1933 Act File No. 33-
49701
1940 Act File No. 811-
7065
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. 4 X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF
1940 X
Amendment No. 3 X
THE PLANTERS FUNDS
(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 September 30, 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 September 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 J. 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 THE
PLANTERS FUNDS, which consists of one portfolio, Tennessee
Tax-Free Bond Fund, is comprised of the following:
PART A. INFORMATION REQUIRED IN A
PROSPECTUS.
Prospectus Heading
(Rule 404(c) Cross Reference)
Item 1. Cover Page Cover Page.
Item 2. Synopsis Summary of Fund
Expenses.
Item 3. Condensed Financial
Information Financial
Highlights; Performance
Information.
Item 4. General Description of
Registrant General
Information; Investment
Information; Investment
Objective; Investment
Policies; Tennessee Municipal
Securities; Investment Risks;
Non-Diversification;
Investment Limitations.
Item 5. Management of the Fund The
Planters Funds Information;
Management of the Trust;
Distribution of Fund Shares;
Administration of the Fund.
Item 6. Capital Stock and Other
Securities Dividends and
Distributions; Shareholder
Information; Voting Rights;
Massachusetts Partnership Law;
Effect of Banking Laws; Tax
Information; Federal Income
Tax; State of Tennessee Taxes;
Other State and Local Taxes.
Item 7. Purchase of Securities Being
Offered Net Asset Value;
Investing in the Fund; Share
Purchases; Minimum Investment
Required; What Shares Cost;
Reducing the Sales Load;
Certificates and
Confirmations.
Item 8. Redemption or Repurchase
Redeeming Shares; Accounts
With Low Balances.
Item 9. Pending Legal Proceedings
None.
PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL
INFORMATION.
Item 10. Cover Page Cover Page.
Item 11. Table of Contents Table of
Contents.
Item 12. General Information and
History General Information
About the Fund.
Item 13. Investment Objectives and
Policies Investment Objective
and Policies.
Item 14. Management of the Fund
Management of The Trust.
Item 15. Control Persons and Principal
Holders of Securities Not
Applicable.
Item 16. Investment Advisory and Other
Services Investment Advisory
Services; Administrative
Services; Transfer Agent and
Dividend Disbursing Agent.
Item 17. Brokerage Allocation
Brokerage Transactions.
Item 18. Capital Stock and Other
Securities Not Applicable.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered Purchasing Shares;
Determining Net Asset Value;
Redeeming Shares.
Item 20. Tax Status Tax Status.
Item 21. Underwriters Not Applicable.
Item 22. Calculation of Performance
Data Total Return; Yield; Tax-
Equivalent Yield; Performance
Comparisons.
Item 23. Financial Statements Filed
in Part A.
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
PROSPECTUS
The shares of Tennessee Tax-Free Bond Fund (the "Fund")
offered by this
prospectus represent interests in a non-diversified
portfolio of securities
which is an investment portfolio in The Planters Funds (the
"Trust"), an
open-end management investment company (a mutual fund).
The investment objective of the Fund is to provide current
income exempt from
federal income tax and personal income taxes imposed by the
state of Tennessee
and Tennessee municipalities. The Fund invests primarily in
a portfolio of
municipal securities which are exempt from federal income
tax and personal
income taxes imposed by the state of Tennessee and Tennessee
municipalities
("Tennessee Municipal Securities"). These securities include
those issued by or
on behalf of the state of Tennessee and Tennessee
municipalities as well as
those issued by states, territories and possessions of the
United States that
are not issued by or on behalf of Tennessee and its
political subdivisions, but
which are exempt from Tennessee state income tax.
THE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR
OBLIGATIONS OF UNION
PLANTERS NATIONAL BANK, ARE NOT ENDORSED OR GUARANTEED BY
UNION PLANTERS
NATIONAL BANK, OR ANY BANK, AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE
CORPORATION ("FDIC"), 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 September
30, 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 free of charge, obtain other information, or
make inquiries about
the Fund by calling Union Planters Brokerage Services at 1-
800-238-7125.
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 September 30, 1995
TABLE OF CONTENTS
- ------------------------------------------------------------
- --------------------
SUMMARY OF FUND EXPENSES
1
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
2
- ------------------------------------------------------
GENERAL INFORMATION
3
- ------------------------------------------------------
INVESTMENT INFORMATION
3
- ------------------------------------------------------
Investment Objective
3
Investment Policies
3
Acceptable Investments
3
Characteristics
4
Participation Interests
4
Variable Rate Municipal Securities
4
Municipal Leases
4
Restricted and Illiquid Securities
5
Investing in Securities of Other
Investment Companies
5
When-Issued and Delayed
Delivery Transactions
5
Temporary Investments
5
Tennessee Municipal Securities
6
Investment Risks
6
Non-Diversification
7
Investment Limitations
7
THE PLANTERS FUNDS INFORMATION
7
- ------------------------------------------------------
Management of the Trust
7
Board of Trustees
7
Investment Adviser
7
Advisory Fees
8
Adviser's Background
8
Portfolio Managers
8
Distribution of Fund Shares
8
Payments to Financial Institutions
9
Administration of the Fund
9
Administrative Services
9
Custodian
9
Transfer Agent, Dividend
Disbursing Agent and
Portfolio Accounting Services
9
Independent Auditors
9
NET ASSET VALUE
10
- ------------------------------------------------------
INVESTING IN THE FUND
10
- ------------------------------------------------------
Share Purchases
10
Minimum Investment Required
10
What Shares Cost
10
Purchases at Net Asset Value
11
Dealer Concessions
11
Reducing the Sales Load
11
Quantity Discounts and Accumulated
Purchases
11
Letter of Intent
12
Reinvestment Privilege
12
Certificates and Confirmations
12
Dividends and Distributions
13
REDEEMING SHARES
13
- ------------------------------------------------------
By Telephone
13
By Mail
14
Signatures
14
Accounts with Low Balances
14
SHAREHOLDER INFORMATION
14
- ------------------------------------------------------
Voting Rights
14
Massachusetts Partnership Law
15
EFFECT OF BANKING LAWS
15
- ------------------------------------------------------
TAX INFORMATION
16
- ------------------------------------------------------
Federal Income Tax
16
State of Tennessee Taxes
16
Other State and Local Taxes
16
PERFORMANCE INFORMATION
16
- ------------------------------------------------------
FINANCIAL STATEMENTS
18
- ------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
29
- ------------------------------------------------------
ADDRESSES
30
- ------------------------------------------------------
I
SUMMARY OF FUND EXPENSES
- ------------------------------------------------------------
- --------------------
<TABLE>
<S>
<C>
SHAREHOLDER
TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of
offering price)........................... 2.00%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering
price)......................................................
......... None
Contingent Deferred Sales Charge (as a percentage of
original purchase price
or redemption proceeds, as
applicable).................................................
........... None
Redemption Fee (as a percentage of amount redeemed, if
applicable).................................... None
Exchange
Fee.........................................................
................................. None
<CAPTION>
ANNUAL FUND
OPERATING EXPENSES*
(As a percentage
of average net assets)
<S>
<C>
Management Fee (after waiver)
(1).........................................................
............ 0.00%
12b-1
Fees........................................................
.................................... None
Other
Expenses....................................................
.................................... 0.78%
Total Fund Operating Expenses
(2).........................................................
... 0.78%
</TABLE>
(1) The management fee has been reduced to reflect the
voluntary waiver by the
investment adviser. The adviser can terminate this
voluntary waiver at any
time at its sole discretion. The maximum management fee
is 0.75%.
(2) The Total Fund Operating Expenses were 0.61% for the
fiscal year ended July
31, 1995. Total Fund Operating Expenses in the table
above reflect a
reduction in the voluntary waiver of the administrative
personnel and
services fee for the fiscal year ending July 31, 1996.
Total Fund Operating
Expenses are anticipated to be 1.53% absent the
voluntary waiver of the
management fee (See (1) above).
* Expenses in this table are estimated based on average
expenses expected to be
incurred during the fiscal year ending July 31, 1996.
During the course of
this period, expenses may be more or less than the amount
shown.
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 "THE PLANTERS FUNDS INFORMATION," AND
"INVESTING IN THE FUND."
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; (2) redemption at the end of each time
period;
and (3) payment of the maximum sales
load........................................................
........... $28 $44 $62 $115
</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.
1
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------
- --------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED
JULY 31, 1995 JULY 31, 1994(A)
<S>
<C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$ 10.22 $ 10.50
- ------------------------------------------------------------
- ----------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
- ----------------
Net investment income
0.51 0.44
- ------------------------------------------------------------
- ----------------
Net realized and unrealized gain (loss) on investments
0.24 (0.31)
- ------------------------------------------------------------
- ---------------- ------- -------
Total from investment operations
0.75 0.13
- ------------------------------------------------------------
- ----------------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
- ----------------
Distributions from net investment income
(0.51) (0.41)
- ------------------------------------------------------------
- ---------------- ------- -------
NET ASSET VALUE, END OF PERIOD
$ 10.46 $ 10.22
- ------------------------------------------------------------
- ---------------- ------- -------
TOTAL RETURN (B)
7.60% 1.19%
- ------------------------------------------------------------
- ----------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
- ----------------
Expenses
0.61% 0.56%(c)
- ------------------------------------------------------------
- ----------------
Net investment income
4.93% 4.69%(c)
- ------------------------------------------------------------
- ----------------
Expense waiver/reimbursement (d)
0.95% 0.87%(c)
- ------------------------------------------------------------
- ----------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
- ----------------
Net assets, end of period (000 omitted)
$ 35,888 $ 42,400
- ------------------------------------------------------------
- ----------------
Portfolio Turnover
3% 30%
- ------------------------------------------------------------
- ----------------
</TABLE>
(a) Reflects operations for the period from August 30, 1993
(date of initial
public investment) to July 31, 1994. For the period
from August 5, 1993
(start of business) to August 29, 1993, all income was
distributed to the
administrator.
(b) Based on net asset value, which does not reflect the
sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(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)
2
GENERAL INFORMATION
- ------------------------------------------------------------
- --------------------
The Planters Funds (the "Trust") was established as a
Massachusetts business
trust under a Declaration of Trust dated May 14, 1993. 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. With
respect to this Fund, as
of the date of this prospectus, the Board of Trustees
("Trustees") has not
established separate classes of shares.
Shares of the Fund are designed for customers of financial
institutions such as
broker/dealers, banks, fiduciaries, and investment advisers
as a convenient
means of accumulating an interest in a professionally
managed, non-diversified
portfolio investing primarily in Tennessee Municipal
Securities. A minimum
initial investment of $1,000 is required. The Fund is not
likely to be a
suitable investment for non-Tennessee taxpayers or
retirement plans since the
Fund invests in Tennessee Municipal Securities.
Except as otherwise noted in this prospectus, shares of the
Fund are sold at net
asset value plus a sales load and are redeemed at net asset
value.
INVESTMENT INFORMATION
- ------------------------------------------------------------
- --------------------
INVESTMENT OBJECTIVE
The investment objective of the Fund is to provide current
income exempt from
federal income tax and personal income taxes imposed by the
state of Tennessee
and Tennessee municipalities. The investment objective
cannot be changed without
approval of shareholders of a majority of the Fund's shares.
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.
Interest income of the Fund that is exempt from the income
tax described above
retains its exempt status when distributed to the Fund's
shareholders. However,
income distributed by the Fund may not necessarily be exempt
from state or
municipal taxes in states other than Tennessee.
INVESTMENT POLICIES
The Fund pursues its investment objective by investing
primarily in a portfolio
of Tennessee Municipal Securities. As a matter of investment
policy, which may
not be changed without shareholder approval, under normal
market conditions at
least 80% of the Fund's income will be exempt from federal
income tax (including
alternative minimum tax) and personal income tax imposed by
the state of
Tennessee and Tennessee municipalities. Unless indicated
otherwise, the other
investment policies of the Fund described below may be
changed by the Trustees
without approval of shareholders. Shareholders will be
notified before any
material changes in these policies become effective.
ACCEPTABLE INVESTMENTS. The Tennessee Municipal Securities
in which the Fund
invests are:
3
obligations issued by or on behalf of the state of
Tennessee, its
political subdivisions, or agencies;
debt obligations of any state, territory, or
possession of the United
States, including the District of Columbia or any
political subdivision
of any of these; and
participation interests, as described below, in any
of the above
obligations, the interest from which is, in the
opinion of bond counsel
for the issuers or in the opinion of officers of the
Fund and/or the
investment adviser to the Fund, exempt from both
federal income tax and
the personal income taxes imposed by the state of
Tennessee and Tennessee
municipalities.
CHARACTERISTICS. The Tennessee Municipal Securities in
which the Fund
invests are rated "investment grade," i.e., Baa or
above by Moody's
Investor Service, Inc. ("Moody's") or BBB or above by
Standard & Poor's
Rating Group ("S&P") or Fitch Investors Service, Inc.
("Fitch"). A
description of the rating categories is contained in
the Appendix to the
Statement of Additional Information. In certain cases,
the Fund's adviser
may choose bonds that are unrated if it judges the
bonds to be of
comparable quality to one of the foregoing rating
categories. Bonds rated
"BBB" by S&P or "Baa" by Moody's have speculative
characteristics. Changes
in economic conditions or other circumstances are more
likely to lead to
weakened capacity to make principal and interest
payments than higher rated
bonds. The prices of fixed income securities fluctuate
inversely to the
direction of interest rates. If the Fund purchases an
investment grade
bond, and the rating of such bond is subsequently
downgraded so that the
bond is no longer classified as investment grade, the
Fund is not required
to sell the bond, but will consider whether such action
is appropriate. As
a matter of investment policy, under normal market
conditions, the Fund
will invest at least 65% of its assets in bonds.
PARTICIPATION INTERESTS. The Fund may purchase
participation interests in
Tennessee Municipal Securities from financial institutions
such as commercial
banks, savings and loan associations and insurance
companies. These
participation interests may take the form of participations,
beneficial
interests in a trust, partnership interests or any other
form of indirect
ownership that allows the Fund to treat the income from the
investment as exempt
from federal income tax. The financial institutions from
which the Fund
purchases participation interests frequently provide or
secure irrevocable
letters of credit or guarantees to assure that the
participation interests are
of high quality.
VARIABLE RATE MUNICIPAL SECURITIES. Some of the Tennessee
Municipal Securities
which the Fund purchases may have variable interest rates.
Variable interest
rates are ordinarily based on a published interest rate or
interest rate index.
Many variable rate municipal securities are subject to
payment of principal on
demand by the Fund in not more than seven days. All variable
rate municipal
securities will meet the quality standards for the Fund. The
Fund's investment
adviser has been instructed by the Trustees to monitor the
pricing, quality, and
liquidity of the variable rate municipal securities,
including participation
interests held by the Fund, on the basis of published
financial information and
reports of the rating agencies and other analytical
services.
MUNICIPAL LEASES. Municipal leases are obligations issued
by state and local
governments or authorities to finance the acquisition of
equipment and
facilities and may be considered to be illiquid. They may
take the form of a
lease, an installment purchase contract, a conditional sales
4
contract or a participation certificate on any of the above.
The lease payments
and other rights under the lease provide for and secure the
payments on the
certificates. Lease obligations may be limited by municipal
charter or the
nature of the appropriation for the lease. In particular,
lease obligations may
be subject to periodic appropriation. If the entity does not
appropriate funds
for future lease payments, the entity cannot be compelled to
make such payments.
Furthermore, a lease may provide that the certificate
trustee cannot accelerate
lease obligations upon default. The trustee would only be
able to enforce lease
payments as they become due. In the event of a default or
failure of
appropriation, it is unlikely that the trustee would be able
to obtain an
acceptable substitute source of payment.
If the Fund purchases unrated municipal leases, the Trustees
will be responsible
for determining on an ongoing basis, the credit quality of
such leases and the
likelihood that a lease will not be cancelled.
RESTRICTED AND ILLIQUID SECURITIES. The Fund may invest in
restricted
securities. Restricted securities are any securities in
which the Fund may
otherwise invest pursuant to its investment objective and
policies but which are
subject to restriction upon resale under federal securities
laws. To the extent
these securities are deemed to be illiquid, the Fund will
limit its purchases,
together with other securities considered to be illiquid, to
15% of its net
assets.
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES. The
Fund may invest in
the securities of other investment companies, but it will
not own more than 3%
of the total outstanding voting stock of any investment
company, invest more
than 5% of its total assets in any one investment company,
or invest more than
10% of its total assets in investment companies in general.
The Fund will invest
in other investment companies primarily for the purpose of
investing short-term
cash which has not yet been invested in other portfolio
instruments. The adviser
will waive its investment advisory fee on assets invested in
securities of
open-end investment companies.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS. The Fund may
purchase 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 adviser deems it
appropriate to do so. In addition, the Fund may enter into
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.
TEMPORARY INVESTMENTS. The Fund normally invests its assets
so that at least
80% of its annual interest income is exempt from federal
income tax and the
personal income taxes imposed by the state of Tennessee and
Tennessee
municipalities and at least 65% of the value of its total
assets will be
invested in bonds. From time to time, during periods of
other than normal market
conditions, the Fund may invest in short-term tax exempt or
taxable temporary
investments. These temporary
5
investments include: notes issued by or on behalf of
municipal or corporate
issuers; obligations issued or guaranteed by the U.S.
government, its agencies,
or instrumentalities; other debt securities; commercial
paper; certificates of
deposit of banks; and repurchase agreements (arrangements in
which the
organization selling the Fund a bond or temporary investment
agrees at the time
of sale to repurchase it at a mutually agreed upon time and
price).
The investment adviser will limit temporary investments to
those rated within
the investment grade categories described under "Acceptable
Investments--Characteristics" (if rated) or of comparable
quality (if unrated).
Although the Fund is permitted to make taxable, temporary
investments, there is
no current intention of generating income subject to federal
income tax or
personal income taxes imposed by the state of Tennessee or
Tennessee
municipalities.
TENNESSEE MUNICIPAL SECURITIES
Tennessee Municipal Securities are generally issued to
finance public works,
such as airports, bridges, highways, housing, hospitals,
mass transportation
projects, schools, streets, and water and sewer works. They
are also issued to
repay outstanding obligations, to raise funds for general
operating expenses,
and to make loans to other public institutions and
facilities.
Tennessee Municipal Securities include industrial
development bonds issued by or
on behalf of public authorities to provide financing aid to
acquire sites or
construct and equip facilities for privately or publicly
owned corporations. The
availability of this financing encourages these corporations
to locate within
the sponsoring communities and thereby increases local
employment.
The two principal classifications of municipal securities
are "general
obligation" and "revenue" bonds. General obligation bonds
are secured by the
issuer's pledge of its full faith and credit and taxing
power for the payment of
principal and interest. However, interest on and principal
of revenue bonds are
payable only from the revenue generated by the facility
financed by the bond or
other specified sources of revenue. Revenue bonds do not
represent a pledge of
credit or create any debt of or charge against the general
revenues of a
municipality or public authority. Industrial development
bonds are typically
classified as revenue bonds.
INVESTMENT RISKS
Yields on municipal securities depend on a variety of
factors, including: the
general conditions of the short-term municipal bond market
and the municipal
bond market; the size and maturity of the particular
offering; and the rating of
the issue. Further, any adverse economic conditions or
developments affecting
the issuer or its municipalities could impact the Fund's
portfolio. The ability
of the Fund to achieve its investment objective also depends
on the continuing
ability of the issuers of Tennessee Municipal Securities and
participation
interests, or the credit enhancers of either, to meet their
obligations for the
payment of interest and principal when due. See the Fund's
Statement of
Additional Information for a discussion of the state's
economy.
6
Investing in municipal securities which meet the Fund's
quality standards may
not be possible if the issuer or its municipalities do not
maintain their
current credit ratings. In addition, certain constitutional
amendments,
legislative measures, executive orders, administrative
regulations, and voter
initiatives could result in adverse consequences affecting
municipal securities.
NON-DIVERSIFICATION
The Fund is a non-diversified investment portfolio. As such,
there is no limit
on the percentage of assets which can be invested in any
single issuer. An
investment in the Fund, therefore, will entail greater risk
than investment in a
diversified portfolio of securities because the higher
percentage of investments
among fewer issuers may result in greater fluctuation in the
total market value
of the Fund's portfolio. Any economic, political, or
regulatory developments
affecting the value of the securities in the Fund's
portfolio will have a
greater impact on the total value of the portfolio than
would be the case if the
portfolio were diversified among more issuers.
The Fund intends to comply with Subchapter M of the Internal
Revenue Code, as
amended. This undertaking requires that at the end of each
quarter of the
taxable year: (a) with regard to at least 50% of the Fund's
total assets, no
more than 5% of its total assets are invested in the
securities of a single
issuer; and (b) no more than 25% of its total assets are
invested in the
securities of a single issuer.
INVESTMENT LIMITATIONS
The Fund will not borrow money directly or through reverse
repurchase agreements
(arrangements in which the Fund sells a portfolio instrument
for a percentage of
its cash value with an agreement to buy it back on a set
date) or pledge
securities except, under certain circumstances, the Fund may
borrow up to
one-third of the value of its total assets and pledge assets
as necessary to
secure such borrowings.
The above investment limitation cannot be changed without
shareholder approval.
THE PLANTERS FUNDS INFORMATION
- ------------------------------------------------------------
- --------------------
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES. The Trust is managed by a Board of
Trustees. The Trustees
are responsible for managing the Trust's business affairs
and for exercising all
the Trust's powers except those reserved for the
shareholders. The Executive
Committee of the Board of Trustees handles the Trustee's
responsibilities
between meetings of the Trustees.
INVESTMENT ADVISER. Pursuant to an investment advisory
contract with the Trust,
investment decisions for the Fund are made by Union Planters
National Bank
("Union Planters" or the "adviser"), the Fund's investment
adviser, subject to
direction by the Trustees. The investment adviser
continually conducts
investment research and supervision for the Fund and is
responsible for the
purchase or sale of portfolio instruments, for which it
receives an annual fee
from the assets of the Fund.
7
From time to time, to the extent consistent with the
objective, policies and
restrictions of the Fund, the Fund may invest in securities
of issuers with
which the investment adviser has a lending relationship.
ADVISORY FEES. The investment adviser receives an
investment advisory fee
at an annual rate equal to 0.75% of the Fund's average
daily net assets.
The fee paid by the Fund, while higher than the
advisory fees paid by other
mutual funds in general, is comparable to fees paid by
other mutual funds
with similar objectives and policies. The investment
adviser has undertaken
to reimburse the Fund, up to the amount of the advisory
fee, for operating
expenses in excess of limitations established by
certain states. The
investment adviser may voluntarily choose to waive a
portion of its fee or
reimburse the Fund for certain other expenses, but
reserves the right to
terminate such waiver or reimbursement at any time at
its sole discretion.
ADVISER'S BACKGROUND. Founded in 1869, Union Planters,
a national banking
association, is a wholly-owned subsidiary of Union
Planters Corporation
(the "Corporation") a multi-bank holding company
headquartered in Memphis,
Tennessee. Union Planters is a commercial bank offering
a wide range of
banking services to its customers. The investment
adviser has been managing
trust assets for over 80 years. As of December 31,
1994, the Trust Group of
Union Planters had approximately $1 billion under
administration, of which
it had investment discretion over approximately $625
million. The adviser
has served as investment adviser to the Fund since its
inception.
As part of it's regular banking operations, Union
Planters may make loans
to public companies. Thus, it may be possible, from
time to time, for the
Fund to hold or acquire the securities of issuers which
are also lending
clients of Union Planters. The lending relationship
will not be a factor in
the selection of securities.
PORTFOLIO MANAGERS. The following individuals are
primarily responsible
for the day-to-day management of the Fund's portfolio:
Robert G. L. Eason has been a co-portfolio manager
since the Fund's
inception. Mr. Eason has been a Vice President and
Senior Fixed Income
Portfolio Manager of Union Planters since 1989. From
1983-1989, Mr. Eason
was Portfolio Manager at First Tennessee National Bank.
P. Thomas Dorian has also been a co-portfolio manager
since the Fund's
inception. Mr. Dorian has been a Senior Vice President
of Union Planters
since 1989. From 1987-1989, Mr. Dorian was Vice
President of Union
Planters. Mr. Dorian has been a Chartered Financial
Analyst since 1985.
DISTRIBUTION OF FUND SHARES
Federated Securities Corp. is the principal distributor for
shares of the Fund.
Federated Securities Corp. 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.
8
PAYMENTS TO FINANCIAL INSTITUTIONS. The distributor, the
Adviser, or their
affiliates may offer to pay a fee from their own assets to
financial
institutions as financial assistance for providing
substantial marketing and
sales support. The support may include initiating customer
accounts, providing
sales literature, or participating in sales, educational and
training seminars
(including those held at recreational facilities). Such
assistance will be
predicated upon the amount of shares the financial
institution sells or may sell
and/or upon the type and nature of sales or marketing
support furnished by the
financial institution. Any payments made by the distributor
may be reimbursed by
the Adviser or its affiliates.
The Glass-Steagall Act prohibits a depository institution
(such as a commercial
bank or a savings and loan association) from being an
underwriter or distributor
of most securities. In the event the Glass-Steagall Act is
deemed to prohibit
depository institutions from acting in the administrative
capacities described
above or should Congress relax current restrictions on
depository institutions
the Trustees will consider appropriate changes in the
services.
State securities laws governing the ability of depository
institutions to act as
underwriters or distributors of securities may differ from
interpretations given
to the Glass-Steagall Act and, therefore, banks and
financial institutions may
be required to register as dealers pursuant to state law.
ADMINISTRATION OF THE FUND
ADMINISTRATIVE SERVICES. Federated Administrative Services,
Pittsburgh,
Pennsylvania, a subsidiary of Federated Investors, provides
the Fund with
certain administrative personnel and services necessary to
operate the Fund,
such as legal and accounting services. Federated
Administrative Services
provides these at an annual rate as specified below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AGGREGATE DAILY
ADMINISTRATIVE FEE NET ASSETS OF THE TRUST
<C> <S>
.150 of 1% on the first $250 million
.125 of 1% on the next $250 million
.100 of 1% on the next $250 million
.075 of 1% on assets in excess of $750 million
</TABLE>
The administrative fee received during any fiscal year shall
be at least
$120,000 per Fund. Federated Administrative Services may
voluntarily choose to
waive a portion of its fee.
CUSTODIAN. State Street Bank and Trust Company ("State
Street Bank"), Boston,
Massachusetts, is custodian for the securities and cash of
the Fund.
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND PORTFOLIO
ACCOUNTING SERVICES.
Federated Services Company, Pittsburgh, Pennsylvania, a
subsidiary of Federated
Investors, is transfer agent and dividend disbursing agent
for the Fund. It also
provides certain accounting and recordkeeping services with
respect to the
Fund's portfolio investments.
INDEPENDENT AUDITORS. The independent auditors for the Fund
are Price
Waterhouse LLP, Boston, Massachusetts.
9
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 all other
assets, less
liabilities, by the number of shares outstanding.
INVESTING IN THE FUND
- ------------------------------------------------------------
- --------------------
SHARE PURCHASES
Shares are sold on days on which the New York Stock Exchange
and the Federal
Reserve Wire System are open for business. An individual
investor can purchase
shares of the Fund by telephoning Union Planters Brokerage
Services at
1-800-238-7125 or by calling his financial institution (such
as a bank or an
investment dealer). Orders through a financial institution
are considered
received when the Fund is notified of the purchase order.
Purchase orders
through a registered broker/dealer must be received by the
broker before 4:00
p.m. (Eastern time) and must be transmitted by the broker to
the Fund before
5:00 p.m. (Eastern time) in order for shares to be purchased
at that day's
price. Purchase orders through other financial institutions
must be received by
the financial institution and transmitted to the Fund before
4:00 p.m. (Eastern
time) in order for shares to be purchased at that day's
price. It is the
financial institution's responsibilty to transmit orders
promptly.
Texas residents must purchase shares of the Fund through
Federated Securities
Corp. at 1-800-618-8573. In connection with the sale of
shares, the distributor
may, from time to time, offer certain items of nominal value
to any shareholder
or investor. The Fund reserves the right to reject any
purchase request.
Payment may be made by either check or federal funds.
Payments should be made to
your financial institution, broker/dealer, Union Planters
Brokerage Services or
Federated Securities Corp., as appropriate. 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 before shareholders begin to earn dividends.
MINIMUM INVESTMENT REQUIRED
The minimum initial investment in the Fund is $1,000.
Subsequent investments
must be in amounts of at least $100.
WHAT SHARES COST
Shares of the Fund are sold at their net asset value next
determined after an
order is received plus a sales load as follows:
10
<TABLE>
<CAPTION>
SALES LOAD AS A
SALES LOAD AS A
PERCENTAGE OF
PUBLIC PERCENTAGE OF NET
AMOUNT OF TRANSACTION OFFERING PRICE
AMOUNT INVESTED
<S> <C>
<C>
Less than $250,000 2.00%
2.04%
$250,000 but less than $500,000 1.50%
1.52%
$500,000 but less than $1,000,000 1.00%
1.01%
$1,000,000 or more 0.00%
- --
</TABLE>
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, Columbus Day, Veterans' Day, Thanksgiving Day and
Christmas Day.
PURCHASES AT NET ASSET VALUE. Shares of the fund may be
purchased at net asset
value, without a sales load, by Trust customers of Union
Planters and employees
and retired employees of Union Planters and its affiliates
and their spouses and
children under 21.
No sales load is imposed for shares purchased through bank
trust departments,
investment advisers registered under the Investment Advisers
Act of 1940, as
amended, insurance companies and credit unions. However,
investors who purchase
shares through a trust department or investment adviser may
be charged an
additional service fee by that institution.
DEALER CONCESSIONS. For sales of shares of the Fund, a
dealer will normally
receive up to 85% of the applicable sales load. Any portion
of the sales load
which is not paid to a dealer will be retained by the
distributor. However, the
distributor, in its sole discretion, may uniformly offer to
pay to all dealers
selling shares of the Fund, all or a portion of the sales
load it normally
retains. If accepted by the dealer, such additional payments
will be predicated
upon the amount of Fund shares sold.
The sales load for shares sold other than through registered
broker/dealers will
be retained by the distributor. The distributor may pay fees
to banks out of the
sales load in exchange for sales and/or administrative
services performed on
behalf of the bank's customers including the initiation of
customer accounts and
purchases of shares.
REDUCING THE SALES LOAD
The sales load can be reduced on the purchase of shares of
the Fund through:
quantity discounts and accumulated purchases;
signing a 13-month letter of intent; or
using the reinvestment privilege.
QUANTITY DISCOUNTS AND ACCUMULATED PURCHASES. As shown in
the table on the
previous page, larger purchases reduce the sales load paid.
The Fund will
combine purchases of shares made on
11
the same day by the investor, his spouse, and his children
under age 21 when it
calculates the sales load.
If an additional purchase of shares is made, the Fund will
consider the previous
purchases still invested in the Fund. For example, if a
shareholder already owns
shares having a current value at the public offering price
of $240,000 and
purchases $10,000 more at the current public offering price,
the sales load on
the additional purchase according to the schedule now in
effect would be 1.50%,
not 2.00%.
To receive the sales load reduction, Federated Securities
Corp. must be notified
by the shareholder in writing or by the shareholder's
financial institution at
the time the purchase is made that shares are already owned
or that purchases
are being combined. The Fund will reduce the sales load
after it confirms the
purchases.
LETTER OF INTENT. If a shareholder intends to purchase at
least $100,000 of
shares in the Fund over the next 13 months, the sales load
may be reduced by
signing a letter of intent to that effect. This letter of
intent includes a
provision for a sales load adjustment depending on the
amount actually purchased
within the 13-month period and a provision for the custodian
to hold up to 2.00%
of the total amount intended to be purchased in escrow (in
shares) until such
purchase is completed.
The amount held in escrow will be applied to the
shareholder's account at the
end of the 13-month period unless the amount specified in
the letter of intent
is not purchased. In this event, an appropriate number of
escrowed shares may be
redeemed in order to realize the difference in the sales
load.
This letter of intent will not obligate the shareholder to
purchase shares, but
if he does, each purchase during the period will be at the
sales load applicable
to the total amount intended to be purchased. This letter
may be dated as of a
prior date to include any purchases made within the past 90
days towards the
dollar fulfillment of the letter of intent. Prior trade
prices will not be
adjusted.
REINVESTMENT PRIVILEGE. If shares in the Fund have been
redeemed, the
shareholder has a one-time right, within 30 days, to
reinvest the redemption
proceeds at the next-determined net asset value without any
sales load.
Federated Securities Corp. must be notified by the
shareholder in writing or by
the shareholder's financial institution of the reinvestment
in order to
eliminate a sales load. If the shareholder redeems shares in
the Fund, there may
be tax consequences, and exercise of the reinvestment
privilege may result in
additional tax considerations. Shareholders contemplating
such transactions
should consult their own tax advisers.
CERTIFICATES AND CONFIRMATIONS
As transfer agent for the Fund, Federated Services Company
maintains a share
account for each shareholder of record. Share certificates
are not issued unless
requested by contacting your financial institution,
broker/dealer, Union
Planters Brokerage Services or Federated Securities Corp.,
as appropriate.
Detailed statements that include account balances,
information on each purchase
or redemption, and a report of dividends are sent to each
shareholder.
12
DIVIDENDS AND DISTRIBUTIONS
Dividends are declared and paid monthly to all shareholders
invested in the Fund
on the record date.
Dividends are declared just prior to determining net asset
value. Capital gains
realized by the Fund, if any, will be distributed at least
once every 12 months.
Dividends and capital gains will be reinvested in additional
shares on payment
dates at the ex-dividend date's net asset value without a
sales load, unless
cash payments are requested by writing to your financial
institution,
broker/dealer, Union Planters Brokerage Services or
Federated Securities Corp.,
as appropriate.
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. Telephone or written
requests for redemption
must be received in proper form.
BY TELEPHONE. A shareholder may redeem shares by calling
his financial
institution (such as a bank or an investment dealer) to
request the redemption.
Shares will be redeemed at the net asset value next
determined after the Fund
receives the redemption request from the financial
institution. Redemption
requests through a registered broker/dealer must be received
by the broker
before 4:00 p.m. (Eastern time) and must be transmitted by
the broker to the
Fund before 5:00 p.m. (Eastern time) in order for shares to
be redeemed at that
day's net asset value. Redemption requests through other
financial institutions
must be received by the financial institution and
transmitted to the Fund before
4:00 p.m. (Eastern time) in order for shares to be redeemed
at that day's net
asset value. The financial institution is responsible for
promptly submitting
redemption requests and providing proper written redemption
instructions to the
Fund. The financial institution may charge customary fees
and commissions for
this service.
For orders received before 4:00 p.m. (Eastern time),
proceeds will normally be
wired the next day to the shareholder's account as
instructed on the
shareholder's authorization form or a check will be sent to
the address of
record. Proceeds delivered in the form of a check will be
sent within seven days
after a proper request for redemption has been received,
provided Federated
Services Company has received the purchase price for the
shares from the
shareholder. Before a financial institution may request
redemption by telephone
on behalf of a shareholder, an authorization form permitting
the Fund to accept
redemption requests by telephone must be completed.
Telephone redemption instructions may be recorded. If
reasonable procedures are
not followed by the Fund, it may be liable for losses due to
unauthorized or
fraudulent telephone instructions.
In the event of drastic economic or market changes, a
shareholder may experience
difficulty in redeeming by telephone. If such a case should
occur, it is
recommended that a redemption request be made in writing and
be hand delivered
or sent by overnight mail to Federated Securities Corp. If,
at any time, the
Fund should determine it necessary to terminate or modify
this method of
redemption, shareholders would be promptly notified.
13
BY MAIL. Shareholders may redeem shares by sending a
written request to
Federated Securities Corp., as appropriate. The written
request should include
the shareholder's name, the Fund name, the 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. Shareholders should call Federated
Securities Corp. at
1-800-618-8573 for assistance in redeeming by mail.
SIGNATURES. Shareholders requesting a redemption of $50,000
or more, a
redemption of any amount to be sent to an address other than
that on record with
the Fund, or a redemption payable other than to the
shareholder of record, must
have signatures on written redemption requests guaranteed
by:
a trust company or commercial bank whose deposits are
insured by the Bank
Insurance Fund, which is administered by the FDIC;
a member of the New York, American, Boston, Midwest,
or Pacific Stock
Exchange;
a savings bank or savings and loan association whose
deposits are insured
by the Savings Association Insurance Fund, 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.
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 the required minimum of $1,000
due to shareholder
redemptions.
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 of September 6, 1995, Union Planters
National Bank,
Memphis, Tennessee, acting in various capacities for
numerous accounts, was the
owner of record of approximately 3,088,907 shares (90.96%)
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.
14
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 for
this purpose shall be called by the Trustees upon the
written request of
shareholders owning at least 10% of the outstanding shares
of all series in the
Trust entitled to vote.
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 or its Trustees
enter into or sign on
behalf of the Fund.
In the unlikely event that 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
of the Fund 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.
EFFECT OF BANKING LAWS
- ------------------------------------------------------------
- --------------------
The Glass-Steagall Act and other banking laws and
regulations presently prohibit
a bank holding company registered under the Federal Bank
Holding Company Act of
1956 or any affiliate thereof from sponsoring, organizing or
controlling a
registered, open-end investment company continuously engaged
in the issuance of
its shares, and from issuing, underwriting, selling or
distributing securities
in general. Such laws and regulations do not prohibit such a
holding company or
affiliate from acting as investment adviser, transfer agent
or custodian to such
an investment company or from purchasing shares of such a
company as agent for
and upon the order of their customers. The Fund's adviser,
Union Planters, is
subject to such banking laws and regulations.
Union Planters believes that it may perform the investment
advisory services for
the Fund contemplated by its advisory agreement with the
Trust without violating
the Glass-Steagall Act or other applicable banking laws or
regulations. Changes
in either federal or state statutes and regulations relating
to the permissible
activities of banks and their subsidiaries or affiliates, as
well as further
judicial or administrative decisions or interpretations of
present or future
statutes and regulations, could prevent Union Planters from
continuing to
perform all or a part of the above services for its
customers and/or the Fund.
In such event, changes in the operation of a Fund may occur,
including the
possible alteration or termination of any automatic or other
Fund share
investment or redemption services then being provided by
Union Planters, and the
Trustees would consider alternative investment advisers and
other means of
continuing available investment services. It is not expected
15
that the Fund's existing shareholders would suffer any
adverse financial
consequences (if another adviser with equivalent abilities
to Union Planters is
found) as a result of any of these occurrences.
TAX INFORMATION
- ------------------------------------------------------------
- --------------------
FEDERAL INCOME TAX
The Fund expects to pay no federal income tax because it
expects to meet
requirements of the Internal Revenue Code, as amended ("the
Code"), applicable
to regulated investment companies and to receive the special
tax treatment
afforded to such companies.
Dividends of the Fund representing net interest income
earned on some temporary
investments and any realized net short-term gains are taxed
as ordinary income.
Distributions representing net long-term capital gains
realized by the Fund, if
any, will be taxable as long-term capital gains regardless
of the length of time
shareholders have held their shares.
These tax consequences apply whether dividends are received
in cash or as
additional shares. Information on the tax status of
dividends and distributions
is provided annually.
STATE OF TENNESSEE TAXES
Under existing Tennessee law, shareholders of the Fund will
not be subject to
Tennessee personal income taxes on Fund dividends to the
extent that such
dividends represent "exempt-interest dividends" as defined
in the Code, which
are directly attributable to (i) interest on obligations of
the state of
Tennessee or any of its political subdivisions; or (ii)
interest on certain
obligations of the United States, or any agency or
instrumentality thereof.
To the extent that distributions by the Fund are derived
from capital gains on
such obligations, or from dividends or capital gains on
other types of
obligations, such distributions will be subject to Tennessee
income taxes.
OTHER STATE AND LOCAL TAXES
Income from the Fund is not necessarily free from state
income taxes in states
other than Tennessee or from personal property taxes. State
laws differ on this
issue, and 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 total return, yield,
and tax-equivalent
yield. Total return represents the change, over a specified
period of time, in
the value of an investment in shares after reinvesting all
income and capital
gains 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 maximum offering price per
share of the Fund on
the last day of the period. This number is then
16
annualized using semi-annual compounding. The tax-equivalent
yield of the Fund
is calculated similarly to the yield, but is adjusted to
reflect the taxable
yield that the Fund would have had to earn to equal its
actual yield, assuming a
specific tax rate. The yield and the tax-equivalent yield do
not necessarily
reflect income actually earned by the Fund and, therefore,
may not correlate to
the dividends or other distributions paid to shareholders.
The performance information reflects the effect of the sales
load, which, if
excluded, would increase the total return, yield, and tax-
equivalent yield.
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.
17
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
PORTFOLIO OF INVESTMENTS
JULY 31, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
PRINCIPAL
CREDIT
AMOUNT
RATING* VALUE
- ------------ ----------------------------------------------
- --------------------------- ----------- -------------
<C> <S>
<C> <C>
MUNICIPAL NOTES--98.6%
- ------------------------------------------------------------
- ---------------------------
TENNESSEE--98.6%
----------------------------------------------
- ---------------------------
$ 1,000,000 Chattanooga--Hamilton County, TN, Hospital
Authority Revenue, 5.50%
Refunding Bonds, (Erlanger Medical Center)/
(Callable 10/1/2003 @
102)/(FSA Insured)/(Original Issue Yield:
5.85%), 10/1/2013 AAA $ 949,280
----------------------------------------------
- ---------------------------
465,000 Chattanooga--Hamilton County, TN, Hospital
Authority Revenue, 5.50%
Refunding Bonds, (Erlanger Medical Center)/
(FSA Insured)/(Original Issue
Yield: 5.60%), 10/1/2006
AAA 472,724
----------------------------------------------
- ---------------------------
1,130,000 Clarksville, TN, Electric System Revenue,
5.125% Refunding and
Improvement Bonds, (Callable 9/1/2003 @ 102),
9/1/2011 A 1,032,085
----------------------------------------------
- ---------------------------
735,000 Clarksville, TN, Water, Sewer and Gas Systems,
6.125%
Refunding and Improvement Revenue Bonds,
(Callable
2/1/2002 @ 102)/(MBIA Insured)/(Original Issue
Yield: 6.15%),
2/1/2007
AAA 781,232
----------------------------------------------
- ---------------------------
500,000 Clarksville, TN, Water, Sewer and Gas Systems,
6.125%
Refunding and Improvement Revenue Bonds,
(Callable
2/1/2002 @ 102)/(MBIA Insured)/(Original Issue
Yield: 6.328%), 2/1/2012 AAA 510,110
----------------------------------------------
- ---------------------------
400,000 Hamblen County, TN, Hospital Revenue, 4.90% UT
GO Bonds, (Callable
5/1/1999 @ 102)/(AMBAC Insured), 5/1/2006
AAA 392,112
----------------------------------------------
- ---------------------------
500,000 Jackson, TN, Health, Educational and Housing
Facilities Revenue, 5.90%,
(Jackson-Madison County General Hospital)/
(MBIA Insured), 4/1/2000 AAA 525,270
----------------------------------------------
- ---------------------------
400,000 Jackson, TN, Water and Sewer Authority
Revenue, 5.125% Refunding Bonds,
(Callable 1/1/2003 @ 102)/(AMBAC Insured),
1/1/2010 AAA 381,732
----------------------------------------------
- ---------------------------
440,000 Johnson City, TN, Health and Educational
Facilities, 6.75%
Refunding Revenue Bonds, (Johnson City
Medical)/(Callable 7/1/2001 @
102)/(MBIA Insured)/(Original Issue Yield:
6.912%), 7/1/2006 AAA 480,586
----------------------------------------------
- ---------------------------
</TABLE>
18
TENNESSEE TAX-FREE BOND FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
PRINCIPAL
CREDIT
AMOUNT
RATING* VALUE
- ------------ ----------------------------------------------
- --------------------------- ----------- -------------
<C> <S>
<C> <C>
MUNICIPAL NOTES--CONTINUED
- ------------------------------------------------------------
- ---------------------------
$ 810,000 Johnson City, TN, Health and Educational
Facilities, 6.75%
Refunding Revenue Bonds, (Johnson City
Medical)/(MBIA
Insured)/(Original Issue Yield: 6.912%)/(Pre-
Refunded
7/1/2001 @ 102), 7/1/2006 (a)
AAA $ 913,000
----------------------------------------------
- ---------------------------
750,000 Knox County, TN, Health, Educational and
Housing Facilities Revenue,
4.90%, (Fort Sanders Alliance)/(Series
A)/(Callable 1/1/2004 @ 102)/(MBIA
Insured)/(Original Issue Yield: 5.10%),
1/1/2005 AAA
726,870
----------------------------------------------
- ---------------------------
750,000 Knox County, TN, Health, Educational and
Housing Facilities Revenue,
7.00%, (Fort Sanders Alliance)/(Series
C)/(MBIA Insured)/(Pre-Refunded
1/1/2000 @ 102), 1/1/2008 (a)
AAA 838,230
----------------------------------------------
- ---------------------------
1,000,000 Knoxville, TN, Natural Gas Revenue, 5.05%
Refunding Bonds, (Callable
3/1/2000 @ 102)/(Original Issue Yield: 5.10%),
3/1/2008
AA 954,220
----------------------------------------------
- ---------------------------
1,330,000 Knoxville, TN, Water Revenue, 5.20% Refunding
and
Improvement Bonds, (Series M), (Callable
3/1/2000 @ 102)/ (Original Issue
Yield: 5.45%), 3/1/2010
AA 1,271,001
----------------------------------------------
- ---------------------------
1,750,000 Memphis-Shelby County, TN, Airport Revenue,
6.75% Refunding Bonds,
(Federal Express Corp.)/(Callable 9/1/2002 @
102), 9/1/2012 BBB 1,814,715
----------------------------------------------
- ---------------------------
230,000 Metropolitan Government Nashville and Davidson
County, TN, 5.25%
Refunding UT GO Bonds, (Original Issue Yield:
5.45%), 5/15/2007 AA 230,782
----------------------------------------------
- ---------------------------
750,000 Metropolitan Government Nashville and Davidson
County, TN, Electric
Revenue, 6.00%, (Series A)/(Callable 5/15/2002
@ 102)/(Original Issue
Yield: 6.282%), 5/15/2017
AA 750,420
----------------------------------------------
- ---------------------------
1,500,000 Metropolitan Government Nashville and Davidson
County, TN, Health and
Educational Facilities Revenue, 5.20%
Refunding Bonds, (Vanderbilt
University)/(Callable 7/1/2003 @
102)/(Original Issue Yield: 5.55%),
7/1/2018
AA 1,361,910
----------------------------------------------
- ---------------------------
230,000 Metropolitan Government Nashville and Davidson
County, TN, Water and
Sewer Revenue, 5.20% Refunding Bonds, (FGIC
Insured)/(Original Issue
Yield: 5.53%), 1/1/2013
AAA 217,635
----------------------------------------------
- ---------------------------
</TABLE>
19
TENNESSEE TAX-FREE BOND FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
PRINCIPAL
CREDIT
AMOUNT
RATING* VALUE
- ------------ ----------------------------------------------
- --------------------------- ----------- -------------
<C> <S>
<C> <C>
MUNICIPAL NOTES--CONTINUED
- ------------------------------------------------------------
- ---------------------------
$ 250,000 Metropolitan Government Nashville and Davidson
County, TN, Water and
Sewer Revenue, 5.75%, (Callable 1/1/2002 @
102)/(AMBAC Insured)/(Original
Issue Yield: 6.15%),
1/1/2012
AAA $ 248,672
----------------------------------------------
- ---------------------------
500,000 Metropolitan Government Nashville and Davidson
County, TN, Water and
Sewer Revenue, 7.25% Refunding Bonds,
(Callable 1/1/1996 @ 102), 1/1/2006 A
518,215
----------------------------------------------
- ---------------------------
400,000 Metropolitan Government Nashville and Davidson
County, TN, Water and
Sewer Revenue, 7.30% Refunding Bonds,
(Callable 1/1/1996 @ 102), 1/1/2008 A
413,476
----------------------------------------------
- ---------------------------
1,375,000 Montgomery County, TN, Public Building
Authority Revenue, 7.50%,
(Tennessee County Loan Pool)/(Callable
12/15/1995 @ 100)/(Prudential
Insurance Company of America Insured),
12/15/2000 AA+
1,394,828
----------------------------------------------
- ---------------------------
800,000 Mt. Juliet, TN, Public Building Authority
Revenue, 7.00%, (Series
O)/(Callable 2/1/2001 @ 102)/(MBIA Insured),
2/1/2006
AAA 888,712
----------------------------------------------
- ---------------------------
1,500,000 Putnam County, TN, 5.125%, UT GO Bonds,
(Public
Improvements)/(Callable 4/1/2003 @ 102)/(MBIA
Insured)/ (Original Issue
Yield: 5.35%), 4/1/2011
AAA 1,405,380
----------------------------------------------
- ---------------------------
500,000 Shelby County, TN, 5.10% UT GO Bonds, (Public
Improvements)/(Callable
3/1/2001 @ 101)/(Original Issue Yield: 5.25%),
3/1/2011 AA+ 472,220
----------------------------------------------
- ---------------------------
500,000 Shelby County, TN, 5.875% Refunding UT GO
Bonds, (Series B)/(Callable
3/1/2000 @ 101-1/2)/(Original Issue Yield:
5.95%),
3/1/2007
AA+ 520,585
----------------------------------------------
- ---------------------------
480,000 Shelby County, TN, 6.20% Refunding UT GO
Bonds, (Series A)/(Callable
3/1/2000 @ 101-1/2)/(Original Issue Yield:
6.30%),
3/1/2006
AA+ 507,432
----------------------------------------------
- ---------------------------
1,000,000 Shelby County, TN, Health, Educational and
Housing Facilities Revenue,
6.00%, (St. Joseph Hospital East, Inc.)/
(Callable 3/1/2005 @ 100)
3/1/2005 (Escrowed to Maturity) (a)
AAA 1,072,990
----------------------------------------------
- ---------------------------
</TABLE>
20
TENNESSEE TAX-FREE BOND FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
PRINCIPAL
CREDIT
AMOUNT
RATING* VALUE
- ------------ ----------------------------------------------
- --------------------------- ----------- -------------
<C> <S>
<C> <C>
MUNICIPAL NOTES--CONTINUED
- ------------------------------------------------------------
- ---------------------------
$ 1,250,000 Shelby County, TN, Health, Educational and
Housing
Facilities Revenue, 7.40% Refunding Bonds,
(Methodist
Health System)/(Series A)/(Callable 6/1/1998 @
102)/(MBIA Insured),
6/1/2003
AAA $ 1,368,750
----------------------------------------------
- ---------------------------
1,250,000 Tennessee Housing Development Agency Mortgage,
5.40% Refunding Revenue
Bonds, (Series A)/(Callable 7/1/2003 @ 102),
7/1/2004 A+ 1,257,837
----------------------------------------------
- ---------------------------
235,000 Tennessee Housing Development Agency Mortgage,
5.65% Refunding Revenue
Bonds, (Series A)/(Callable 7/1/2003 @ 102),
1/1/2007 A+ 236,048
----------------------------------------------
- ---------------------------
1,500,000 Tennessee Housing Development Agency Mortgage,
5.70% Refunding Revenue
Bonds, (Series A)/(Callable 7/1/2003 @ 102),
7/1/2008 A+ 1,501,035
----------------------------------------------
- ---------------------------
1,205,000 Tennessee Housing Development Agency Mortgage,
5.70% Refunding Revenue
Bonds, (Series A)/(Callable 7/1/2003 @ 102),
7/1/2008 A+ 1,205,831
----------------------------------------------
- ---------------------------
2,050,000 Tennessee Housing Development Agency Mortgage,
5.85% Refunding Revenue
Bonds, (Series A)/(Callable 7/1/2003 @ 102),
7/1/2013 A+ 2,001,025
----------------------------------------------
- ---------------------------
400,000 Tennessee Housing Development Agency, 6.40%
Revenue Bonds, (Homeownership
Program-Issue U), 7/1/2000
A+ 418,276
----------------------------------------------
- ---------------------------
430,000 Tennessee Housing Development Agency, 6.90%
Revenue Bonds, (Homeownership
Program-Issue U)/(Callable 7/1/2001 @ 102),
7/1/2005 A+ 454,350
----------------------------------------------
- ---------------------------
500,000 Tennessee State Local Development Authority,
5.65% Refunding Revenue
Bonds, State Loan Program, (Series A)/
(Callable 3/1/2003 @ 102),
3/1/2007
AA- 512,990
----------------------------------------------
- ---------------------------
495,000 Tennessee State Local Development Authority,
6.10% Revenue Bonds,
(Community Provider Pooled Loan
Program)/(State Aid
Withholding)/(Callable 10/1/2004 @ 102),
10/1/2007 A- 511,558
----------------------------------------------
- ---------------------------
195,000 Tennessee State School Board Authority, 5.75%
Refunding Revenue Bonds,
(Callable 5/1/1996 @ 100-1/2)/(GO of
Authority), 5/1/2006 AA
196,745
----------------------------------------------
- ---------------------------
</TABLE>
21
TENNESSEE TAX-FREE BOND FUND
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
PRINCIPAL
CREDIT
AMOUNT
RATING* VALUE
- ------------ ----------------------------------------------
- --------------------------- ----------- -------------
<C> <S>
<C> <C>
MUNICIPAL NOTES--CONTINUED
- ------------------------------------------------------------
- ---------------------------
$ 750,000 Tennessee State School Board Authority, 6.25%
Refunding Revenue Bonds,
(Higher Educational Facilities)/(Series A)/
(Callable 5/1/2002 @
101-1/2), 5/1/2017
AA $ 779,873
----------------------------------------------
- ---------------------------
700,000 Tennessee State, 5.55% GO Bonds, (Series A),
(Callable
3/1/2005 @ 100), 3/1/2010
AA+ 707,735
----------------------------------------------
- ---------------------------
250,000 Tennessee State, 6.10% Refunding UT GO Bonds,
(Series A),
6/1/2000
AA+ 269,658
----------------------------------------------
- ---------------------------
750,000 Tennessee State, 6.60% UT GO Bonds,
(Miscellaneous Improvements)/(Series
B)/(Callable 6/1/2001 @ 101-1/2), 6/1/ 2004
AA+ 829,673
----------------------------------------------
- ---------------------------
1,035,000 Williamson County, TN, 6.00% Refunding UT GO
Bonds,
3/1/2008
AA 1,097,928
----------------------------------------------
- --------------------------- -------------
TOTAL LONG-TERM MUNICIPAL SECURITIES (B)
(IDENTIFIED COST $35,734,455)
$ 35,395,736
----------------------------------------------
- --------------------------- -------------
</TABLE>
(a) The issuer of this security has placed U.S. government
securities in escrow
with a trustee. The proceeds from the government
securities will be used to
pay principal and interest on the security.
(b) The cost of investments for federal tax purposes amounts
to $35,734,455. The
net unrealized depreciation of investments on a federal
tax basis amounts to
$338,719, which is comprised of $287,289 appreciation
and $626,008
depreciation at July 31, 1995.
* Please refer to the Appendix of the Statement of
Additional Information for
an explanation of the credit ratings. Current credit
ratings are unaudited.
Note: The category of investments is shown as a percentage
of net assets
($35,887,520) at July 31, 1995.
The following acronyms are used throughout this portfolio:
AMBAC--American Municipal Bond Assurance Corporation
FGIC--Financial Guaranty Insurance Company
FSA--Financial Security Assurance
GO--General Obligation
MBIA--Municipal Bond Investors Assurance
UT--Unlimited Tax
(See Notes which are an integral part of the Financial
Statements)
22
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF ASSETS AND LIABILITIES
JULY 31, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<S>
<C> <C>
ASSETS:
- ------------------------------------------------------------
- ---------------------------------------
Investments in securities (identified cost and tax cost,
$35,734,455) $ 35,395,736
- ------------------------------------------------------------
- ---------------------------------------
Income receivable
509,360
- ------------------------------------------------------------
- ---------------------------------------
Deferred expenses
19,592
- ------------------------------------------------------------
- --------------------------------------- -------------
Total assets
35,924,688
- ------------------------------------------------------------
- ---------------------------------------
LIABILITIES:
- ------------------------------------------------------------
- ---------------------------------------
Payable to portfolio accounting agent
$ 9,189
- ------------------------------------------------------------
- ----------------------------
Payable to bank
6,753
- ------------------------------------------------------------
- ----------------------------
Accrued expenses
21,226
- ------------------------------------------------------------
- ---------------------------- ---------
Total liabilities
37,168
- ------------------------------------------------------------
- --------------------------------------- -------------
NET ASSETS for 3,430,418 shares of beneficial interest
outstanding $ 35,887,520
- ------------------------------------------------------------
- --------------------------------------- -------------
NET ASSETS CONSISTS OF:
- ------------------------------------------------------------
- ---------------------------------------
Paid in capital
$ 36,382,737
- ------------------------------------------------------------
- ---------------------------------------
Net unrealized depreciation of investments
(338,719)
- ------------------------------------------------------------
- ---------------------------------------
Accumulated net realized loss on investments
(265,182)
- ------------------------------------------------------------
- ---------------------------------------
Undistributed net investment income
108,684
- ------------------------------------------------------------
- --------------------------------------- -------------
Total Net Assets
$ 35,887,520
- ------------------------------------------------------------
- --------------------------------------- -------------
NET ASSET VALUE, and Redemption Proceeds Per Share:
($35,887,520 / 3,430,418 shares of beneficial interest
outstanding) $10.46
- ------------------------------------------------------------
- --------------------------------------- -------------
Computation of Offering Price:
Offering Price Per Share (100/98 of $10.46)*
$10.67
- ------------------------------------------------------------
- --------------------------------------- -------------
</TABLE>
*See "What Shares Cost" in the Prospectus.
(See Notes which are an integral part of the Financial
Statements)
23
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF OPERATIONS
YEAR ENDED JULY 31, 1995
- ------------------------------------------------------------
- --------------------
<TABLE>
<S>
<C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------
- ---------------------------------------
Interest income
$ 2,103,592
- ------------------------------------------------------------
- ---------------------------------------
EXPENSES:
- ------------------------------------------------------------
- ---------------------------------------
Investment advisory fee
$ 284,526
- ------------------------------------------------------------
- ---------------------------
Administrative personnel and services fee
120,001
- ------------------------------------------------------------
- ---------------------------
Custodian fees
21,379
- ------------------------------------------------------------
- ---------------------------
Transfer agent and dividend disbursing agent fees and
expenses 28,657
- ------------------------------------------------------------
- ---------------------------
Trustees' fees
9,001
- ------------------------------------------------------------
- ---------------------------
Auditing fees
15,000
- ------------------------------------------------------------
- ---------------------------
Legal fees
6,851
- ------------------------------------------------------------
- ---------------------------
Portfolio accounting fees
57,079
- ------------------------------------------------------------
- ---------------------------
Share registration costs
18,246
- ------------------------------------------------------------
- ---------------------------
Printing and postage
17,001
- ------------------------------------------------------------
- ---------------------------
Insurance premiums
4,541
- ------------------------------------------------------------
- ---------------------------
Miscellaneous
8,773
- ------------------------------------------------------------
- --------------------------- ----------
Total expenses
591,055
- ------------------------------------------------------------
- ---------------------------
Deduct--
- ------------------------------------------------------------
- ---------------------------
Waiver of investment advisory fee
$ 284,526
- ------------------------------------------------------------
- ---------------
Waiver of administrative personnel and services fee
75,000 359,526
- ------------------------------------------------------------
- --------------- ---------- ----------
Net expenses
231,529
- ------------------------------------------------------------
- --------------------------------------- ------------
Net investment income
1,872,063
- ------------------------------------------------------------
- --------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ------------------------------------------------------------
- ---------------------------------------
Net realized loss on investments
(215,683)
- ------------------------------------------------------------
- ---------------------------------------
Net change in unrealized depreciation on investments
1,023,037
- ------------------------------------------------------------
- --------------------------------------- ------------
Net realized and unrealized gain (loss) on investments
807,354
- ------------------------------------------------------------
- --------------------------------------- ------------
Change in net assets resulting from operations
$ 2,679,417
- ------------------------------------------------------------
- --------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial
Statements)
24
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------
- --------------------
<TABLE>
<CAPTION>
YEAR ENDED
- ------------------------------
JULY 31, 1995 JULY 31, 1994*
- ------------- -------------
<S>
<C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------
- ------------------
OPERATIONS--
- ------------------------------------------------------------
- ------------------
Net investment income
$ 1,872,063 $ 1,564,175
- ------------------------------------------------------------
- ------------------
Net realized loss on investment transactions ($153,288 and
$0 net loss,
respectively, as computed for federal tax purposes)
(215,683) (49,499)
- ------------------------------------------------------------
- ------------------
Net change in unrealized depreciation on investments
1,023,037 (1,361,756)
- ------------------------------------------------------------
- ------------------ --------------- ----------------
Change in net assets resulting from operations
2,679,417 152,920
- ------------------------------------------------------------
- ------------------ --------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------
- ------------------
Distributions from net investment income
(1,887,110) (1,440,444)
- ------------------------------------------------------------
- ------------------ --------------- ----------------
SHARE TRANSACTIONS--
- ------------------------------------------------------------
- ------------------
Proceeds from sale of shares
3,372,891 50,071,452
- ------------------------------------------------------------
- ------------------
Net asset value of shares issued to shareholders in payment
of distributions declared
145,754 151,236
- ------------------------------------------------------------
- ------------------
Cost of shares redeemed
(10,823,155) (6,535,441)
- ------------------------------------------------------------
- ------------------ --------------- ----------------
Change in net assets resulting from share transactions
(7,304,510) 43,687,247
- ------------------------------------------------------------
- ------------------ --------------- ----------------
Change in net assets
(6,512,203) 42,399,723
- ------------------------------------------------------------
- ------------------
NET ASSETS:
- ------------------------------------------------------------
- ------------------
Beginning of period
42,399,723 --
- ------------------------------------------------------------
- ------------------ --------------- ----------------
End of period (including undistributed net investment income
of $108,684 and
$123,731, respectively)
$ 35,887,520 $ 42,399,723
- ------------------------------------------------------------
- ------------------ --------------- ----------------
</TABLE>
*For the period from August 5, 1993 (start of business) to
July 31, 1994.
(See Notes which are an integral part of the Financial
Statements)
25
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
NOTES TO FINANCIAL STATEMENTS
JULY 31, 1995
- ------------------------------------------------------------
- --------------------
(1) ORGANIZATION
The Planters Funds (the "Trust") is registered under the
Investment Company Act
of 1940, as amended (the "Act"), as a non-diversified, open-
end management
investment company. The financial statements presented
herein are those of
Tennessee Tax-Free Bond Fund (the "Fund"). At July 31, 1995,
the Trust did not
offer any other portfolios.
(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.
A. INVESTMENT VALUATIONS--Municipal bonds are valued by an
independent pricing
service taking into consideration yield, liquidity,
risk, credit, quality,
coupon, maturity, type of issue, and any other factors
or market data it
deems relevant in determining valuations for normal
institutional size
trading units of debt securities. The independent
pricing service does not
rely exclusively on quoted prices.
B. 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").
Distributions to shareholders are recorded on the ex-
dividend date.
C. 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.
At July 31, 1995, the Fund, for federal tax purposes,
had a capital loss
carryforward of $153,288, which will reduce the Fund's
taxable income
arising from 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 in 2003.
Additionally, net capital losses of $111,894
attributable to security
transactions incurred after October 31, 1994 are
treated as arising on
August 1, 1995, the first day of the Fund's next
taxable year.
D. 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
26
TENNESSEE TAX-FREE BOND FUND
- ------------------------------------------------------------
- --------------------
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.
E. 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.
F. 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 JULY 31,
1995 1994*
- ----- -----
<S>
<C> <C>
Shares sold
333,883 4,761,847
- ------------------------------------------------------------
- ----------------------------
Shares issued to shareholders in payment of distributions
declared 14,443 14,402
- ------------------------------------------------------------
- ----------------------------
Shares redeemed
(1,066,291) (627,866)
- ------------------------------------------------------------
- ---------------------------- ----------- ----------
Net change resulting from share transactions
(717,965) 4,148,383
- ------------------------------------------------------------
- ---------------------------- ----------- ----------
</TABLE>
*For the period from August 5, 1993 (start of business) to
July 31, 1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH
AFFILIATES
INVESTMENT ADVISORY FEE--Union Planters National Bank, the
Fund's investment
adviser (the "Adviser"), receives for its services an annual
investment advisory
fee equal to .75 of 1% of the Fund's average daily net
assets.
The Adviser may voluntarily choose to waive all or a portion
of its fee. The
Adviser can modify or terminate this voluntary waiver at any
time at its sole
discretion.
As of July 31, 1995, Union Planters National Bank was the
owner of record of
approximately 3,124,137 shares, which is 91.07% of the Fund.
ADMINISTRATIVE FEE--Federated Administrative Services
("FAS") provides the Fund
with certain administrative personnel and services. The FAS
fee is based on the
level of average aggregate net assets of the Trust for the
period. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES AND
PORTFOLIO
ACCOUNTING FEES-- Federated Services Company ("FServ")
serves as transfer and
dividend disbursing agent for the
27
TENNESSEE TAX-FREE BOND FUND
- ------------------------------------------------------------
- --------------------
Fund for which it receives a fee. The fee is based on the
size, type, and number
of accounts and transactions made by shareholders.
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 net
assets for the period,
plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses ($35,622)
were initially borne
by FAS. The Fund has agreed to reimburse FAS for such
organizational expenses
during the five year period following August 5, 1993 (the
date the Fund became
effective). For the year ended July 31, 1995, the Fund paid
$2,367 pursuant to
this agreement.
Certain of the Officers and Trustees of the Fund 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
July 31, 1995, were as follows:
<TABLE>
<S>
<C>
PURCHASES
$ 1,030,211
- ------------------------------------------------------------
- ---------------------------------------- ------------
SALES
$ 8,179,850
- ------------------------------------------------------------
- ---------------------------------------- ------------
</TABLE>
(6) CONCENTRATION OF CREDIT RISK
Since the Fund invests a substantial portion of its assets
in issuers located in
one state, it will be more susceptible to factors adversely
affecting issuers in
that state than would be a comparable general tax-exempt
mutual fund. In order
to reduce the credit risk associated with such factors, at
July 31, 1995, 35.3%
of the securities in the portfolio of investments are backed
by letters of
credit or bond insurance of various financial institutions
and financial
guaranty assurance agencies. The value of investments
insured by or supported
(backed) by a letter of credit from any one institution or
agency did not exceed
23.8% of total investments.
28
INDEPENDENT AUDITORS' REPORT
- ------------------------------------------------------------
- --------------------
To the Trustees and Shareholders of
TENNESSEE TAX-FREE BOND FUND
(a Portfolio of the Planters Funds):
In our opinion, the accompanying statement of assets and
liabilities, including
the portfolio of investments (except for the Credit
Ratings), and the related
statements of operations and of changes in net assets and
the financial
highlights (included on page 2 of the Prospectus) present
fairly, in all
material respects, the financial position of the Tennessee
Tax-Free Bond Fund
(the "Fund") at
July 31, 1995, the results of operations for the year then
ended, and the
changes in net assets and the financial highlights for the
periods indicated, in
conformity with generally accepted accounting principles.
These financial
statements and financial highlights (hereafter referred to
as "financial
statements") are the responsibility of the Fund's
management; our responsibility
is to express an opinion on these financial statements based
on our audits. We
conducted our audits of these financial statements in
accordance with generally
accepted auditing standards which require that we plan and
perform the audit to
obtain reasonable assurance about whether the financial
statements are free of
material misstatement. An audit includes examining, on a
test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing
the accounting principles used and significant estimates
made by management, and
evaluating the overall financial statement presentation. We
believe that our
audits, which included confirmation of securities at July
31, 1995 by
correspondence with the custodian, provide a reasonable
basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
September 7, 1995
29
ADDRESSES
- ------------------------------------------------------------
- --------------------
<TABLE>
<S> <C>
<C>
Tennessee Tax-Free Bond Fund
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------
- ---------------------------------------------------------
Distributor
Federated Securities Corp.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------
- ---------------------------------------------------------
Investment Adviser
Union Planters National Bank
P.O. Box 387
Memphis, Tennessee 38147
- ------------------------------------------------------------
- ---------------------------------------------------------
Custodian
State Street Bank
P.O. Box 8604
and Trust Company
Boston, Massachusetts 02266-8604
- ------------------------------------------------------------
- ---------------------------------------------------------
Transfer Agent, Dividend Disbursing Agent,
and Portfolio Accounting Services
Federated Services Company
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
- ------------------------------------------------------------
- ---------------------------------------------------------
Independent Auditors
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
- ------------------------------------------------------------
- ---------------------------------------------------------
</TABLE>
30
TENNESSEE TAX-
FREE
BOND FUND
PROSPECTUS
A Non-
Diversified Portfolio
of The Planters
Funds
An Open-End,
Management
Investment
Company
September 30,
1995
[logo] FEDERATED SECURITIES CORP.
----------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Cusip 727426108
3072709A (9/95)
<R/>
TENNESSEE TAX-FREE BOND FUND
(A PORTFOLIO OF THE PLANTERS FUNDS)
Statement of Additional Information
This Statement of Additional Information should be read
with the prospectus of shares of Tennessee Tax-Free
Bond Fund (the "Fund") dated September 30, 1995. This
Statement is not a prospectus itself. To receive a copy
of the prospectus write or call Union Planters
Brokerage Services at 1-800-238-7125.
FEDERATED INVESTORS TOWER
PITTSBURGH, PENNSYLVANIA 15222-3779
Statement dated September 30, 1995
FEDERATED SECURITIES
CORP.
Distributor
A subsidiary of
FEDERATED INVESTORS
TRANSFER AGENT AND DIVIDEND
DISBURSING AGENT 10
GENERAL INFORMATION ABOUT THE
FUND 1 BROKERAGE TRANSACTIONS 11
INVESTMENT OBJECTIVE AND POLICIES 11
PURCHASING SHARES 11
ACCEPTABLE INVESTMENTS 1 DETERMINING NET ASSET VALUE 11
WHEN-ISSUED AND DELAYED VALUING MUNICIPAL BONDS 11
DELIVERY TRANSACTIONS 2
USE OF AMORTIZED COST 11
TEMPORARY INVESTMENTS 2
REDEEMING SHARES 12
REPURCHASE AGREEMENTS 2
REDEMPTION IN KIND 12
PORTFOLIO TURNOVER 2
TAX STATUS 12
INVESTMENT LIMITATIONS 2
THE FUND'S TAX STATUS 12
INVESTMENT RISKS 4
SHAREHOLDER'S TAX STATUS 12
MANAGEMENT OF THE TRUST 5
TOTAL RETURN 13
FUND OWNERSHIP 8
YIELD 13
TRUSTEES' COMPENSATION 8
TAX-EQUIVALENT YIELD 13
TRUSTEE LIABILITY 9
TAX-EQUIVALENCY TABLE 13
INVESTMENT ADVISORY SERVICES 10
PERFORMANCE COMPARISONS 14
ADVISER TO THE FUND 10
APPENDIX 16
ADVISORY FEES 10
ADMINISTRATIVE SERVICES 10
GENERAL INFORMATION ABOUT THE FUND
Tennessee Tax-Free Bond Fund (the "Fund") is a portfolio in
The Planters Funds (the "Trust"). The Trust was established
as a Massachusetts business trust under a Declaration of
Trust dated May 14, 1993.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to provide current income
exempt from federal income tax and personal income taxes
imposed by the state of Tennessee and Tennessee
municipalities. The investment objective cannot be changed
without the approval of shareholders.
ACCEPTABLE INVESTMENTS
The Fund invests primarily in a portfolio of municipal
securities which are exempt from federal income tax and
personal income taxes imposed by the state of Tennessee and
Tennessee municipalities ("Tennessee Municipal Securities").
The municipal securities in which the Fund invests include
those issued by or on behalf of the state of Tennessee and
Tennessee municipalities as well as those issued by states,
territories, and possessions of the United States which are
exempt from federal income tax and personal income taxes
imposed by the state of Tennessee and Tennessee
municipalities.
Characteristics
The Tennessee Municipal Securities in which the Fund
invests have the characteristics set forth in the
prospectus. If ratings made by Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's Rating
Group ("S&P") or Fitch's Investors Service, Inc.
("Fitch's") change because of changes in those
organizations or in their rating systems, the Fund will
try to use comparable ratings as standards in
accordance with the investment policies described in
the Fund's prospectus.
Types of Acceptable Investments
Examples of Tennessee Municipal Securities include:
governmental lease certificates of participation
issued by state or municipal authorities where
payment is secured by installment payments for
equipment, buildings, or other facilities being
leased by the state or municipality;
municipal notes and tax-exempt commercial paper;
serial bonds;
tax anticipation notes sold to finance working
capital needs of municipalities in anticipation of
receiving taxes;
bond anticipation notes sold in anticipation of the
issuance of long-term bonds;
pre-refunded municipal bonds whose timely payment of
interest and principal is ensured by an escrow of
U.S. government obligations; and
general obligation bonds.
Participation Interests
The financial institutions from which the Fund
purchases participation interests frequently provide or
secure from another financial institution irrevocable
letters of credit or guarantees and give the Fund the
right to demand payment of the principal amounts of the
participation interests plus accrued interest on short
notice (usually within seven days).
Variable-Rate Municipal Securities
Variable interest rates generally reduce changes in the
market value of municipal securities from their
original purchase prices. Accordingly, as interest
rates decrease or increase, the potential for capital
appreciation or depreciation is less for variable-rate
municipal securities than for fixed-income obligations.
Many municipal securities with variable interest rates
purchased by the Fund are subject to repayment of
principal (usually within seven days) on the Fund's
demand. The terms of these variable-rate demand
instruments require payment of principal and accrued
interest from the issuer of the municipal obligations,
the issuer of the participation interests, or a
guarantor of either issuer.
Municipal Leases
In determining the liquidity of municipal lease
securities, the adviser, under the authority delegated
by the Board of Trustees ("Trustees"), will base its
determination on the following factors: (a) whether the
lease can be terminated by the lessee; (b) the
potential recovery, if any, from a sale of the leased
property upon termination of the lease; (c) the
lessee's general credit strength (e.g., its debt,
administrative, economic and financial characteristics,
and prospects); (d) the likelihood that the lessee will
discontinue appropriating funding for the leased
property because the property is no longer deemed
essential to its operations (e.g., the potential for an
event of nonappropriation); and (e) any credit
enhancement or legal recourse provided upon an event of
nonappropriation or other termination of the lease.
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. Settlement
dates may be a month or more after entering into these
transactions, and the market values of the securities
purchased may vary from the purchase prices. No fees or
other expenses, other than normal transaction costs, are
incurred. However, liquid assets of the Fund sufficient to
make payment for the securities to be purchased are
segregated 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.
TEMPORARY INVESTMENTS
From time to time, during periods of other than normal
market conditions, the Fund may invest in short-term tax-
exempt or taxable temporary investments.
REPURCHASE AGREEMENTS
The Fund requires its custodian to take possession of the
securities subject to repurchase agreements. 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 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 may only enter into
repurchase agreements with banks and other recognized
financial institutions such as broker/dealers which are
found by the Fund's adviser to be creditworthy pursuant to
guidelines established by the Trustees.
From time to time, such as when suitable Tennessee Municipal
Securities are not available, the Fund may invest a portion
of its assets in cash. Any portion of the Fund's assets
maintained in cash will reduce the amount of assets in
Tennessee Municipal Securities and thereby affect the Fund's
yield.
PORTFOLIO TURNOVER
The Fund may trade or dispose of portfolio securities as
considered necessary to meet its investment objective. It is
not anticipated that the portfolio trading engaged in by the
Fund will result in its annual rate of portfolio turnover
exceeding 100%. For the period from August 5, 1993 (start of
business) to July 31, 1994, the portfolio turnover rate was
30%. For the fiscal year ended July 31, 1995, the portfolio
turnover rate was 3%.
INVESTMENT LIMITATIONS
Selling Short and Buying on Margin
The Fund will not sell any securities short or purchase
any securities on margin but may obtain such short-term
credits as may be necessary for clearance of purchases
and sales of securities.
Issuing Senior Securities and Borrowing Money
The Fund will not issue senior securities except that
the Fund may borrow money in amounts up to one-third of
the value of its total assets, including the amounts
borrowed. The Fund will not borrow money for investment
leverage, but rather as a temporary extraordinary, or
emergency measure 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.
Pledging Assets
The Fund will not mortgage, pledge, or hypothecate its
assets except to secure permitted borrowings. In those
cases, it may mortgage, pledge, or hypothecate assets
having a market value not exceeding 10% of the value of
its total assets at the time of the pledge.
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 securities in accordance with its investment
objective, policies and limitations.
Investing in Commodities
The Fund will not buy or sell commodities, commodity
contracts, or commodity futures contracts.
Investing in Real Estate
The Fund will not purchase or sell real estate,
including limited partnership interests, although it
may invest in municipal bonds secured by real estate or
interests in real estate.
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. The Fund may, however, acquire
publicly or non-publicly issued municipal bonds or
temporary investments or enter into repurchase
agreements in accordance with its investment objective,
policies and limitations.
Dealing in Puts And Calls
The Fund will not buy or sell puts, calls, straddles,
spreads, or any combination of these.
Concentration of Investments
The Fund will not purchase securities if, as a result
of such purchase, 25% or more of the value of its total
assets would be invested in any one industry or in
industrial development bonds or other securities, the
interest upon which is paid from revenues of similar
types of projects. However, under other than normal
market conditions, the Fund may invest more than 25% of
the value of its assets in cash or cash items,
securities issued or guaranteed by the U.S. government,
its agencies or instrumentalities, or instruments
secured by these money market instruments, i.e.,
repurchase agreements.
The above investment limitations cannot be changed without
shareholder approval. The following limitations, however,
may be changed by the Trustees without shareholder approval.
Shareholders will be notified before any material change in
these limitations becomes effective.
Investing in Issuers Whose Securities are Owned by
Officers and Trustees of the Fund
The Fund will not purchase or retain the securities of
any issuer if the officers and Trustees of the Fund or
its investment adviser, owning individually more than
1/2 of 1% of the issuer's securities, together own more
than 5% of the issuer's securities.
Investing in Restricted Securities
The Fund will not invest more than 10% of its total
assets in securities subject to restrictions on resale
under the Securities Act of 1933, except for commercial
paper issued under Section 4(2) of the Securities Act
of 1933 and certain other restricted securities which
meet the criteria for liquidity as established by the
Board of Trustees.
Investing in Illiquid Securities
The Fund will not invest more than 15% of its net
assets in illiquid obligations, including repurchase
agreements providing for settlement in more than seven
days after notice, and certain restricted securities
not determined by the Trustees to be liquid, including
certain municipal leases.
Investing in New Issuers
The Fund will not invest more than 5% of the value of
its total assets in industrial development bonds where
the principal and interest are the responsibility of
companies (or guarantors, where applicable) with less
than three years of continuous operations, including
the operation of any predecessor.
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 securities of issuers
which invest in or sponsor such programs.
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.
For purposes of its policies and limitations, the Fund
considers certificates of deposit and demand and time
deposits issued by a U.S. branch of a domestic bank or
savings and loan having capital, surplus, and undivided
profits in excess of $100,000,000 at the time of
investment to be cash items. Cash items may include
obligations such as:
certificates of deposit (including those issued by
domestic and foreign branches of FDIC insured banks);
obligations issued or guaranteed as to principal and
interest by the U.S. government or any of its
agencies or instrumentalities; and
repurchase agreements.
INVESTMENT RISKS
The Fund's performance can be expected to be closely tied to
the prevailing economic conditions of the state of Tennessee
as a whole, its particular geographic regions, and the
industries located within the state.
Traditionally divided into three geographic regions, the
State's economy has historically been dominated by
agriculture in the west, manufacturing in the east, and
government in the middle region. Though trade and services
have replaced agriculture in terms of total output,
manufacturing continues to be the largest single sector of
the economy. While the Gross State Product of Tennessee was
in excess of $100 billion in 1991 and the state placed 20th
in national rank, manufacturing comprised 24% of total
production in that year. The recent decision by Saturn and
Nissan to locate automobile production facilities in the
state suggests that manufacturing, with its inherent
susceptibility to economic downturns, will continue to
dominate.
Tennessee's economy experienced many of the problems
associated with the national economy during the past
recession. Though it consistently remained below the
national average, the state's unemployment rate rose
significantly during the prior recessionary period. Also,
overbuilding of commercial and residential properties in
prior years caused the state to experience some difficulties
with declining real estate values.
Along with the national economy, Tennessee has recently
experienced a significant recovery in economic activity.
Although moderate rates of economic growth in past
recoveries along with a steady influx of transplant
corporations have helped the state avoid the dramatic "boom
and bust" cycle experienced by many sunbelt states, the
recent recession did put pressure on governmental receipts
and outlays.
The constitution of the state requires a balanced budget.
This constraint along with relatively low debt and
expenditure per capita ratios has helped the state maintain
its current long term bond rating of AAA by Standard and
Poor's Rating Group and Aaa by Moody's Investors Service
Inc. While Tennessee is one of only nine states which have
such ratings, the ability of the state to maintain this
rating given the current economic and political environment
is by no means certain.
MANAGEMENT OF THE TRUST
Officers and Trustees are listed with their addresses,
present positions with Tennessee Tax-Free Bond Fund, and
principal occupations during the past five years.
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 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.
Edward C. Gonzales *
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President, Treasurer, and Trustee
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.
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.
J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA
Birthdate: April 11, 1949
Executive Vice President
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 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.
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.
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.
Judith J. Mackin
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 30, 1960
Vice President and Assistant Treasurer
Vice President, Federated Administrative Services; Vice
President and Assistant Treasurer of some of the Funds.
* This Trustee is deemed to be an "interested person"
as defined in the Investment Company Act of 1940, as
amended.
@ Member of the Executive Committee. The Executive
Committee of the Board of Trustees handles the
responsibilities of the Board of Trustees between
meetings of the Board.
FUND OWNERSHIP
Officers and Trustees own less than 1% of the Fund's
outstanding shares.
As of September 6, 1995, the following shareholder of record
owned 5% or more of the outstanding shares of the Fund:
National Financial Services Corp. (as record owner holding
shares for its clients), New York, New York owned
approximately 253,161 shares (7.45%), Union Planters
National Bank, Memphis, Tennessee, acting in various
capacities for numerous accounts owned approximately
3,088,907 shares (90.96%).
TRUSTEES' COMPENSATION
AGGREGATE
NAME, COMPENSATION
POSITION WITH FROM
TRUST TRUST *#
John F. Donahue $0
Trustee
Thomas G. Bigley $780
Trustee
John T. Conroy, Jr. $857
Trustee
William J. Copeland $857
Trustee
James E. Dowd $857
Trustee
Lawrence D. Ellis, M.D. $780
Trustee
Edward L. Flaherty, Jr. $857
Trustee
Edward C. Gonzales $0
Trustee
Peter E. Madden $630
Trustee
Gregor F. Meyer $780
Trustee
John E. Murray, Jr. $520
Trustee
Wesley W. Posvar $780
Trustee
Marjorie P. Smuts $780
Trustee
*Information is furnished for the fiscal year ended July 31,
1995.
#The aggregate compensation is provided for the Trust which
is comprised of one portfolio. The Fund is the only
investment company in the Fund Complex.
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; Cash Trust; Series II; Cash Trust Series, Inc.;
DG Investor Series; Edward D. Jones & Co. Daily Passport
Cash Trust; Federated ARMs Fund; Federated Exchange Fund,
Ltd.; Federated GNMA Trust; Federated Government Trust;
Federated Growth Trust; Federated High Yield Trust;
Federated Income Securities Trust; Federated Income Trust;
Federated 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; and
World Investment Series, Inc.
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.
INVESTMENT ADVISORY SERVICES
ADVISER TO THE FUND
The Fund's investment adviser is Union Planters National
Bank ("Union Planters" or the "adviser"). Union Planters is
a wholly-owned subsidiary of Union Planters Corporation, a
multi-bank holding company headquartered in Memphis,
Tennessee.
Because of the internal controls maintained by Union
Planters to restrict the flow of non-public information,
Fund investments are typically made without any knowledge of
Union Planters National Bank or its affiliates' lending
relationships with an issuer. The investment adviser shall
not 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 it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its
contract with the Fund.
From time to time, to the extent consistent with the
objective, policies and restrictions of the Fund, the Fund
may invest in securities of issuers with which the
investment adviser has a lending relationship.
ADVISORY FEES
For its advisory services, Union Planters receives an annual
investment advisory fee as described in the prospectus.
For the period from August 5, 1993, (start of business) to
July 31, 1994, the investment adviser earned advisory fees
of $249,876, of which $237,172 was voluntarily waived. For
the fiscal year ended July 31, 1995, the investment adviser
earned advisory fees of $284,526, all of which was
voluntarily waived.
State Expense Limitations
The investment adviser has undertaken to comply with
the expense limitations 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 investment advisory
fee, but not including brokerage commissions, interest,
taxes, and extraordinary expenses) exceed 2.5% per year
of the first $30 million of average net assets, 2% per
year of the next $70 million of average net assets, and
1.5% per year of the remaining average net assets, the
investment adviser will reimburse the Trust for its
expenses over the limitation.
If the Fund's monthly projected operating expenses
exceed this expense limitation, the investment advisory
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 investment adviser will be limited, in any single
fiscal year, by the amount of the investment advisory
fee. This arrangement is not part of the advisory
contract and may be amended or rescinded in the future.
ADMINISTRATIVE SERVICES
Federated Administrative Services, a subsidiary of Federated
Investors, provides administrative personnel and services to
the Fund as described in the prospectus. For the fiscal year
ended July 31, 1995, Federated Administrative Services
earned $120,001, of which $75,000 was voluntarily waived.
(Prior to March 1, 1994, Federated Administrative Services,
Inc., also a subsidiary of Federated Investors, served as
the Trust's administrator. For purposes of this Statement of
Additonal Information, Federated Administrative Services and
Federated Administrative Services, Inc., may hereinafter
collectively be referred to as the "Administrators"). For
the period from August 5, 1993 (start of business) to July
31, 1994, the Administrators earned $110,137, of which
$53,269 was voluntarily waived.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
Federated Services Company serves as transfer agent and
dividend disbursing agent for the Fund. The fee paid to the
transfer agent is based upon the size, type and number of
accounts and transactions made by shareholders.
Federated Services Company also maintains the Fund's
accounting records. The fee paid for this service is based
upon the level of the Fund's average net assets for the
period plus out-of-pocket expenses.
BROKERAGE TRANSACTIONS
When selecting brokers and dealers to handle the purchase
and sale of portfolio instruments, the investment adviser
looks for prompt execution of the order at a favorable
price. In working with dealers, the investment adviser will
generally use those which are recognized dealers in specific
portfolio instruments, except when a better price and
execution of the order can be obtained elsewhere. The
investment adviser makes decisions on portfolio transactions
and selects brokers and dealers subject to review by the
Trustees.
The investment adviser may select brokers and dealers who
offer brokerage and research services. These services may be
furnished directly to the Fund or to the investment adviser
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.
The investment adviser and its affiliates exercise
reasonable business judgment in selecting brokers who offer
brokerage and research services to execute securities
transactions. They determine in good faith that commissions
charged by such persons are reasonable in relationship to
the value of the brokerage and research services provided.
Research services provided by brokers may be used by the
investment adviser and other accounts. To the extent that
receipt of these services may supplant services for which
the investment adviser or its affiliates might otherwise
have paid, it would tend to reduce their expenses.
From August 5, 1993 (start of business) to July 31, 1994,
the Fund paid $650 in commissions on brokerage transactions.
For the fiscal year ended July 31, 1995, the Fund paid no
commissions on brokerage transactions.
PURCHASING SHARES
Shares of the Fund are sold at their net asset value with a
sales load on days the New York Stock Exchange and Federal
Reserve Wire System are open for business. The procedure for
purchasing shares is explained in the prospectus under
"Investing in the Fund."
DETERMINING NET ASSET VALUE
Net asset value generally changes each day. The days on
which net asset value is calculated for the Fund are
described in the prospectus.
VALUING MUNICIPAL BONDS
The Trustees use an independent pricing service to value
municipal bonds. The independent pricing service takes into
consideration yield, stability, risk, quality, coupon rate,
maturity, type of issue, trading characteristics, special
circumstances of a security or trading market, and any other
factors or market data it considers relevant in determining
valuations for normal institutional size trading units of
debt securities, and does not rely exclusively on quoted
prices.
USE OF AMORTIZED COST
The Trustees have decided that the fair value of debt
securities authorized to be purchased by the Fund with
remaining maturities of 60 days or less at the time of
purchase shall be their amortized cost value, unless the
particular circumstances of the security indicate otherwise.
Under this method, portfolio instruments and assets are
valued at the acquisition cost as adjusted for amortization
of premium or accumulation of discount rather than at
current market value. The Executive Committee continually
assesses this method of valuation and recommends changes
where necessary to assure that the Fund's portfolio
instruments are valued at their fair value as determined in
good faith by the Trustees.
REDEEMING SHARES
Shares are redeemed at the next computed net asset value
after the Fund receives the redemption request. Redemption
procedures are explained in the prospectus under "Redeeming
Shares." Although the Fund does not charge for telephone
redemptions, it reserves the right to charge a fee for the
cost of wire-transferred redemptions of less than $5,000.
REDEMPTION IN KIND
The Fund has elected to be governed by Rule 18f-1 of the
Investment Company Act of 1940, as amended 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.
Any redemption beyond this amount will also be in cash
unless the Trustees determine that payments should be in
kind. In such a case, the Fund will pay all or a portion of
the remainder of the redemption in portfolio instruments,
valued in the same way as the Fund determines net asset
value. The portfolio instruments will be selected in a
manner that the Trustees deem fair and equitable. To the
extent available, such securities will be readily
marketable.
Redemption in kind is not as liquid as a cash redemption. If
redemption is made in kind, shareholders receiving their
securities could receive less than the redemption value of
their securities when they are sold or mature and could
incur certain transactions costs if they are sold.
TAX STATUS
THE FUND'S TAX STATUS
The Fund will pay no federal income tax because it expects
to meet the requirements of Subchapter M of the Internal
Revenue Code, as amended, 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:
derive at least 90% of its gross income from dividends,
interest, and gains from the sale of securities;
derive less than 30% of its gross income from the sale
of securities held less than three months;
invest in securities within certain statutory limits;
and
distribute to its shareholders at least 90% of its net
income earned during the year.
SHAREHOLDER'S TAX STATUS
No portion of any income dividend paid by the Fund is
eligible for the dividends received deduction available to
corporations.
Capital Gains
Capital gains or losses may be realized by the Fund on
the sale of portfolio securities. Sales would generally
be made because of:
the availability of higher relative yields;
differentials in market values;
new investment opportunities;
changes in creditworthiness of an issuer; or
an attempt to preserve gains or limit losses.
Distributions of long-term capital gains are taxed as such,
whether they are taken in cash or reinvested, and regardless
of the length of time that the shareholder has owned shares.
Any loss by a shareholder on shares held for less than six
months and sold after a capital gains distribution will be
treated as a long-term capital loss to the extent of the
capital gains distribution. Distributions of short-term
capital gains, if any, are taxed as ordinary income.
TOTAL RETURN
The average annual total returns for the Fund for the fiscal
year ended July 31,1995, and for the period from August 30,
1993 (date of initial public investment) through July 31,
1994, were 3.25% and 2.31%, respectively. These returns
assume the maximum sales load applicable during the period
(4.00%).
The average annual total returns for the Fund for the fiscal
year ended July 31,1995, and for the period from August 30,
1993 (date of initial public investment) through July 31,
1994, assuming a maximum sales load of 2.00% (the maximum
sales load beginning October 1, 1995) were 5.43% and 3.44%,
respectively.
The average annual total return for 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, less any applicable
sales load, adjusted over the period by any additional
shares, assuming the monthly reinvestment of all dividends
and distributions.
YIELD
The Fund's yield for the thirty-day period ended July 31,
1995, was 4.56% based on offering price assuming a 4.00%
maximun sales load. The Fund's yield for the thirty-day
period ended July 31, 1995, was 4.66% based on offering
price assuming a 2.00% sales load.
The yield for 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 maximum offering price per share of the
Fund on the last day of the period. This value is then
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.
TAX-EQUIVALENT YIELD
The Fund's tax-equivalent yield for the thirty-day period
ended July 31, 1995 was 6.91% based on offering price
assuming a maximum sales load of 4.00%. The Funds' tax-
equivalent yield for the thirty-day period ended July 31,
1995 was 7.06% based on offering price assuming a sales load
of 2.00%.
The tax-equivalent yield of the Fund is calculated similarly
to the yield, but is adjusted to reflect the taxable yield
that the Fund would have had to earn to equal its actual
yield, assuming a state and federal combined tax rate of
34%, and assuming that income is 100% tax-exempt.
TAX-EQUIVALENCY TABLE
The Fund may also use a tax-equivalency table in advertising
and sales literature. The interest earned by the municipal
obligations in the Fund's portfolio generally remains free
from federal regular income tax, and often is free from
taxes imposed by the state of Tennessee and Tennessee
municipalities.* As the table below indicates, a "tax-free"
investment is an attractive choice for investors,
particularly in times of narrow spreads between tax-free and
taxable yields.
TAXABLE YIELD EQUIVALENT FOR 1995
State of Tennessee
TAX BRACKET:
FEDERAL 15.00% 28.00% 31.00% 36.00% 39.60%
COMBINED
FEDERAL
AND STATE21.00% 34.00% 37.00% 42.00% 45.60%
JOINT $1- $39,001- $94,251- $143,601- OVER
RETURN 39,000 94,250 143,600 256,500 256,500
SINGLE $1- $23,351- $56,551- $117,951- OVER
RETURN 23,350 56,550 117,950 256,500 256,500
Tax-Exempt
Yield Taxable Yield Equivalent
1.50% 1.90% 2.27% 2.38% 2.59%
2.76%
2.00% 2.53% 3.03% 3.17% 3.45%
3.68%
2.50% 3.16% 3.79% 3.97% 4.31%
4.60%
3.00% 3.80% 4.55% 4.76% 5.17%
5.51%
3.50% 4.43% 5.30% 5.56% 6.03%
6.43%
4.00% 5.06% 6.06% 6.35% 6.90%
7.35%
4.50% 5.70% 6.82% 7.14% 7.76%
8.27%
5.00% 6.33% 7.58% 7.94% 8.62%
9.19%
5.50% 6.96% 8.33% 8.73% 9.48%
10.11%
6.00% 7.59% 9.09% 9.52% 10.34%
11.03%
Note: The maximum marginal tax rate for each bracket
was used in calculating the taxable yield equivalent.
Furthermore, additional state and local taxes paid on
comparable taxable investments were not used to increase
federal deductions.
The chart above is for illustrative purposes only. It
is not an indicator of past or future performance of
Fund shares.
* Some portion of the Fund's income may be subject to
the federal alternative minimum tax and state and local
income taxes.
PERFORMANCE COMPARISONS
The performance of the Fund depends upon such variables as:
portfolio quality;
average portfolio maturity;
type of instruments in which the portfolio is invested;
changes in interest rates and market value of portfolio
securities;
changes in the Fund's expenses; and
various 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 as
described above.
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 comparisons 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:
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.
MORNINGSTAR, INC., an independent rating service, is
the publisher of the bi-weekly MUTUAL FUND VALUES.
MUTUAL FUND VALUES rates more than 1,000 NASDAQ-listed
mutual funds of all types, according to their risk-
adjusted returns. The maximum rating is five stars, and
ratings are effective for two weeks.
Advertisements and other sales literature for the Fund may
quote total returns which are calculated on non-standardized
base periods. The total returns represent the historic
change in the value of an investment in the Fund based on
monthly reinvestment of dividends over a specified period of
time.
Advertisements may quote performance information which does
not reflect the effect of the sales load.
APPENDIX
STANDARD AND POOR'S RATINGS GROUP ("S&P") MUNICIPAL BOND
RATINGS
AAA--Debt rated "AAA" has the highest rating assigned by
S&P. Capacity to pay interest and repay principal is
extremely strong.
AA--Debt rated "AA" has a very strong capacity to pay
interest and repay principal and differs from the higher
rated issues only in small degree.
A--Debt rated "A" has a strong capacity to pay interest and
repay principal although it is somewhat more susceptible to
the adverse effects of changes in circumstances and economic
conditions than debt in higher rated categories.
BBB--Debt rated "BBB" is regarded as having an adequate
capacity to pay interest and repay principal. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and
repay principal for debt in this category than in higher
rated categories.
NR--Indicates that no public rating has been requested, that
there is insufficient information on which to base a rating,
or that S&P does not rate a particular type of obligation as
a matter of policy.
Plus (+) or minus (-): Ratings may be modified by the
addition of a plus or minus sign to show relative standing
within the major rating categories.
MOODY'S INVESTORS SERVICE, INC., ("MOODY'S") MUNICIPAL BOND
RATINGS
AAA--Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt edged." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various
protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
AA--Bonds which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they
comprise what are generally known as high grade bonds. They
are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa
securities.
A--Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper medium grade
obligations. Factors giving security to principal and
interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the
future.
BAA--Bonds which are rated Baa are considered as medium
grade obligations, (i.e., they are neither highly protected
nor poorly secured). Interest payments and principal
security appear adequate for the present but certain
protective elements may be lacking or may be
characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and
in fact have speculative characteristics as well.
NR--Not rated by Moody's.
Moody's applies numerical modifiers, 1, 2 and 3 in its
generic rating category; the modifier 1 indicates that the
security ranks in the higher end of its generic rating
category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.
FITCH INVESTORS SERVICE, INC., ("FITCH") LONG-TERM DEBT
RATINGS
AAA--Bonds considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally
strong ability to pay interest and repay principal, which is
unlikely to be affected by reasonably foreseeable events.
AA--Bonds considered to be investment grade and of very high
quality. The obligor's ability to pay interest and repay
principal is very strong, although not quite as strong as
bonds rated "AAA". Because bonds rated in the "AAA" and "AA"
categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is
generally rated F-1+.
A--Bonds considered to be investment grade and of high
credit quality. The obligor's ability to pay interest and
repay principal is considered strong, but may be more
vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB--Bonds considered to be investment grade and of
satisfactory credit quality. The obligor's ability to pay
interest and repay principal is considered to be adequate.
Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these
bonds, and therefore, impair timely payment. The likelihood
that the ratings of these bonds will fall below investment
grade is higher than for bonds with higher ratings.
NR--NR indicates that Fitch does not rate the specific
issue.
Plus (+) or minus (-): Plus and minus signs are used with a
rating symbol to indicate the relative position of a credit
within the rating category. Plus and minus signs, however,
are not used in the "AAA" category.
STANDARD AND POOR'S RATINGS GROUP MUNICIPAL NOTE RATINGS
SP-1--Very strong or strong capacity to pay principal and
interest. Those issues determined to possess overwhelming
safety charactertics will be given a plus sign (+)
designation.
SP-2--Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC., SHORT-TERM LOAN RATINGS
MIG1/VMIG1--This designation denotes best quality. There is
present strong protection by established cash flows,
superior liquidity support or demonstrated broadbased access
to the market for refinancing.
MIG2/VMIG2--This designation denotes high quality. Margins
of protection are ample although not so large as in the
preceding group.
FITCH INVESTORS SERVICE, INC. SHORT-TERM DEBT RATINGS
F-1+--Exceptionally Strong Credit Quality. Issues assigned
this rating are regarded as having the strongest degree of
assurance for timely payment.
F-1--Very Strong Credit Quality. Issues assigned this rating
reflect an assurance of timely payment only slightly less in
degree than issues rated F-1+.
F-2--Good Credit Quality. Issues carrying this rating have a
satisfactory degree of assurance for timely payment, but the
margin of safety is not as great as the F-1+ and F-1
categories.
STANDARD AND POOR'S RATINGS GROUP COMMERCIAL PAPER RATINGS
A-1--This highest category designation indicates that the
degree of safety regarding timely payment is strong. Those
issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+)
designation.
A-2--Capacity for timely payment on issues with this
designation is satisfactory. However, the relative degree of
safety is not as high as for issues designated A-1.
MOODY'S INVESTORS SERVICE, INC., COMMERCIAL PAPER RATINGS
PRIME-1--Issuers rated PRIME-1 (or related supporting
institutions) have a superior capacity for repayment of
short-term promissory obligations. PRIME-1 repayment
capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established
industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate
reliance on debt and ample asset protection.
Broad margins in earning coverage of fixed financial
charges and high internal cash generation.
Well-established access to a range of financial markets
and assured sources of alternate liquidity.
PRIME-2--Issuers rated PRIME-2 (or related supporting
institutions) have a strong capacity for repayment of short-
term promissory obligations. This will normally be evidenced
by many of the characteristics cited above, but to a lesser
degree. Earnings trends and coverage ratios, while sound,
will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity
is maintained.
CUSIP 727426108
3072709B (9/95)
PART C. OTHER INFORMATION
Item 24. Financial Statements and
Exhibits:
(a) Financial Statements.
(Filed in Part A)
(b) Exhibits:
(1) Copy of Declaration of
Trust of the Registrant (2);
(2) Copy of By-Laws of the
Registrant (2);
(3) Not applicable;
(4) Copy of Specimen
Certificate for Shares of Beneficial Interest
of the Registrant (2);
(5) Conformed Copy of
Investment Advisory Contract of the
Registrant (3);
(6) (i) Conformed Copy of
the Distributor's Contract/
Administrative Support and
Distributor's Contract of the
Registrant;(3)
(ii) Conformed Copy
of Administrative Services
Agreement;(3)
(7) Not applicable;
(8) Conformed copy of
Custodian Agreement of the Registrant;(4)
(9) Conformed copy of
Transfer Agency and Service Agreement of the
Registrant; (3)
(10) (i) Copy of Opinion and Consent of
Counsel as to legality of shares being
registered (2);
(ii) Opinion and Consent of Special
Counsel (2);
(11)Conformed Copy of
Consent of Independent Public
Auditors;+
(12) Not applicable;
(13) Copy of Initial Capital
Understanding (2);
(14) Not applicable;
(15) Not applicable;
(16) Schedule for Computation of Fund
Performance Data;(3)
(17) Copy of Financial Data Schedule;+
(18) Not Applicable;
(19) Power of Attorney;+
___________________
+ All exhibits have been filed electronically.
(2) Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 on Form N-1A filed August 11,
1993. (File Nos. 33-49701 and 811-7065)
(3) Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 1 on Form N1-A filed March 1, 1994.
(File Nos. 33-49701 and 811-7065)
(4) Response is incorporated by reference to Registrant's Post-
Effective Amendment No. 2 on Form N1-A filed September 29,
1994. (File Nos. 33-49701 and 811-7065)
Item 25. Persons Controlled by or Under
Common Control with
Registrant:
None.
Item 26. Number of Holders of
Securities:
Number of
Record Holders
Title of Class (as of September 6, 1995)
Tennesse Tax-Free Bond Fund
Shares of Beneficial Interest 24
(no par value)
Item 27. Indemnification: (2)
Item 28. Business and Other Connections
of Investment Adviser:
(a) Founded in 1869, Union Planters National
Bank, a national banking association, is a wholly-
owned subsidiary of Union Planters Corporation (the
"Corporation") a multi-bank holding company
headquartered in Memphis, Tennessee. Union
Planters is a commercial bank offering a wide range
of banking services to its customers. The adviser
has been managing trust assets for over 80 years.
As of December 31, 1994, the Trust Group of Union
Planters had approximately $1 billion under
administration, of which it had investment
discretion over approximately $625 million.
(b)
Other Substantial
Position with Business, Profession,
Name the Adviser Vocation or
Employment
Benjamin W. Rawlins, Jr. Chairman of the
Chairman & Chief
Exec.
Board, Chief
Executive Officer,
Union Planters
Officer and Director
Corporation
Kenneth W. Plunk President and
Director
Robert L. Booth, Jr. Executive Vice
President
Dianne K. Stigall Executive Vice
President
John D. Temple Executive Vice
President
Luke Yancey, III Executive Vice
President
Peter G. Williston Secretary
Jackson W. Moore Director President,
Union Planters
Corporation
Albert M. Austin Director Chairman,
Cannon,
Austin and
Cannon, Inc.
2. Response is incorporated by reference to Registrant's Pre-
Effective Amendment No. 1 on Form N-1A filed on August 11,
1993. (File Nos. 33-49701 and 811-7065)
George W. Bryan Director Senior
Vice President, Sara
Lee Corporation
Hanford F. Farell, Jr. Director Chairman,
Farrell-Cooper
Mining Co.
Dr. Alvin O. Jackson Director Senior
Pastor, Mississippi
Boulevard Christian
Church
Parnell S. Lewis, Jr. Director President,
Anderson Tilly Co.
C.J. Lowrance, III Director President,
Lowrance Brothers &
Company, Inc.
C. Penn Owen, Jr. Director Managing
Partner, Bowdre
Place
Dr. V. Lane Rawlins Director President,
University of
Memphis
Donald F. Schuppe Director Retired
Leslie M. Stratton, III Director President,
Leslie M. Stratton
Co.
Richard A. Trippeer, Jr. Director President,
R.A. Trippeer, Inc.
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: Alexander Hamilton Funds; 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
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
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. Fitzherald 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
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
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 30. Location of Accounts and Records: All accounts and
records required to be maintained by Section 31(a) of
the Investment Company Act of 1940 and Rules 31a-1
through 31a-3 promulgated thereunder are maintained
at one of the following locations:
Registrant Federated Investors Tower
Pittsburgh, PA 15222-3779
Federated Services Company Federated Investors Tower
Transfer Agent, Dividend Pittsburgh, PA 15222-3779
Disbursing Agent, and Portfolio
Recordkeeper
Federated Administrative Services Federated Investors Tower
Administrator Pittsburgh, PA 15222-3779
State Street Bank and Trust Company P.O. Box 8604
Custodian Boston, MA 02266-8604
Union Planters National Bank P.O. Box 387
Adviser Memphis, Tennessee 38147
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,
THE PLANTERS FUNDS certifies that it meets all of the
requirements for effectiveness of the Amendment to its
Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and 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 26th day
of September, 1995.
THE PLANTERS FUNDS
BY: /s/Gail Cagney
Gail Cagney, Assistant Secretary
Attorney in Fact for John F. Donahue
September 26, 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/Gail Cagney
Gail Cagney Attorney In Fact September 26, 1995
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue* Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales* President, Treasurer and Trustee
(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
* By Power of Attorney
Exhibit 11 Under N1-A
Exhibit 23 Under Item 601/Reg SK
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting
part of this Registration Statement on Form N1-A of our report
dated September 7, 1995, relating to the financial statements
and financial highlights of the Tennessee Tax-Free Bond Fund
(A Portfolio of the Planters Fund) included in such
Prospectus. We also consent to the reference to us under the
heading "Independent Auditors" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
September 25, 1995
Exhibit 19 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 THE PLANTERS FUNDS. 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 thterewith, 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 thereiwth, 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 September 11, 1995
John F. Donahue and Trustee
(Chief Executive Officer)
/s/ Edward C. Gonzales President and Treasurer September 11, 1995
Edward C. Gonzales and Trustee
(Principal Financial and
Accounting Officer)
/s/ Thomas G. Bigley Trustee September 11, 1995
Thomas G. Bigley
/s/ John T. Conroy, Jr. Trustee September 11, 1995
John T. Conroy, Jr.
/s/ William J. Copeland Trustee September 11, 1995
William J. Copeland
/s/ James E. Dowd Trustee September 11, 1995
James E. Dowd
/s/ Lawrence D. Ellis, M.D. Trustee September 11, 1995
Lawrence D. Ellis, M.D.
/s/ Edward L. Flaherty, Jr. Trustee September 11, 1995
Edward L. Flaherty, Jr.
/s/ Peter E. Madden Trustee September 11, 1995
Peter E. Madden
/s/ Gregor F. Meyer Trustee September 11, 1995
Gregor F. Meyer
/s/ John E. Murray Trustee September 11, 1995
John E. Murray
/s/ Wesley W. Posvar Trustee September 11, 1995
Wesley W. Posvar
/s/ Marjorie P. Smuts Trustee September 11, 1995
Marjorie P. Smuts
Sworn to and subscribed before me this 11th day of September, 1995.
/s/ Marie M. Hamm
Notary Public
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> Tennessee Tax-Free Bond Fund
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> Jul-31-1995
<PERIOD-END> Jul-31-1995
<INVESTMENTS-AT-COST> 35,734,455
<INVESTMENTS-AT-VALUE> 35,395,736
<RECEIVABLES> 509,360
<ASSETS-OTHER> 19,592
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 35,924,688
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 37,168
<TOTAL-LIABILITIES> 37,168
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36,382,737
<SHARES-COMMON-STOCK> 3,430,418
<SHARES-COMMON-PRIOR> 4,148,383
<ACCUMULATED-NII-CURRENT> 108,684
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (265,182)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (338,719)
<NET-ASSETS> 35,887,520
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 2,103,592
<OTHER-INCOME> 0
<EXPENSES-NET> 231,529
<NET-INVESTMENT-INCOME> 1,872,063
<REALIZED-GAINS-CURRENT> (215,683)
<APPREC-INCREASE-CURRENT> 1,023,037
<NET-CHANGE-FROM-OPS> 2,679,417
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,887,110
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 333,883
<NUMBER-OF-SHARES-REDEEMED> 1,066,291
<SHARES-REINVESTED> 14,443
<NET-CHANGE-IN-ASSETS> (6,512,203)
<ACCUMULATED-NII-PRIOR> 123,731
<ACCUMULATED-GAINS-PRIOR> (49,499)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 284,526
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 591,055
<AVERAGE-NET-ASSETS> 37,924,702
<PER-SHARE-NAV-BEGIN> 10.220
<PER-SHARE-NII> 0.510
<PER-SHARE-GAIN-APPREC> 0.240
<PER-SHARE-DIVIDEND> 0.510
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.460
<EXPENSE-RATIO> 61
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.000
</TABLE>
