000 |
|
American General Corp., Note, 7.75%, 4/1/2005 |
|
|
448,375 |
|
|
8,000,000 |
|
CNA Financial Corp., Bond, 6.95%, 1/15/2018 |
|
|
6,424,400 |
|
|
5,800,000 |
|
Conseco, Inc., Note, 6.40%, 2/10/2003 |
|
|
3,661,250 |
|
|
7,025,000 |
|
Conseco, Inc., Sr. Note, 10.50%, 12/15/2004 |
|
|
4,434,531 |
|
|
8,296,000 |
|
Conseco, Inc., Sr. Sub. Note, 10.25%, 6/1/2002 |
|
|
5,330,180 |
|
|
2,950,000 |
|
Delphi Financial Group, Inc., Series A, 9.31%, 3/25/2027 |
|
|
2,710,076 |
|
|
10,350,000 |
|
Delphi Financial Group, Inc., Sr. Note, 8.00%, 10/1/2003 |
|
|
10,072,206 |
|
|
10,880,000 |
|
GEICO Corp., Deb., 9.15%, 9/15/2021 |
|
|
11,526,707 |
|
|
7,800,000 |
1, 2 |
Life Re Capital Trust I, Company Guarantee, 8.72%, 6/15/2027 |
|
|
7,630,272 |
|
|
25,000 |
|
Progressive Corp., OH, Unsecd. Note, 7.30%, 6/1/2006 |
|
|
23,946 |
|
|
3,300,000 |
|
Provident Financial, Inc., Company Guarantee, 7.405%, 3/15/2038 |
|
|
2,630,892 |
|
|
6,500,000 |
1, 2 |
Reinsurance Group of America, Sr. Note, 7.25%, 4/1/2006 |
|
|
6,305,195 |
|
|
3,000,000 |
|
SunAmerica, Inc., Deb., 8.125%, 4/28/2023 |
|
|
3,130,860 |
|
|
525,000 |
|
Transamerica Corp., Note, 6.75%, 11/15/2006 |
|
|
493,747 |
|
|
1,000,000 |
1, 2 |
USF&G Corp., 8.312%, 7/1/2046 |
|
|
957,730 |
|
|
5,750,000 |
|
USF&G Corp., Company Guarantee, 8.47%, 1/10/2027 |
|
|
5,425,010 |
|
|
6,950,000 |
1, 2 |
Union Central Life Insurance Co., Note, 8.20%, 11/1/2026 |
|
|
6,694,171 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
77,899,548 |
|
|
||||||
|
|
|
|
Leisure & Entertainment--2.5% |
|
|
|
|
|
11,550,000 |
|
International Speedway Corp., 7.875%, 10/15/2004 |
|
|
11,250,047 |
|
|
10,250,000 |
|
Paramount Communications, Inc., Deb., 8.25%, 8/1/2022 |
|
|
9,889,405 |
|
|
2,606,000 |
|
Paramount Communications, Inc., Sr. Note, 7.50%, 1/15/2002 |
|
|
2,607,355 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
23,746,807 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Metals & Mining--4.2% |
|
|
|
|
$ |
9,600,000 |
|
Barrick Gold Corp., Deb., 7.50%, 5/1/2007 |
|
$ |
9,470,688 |
|
|
11,000,000 |
|
Inco Ltd., Note, 9.60%, 6/15/2022 |
|
|
11,004,950 |
|
|
8,850,000 |
1, 2 |
Normandy Finance Ltd., Company Guarantee, 7.50%, 7/15/2005 |
|
|
8,038,367 |
|
|
9,750,000 |
|
Placer Dome, Inc., Bond, 8.50%, 12/31/2045 |
|
|
8,406,041 |
|
|
2,550,000 |
|
Santa Fe Pacific Gold, Sr. Deb, 8.375%, 7/1/2005 |
|
|
2,474,979 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
39,395,025 |
|
|
||||||
|
|
|
|
Oil & Gas--4.9% |
|
|
|
|
|
125,000 |
|
Chevron Capital USA, Inc., Unsecd. Note, 7.45%, 8/15/2004 |
|
|
123,665 |
|
|
450,000 |
|
Husky Oil Ltd., Sr. Deb., 7.55%, 11/15/2016 |
|
|
419,783 |
|
|
10,250,000 |
|
Husky Oil Ltd., Sr. Note, 7.125%, 11/15/2006 |
|
|
9,550,438 |
|
|
10,000,000 |
1, 2 |
Pemex Finance Ltd., 9.03%, 2/15/2011 |
|
|
10,114,200 |
|
|
8,750,000 |
|
Sun Co., Inc., 9.00%, 11/1/2024 |
|
|
9,223,113 |
|
|
2,500,000 |
|
Sun Co., Inc., Deb., 9.375%, 6/1/2016 |
|
|
2,640,800 |
|
|
6,550,000 |
|
Tosco Corp., 8.125%, 2/15/2030 |
|
|
6,296,253 |
|
|
1,750,000 |
|
Veritas DGC, Inc., Sr. Note, 9.75%, 10/15/2003 |
|
|
1,758,750 |
|
|
6,000,000 |
1, 2 |
Yosemite Securities Trust I, Bond, 8.25%, 11/15/2004 |
|
|
5,920,500 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
46,047,502 |
|
|
||||||
|
|
|
|
Printing & Publishing--2.0% |
|
|
|
|
|
9,620,000 |
|
Harcourt General Inc., Sr. Note, 6.70%, 8/1/2007 |
|
|
8,668,582 |
|
|
2,500,000 |
|
News America Holdings, Inc., 10.125%, 10/15/2012 |
|
|
2,681,075 |
|
|
3,000,000 |
|
News America Holdings, Inc., Company Guarantee, 8.00%, 10/17/2016 |
|
|
2,809,860 |
|
|
4,850,000 |
|
News America Holdings, Inc., Deb., 7.90%, 12/1/2095 |
|
|
4,134,140 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
18,293,657 |
|
|
||||||
|
|
|
|
Rail Industry--0.3% |
|
|
|
|
|
3,200,000 |
|
Burlington Northern Santa Fe, Pass Thru Cert., 7.57%, 1/2/2021 |
|
|
3,119,744 |
|
|
||||||
|
|
|
|
Real Estate--2.7% |
|
|
|
|
|
2,750,000 |
|
New Plan Excel Realty Trust, Medium Term Note, 7.40%, 9/15/2009 |
|
|
2,508,138 |
|
|
8,250,000 |
|
Price REIT, Inc., Sr. Note, 7.50%, 11/5/2006 |
|
|
7,909,605 |
|
|
3,250,000 |
|
Storage USA, 8.20%, 6/1/2017 |
|
|
3,069,950 |
|
|
5,300,000 |
|
Storage USA, Deb., 7.50%, 12/1/2027 |
|
|
4,571,674 |
|
|
7,400,000 |
|
Sun Communities, Inc., Medium Term Note, 6.77%, 5/16/2005 |
|
|
6,840,042 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
24,899,409 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Retailers--4.8% |
|
|
|
|
$ |
1,650,000 |
|
Dayton-Hudson Corp., Deb., 8.50%, 12/1/2022 |
|
$ |
1,649,356 |
|
|
6,750,000 |
|
Dayton-Hudson Corp., Deb., 10.00%, 12/1/2000 |
|
|
6,866,977 |
|
|
8,546,363 |
|
K Mart Corp., Pass Thru Cert., 8.54%, 1/2/2015 |
|
|
8,035,119 |
|
|
5,600,000 |
|
May Department Stores Co., Deb., 8.125%, 8/15/2035 |
|
|
5,471,704 |
|
|
5,065,000 |
|
Sears, Roebuck & Co., Medium Term Note, 10.00%, 2/3/2012 |
|
|
5,648,387 |
|
|
1,650,000 |
|
Shopko Stores, Inc., 8.50%, 3/15/2002 |
|
|
1,669,652 |
|
|
10,497,000 |
|
Shopko Stores, Inc., Sr. Note, 9.25%, 3/15/2022 |
|
|
11,207,017 |
|
|
5,000,000 |
|
TJX Cos., Inc., 7.45%, 12/15/2009 |
|
|
4,779,500 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
45,327,712 |
|
|
||||||
|
|
|
|
Sovereign Government--1.8% |
|
|
|
|
|
4,565,000 |
|
Colombia, Republic of, Note, 7.25%, 2/15/2003 |
|
|
4,085,675 |
|
|
2,250,000 |
|
Quebec, Province of, Deb., Series NN, 7.125%, 2/9/2024 |
|
|
2,097,180 |
|
|
3,390,000 |
|
Quebec, Province of, Deb., 9.125%, 8/22/2001 |
|
|
3,457,820 |
|
|
2,310,000 |
|
Quebec, Province of, Notes, 11.00%, 6/15/2015 |
|
|
2,411,917 |
|
|
3,500,000 |
|
Sweden, Kingdom of, Deb., 10.25%, 11/1/2015 |
|
|
4,281,445 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
16,334,037 |
|
|
||||||
|
|
|
|
Supranational--0.4% |
|
|
|
|
|
4,250,000 |
|
Corp Andina De Fomento, Note, 7.25%, 3/1/2007 |
|
|
4,148,680 |
|
|
||||||
|
|
|
|
Technology Services--2.2% |
|
|
|
|
|
10,437,000 |
|
Dell Computer Corp., Deb., 7.10%, 4/15/2028 |
|
|
9,389,751 |
|
|
9,910,000 |
|
Unisys Corp., Sr. Note, 11.75%, 10/15/2004 |
|
|
10,752,350 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
20,142,101 |
|
|
||||||
|
|
|
|
Telecommunications & Cellular--2.3% |
|
|
|
|
|
1,350,000 |
|
LCI International, Inc., Sr. Note, 7.25%, 6/15/2007 |
|
|
1,283,135 |
|
|
1,300,000 |
|
MetroNet Communications Corp., Sr. Note, 12.00%, 8/15/2007 |
|
|
1,478,750 |
|
|
6,500,000 |
|
MetroNet Escrow Corp., Sr. Note, 10.625%, 11/1/2008 |
|
|
7,353,125 |
|
|
5,200,000 |
|
Qwest Communications International, Inc., Sr. Note, Series B, 7.50%, 11/1/2008 |
|
|
5,037,500 |
|
|
6,650,000 |
|
Telecom de Puerto Rico, Sr. Note, 6.65%, 5/15/2006 |
|
|
6,193,877 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
21,346,387 |
|
|
||||||
|
Principal |
|
|
|
|
Value |
|
|
|
|
|
CORPORATE BONDS--continued |
|
|
|
|
|
|
|
Utilities--3.3% |
|
|
|
|
$ |
55,000 |
|
Baltimore Gas & Electric Co., 1st Ref. Mtg., 7.50%, 1/15/2007 |
|
$ |
53,626 |
|
|
7,650,000 |
1, 2 |
Edison Mission Holding Co., Sr. Secd. Note, 8.734%, 10/1/2026 |
|
|
7,251,435 |
|
|
5,150,000 |
|
Enersis S.A., Note, 7.40%, 12/1/2016 |
|
|
4,516,138 |
|
|
5,500,000 |
1, 2 |
Israel Electric Corp. Ltd., Sr. Note, 7.875%, 12/15/2026 |
|
|
5,015,065 |
|
|
3,400,000 |
1, 2 |
Israel Electric Corp. Ltd., Sr. Secd. Note, 7.75%, 3/1/2009 |
|
|
3,265,170 |
|
|
5,795,000 |
|
Puget Sound Energy, Inc., Medium Term Note, 7.02%, 12/1/2027 |
|
|
4,985,381 |
|
|
7,500,000 |
1, 2 |
Tenaga Nasional Berhad, Deb., 7.50%, 1/15/2096 |
|
|
5,732,775 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
30,819,590 |
|
|
||||||
|
|
|
|
TOTAL CORPORATE BONDS (IDENTIFIED COST $670,007,468) |
|
|
619,884,613 |
|
|
||||||
|
|
|
|
GOVERNMENT AGENCIES--0.6% |
|
|
|
|
|
3,000,000 |
|
Federal Home Loan Mortgage Corp., Deb., 8.29%, 9/30/2009 |
|
|
2,978,190 |
|
|
900,000 |
|
Federal National Mortgage Association, 7.65%, 3/10/2005 |
|
|
911,502 |
|
|
175,000 |
|
Federal National Mortgage Association, Note, 6.87%, 10/2/2001 |
|
|
174,185 |
|
|
700,000 |
|
Federal National Mortgage Association, Note, 7.50%, 4/16/2007 |
|
|
686,350 |
|
|
805,000 |
|
Financial Assistance Corp., 9.20%, 9/27/2005 |
|
|
812,301 |
|
|
||||||
|
|
|
|
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $5,916,117) |
|
|
5,562,528 |
|
|
||||||
|
|
|
|
MUNICIPAL SECURITIES--4.4% |
|
|
|
|
|
5,630,000 |
|
Atlanta & Fulton County, GA, Recreation Authority, Taxable Revenue Bonds, Series 1997, 7.00% (Downtown Arena Project)/(FSA INS), 12/1/2028 |
|
|
5,033,614 |
|
|
3,000,000 |
|
Harvard University, MA, Revenue Bonds, 8.125%, 4/15/2007 |
|
|
3,100,140 |
|
|
6,050,000 |
|
Kansas City, MO, Redevelopment Authority, 7.65% Bonds (FSA INS), 11/1/2018 |
|
|
5,874,671 |
|
|
3,090,000 |
|
McKeesport, PA, Taxable GO, Series 1997 B, 7.30% Bonds (MBIA INS), 3/1/2020 |
|
|
2,874,133 |
|
|
3,000,000 |
|
Miami, FL, Revenue Pension Obligation, 7.20% Bonds (AMBAC INS), 12/1/2025 |
|
|
2,746,080 |
|
|
4,940,000 |
|
Minneapolis/St. Paul, MN, Airport Commission, UT GO Taxable Revenue Bonds, Series 9, 8.95%, 1/1/2022 |
|
|
5,199,498 |
|
|
4,675,000 |
|
Pittsburgh, PA, Urban Redevelopment Authority, 8.01% Bonds (Alcoa, Inc.), 6/1/2015 |
|
|
4,733,157 |
|
|
2,635,000 |
|
Pittsburgh, PA, Urban Redevelopment Authority, 9.07% Bonds (CGIC INS), 9/1/2014 |
|
|
2,852,124 |
|
|
2,200,000 |
|
Southeastern, PA, Transportation Authority, Series B, 8.75% Bonds (FGIC INS), 3/1/2020 |
|
|
2,302,740 |
|
|
4,200,000 |
|
St. Johns County, FL, Convention Center, Taxable Municipal Revenue Bonds, 8.00% (FSA INS), 1/1/2026 |
|
|
4,177,782 |
|
|
2,080,000 |
|
Tampa, FL, Sports Authority, 8.02% Bonds (MBIA INS), 10/1/2026 |
|
|
2,113,238 |
|
|
||||||
|
|
|
|
TOTAL MUNICIPAL SECURITIES (IDENTIFIED COST $42,592,472) |
|
|
41,007,177 |
|
|
||||||
|
Shares or |
|
|
|
|
Value |
|
|
|
|
|
PREFERRED STOCKS--2.6% |
|
|
|
|
|
|
|
Financial Intermediaries--1.2% |
|
|
|
|
|
142,000 |
|
Citigroup, Inc., Cumulative Pfd., $3.18 |
|
$ |
6,816,000 |
|
|
130,000 |
|
Lehman Brothers Holdings, Inc., Pfd., $2.84 |
|
|
5,005,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
11,821,000 |
|
|
||||||
|
|
|
|
Real Estate--1.0% |
|
|
|
|
|
8,000 |
|
Highwoods Properties, Inc., REIT Perpetual Pfd. Stock, Series A, 8.625% |
|
|
5,566,480 |
|
|
80,000 |
|
Prologis Trust, Cumulative Pfd. |
|
|
3,505,000 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
9,071,480 |
|
|
||||||
|
|
|
|
Telecommunications & Cellular--0.4% |
|
|
|
|
|
23,658 |
|
TCI Communications, Cumulative Pfd., $2.43 |
|
|
612,151 |
|
|
3,872 |
|
TCI Communications, Pfd., $2.18 |
|
|
96,316 |
|
|
110,000 |
|
TCI Communications, Pfd., $2.50 |
|
|
2,832,500 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
3,540,967 |
|
|
||||||
|
|
|
|
TOTAL PREFERRED STOCKS (IDENTIFIED COST $27,605,948) |
|
|
24,433,447 |
|
|
||||||
|
|
|
|
ASSET-BACKED SECURITIES--1.5% |
|
|
|
|
|
|
|
Financial Intermediaries--0.1% |
|
|
|
|
$ |
1,000,000 |
|
Green Tree Financial Corp. 1992-2, Class B, 9.15%, 1/15/2018 |
|
|
923,310 |
|
|
||||||
|
|
|
|
Structured Product (Abs)--1.2% |
|
|
|
|
|
9,000,000 |
1, 2 |
125 Home Loan Owner Trust 1998-1A, Class B1, 9.26%, 2/15/2029 |
|
|
7,811,712 |
|
|
512,763 |
|
Green Tree Home Equity Loan Trust 1999-A, Class B2A, 7.44%, 2/15/2029 |
|
|
513,471 |
|
|
1,769,788 |
1, 2 |
Merrill Lynch Mortgage Investors, Inc. 1998-FF3, Class BB, 5.50%, 11/20/2029 |
|
|
1,677,980 |
|
|
1,000,000 |
|
Residential Funding Corp. 1993-S26, Class A10, 7.50%, 7/25/2023 |
|
|
981,940 |
|
|
||||||
|
|
|
|
TOTAL |
|
|
10,985,103 |
|
|
||||||
|
|
|
|
Whole Loan--0.2% |
|
|
|
|
|
2,303,599 |
1 |
SMFC Trust Asset-Backed Certificates, Series 1997-A, Class 4, 7.3565%, 1/28/2025 |
|
|
1,925,663 |
|
|
||||||
|
|
|
|
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $15,376,113) |
|
|
13,834,076 |
|
|
||||||
|
Shares |
|
|
|
|
Value |
|
|
|
|
|
MUTUAL FUNDS--22.2%3 |
|
|
|
|
|
25,454,761 |
|
The High Yield Bond Portfolio (identified cost $240,962,958) |
|
$ |
207,201,751 |
|
|
||||||
|
|
|
|
TOTAL INVESTMENTS (IDENTIFIED COST $1,002,461,076)4 |
|
$ |
911,923,592 |
|
|
||||||
1 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. At April 30, 2000, these securities amounted to $114,779,081 which represents 12.3% of net assets. Included in these amounts, securities which have been deemed liquid amounted to $112,853,418 which represents 12.1% of net assets.
2 Denotes a restricted security that has been deemed liquid by criteria approved by the fund's Board of Directors.
3 Pursuant to an Exemptive Order, the fund may invest in Federated Core Trust (the "Trust") which is also managed by Federated Investment Management Company, the fund's adviser. The Trust is an open-end management investment company under the Investment Company Act of 1940 available only to registered investment companies and other institutional investors. High Yield Bond Portfolio and Federated Mortgage Core Portfolio (the "Portfolios") are two series of the Trust. Federated receives no fees on behalf of the portfolios. Income distributions from the portfolios are declared daily and paid monthly. Income distributions earned by the fund are recorded as dividend income in the accompanying financial statements.
4 The cost of investments for federal tax purposes amounts to $1,002,461,076. The net unrealized depreciation of investments on a federal tax basis amounts to $90,537,484 which is comprised of $1,197,104 appreciation and $91,734,588 depreciation at April 30, 2000.
Note: The categories of investments are shown as a percentage of net assets ($932,167,110) at April 30, 2000.
The following acronyms are used throughout this portfolio:
|
AMBAC |
--American Municipal Bond Assurance Corporation |
|
CGIC |
--Capital Guaranty Insurance Corporation |
|
FGIC |
--Financial Guaranty Insurance Company |
|
FSA |
--Financial Security Assurance |
|
GO |
--General Obligation |
|
INS |
--Insured |
|
MBIA |
--Municipal Bond Investors Assurance |
|
REIT |
--Real Estate Investment Trust |
|
UT |
--Unlimited Tax |
See Notes which are an integral part of the Financial Statements
APRIL 30, 2000 (UNAUDITED)
|
Assets: |
|
|
|
|
|
|
|
|
Total investments in securities, at value (identified and tax cost $1,002,461,076) |
|
|
|
|
$ |
911,923,592 |
|
|
Income receivable |
|
|
|
|
|
19,172,025 |
|
|
Receivable for investments sold |
|
|
|
|
|
4,769,396 |
|
|
Receivable for shares sold |
|
|
|
|
|
1,407,654 |
|
|
|
|||||||
|
TOTAL ASSETS |
|
|
|
|
|
937,272,667 |
|
|
|
|||||||
|
Liabilities: |
|
|
|
|
|
|
|
|
Payable for investments purchased |
|
$ |
2,014,402 |
|
|
|
|
|
Payable for shares redeemed |
|
|
445,095 |
|
|
|
|
|
Income distribution payable |
|
|
2,404,867 |
|
|
|
|
|
Payable to bank |
|
|
47,699 |
|
|
|
|
|
Accrued expenses |
|
|
193,494 |
|
|
|
|
|
|
|||||||
|
TOTAL LIABILITIES |
|
|
|
|
|
5,105,557 |
|
|
|
|||||||
|
Net assets for 106,474,321 shares outstanding |
|
|
|
|
$ |
932,167,110 |
|
|
|
|||||||
|
Net Assets Consist of: |
|
|
|
|
|
|
|
|
Paid in capital |
|
|
|
|
$ |
1,055,576,542 |
|
|
Net unrealized depreciation of investments |
|
|
|
|
|
(90,537,484 |
) |
|
Accumulated net realized loss on investments |
|
|
|
|
|
(30,793,976 |
) |
|
Distributions in excess of net investment income |
|
|
|
|
|
(2,077,972 |
) |
|
|
|||||||
|
TOTAL NET ASSETS |
|
|
|
|
$ |
932,167,110 |
|
|
|
|||||||
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
Net Asset Value Per Share ($221,573,129 ÷ 25,348,929 shares outstanding) |
|
|
|
|
|
$8.74 |
|
|
|
|||||||
|
Offering Price Per Share (100/95.50 of $8.74)1 |
|
|
|
|
|
$9.15 |
|
|
|
|||||||
|
Redemption Proceeds Per Share |
|
|
|
|
|
$8.74 |
|
|
|
|||||||
|
Class B Shares: |
|
|
|
|
|
|
|
|
Net Asset Value Per Share ($300,315,160 ÷ 34,296,739 shares outstanding) |
|
|
|
|
|
$8.76 |
|
|
|
|||||||
|
Offering Price Per Share |
|
|
|
|
|
$8.76 |
|
|
|
|||||||
|
Redemption Proceeds Per Share (94.50/100 of $8.76)1 |
|
|
|
|
|
$8.28 |
|
|
|
|||||||
|
Class C Shares: |
|
|
|
|
|
|
|
|
Net Asset Value Per Share ($77,149,584 ÷ 8,808,371 shares outstanding) |
|
|
|
|
|
$8.76 |
|
|
|
|||||||
|
Offering Price Per Share |
|
|
|
|
|
$8.76 |
|
|
|
|||||||
|
Redemption Proceeds Per Share (99.00/100 of $8.76)1 |
|
|
|
|
|
$8.67 |
|
|
|
|||||||
|
Class F Shares: |
|
|
|
|
|
|
|
|
Net Asset Value Per Share ($333,129,237 ÷ 38,020,282 shares outstanding) |
|
|
|
|
|
$8.76 |
|
|
|
|||||||
|
Offering Price Per Share (100/99.00 of $8.76)1 |
|
|
|
|
|
$8.85 |
|
|
|
|||||||
|
Redemption Proceeds Per Share (99/100 of $8.76)1 |
|
|
|
|
|
$8.67 |
|
|
|
|||||||
1 See "What Do Shares Cost?" in the Prospectus.
See Notes which are an integral part of the Financial Statements
SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
|
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends |
|
|
|
|
|
|
|
|
|
$ |
13,435,083 |
|
|
Interest |
|
|
|
|
|
|
|
|
|
|
30,415,989 |
|
|
|
||||||||||||
|
TOTAL INCOME |
|
|
|
|
|
|
|
|
|
|
43,851,072 |
|
|
|
||||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee |
|
|
|
|
|
$ |
3,734,328 |
|
|
|
|
|
|
Administrative personnel and services fee |
|
|
|
|
|
|
375,028 |
|
|
|
|
|
|
Custodian fees |
|
|
|
|
|
|
26,424 |
|
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses |
|
|
|
|
|
|
425,530 |
|
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
|
7,463 |
|
|
|
|
|
|
Auditing fees |
|
|
|
|
|
|
6,470 |
|
|
|
|
|
|
Legal fees |
|
|
|
|
|
|
2,012 |
|
|
|
|
|
|
Portfolio accounting fees |
|
|
|
|
|
|
75,723 |
|
|
|
|
|
|
Distribution services fee--Class B Shares |
|
|
|
|
|
|
1,214,461 |
|
|
|
|
|
|
Distribution services fee--Class C Shares |
|
|
|
|
|
|
321,305 |
|
|
|
|
|
|
Shareholder services fee--Class A Shares |
|
|
|
|
|
|
288,182 |
|
|
|
|
|
|
Shareholder services fee--Class B Shares |
|
|
|
|
|
|
404,820 |
|
|
|
|
|
|
Shareholder services fee--Class C Shares |
|
|
|
|
|
|
107,101 |
|
|
|
|
|
|
Shareholder services fee--Class F Shares |
|
|
|
|
|
|
444,672 |
|
|
|
|
|
|
Share registration costs |
|
|
|
|
|
|
64,171 |
|
|
|
|
|
|
Printing and postage |
|
|
|
|
|
|
127,166 |
|
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
|
1,485 |
|
|
|
|
|
|
Taxes |
|
|
|
|
|
|
37,305 |
|
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
|
9,579 |
|
|
|
|
|
|
|
||||||||||||
|
TOTAL EXPENSES |
|
|
|
|
|
|
7,673,225 |
|
|
|
|
|
|
|
||||||||||||
|
Waivers: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Waiver of investment adviser fee |
|
$ |
(635,347 |
) |
|
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Class A Shares |
|
|
(57,636 |
) |
|
|
|
|
|
|
|
|
|
Waiver of shareholder services fee--Class F Shares |
|
|
(35,574 |
) |
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
TOTAL WAIVERS |
|
|
|
|
|
|
(728,557 |
) |
|
|
|
|
|
|
||||||||||||
|
Net expenses |
|
|
|
|
|
|
|
|
|
|
6,944,668 |
|
|
|
||||||||||||
|
Net investment income |
|
|
|
|
|
|
|
|
|
|
36,906,404 |
|
|
|
||||||||||||
|
Realized and Unrealized Gain (Loss) on Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized loss on investments |
|
|
|
|
|
|
|
|
|
|
(18,426,597 |
) |
|
Net change in unrealized depreciation of investments |
|
|
|
|
|
|
|
|
|
|
(21,076,442 |
) |
|
|
||||||||||||
|
Net realized and unrealized loss on investments |
|
|
|
|
|
|
|
|
|
|
(39,503,039 |
) |
|
|
||||||||||||
|
Change in net assets resulting from operations |
|
|
|
|
|
|
|
|
|
$ |
(2,596,635 |
) |
|
|
||||||||||||
See Notes which are an integral part of the Financial Statements
|
|
|
|
Six Months |
|
|
|
Year Ended |
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
36,906,404 |
|
|
$ |
72,132,742 |
|
|
Net realized loss on investments ($(18,426,597) and $(8,704,395), respectively, as computed for federal tax purposes) |
|
|
(18,426,597 |
) |
|
|
(8,623,837 |
) |
|
Net change in unrealized appreciation/depreciation |
|
|
(21,076,442 |
) |
|
|
(71,860,196 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS |
|
|
(2,596,635 |
) |
|
|
(8,351,291 |
) |
|
|
||||||||
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
Class A Shares |
|
|
(9,132,773 |
) |
|
|
(17,472,755 |
) |
|
Class B Shares |
|
|
(11,267,561 |
) |
|
|
(21,902,578 |
) |
|
Class C Shares |
|
|
(2,967,948 |
) |
|
|
(5,864,574 |
) |
|
Class F Shares |
|
|
(13,721,620 |
) |
|
|
(28,254,560 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
|
(37,089,902 |
) |
|
|
(73,494,467 |
) |
|
|
||||||||
|
Share Transactions: |
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
|
130,540,935 |
|
|
|
404,417,917 |
|
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
|
22,300,171 |
|
|
|
43,524,135 |
|
|
Cost of shares redeemed |
|
|
(243,855,023 |
) |
|
|
(286,557,151 |
) |
|
|
||||||||
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
|
(91,013,917 |
) |
|
|
161,384,901 |
|
|
|
||||||||
|
Change in net assets |
|
|
(130,700,454 |
) |
|
|
79,539,143 |
|
|
|
||||||||
|
Net Assets: |
|
|
|
|
|
|
|
|
|
Beginning of period |
|
|
1,062,867,564 |
|
|
|
983,328,421 |
|
|
|
||||||||
|
End of period |
|
$ |
932,167,110 |
|
|
$ |
1,062,867,564 |
|
|
|
||||||||
See Notes which are an integral part of the Financial Statements
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
|
|
|
Six Months |
|
|
Year Ended October 31, |
|||||||||||||
|
|
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
1995 |
2 |
|
Net Asset Value, Beginning of Period |
|
$ 9.11 |
|
|
$ 9.82 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
$ 9.64 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.34 |
|
|
0.67 |
|
|
0.70 |
|
|
0.74 |
|
|
0.71 |
|
|
0.26 |
|
|
Net realized and unrealized gain (loss) on investments |
|
(0.36 |
) |
|
(0.70 |
) |
|
(0.19 |
) |
|
0.26 |
|
|
(0.04 |
) |
|
0.11 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
(0.02 |
) |
|
(0.03 |
) |
|
0.51 |
|
|
1.00 |
|
|
0.67 |
|
|
0.37 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.35 |
) |
|
(0.68 |
) |
|
(0.71 |
) |
|
(0.70 |
) |
|
(0.71 |
) |
|
(0.25 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 8.74 |
|
|
$ 9.11 |
|
|
$ 9.82 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
|
||||||||||||||||||
|
Total Return3 |
|
(0.27 |
%) |
|
(0.35 |
%) |
|
5.14 |
% |
|
10.73 |
% |
|
7.21 |
% |
|
3.92 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
1.05 |
%4 |
|
1.06 |
% |
|
1.05 |
% |
|
1.05 |
% |
|
1.05 |
% |
|
1.02 |
%4 |
|
|
||||||||||||||||||
|
Net investment income |
|
7.76 |
%4 |
|
7.07 |
% |
|
6.89 |
% |
|
7.30 |
% |
|
7.46 |
% |
|
8.22 |
%4 |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement5 |
|
0.18 |
%4 |
|
0.16 |
% |
|
0.15 |
% |
|
0.20 |
% |
|
0.25 |
% |
|
0.35 |
%4 |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$221,573 |
|
$249,056 |
|
$210,768 |
|
$111,377 |
|
$37,045 |
|
$5,070 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
14 |
% |
|
30 |
% |
|
20 |
% |
|
55 |
% |
|
49 |
% |
|
77 |
% |
|
|
||||||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.
2 Reflects operations for the period from June 28, 1995 (date of initial public investment) to October 31, 1995.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
|
|
|
Six Months |
|
|
Year Ended October 31, |
|||||||||||||
|
|
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
1995 |
2 |
|
Net Asset Value, Beginning of Period |
|
$ 9.12 |
|
|
$ 9.83 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
$ 9.64 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.31 |
|
|
0.60 |
|
|
0.61 |
|
|
0.64 |
|
|
0.64 |
|
|
0.24 |
|
|
Net realized and unrealized gain (loss) on investments |
|
(0.36 |
) |
|
(0.70 |
) |
|
(0.18 |
) |
|
0.28 |
|
|
(0.04 |
) |
|
0.11 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
(0.05 |
) |
|
(0.10 |
) |
|
0.43 |
|
|
0.92 |
|
|
0.60 |
|
|
0.35 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.31 |
) |
|
(0.61 |
) |
|
(0.62 |
) |
|
(0.62 |
) |
|
(0.64 |
) |
|
(0.23 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 8.76 |
|
|
$ 9.12 |
|
|
$ 9.83 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
|
||||||||||||||||||
|
Total Return3 |
|
(0.54 |
%) |
|
(1.11 |
%) |
|
4.34 |
% |
|
9.86 |
% |
|
6.40 |
% |
|
3.72 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
1.85 |
%4 |
|
1.86 |
% |
|
1.85 |
% |
|
1.85 |
% |
|
1.85 |
% |
|
1.81 |
%4 |
|
|
||||||||||||||||||
|
Net investment income |
|
6.95 |
%4 |
|
6.27 |
% |
|
6.09 |
% |
|
6.50 |
% |
|
6.66 |
% |
|
7.36 |
%4 |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement5 |
|
0.13 |
%4 |
|
0.11 |
% |
|
0.10 |
% |
|
0.15 |
% |
|
0.20 |
% |
|
0.30 |
%4 |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$300,315 |
|
$345,034 |
|
$302,010 |
|
$191,600 |
|
$125,620 |
|
$27,768 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
14 |
% |
|
30 |
% |
|
20 |
% |
|
55 |
% |
|
49 |
% |
|
77 |
% |
|
|
||||||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.
2 Reflects operations for the period from June 28, 1995 (date of initial public investment) to October 31, 1995.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
|
|
|
Six Months |
|
|
Year Ended October 31, |
|||||||||||||
|
|
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
1995 |
2 |
|
Net Asset Value, Beginning of Period |
|
$ 9.12 |
|
|
$ 9.83 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
$ 9.64 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.31 |
|
|
0.60 |
|
|
0.61 |
|
|
0.64 |
|
|
0.64 |
|
|
0.24 |
|
|
Net realized and unrealized gain (loss) on investments |
|
(0.36 |
) |
|
(0.70 |
) |
|
(0.18 |
) |
|
0.28 |
|
|
(0.04 |
) |
|
0.11 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
(0.05 |
) |
|
(0.10 |
) |
|
0.43 |
|
|
0.92 |
|
|
0.60 |
|
|
0.35 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.31 |
) |
|
(0.61 |
) |
|
(0.62 |
) |
|
(0.62 |
) |
|
(0.64 |
) |
|
(0.23 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 8.76 |
|
|
$ 9.12 |
|
|
$ 9.83 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
|
||||||||||||||||||
|
Total Return3 |
|
(0.54 |
%) |
|
(1.11 |
%) |
|
4.35 |
% |
|
9.86 |
% |
|
6.40 |
% |
|
3.72 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
1.85 |
%4 |
|
1.86 |
% |
|
1.85 |
% |
|
1.85 |
% |
|
1.85 |
% |
|
1.81 |
%4 |
|
|
||||||||||||||||||
|
Net investment income |
|
6.95 |
%4 |
|
6.27 |
% |
|
6.09 |
% |
|
6.50 |
% |
|
6.70 |
% |
|
7.31 |
%4 |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement5 |
|
0.13 |
%4 |
|
0.11 |
% |
|
0.10 |
% |
|
0.15 |
% |
|
0.20 |
% |
|
0.30 |
%4 |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$77,150 |
|
$92,875 |
|
$76,645 |
|
$39,398 |
|
$22,897 |
|
$5,508 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
14 |
% |
|
30 |
% |
|
20 |
% |
|
55 |
% |
|
49 |
% |
|
77 |
% |
|
|
||||||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.
2 Reflects operations for the period from June 28, 1995 (date of initial public investment) to October 31, 1995.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
|
|
|
Six Months |
|
|
Year Ended October 31, |
|||||||||||||
|
|
|
2000 |
|
|
1999 |
1 |
|
1998 |
|
|
1997 |
|
|
1996 |
|
|
1995 |
|
|
Net Asset Value, Beginning of Period |
|
$ 9.12 |
|
|
$ 9.83 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
$ 9.08 |
|
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
0.35 |
|
|
0.67 |
|
|
0.69 |
|
|
0.72 |
|
|
0.71 |
|
|
0.79 |
|
|
Net realized and unrealized gain (loss) on investments |
|
(0.36 |
) |
|
(0.70 |
) |
|
(0.18 |
) |
|
0.28 |
|
|
(0.04 |
) |
|
0.65 |
|
|
|
||||||||||||||||||
|
TOTAL FROM INVESTMENT OPERATIONS |
|
(0.01 |
) |
|
(0.03 |
) |
|
0.51 |
|
|
1.00 |
|
|
0.67 |
|
|
1.44 |
|
|
|
||||||||||||||||||
|
Less Distributions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
(0.35 |
) |
|
(0.68 |
) |
|
(0.70 |
) |
|
(0.70 |
) |
|
(0.71 |
) |
|
(0.76 |
) |
|
|
||||||||||||||||||
|
Net Asset Value, End of Period |
|
$ 8.76 |
|
|
$ 9.12 |
|
|
$ 9.83 |
|
|
$10.02 |
|
|
$ 9.72 |
|
|
$ 9.76 |
|
|
|
||||||||||||||||||
|
Total Return2 |
|
(0.16 |
%) |
|
(0.35 |
%) |
|
5.12 |
% |
|
10.70 |
% |
|
7.18 |
% |
|
16.51 |
% |
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses |
|
1.08 |
%3 |
|
1.09 |
% |
|
1.08 |
% |
|
1.08 |
% |
|
1.08 |
% |
|
1.03 |
% |
|
|
||||||||||||||||||
|
Net investment income |
|
7.72 |
%3 |
|
7.02 |
% |
|
6.86 |
% |
|
7.27 |
% |
|
7.38 |
% |
|
8.20 |
% |
|
|
||||||||||||||||||
|
Expense waiver/reimbursement4 |
|
0.15 |
%3 |
|
0.13 |
% |
|
0.12 |
% |
|
0.17 |
% |
|
0.22 |
% |
|
0.31 |
% |
|
|
||||||||||||||||||
|
Supplemental Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net assets, end of period (000 omitted) |
|
$333,129 |
|
$375,902 |
|
$393,905 |
|
$325,531 |
|
$267,720 |
|
$195,502 |
|
|||||
|
|
||||||||||||||||||
|
Portfolio turnover |
|
14 |
% |
|
30 |
% |
|
20 |
% |
|
55 |
% |
|
49 |
% |
|
77 |
% |
|
|
||||||||||||||||||
1 For the year ended October 31, 1999, the fund was audited by Deloitte & Touche LLP. Each of the previous years was audited by other auditors.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
APRIL 30, 2000 (UNAUDITED)
Federated Investment Series Fund, Inc. (the "Corporation") (formerly, Investment Series Funds, Inc.) is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Corporation consists of one portfolio. The financial statements included herein are only those of Federated Bond Fund (the "Fund"), a diversified portfolio. The Fund offers four classes of shares: Class A Shares, Class B Shares, Class C Shares and Class F Shares. The investment objective of the Fund is to provide as high a level of current income as is consistent with the preservation of capital.
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.
U.S. government securities, listed corporate bonds, other fixed income, asset-backed securities and unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Listed equity securities are valued at the last sale price reported on a national securities exchange. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end investment companies are valued at net asset value.
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.
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 Directors (the "Directors"). 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. The Fund along with other affiliated investment companies, may utilize a joint account for the purpose of entering into one or more repurchase agreements.
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. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
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 provision for federal tax is necessary.
At October 31, 1999, the Fund, for federal tax purposes, had a capital loss carryforward of $12,318,509, which will reduce the Fund's taxable income arising from the future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the code, such capital loss carryforward will expire as follows:
|
Expiration Year |
|
Expiration Amount |
|
2002 |
|
$2,641,549 |
|
|
||
|
2003 |
|
430,964 |
|
|
||
|
2004 |
|
106,973 |
|
|
||
|
2005 |
|
434,628 |
|
|
||
|
2007 |
|
8,704,395 |
|
|
||
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. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Directors. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined by the Fund's pricing committee.
Additional information on the restricted security held at April 30, 2000 is as follows:
|
Security |
|
Acquisition |
|
|
Acquisition |
|
SMFC Trust Asset-Backed Certificates |
|
2/4/1998 |
|
|
$2,100,521 |
|
|
|||||
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Investment transactions are accounted for on a trade date basis.
At April 30, 2000, par value shares ($0.001 per share) authorized were as follows:
|
Share Class Name |
|
Number of Par |
|
Class A Shares |
|
25,000,000 |
|
Class B Shares |
|
25,000,000 |
|
Class C Shares |
|
25,000,000 |
|
Class F Shares |
|
525,000,000 |
|
Unclassified |
|
400,000,000 |
|
TOTAL |
|
1,000,000,000 |
|
|
||
Transactions in capital stock were as follows:
|
|
|
Six Months Ended (unaudited) |
|
Year Ended |
||||||||||
|
Class A Shares: |
|
Shares |
|
|
|
Amount |
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
6,114,500 |
|
|
$ |
54,897,727 |
|
|
13,182,591 |
|
|
$ |
126,880,404 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
731,859 |
|
|
|
6,552,270 |
|
|
1,325,379 |
|
|
|
12,622,148 |
|
|
Shares redeemed |
|
(8,849,325 |
) |
|
|
(79,732,512 |
) |
|
(8,626,243 |
) |
|
|
(82,332,308 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS |
|
(2,002,966 |
) |
|
$ |
(18,282,515 |
) |
|
5,881,727 |
|
|
$ |
57,170,244 |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended (unaudited) |
|
Year Ended |
||||||||||
|
Class B Shares: |
|
Shares |
|
|
|
Amount |
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
3,001,330 |
|
|
$ |
27,113,452 |
|
|
13,265,666 |
|
|
$ |
128,293,705 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
747,532 |
|
|
|
6,707,576 |
|
|
1,384,268 |
|
|
|
13,197,680 |
|
|
Shares redeemed |
|
(7,273,636 |
) |
|
|
(65,514,197 |
) |
|
(7,560,342 |
) |
|
|
(72,115,989 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS |
|
(3,524,774 |
) |
|
$ |
(31,693,169 |
) |
|
7,089,592 |
|
|
$ |
69,375,396 |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended (unaudited) |
|
|
Year Ended |
|||||||||
|
Class C Shares: |
|
Shares |
|
|
|
Amount |
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
1,272,972 |
|
|
$ |
11,454,650 |
|
|
4,743,310 |
|
|
$ |
45,903,470 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
224,248 |
|
|
|
2,013,143 |
|
|
414,127 |
|
|
|
3,945,605 |
|
|
Shares redeemed |
|
(2,877,794 |
) |
|
|
(25,913,370 |
) |
|
(2,765,261 |
) |
|
|
(26,366,033 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS |
|
(1,380,574 |
) |
|
$ |
(12,445,577 |
) |
|
2,392,176 |
|
|
$ |
23,483,042 |
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended (unaudited) |
|
Year Ended |
||||||||||
|
Class F Shares: |
|
Shares |
|
|
|
Amount |
|
|
Shares |
|
|
|
Amount |
|
|
Shares sold |
|
4,108,057 |
|
|
$ |
37,075,106 |
|
|
10,710,348 |
|
|
$ |
103,340,338 |
|
|
Shares issued to shareholders in payment of distributions declared |
|
782,806 |
|
|
|
7,027,182 |
|
|
1,441,386 |
|
|
|
13,758,702 |
|
|
Shares redeemed |
|
(8,076,545 |
) |
|
|
(72,694,944 |
) |
|
(11,014,256 |
) |
|
|
(105,742,821 |
) |
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM CLASS F SHARE TRANSACTIONS |
|
(3,185,682 |
) |
|
$ |
(28,592,656 |
) |
|
1,137,478 |
|
|
$ |
11,356,219 |
|
|
|
||||||||||||||
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
|
(10,093,996 |
) |
|
$ |
(91,013,917 |
) |
|
16,500,973 |
|
|
$ |
161,384,901 |
|
|
|
||||||||||||||
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment Adviser fee equal to 0.75% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.
Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and $30,000 per each additional class.
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 Class A Shares, Class B Shares and Class C Shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.
|
Share Class Name |
|
Percentage of |
|
Class A Shares |
|
0.25% |
|
Class B Shares |
|
0.75% |
|
Class C Shares |
|
0.75% |
For the six months ended April 30, 2000, Class A Shares did not incur a distribution services fee.
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders.
FServ 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.
Certain of the Officers and Directors of the Corporation are Officers and Directors or Trustees of the above companies.
Purchases and sales of investments, excluding short-term securities (and in-kind contributions), for the period ended April 30, 2000, were as follows:
|
Purchases |
|
$ |
140,299,040 |
|
|
|||
|
Sales |
|
$ |
227,458,766 |
|
|
|||
Chairman
President
Executive Vice President
Executive Vice President and Secretary
Vice President
Treasurer
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses and other information.
Federated
World-Class Investment Manager
SEMI-ANNUAL REPORT
AS OF APRIL 30, 2000
Established 1987
Federated
Federated Bond Fund
Federated Investors
Funds
5800 Corporate Drive
Pittsburgh, PA
15237-7000
1-800-341-7400
www.federatedinvestors.com
Federated
Securities Corp., Distributor
Cusip 31420F103
Cusip 31420F202
Cusip 31420F301
Cusip 31420F400
2072302 (6/00)
Federated is a registered mark of Federated Investors, Inc. 2000 ©Federated Investors, Inc.
Appendix to Federated Investment Series Funds, Inc.
Graph, p. 6
The "x" axis reflects the period from 5/20/87 to 4/30/00. Marks are
made to represent every year and every third year is labeled. This
graphic presentation includes a legend in the upper left corner.
The "y" axis reflects a total investment range from 0 to $40,000.
The shaded line graph assumes an initial investment of $13,000 on
5/20/87. The chart concludes that if income is reinvested, the investment
would have grown to $430,274. This is compared to the value of the
$13,000 had it not been invested.
Graph, p. 7
The "x" axis reflects the period from 5/20/87 to 4/30/00. Marks are
made to represent every year and every third year is labeled. This
graphic presentation includes a legend in the upper left corner.
The "y" axis reflects a total investment range from 0 to $25,000.
The shaded line graph assumes an initial investment of $1,000 on5/20/87
and subsequent investments of $1,000 on each anniversary date for the
next 12 years for a total of $13,000 invested. The chart concludes that
if the income is reinvested, the investment would have grown to $22,616.
This is compared to the value of the $13,000 had it not been invested.
Graph, p. 8
The "x" axis reflects the period from 4/30/90 to 4/30/00. Marks are
made to represent every year and every second year is labeled. This
graphic presentation includes a legend in the upper left corner.
The "y" axis reflects a total investment range from 0 to $60,000.
The shaded line graph assumes an initial investment of $20,000 on
4/30/90. The chart concludes that if income is reinvested, the investment
would have grown to $50,272. This is compared to the value of the $20,000
had it not been invested.
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