FEDERATED
MANAGED INCOME
FUND
[LOGO]
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SEMI-ANNUAL REPORT
TO SHAREHOLDERS
Federated Managed Income Fund
is part of
Managed Series Trust,
a lifecycle investing program
from Federated Investors
MAY 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
56166K206
56166K107
G00517-01
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the first Semi-Annual Report to Shareholders for
Federated Managed Income Fund. The report covers the six-month period ended May
31, 1995, and includes the fund's Investment Review, Portfolio of Investments
and Financial Statements. In addition, separate Financial Highlights tables have
been included for both classes of shares of the fund ("Institutional Shares" and
"Select Shares").
A bond market rally in 1995 was good news for the fund. Heavily weighted in U.S.
Treasury securities, Federated Managed Income Fund took advantage of the
tendency for long-term U.S. government bonds to offer potentially good returns
during an economic slowdown, when bond yields often fall and their prices rise.
The fund's net assets increased from $37.9 million on November 30, 1994 to $45.2
million on May 31, 1995. The fund's net asset value increased from $9.76 to
$10.36 per share for Institutional Shares and from $9.77 to $10.36 per share for
Select Shares. The fund paid dividends of $.30 per share for Institutional
Shares and $.27 for Select Shares over the six month period.
Thank you for your confidence in Federated Managed Income Fund. As always, we
invite your comments and suggestions.
Sincerely,
Glen R. Johnson
President
July 15, 1995
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Financial markets were strong in the first half of 1995, and Federated Managed
Income Fund participated in the rallies. For the six months ended May 31, 1995,
an investor in Institutional Shares experienced a total return of 9.43%*, while
an investor in Select Shares received a total return of 8.90%*. The strong
financial markets were driven by changing investor expectations about economic
growth. Last year investors were concerned that the economy was on the verge of
overheating. They feared that only very high interest rates could restrain
economic growth and prevent an outburst of inflation. As growth moderated in
early 1995, investors began to realize that short-term interest rates had risen
sufficiently to brake the economy, and further near-term restraint was
unnecessary. Once investors realized that the economy was decelerating, the bond
market rally gathered strength, providing attractive returns to fixed income
investors.
The investment philosophy for the fund is based on the belief that over time an
investor with a diversified portfolio will achieve better returns with the same
risk or the same returns with lower risk than an investor in a single asset
class. By placing limits on the weights for each asset class in the portfolio,
the investment policy ensures proper diversification of the portfolio. Fund
management also believes that investors with diversified portfolios will do even
better if they hold above average positions in asset classes offering good
relative value. Therefore, fund management focuses on value in setting
allocations among the asset classes.
Unfortunately, strong rallies in the stock and bond markets reduced the
underlying value in both markets. The cornerstone of a value investment
philosophy is the belief that investors should take risks only when they are
paid to take those risks. Once the price becomes too rich in relationship to the
underlying fundamentals, an investor is no longer being paid to take risk and a
reduction in the exposure to that asset class is appropriate. Management of the
Federated Managed Income Fund believes that this is the case for both stocks and
bonds and, therefore, moved to defensive positions in both asset classes late in
the second quarter.
Since bond prices fall when interest rates rise, and 85% of the fund's net
assets are invested in bonds, controlling exposure to interest rate risk is
important to fund performance. As part of its risk control framework, the
duration of the bond portfolio is limited to the range of 2.0 to 4.0 years. This
duration range means that the sensitivity of the bond portfolio to interest rate
changes is less than the sensitivity of intermediate maturity bonds. Although
bonds began a bear market in October 1993, the fund adopted a more constructive
outlook on interest rates last summer, expecting that interest rates would fall.
Interest rates have declined substantially since then, as bonds enjoyed a very
strong countertrend rally. However, by late May, the countertrend bond rally had
proceeded far enough to restore risk to the bond market. Management believes
that further gains in bonds are likely to be limited, especially in comparison
to the potential losses once the bear market resumes. Therefore, the bond
duration of the portfolio was reduced to 2.5 years, a below average, but not
minimum, level. The fixed income portion of the fund is dominated by government
bonds, both Treasury bonds and mortgage-backed securities.
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
Modest positions are also held in investment grade corporates (10%), while only
minor amounts are held in high yield and foreign government bonds.
As fund management expected, the drop in long-term bond yields caused the stock
market to move to new all-time highs this year. Since the inception of the fund,
a mid-point allocation to equity reserves has been held and invested in
short-term debt. However, by early June, the severe overvaluation of the market
caused fund management to adopt a defensive position in the equity market. This
change involves raising equity reserves to 5.0%, with the increased allocation
coming from a reduction in the allocation to U.S. large company stocks. This
defensive position reflects management's belief that the equity market is
vulnerable to either stronger or weaker economic growth. While a stronger growth
environment would ease market concerns about recession, it would also lead to
renewed upward pressure on interest rates, which would in turn pressure stock
prices. In contrast, a weaker economy would put severe pressure on corporate
profits, which would also pressure stock prices. Either way, an overvalued stock
market is vulnerable and a 5% equity reserve position is appropriate. Utilities
are a substantial portion of the fund, because that sector has an above average
yield in comparison to industrial stocks at this time, indicating good value in
the utility sector.
FEDERATED MANAGED INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--12.4%
- -----------------------------------------------------------------------------------
LARGE COMPANY--5.5%
----------------------------------------------------------------
CONSUMER DURABLES--0.4%
----------------------------------------------------------------
1,000 Eastman Kodak Co. $ 60,375
----------------------------------------------------------------
1,300 Ford Motor Co. 38,025
----------------------------------------------------------------
2,925 Mattel, Inc. 73,125
---------------------------------------------------------------- -----------
Total 171,525
---------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--0.5%
----------------------------------------------------------------
600 Avon Products, Inc. 40,425
----------------------------------------------------------------
1,000 IBP, Inc. 37,500
----------------------------------------------------------------
1,000 Philip Morris Cos., Inc. 72,875
----------------------------------------------------------------
1,300 Reebok International, Ltd. 43,550
----------------------------------------------------------------
7,800 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $0.6012 47,775
---------------------------------------------------------------- -----------
Total 242,125
---------------------------------------------------------------- -----------
CONSUMER SERVICES--0.1%
----------------------------------------------------------------
400 Gannett Co., Inc. 21,400
---------------------------------------------------------------- -----------
ELECTRONIC TECHNOLOGY--0.9%
----------------------------------------------------------------
1,400 Hewlett-Packard Co. 92,575
----------------------------------------------------------------
400 Intel Corp. 44,900
----------------------------------------------------------------
300 International Business Machines Corp. 27,975
----------------------------------------------------------------
800 (a) Litton Industries, Inc. 30,800
----------------------------------------------------------------
1,300 Lockheed Martin Corp. 77,350
----------------------------------------------------------------
700 Raytheon Co. 54,250
----------------------------------------------------------------
1,100 Rockwell International Corp. 50,187
---------------------------------------------------------------- -----------
Total 378,037
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
----------------------------------------------------------------
ENERGY MINERALS--0.5%
----------------------------------------------------------------
700 Burlington Resources, Inc. $ 29,050
----------------------------------------------------------------
1,300 Chevron Corp. 63,863
----------------------------------------------------------------
700 Mapco, Inc. 41,212
----------------------------------------------------------------
800 Texaco, Inc. 54,800
----------------------------------------------------------------
2,200 USX Marathon Group, Inc. 43,725
---------------------------------------------------------------- -----------
Total 232,650
---------------------------------------------------------------- -----------
FINANCE--0.9%
----------------------------------------------------------------
800 American Express Co. 28,500
----------------------------------------------------------------
700 AMLI Residential Properties Trust, REIT 13,388
----------------------------------------------------------------
1,200 Bank of Boston Corp. 43,800
----------------------------------------------------------------
1,100 Citicorp 58,850
----------------------------------------------------------------
800 Dean Witter, Discover & Co. 38,100
----------------------------------------------------------------
400 First Interstate Bancorp. 33,600
----------------------------------------------------------------
1,242 Mellon Bank Corp. 53,096
----------------------------------------------------------------
600 NationsBank Corp. 33,975
----------------------------------------------------------------
700 Providian Corp. 25,462
----------------------------------------------------------------
200 (a) The PMI Group, Inc. 8,175
----------------------------------------------------------------
1,700 Travelers Group, Inc. 71,825
---------------------------------------------------------------- -----------
Total 408,771
---------------------------------------------------------------- -----------
HEALTH TECHNOLOGY--0.4%
----------------------------------------------------------------
850 American Home Products Corp. 62,581
----------------------------------------------------------------
800 Becton, Dickinson & Co. 46,000
----------------------------------------------------------------
800 Bristol-Myers Squibb Co. 53,100
---------------------------------------------------------------- -----------
Total 161,681
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
----------------------------------------------------------------
INDUSTRIAL SERVICES--0.1%
----------------------------------------------------------------
1,700 Baker Hughes, Inc. $ 38,250
----------------------------------------------------------------
600 (a) Western Atlas, Inc. 27,075
---------------------------------------------------------------- -----------
Total 65,325
---------------------------------------------------------------- -----------
NON-ENERGY MINERALS--0.2%
----------------------------------------------------------------
1,300 Phelps Dodge Corp. 71,663
---------------------------------------------------------------- -----------
PROCESS INDUSTRIES--0.3%
----------------------------------------------------------------
800 DuPont (E.I.) de Nemours & Co. 54,300
----------------------------------------------------------------
500 Eastman Chemical Co. 30,000
----------------------------------------------------------------
2,000 Praxair, Inc. 49,750
---------------------------------------------------------------- -----------
Total 134,050
---------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--0.6%
----------------------------------------------------------------
500 Caterpillar, Inc. 30,125
----------------------------------------------------------------
300 Deere & Co. 25,950
----------------------------------------------------------------
800 (a) FMC Corp. 51,500
----------------------------------------------------------------
800 General Electric Co. 46,400
----------------------------------------------------------------
400 Loews Corp. 47,550
----------------------------------------------------------------
1,200 Textron, Inc. 73,050
---------------------------------------------------------------- -----------
Total 274,575
---------------------------------------------------------------- -----------
RETAIL TRADE--0.2%
----------------------------------------------------------------
1,600 American Stores Co. 41,800
----------------------------------------------------------------
1,300 Sears, Roebuck & Co. 73,288
---------------------------------------------------------------- -----------
Total 115,088
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
----------------------------------------------------------------
TECHNOLOGY SERVICES--0.2%
----------------------------------------------------------------
1,800 General Motors Corp., Class E $ 76,500
---------------------------------------------------------------- -----------
+ UTILITIES--0.2%
----------------------------------------------------------------
1,200 AT&T Corp. 60,900
----------------------------------------------------------------
700 Enron Corp. 25,550
----------------------------------------------------------------
1,600 MCI Communications Corp. 32,400
---------------------------------------------------------------- -----------
Total 118,850
---------------------------------------------------------------- -----------
TOTAL LARGE COMPANY (IDENTIFIED COST, $2,157,580) 2,472,240
---------------------------------------------------------------- -----------
UTILITY--6.9%
----------------------------------------------------------------
ELECTRIC UTILITIES--2.8%
----------------------------------------------------------------
3,500 Baltimore Gas & Electric Co. 91,000
----------------------------------------------------------------
4,064 Cinergy Corp. 108,204
----------------------------------------------------------------
3,100 CMS Energy Corp. 74,787
----------------------------------------------------------------
3,700 DPL, Inc. 81,400
----------------------------------------------------------------
3,600 DQE, Inc. 88,200
----------------------------------------------------------------
2,250 Florida Progress Corp. 71,719
----------------------------------------------------------------
1,900 FPL Group, Inc. 74,575
----------------------------------------------------------------
2,700 General Public Utilities Corp. 81,000
----------------------------------------------------------------
2,400 NIPSCO Industries, Inc. 82,800
----------------------------------------------------------------
4,000 Pacificorp 79,000
----------------------------------------------------------------
3,100 Peco Energy Co. 87,188
----------------------------------------------------------------
3,700 Pinnacle West Capital Corp. 85,100
----------------------------------------------------------------
4,000 Southern Co. 88,500
----------------------------------------------------------------
3,000 Utilicorp United, Inc. 85,500
----------------------------------------------------------------
2,400 Western Resources, Inc. 75,600
---------------------------------------------------------------- -----------
Total 1,254,573
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
UTILITY--CONTINUED
----------------------------------------------------------------
NATURAL GAS DISTRIBUTION--0.4%
----------------------------------------------------------------
1,200 Consolidated Natural Gas Co. $ 47,850
----------------------------------------------------------------
2,200 MCN Corp. 41,250
----------------------------------------------------------------
1,700 Pacific Enterprises 42,925
----------------------------------------------------------------
1,900 UGI Corp. 39,900
---------------------------------------------------------------- -----------
Total 171,925
---------------------------------------------------------------- -----------
OIL/GAS TRANSMISSION--0.3%
----------------------------------------------------------------
1,200 Enron Corp. 43,800
----------------------------------------------------------------
1,000 Panhandle Eastern Corp. 25,125
----------------------------------------------------------------
1,500 Sonat, Inc. 49,313
----------------------------------------------------------------
800 Williams Companies, Inc. 27,200
---------------------------------------------------------------- -----------
Total 145,438
---------------------------------------------------------------- -----------
TELECOMMUNICATIONS--3.4%
----------------------------------------------------------------
3,400 Ameritech Corp. 150,875
----------------------------------------------------------------
3,000 AT & T Corp. 152,250
----------------------------------------------------------------
3,000 Bell Atlantic Corp. 167,250
----------------------------------------------------------------
2,600 BellSouth Corp. 159,575
----------------------------------------------------------------
4,500 GTE Corp. 150,187
----------------------------------------------------------------
3,800 NYNEX Corp. 158,650
----------------------------------------------------------------
5,500 Pacific Telesis Group 147,125
----------------------------------------------------------------
3,500 SBC Communications, Inc. 157,500
----------------------------------------------------------------
4,600 Southern New England Telecommunications 154,675
----------------------------------------------------------------
3,800 U.S. West, Inc. 156,750
---------------------------------------------------------------- -----------
Total 1,554,837
---------------------------------------------------------------- -----------
TOTAL UTILITY (IDENTIFIED COST, $2,914,332) 3,126,773
---------------------------------------------------------------- -----------
TOTAL STOCKS (IDENTIFIED COST, $5,071,912) 5,599,013
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--85.5%
- -----------------------------------------------------------------------------------
TREASURY--44.9%
----------------------------------------------------------------
$21,500,000 U.S. Treasury Bill, 5/30/1996 (IDENTIFIED COST $20,279,361) $20,315,350
---------------------------------------------------------------- -----------
MORTGAGE-BACKED SECURITIES--22.9%
----------------------------------------------------------------
GOVERNMENT AGENCY--22.9%
----------------------------------------------------------------
497,111 Federal Home Loan Mortgage Corporation, Pool C80177, 7.50%, 30
Year, 5/1/2024 499,278
----------------------------------------------------------------
262,408 Federal Home Loan Mortgage Corporation, Pool D54720, 7.00%, 30
Year, 7/1/2024 257,158
----------------------------------------------------------------
495,950 Federal Home Loan Mortgage Corporation, Pool E00348, 8.00%, 15
Year, 11/1/2009 510,511
----------------------------------------------------------------
926,914 Federal Home Loan Mortgage Corporation, Pool E58069, 7.00%, 15
Year, 4/1/2009 932,688
----------------------------------------------------------------
533,276 Federal Home Loan Mortgage Corporation, Pool G40136, 8.00%, 7
Year, 3/1/2002 547,600
----------------------------------------------------------------
519,009 Federal National Mortgage Association, Pool 250083, 7.00%, 30
Year, 7/1/2024 510,892
----------------------------------------------------------------
935,731 Federal National Mortgage Association, Pool 250197, 9.50%, 30
Year, 10/1/2024 980,459
----------------------------------------------------------------
220,073 Federal National Mortgage Association, Pool 278507, 7.50%, 15
Year, 6/1/2009 224,609
----------------------------------------------------------------
564,743 Federal National Mortgage Association, Pool 286192, 6.50%, 15
Year, 6/1/2009 558,203
----------------------------------------------------------------
501,812 Federal National Mortgage Association, Pool 303073, 8.00%, 30
Year, 11/1/2024 513,725
----------------------------------------------------------------
248,226 Federal National Mortgage Association, Pool 305742, 8.50%, 30
Year, 2/1/2025 256,678
----------------------------------------------------------------
240,088 Government National Mortgage Association, Pool 379445, 7.50%, 30
Year, 5/15/2024 241,735
----------------------------------------------------------------
1,379,028 Government National Mortgage Association, Pool 380656, 8.00%, 30
Year, 11/15/2024 1,413,917
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--CONTINUED
----------------------------------------------------------------
GOVERNMENT AGENCY--CONTINUED
----------------------------------------------------------------
$ 1,837,223 Government National Mortgage Association, Pool 407068, 8.50%, 30
Year, 10/15/2024 $ 1,912,990
----------------------------------------------------------------
1,008,169 Government National Mortgage Association, Pool 409080, 7.00%, 30
Year, 7/15/2024 992,713
---------------------------------------------------------------- -----------
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST, $10,001,131) 10,353,156
---------------------------------------------------------------- -----------
HIGH YIELD--3.0%
----------------------------------------------------------------
BANKING--0.1%
----------------------------------------------------------------
50,000 First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 53,750
---------------------------------------------------------------- -----------
BROADCAST RADIO & TV--0.3%
----------------------------------------------------------------
125,000 SCI Television, Inc., Sr. Secd. Note, 11.00%, 6/30/2005 132,188
---------------------------------------------------------------- -----------
CABLE TV--0.3%
----------------------------------------------------------------
125,000 Continental Cablevision, Inc., Sr. Deb., 9.50%, 8/1/2013 127,187
---------------------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.3%
----------------------------------------------------------------
125,000 Arcadian Partners L.P., Sr. Note, Series B, 10.75%, 5/1/2005 130,000
---------------------------------------------------------------- -----------
CLOTHING & TEXTILES--0.3%
----------------------------------------------------------------
125,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 123,125
---------------------------------------------------------------- -----------
CONGLOMERATES--0.1%
----------------------------------------------------------------
50,000 Sherritt Gordon Ltd., Sr. Note, 9.75%, 4/1/2003 50,250
---------------------------------------------------------------- -----------
CONSUMER PRODUCTS--0.1%
----------------------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub Note, 9.00%, 12/15/2003 47,875
---------------------------------------------------------------- -----------
CONTAINER & GLASS PRODUCTS--0.2%
----------------------------------------------------------------
75,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 76,875
---------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.1%
----------------------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 50,000
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
----------------------------------------------------------------
FOOD SERVICES--0.2%
----------------------------------------------------------------
$ 125,000 Flagstar Corp., Sr. Note, 10.875%, 12/1/2002 $ 116,250
---------------------------------------------------------------- -----------
FOREST PRODUCTS--0.1%
----------------------------------------------------------------
75,000 Stone Container Corp., Sr. Note, 9.875%, 2/1/2001 75,188
---------------------------------------------------------------- -----------
HEALTHCARE--0.1%
----------------------------------------------------------------
50,000 National Medical, Sr. Sub. Note, 10.125%, 3/1/2005 52,938
---------------------------------------------------------------- -----------
OIL & GAS--0.1%
----------------------------------------------------------------
50,000 Falcon Drilling Co., Inc., Sr. Note, 9.75%, 1/15/2001 48,750
---------------------------------------------------------------- -----------
STEEL--0.2%
----------------------------------------------------------------
75,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 76,313
---------------------------------------------------------------- -----------
TELECOMMUNICATIONS & CELLULAR--0.2%
----------------------------------------------------------------
150,000 (a) Nextel Communications, Inc., Sr. Disc. Note, 0/11.50%, 9/1/2003 86,250
---------------------------------------------------------------- -----------
UTILITIES--0.3%
----------------------------------------------------------------
150,000 (a) California Energy Co., Sr. Disc. Note, 1/15/2004 126,750
---------------------------------------------------------------- -----------
TOTAL HIGH YIELD (IDENTIFIED COST, $1,343,685) 1,373,689
---------------------------------------------------------------- -----------
INVESTMENT-GRADE--9.1%
----------------------------------------------------------------
BEVERAGE & TOBACCO--0.5%
----------------------------------------------------------------
250,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 238,972
---------------------------------------------------------------- -----------
CONGLOMERATES--0.6%
----------------------------------------------------------------
250,000 Leucadia National Corp., Sr. Sub., 10.375%, 6/15/2002 271,250
---------------------------------------------------------------- -----------
FINANCE-AUTOMOTIVE--0.6%
----------------------------------------------------------------
250,000 GMAC, Medium Term Note, 7.25%, 4/30/1999 254,845
---------------------------------------------------------------- -----------
FINANCE-RETAIL--0.5%
----------------------------------------------------------------
250,000 Household Finance, Deb., 6.45%, 2/1/2009 236,248
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
INVESTMENT-GRADE--CONTINUED
----------------------------------------------------------------
FINANCIAL INTERMEDIARIES--1.1%
----------------------------------------------------------------
$ 250,000 Equitable Cos., Inc., Sr. Note, 9.00%, 12/15/2004 $ 277,562
----------------------------------------------------------------
200,000 Merrill Lynch, Medium Term Note, 7.25%, 6/14/2004 201,766
---------------------------------------------------------------- -----------
Total 479,328
---------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.5%
----------------------------------------------------------------
225,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 239,648
---------------------------------------------------------------- -----------
GOVERNMENT AGENCY--0.7%
----------------------------------------------------------------
300,000 Tennessee Valley Authority, 7.318%, 5/31/1999 303,675
---------------------------------------------------------------- -----------
INSURANCE--0.4%
----------------------------------------------------------------
200,000 Sunamerica, Inc., Medium Term Note, 6.58%, 1/15/2002 194,258
---------------------------------------------------------------- -----------
OIL & GAS--0.7%
----------------------------------------------------------------
300,000 Occidental Petroleum, Sr. Note, 11.75%, 3/15/2011 325,806
---------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.6%
----------------------------------------------------------------
250,000 News America Holdings, Inc., Sr. Note, 7.50%, 3/1/2000 255,915
---------------------------------------------------------------- -----------
SOVEREIGN GOVERNMENT--1.2%
----------------------------------------------------------------
300,000 (b) Freeport Terminal (Malta), Gtd. Global Note, 7.50%, 3/29/2004 307,338
----------------------------------------------------------------
150,000 Quebec Hydro, Deb., 7.375%, 2/1/2003 153,777
----------------------------------------------------------------
150,000 Republic of South Africa, Global Bond Deb., 9.625%, 12/15/1999 101,345
---------------------------------------------------------------- -----------
Total 562,460
---------------------------------------------------------------- -----------
UTILITIES--1.7%
----------------------------------------------------------------
300,000 Duke Power Co., 1st Mtg. Note, 7.00%, 9/1/2005 303,735
----------------------------------------------------------------
300,000 Gulf States Utilities, FMB, 6.75%, 10/1/1998 298,164
----------------------------------------------------------------
125,000 Pedernales Electric Coop., 10.875%, 9/1/2017 139,788
---------------------------------------------------------------- -----------
Total 741,687
---------------------------------------------------------------- -----------
TOTAL INVESTMENT-GRADE (IDENTIFIED COST, $3,921,286) 4,104,092
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
OTHER CORPORATE--0.1%
----------------------------------------------------------------
ELECTRONIC & ELECTRIC--0.1%
----------------------------------------------------------------
$ 30,000 General Instrument Corp., Conv. Jr. Sub. Note, 5.00%, 6/15/2000 $ 41,109
---------------------------------------------------------------- -----------
TOTAL OTHER CORPORATE (IDENTIFIED COST, $40,725) 41,109
---------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
FOREIGN
CURRENCY
PAR AMOUNT
- ------------ ----------------------------------------------------------------
<C> <C> <S> <C>
FOREIGN--5.5%
----------------------------------------------------------------
AUSTRALIAN DOLLAR--0.2%
----------------------------------------------------------------
100,000 State Bank of New South Wales, 12.25%, 2/26/2001 82,462
---------------------------------------------------------------- -----------
BELGIAN FRANCS--0.2%
----------------------------------------------------------------
3,100,000 Belgian Government, Foreign Government Guarantee, 10.00%,
4/5/1996 110,968
---------------------------------------------------------------- -----------
CANADIAN DOLLAR--0.3%
----------------------------------------------------------------
150,000 Ontario Hydro, Local Government Guarantee, 9.00%, 6/24/2002 114,291
---------------------------------------------------------------- -----------
DANISH KRONE--0.2%
----------------------------------------------------------------
500,000 Denmark, 8.00%, 5/15/2003 90,551
---------------------------------------------------------------- -----------
DEUTSCHE MARK--1.1%
----------------------------------------------------------------
350,000 Bundesobligationen, Deb., 7.15%, 10/20/1997 259,510
----------------------------------------------------------------
600,000 KFW International Finance, 7.00%, 5/12/2000 120,553
----------------------------------------------------------------
175,000 Treuhandanstalt, 7.75%, 10/1/2002 132,850
---------------------------------------------------------------- -----------
Total 512,913
---------------------------------------------------------------- -----------
FRENCH FRANC--0.4%
----------------------------------------------------------------
850,000 France O.A.T., 8.50%, 11/25/2002 182,798
---------------------------------------------------------------- -----------
ITALIAN LIRA--0.4%
----------------------------------------------------------------
260,000,000 Buoni Poliennali Del Tes, 12.00%, 9/1/1997 159,895
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
FOREIGN--CONTINUED
----------------------------------------------------------------
JAPANESE YEN--1.5%
----------------------------------------------------------------
10,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 $ 145,052
----------------------------------------------------------------
38,000,000 KFW International Finance Gtd. Note, 6.00%, 11/29/1999 523,692
---------------------------------------------------------------- -----------
Total 668,744
---------------------------------------------------------------- -----------
NETHERLANDS GUILDER--0.3%
----------------------------------------------------------------
250,000 Netherlands Government, 5.75%, 1/15/2004 149,039
---------------------------------------------------------------- -----------
SPAINISH PESETA--0.2%
----------------------------------------------------------------
13,000,000 Spain (Government), 8.30%, 12/15/1998 97,745
---------------------------------------------------------------- -----------
SWEDISH KRONA--0.1%
----------------------------------------------------------------
500,000 Sweden, 6.00%, 2/9/2005 49,298
---------------------------------------------------------------- -----------
UNITED KINGDOM POUND--0.6%
----------------------------------------------------------------
150,000 UK Conversion, 9.00%, 3/3/2000 250,416
---------------------------------------------------------------- -----------
TOTAL FOREIGN (IDENTIFIED COST, $2,213,955) 2,469,120
---------------------------------------------------------------- -----------
TOTAL BONDS (IDENTIFIED COST, $37,800,143) 38,656,516
---------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ------------ ----------------------------------------------------------------
<C> <C> <S> <C>
*REPURCHASE AGREEMENTS--46.2%
- -----------------------------------------------------------------------------------
$10,000,000 Bear, Stearns Co., 6.125%, dated 5/31/1995, due 6/1/1995 10,000,000
----------------------------------------------------------------
10,890,000 J.P. Morgan & Co., 6.17%, dated 5/31/1995, due 6/1/1995 10,890,000
---------------------------------------------------------------- -----------
TOTAL REPURCHASE AGREEMENTS (AT AMORTIZED COST) 20,890,000
---------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $63,762,055)(C) $65,145,529
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
The following abbreviation is used in this portfolio:
REIT--Real Estate Investment Trust
(a) Non-income producing.
(b) Restricted Securities-Investment in securities not registered under the
Securities Act of 1933. At the end of the period, this security amounted to
$307,338, which represents 0.7% of net assets.
(c) The cost for federal income tax purposes amounts to $63,762,055.The net
unrealized appreciation on a federal tax cost basis amounts to $1,383,474,
and is comprised of $1,492,826 appreciation and $109,352 depreciation at May
31, 1995.
+ The Fund's overall exposure to utility stock is 7.2%.
* The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations. The investments in the repurchase agreement were through
participation in a joint account with other Federated funds. Of the total
repurchase agreement amount, $20,279,361 is to settle on Treasury securities
on 6/1/95. As of 6/1/95, cash equivalents/repurchase agreements were $620,000,
or 1.4% of net assets on that date.
Note: The categories of investments are shown as a percentage of net assets
($45,206,276) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
------------ ---------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.76 $ 10.00
- --------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------
Net investment income 0.31 0.31
- --------------------------------------------------------
Net realized and unrealized gain (loss) on
investments,
foreign currency transactions, and futures contracts 0.60 (0.25)
- -------------------------------------------------------- ---------- --------------
Total from investment operations 0.91 0.06
- --------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------
Distributions to shareholders from net investment
income (0.31) (0.30)
- -------------------------------------------------------- ---------- --------------
NET ASSET VALUE, END OF PERIOD $10.36 $ 9.76
- -------------------------------------------------------- ---------- --------------
TOTAL RETURN (B) 9.43% 0.55%)
- --------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------
Expenses 0.75%(c) 0.67%(c)
- --------------------------------------------------------
Net investment income 6.08%(c) 6.02%(c)
- --------------------------------------------------------
Expense waiver/reimbursement (d) 0.93%(c) 1.01%(c)
- --------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------
Net assets, end of period (000 omitted) $38,190 $34,692
- --------------------------------------------------------
Portfolio turnover rate 105% 153%
- --------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from the start of business,
January 18, 1994 to May 24, 1994, the net investment income was distributed
to the Trust's adviser.
(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)
FEDERATED MANAGED INCOME FUND
FINANCIAL HIGHLIGHTS--SELECT SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994(A)
------------ ------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.77 $10.00
- ----------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------
Net investment income 0.27 0.28
- ----------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts 0.59 (0.25)
- ---------------------------------------------------------- ---------- ----------
Total from investment operations 0.86 0.03
- ----------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------
Distributions to shareholders from net investment income (0.27) (0.26)
- ---------------------------------------------------------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $10.36 $ 9.77
- ---------------------------------------------------------- ---------- ----------
TOTAL RETURN (B) 8.90% 0.26%
- ----------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------
Expenses 1.50%(c) 1.42%(c)
- ----------------------------------------------------------
Net investment income 5.33%(c) 5.24%(c)
- ----------------------------------------------------------
Expense waiver/reimbursement (d) 1.18%(c) 1.26%(c)
- ----------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------
Net assets, end of period (000 omitted) $7,016 $3,198
- ----------------------------------------------------------
Portfolio turnover rate 105% 153%
- ----------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from the start of business,
January 27, 1994 to May 24, 1994, the net investment income was distributed
to the Trust's adviser.
(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)
FEDERATED MANAGED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------
Investments in securities, at value (identified and tax costs,
$42,872,055) $44,255,529
- -----------------------------------------------------------------
Investments in repurchase agreements at amortized cost 20,890,000
- ----------------------------------------------------------------- -----------
Total investments, at amortized cost and value (identified
and
tax cost, $63,762,055) $65,145,529
- -------------------------------------------------------------------------------
Cash 5,375
- -------------------------------------------------------------------------------
Income receivable 302,523
- -------------------------------------------------------------------------------
Receivable for investments sold 51,975
- -------------------------------------------------------------------------------
Receivable for shares sold 9,971
- -------------------------------------------------------------------------------
Deferred expenses 38,394
- ------------------------------------------------------------------------------- -----------
Total assets 65,553,767
- -------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------
Payable for investments purchased 20,329,361
- -----------------------------------------------------------------
Payable for shares redeemed 6,313
- -----------------------------------------------------------------
Tax withholding liability 594
- -----------------------------------------------------------------
Accrued expenses 11,223
- -------------------------------------------------------------------------------
Total liabilities 20,347,491
- ------------------------------------------------------------------------------- -----------
NET ASSETS for 4,364,082 shares of beneficial interest
outstanding $45,206,276
- ------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------
Paid-in capital 43,620,263
- -------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments,
translation of assets and liabilities in foreign currency, and
futures contracts 1,386,057
- -------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments, foreign
currency transactions, and futures contracts 159,733
- -------------------------------------------------------------------------------
Undistributed net investment income 40,223
- ------------------------------------------------------------------------------- -----------
Total Net Assets $45,206,276
- ------------------------------------------------------------------------------- -----------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per
Share:
- -------------------------------------------------------------------------------
Institutional Shares ($38,190,283 / 3,686,834 shares of beneficial interest
outstanding) $10.36
- ------------------------------------------------------------------------------- -----------
Select Shares ($7,015,993 / 677,248 shares of beneficial interest outstanding) $10.36
- ------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $1,180) $1,298,028
- ----------------------------------------------------------------------------------------
Dividend 98,072
- ---------------------------------------------------------------------------------------- ----------
Total income 1,396,100
- ----------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------
Investment advisory fee $153,307
- ----------------------------------------------------------------------------
Administrative personnel and services fee 77,288
- ----------------------------------------------------------------------------
Custodian and portfolio accounting fees 26,114
- ----------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 18,359
- ----------------------------------------------------------------------------
Legal fees 3,824
- ----------------------------------------------------------------------------
Fund share registration costs 17,190
- ----------------------------------------------------------------------------
Printing and postage 31,828
- ----------------------------------------------------------------------------
Insurance premiums 2,186
- ----------------------------------------------------------------------------
Directors'/Trustees' fees 1,250
- ----------------------------------------------------------------------------
Auditing fees 6,000
- ----------------------------------------------------------------------------
Shareholder services fee--Select Shares 5,965
- ----------------------------------------------------------------------------
Distribution services fee 17,895
- ----------------------------------------------------------------------------
Miscellaneous 7,002
- ---------------------------------------------------------------------------- --------
Total expenses 368,208
- ----------------------------------------------------------------------------
Deduct--
- ----------------------------------------------------------------------------
Waiver of investment advisory fee $153,307
- -----------------------------------------------------------------
Waiver of distribution services fee--Select Shares 5,965
- -----------------------------------------------------------------
Reimbursement of other operating expenses 37,734 197,006
- ----------------------------------------------------------------- -------- --------
Net expenses 171,202
- ---------------------------------------------------------------------------------------- ----------
Net investment income 1,224,898
- ---------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, AND FUTURES
CONTRACTS:
- ----------------------------------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency transactions, and futures
contracts (identified cost basis) 489,125
- ----------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments, translation of
assets and liabilities in foreign currency, and futures contracts 1,995,520
- ---------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain (loss) on investments, foreign currency, and
futures contracts 2,484,645
- ---------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $3,709,543
- ---------------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------
Net investment income $ 1,224,898 $ 999,639
- -----------------------------------------------------------
Net realized gain (loss) on investments, foreign currency
transactions, and futures contracts ($489,125 net gain and
$305,808 net loss, respectively, as computed for federal
tax purposes) 489,125 (311,738)
- -----------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments, translation of assets and liabilities in
foreign currency, and futures contracts 1,995,520 (609,463)
- ----------------------------------------------------------- -------------- --------------
Change in net assets resulting from operations 3,709,543 78,438
- ----------------------------------------------------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------
Distributions from net investment income:
- -----------------------------------------------------------
Institutional Shares (1,097,454) (883,551)
- -----------------------------------------------------------
Select Shares (124,491) (87,664)
- -----------------------------------------------------------
Distributions in excess of net investment income:
- -----------------------------------------------------------
Institutional Shares (8,699)
- ----------------------------------------------------------- -------------- --------------
Change in net assets resulting from distributions to
shareholders (1,230,644) (971,215)
- ----------------------------------------------------------- -------------- --------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------
Proceeds from sale of shares 12,306,067 42,977,477
- -----------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 357,955 228,430
- -----------------------------------------------------------
Cost of shares redeemed (7,826,558) (4,523,217)
- ----------------------------------------------------------- -------------- --------------
Change in net assets from Fund share transactions 4,837,464 38,682,690
- ----------------------------------------------------------- -------------- --------------
Change in net assets 7,316,363 37,789,913
- -----------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------
Beginning of period 37,889,913 100,000
- ----------------------------------------------------------- -------------- --------------
End of period (including undistributed net investment
income of $40,223 and $45,969, respectively) $45,206,276 $ 37,889,913
- ----------------------------------------------------------- -------------- --------------
</TABLE>
(a) For the period from January 18, 1994 (start of business) to November 30,
1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Managed Series Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end management investment
company. The Trust consists of four diversified portfolios. The financial
statements included herein are only those of Federated Managed Income Fund (the
"Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Shares (formerly, Institutional Service
Shares) and Select Shares. The Institutional Service Shares changed its name to
Institutional Shares effective June 30, 1995.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government obligations are generally valued at
the mean between the over-the-counter bid and asked prices as furnished by
an independent pricing service. Listed equity securities are valued at the
last sale price reported on national securities exchanges. Unlisted
securities, bonds, corporate bonds and other fixed income securities are
generally valued at the price provided by an independent pricing service.
Short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value. Investments in other regulated investment companies are
valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
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.
FOREIGN CURRENCY TRANSLATION --The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
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. However, federal taxes may be
imposed on the Fund upon the disposition of certain investments in Passive
Foreign Investment Companies. Withholding taxes on foreign dividends have
been provided for in accordance with the Fund's understanding of the
applicable country's tax rules and rates. At November 30, 1994, the Fund,
for federal tax purposes, had a capital loss carryforward of $305,808,
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 2002 ($305,808).
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account an amount
of cash or U.S. government securities equal to a percentage of the contract
value. The Fund agrees to receive from or pay to the broker an amount of
cash equal to a specific dollar amount times the difference between the
closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contract is determined and any
difference between such value and the original futures contract value is
reflected in the "daily variation margin" account. Daily variation margin
adjustments,
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
arising from this "marking to market" process, are recorded by the Fund as
unrealized gains or losses.
Risks of entering into futures contracts include the possibility that a
change in the value of the contract may not correlate with changes in the
value of the underlying securities. Risks may arise from the inability of
counterparties to perform under the terms of the contract. The Fund may
decide to close its position on a contract at any time prior to the
contract's expiration. When a contract is closed, the Fund recognizes a
realized gain or loss. For the six months ended May 31, 1995, the Fund had
a realized gain of $14,814 on futures contracts.
DOLLAR ROLL TRANSACTIONS--The Fund enters into dollar roll transactions,
with respect to mortgage securities issued by GNMA, FNMA, and FHLMC, in
which the Fund loans mortgage securities to financial institutions and
simultaneously agrees to accept substantially similar (same type, coupon
and maturity) securities at a later date at an agreed upon price. Dollar
roll transactions are short-term financing arrangements which will not
exceed twelve months. The Fund will use the proceeds generated from the
transactions to invest in short-term investments, which may enhance the
Fund's current yield and total return.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS --The Fund may engage in
when-issued or delayed delivery transactions. The fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK --The Fund invests in equity and fixed income
securities of non-U.S. issuers. Although the Fund maintains a diversified
investment portfolio, the political or economic developments within a
particular country or region may have an adverse effect on the ability of
domiciled issuers to meet their obligations. Additionally, political or
economic developments may have an effect on the liquidity and volatility of
portfolio securities and currency holdings.
At May 31, 1995, the foreign portion of the portfolio was diversified with
the following industries:
<TABLE>
<S> <C> <C> <C>
Agency 1.2% State/Provincial 0.1%
Sovereign 3.1 Supranational 0.2
</TABLE>
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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
securities. Many restricted securities may be resold in the secondary
market in transactions exempt from registration. Such restricted securities
may be determined to be liquid under criteria established by the Trustees.
The Fund will not incur any registration costs upon such resales. The
Fund's restricted securities are valued at the price provided by dealers in
the secondary market or, if no market prices are available, at the fair
value as determined by the Fund's pricing committee. Additional information
on each restricted security held at May 31, 1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
--------------------------------------------------- ----------- -----------
<S> <C> <C>
Freeport Terminal (Malta) 7/19/94 $284,196
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
----------------------- -------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 795,930 $7,927,782 3,801,238 $37,969,931
- --------------------------------------------
Shares issued to shareholders in payment of
distributions declared 31,267 312,641 21,807 216,633
- --------------------------------------------
Shares redeemed (693,179) (6,916,715) (280,229) (2,787,738)
- -------------------------------------------- -------- ---------- --------- -----------
Net change resulting from Institutional
Share transactions 134,018 $1,323,708 3,542,816 $35,398,826
- -------------------------------------------- -------- ---------- --------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
----------------------- -------------------------
SELECT SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------- --------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 436,256 $4,378,285 501,463 $ 5,007,546
- --------------------------------------------
Shares issued to shareholders in payment of
distributions declared 4,485 45,314 1,189 11,797
- --------------------------------------------
Shares redeemed (90,929) (909,843) (175,216) (1,735,479)
- -------------------------------------------- -------- ---------- --------- -----------
Net change resulting from Institutional
Service Share transactions 349,812 3,513,756 327,436 $ 3,283,864
- -------------------------------------------- -------- ---------- --------- -----------
Total net change resulting from Fund
Share transactions 483,830 $4,837,464 3,870,252 $38,682,690
- -------------------------------------------- -------- ---------- --------- -----------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, 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 a portion of its fee and reimburse certain operating
expenses of the Fund. The Adviser can modify or terminate this voluntary waiver
and reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund administrative personnel
and services. The FAS fee is based on the level of average aggregate daily net
assets of all funds advised by subsidiaries of Federated Investors for the
period. The administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.
DISTRIBUTION FEE--The Fund has adopted a Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the Act. Under the terms of the Plan, the fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Select Shares. The Plan provides that the Fund may incur
distribution expenses up to .75 of 1% of the average daily net assets of the
Select Shares, annually, to compensate FSC. The distributor may voluntarily
choose to waive a portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of each class of shares for the period. This fee
is to obtain certain services for shareholders and to maintain the
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
shareholder accounts. For the six months ended May 31, 1995, Institutional
Shares did not incur a shareholder services fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. The fee
is based on the size, type and number of accounts and transactions made by
shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($52,265) and start-up
administrative service expenses ($39,068) were initially borne by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative expenses during the five year period following March 11,
1994 (date the Fund first became effective). For the six months ended May 31,
1995, the Fund paid $8,414 and $4,992, respectively, pursuant to this agreement.
GENERAL--Certain 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 six
months ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $46,427,670
- ------------------------------------------------------------------------------- -----------
SALES $41,942,445
- ------------------------------------------------------------------------------- -----------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue
John F. Donahue
Thomas G. Bigley
Chairman
John T. Conroy, Jr.
Glen R. Johnson
President
William J. Copeland
J. Christopher Donahue
James E. Dowd
Vice President
Lawrence D. Ellis, M.D.
Richard B. Fisher
Edward L. Flaherty, Jr.
Vice President
Glen R. Johnson
Edward C. Gonzales
Vice President and Treasurer
Peter E. Madden
John W. McGonigle
Gregor F. Meyer
Vice President and Secretary
John E. Murray, Jr.
David M. Taylor
Wesley W. Posvar
Assistant Treasurer
Marjorie P. Smuts
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including, possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
FEDERATED
MANAGED AGGRESSIVE
GROWTH FUND
[LOGO]
----------------------------------------------------------------
----------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
Federated Managed
Aggressive Growth Fund is part of
Managed Series Trust,
a lifecycle investing program
from Federated Investors.
MAY 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
56166K800
56166K701
G00514-01 (7/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the first Semi-Annual Report to Shareholders for
Federated Managed Aggressive Growth Fund. The report covers the six-month period
ended May 31, 1995, and includes the fund's Investment Review, Portfolio of
Investments and Financial Statements. In addition, separate Financial Highlights
tables have been included for both classes of shares of the fund ("Institutional
Shares" and "Select Shares").
The United States had the strongest stock market in the world in the first
quarter of 1995, and the fund's performance reflected this fact. Federated
Managed Aggressive Growth Fund had holdings in large-company domestic stocks,
which performed extremely well as a group.
The fund's net assets increased from $17.4 million on November 30, 1994 to $22.5
million on May 31, 1995. Between the first and last days of the period, the
fund's net asset value increased from $9.82 to $10.80 per share for
Institutional Shares and from $9.80 to $10.77 for Select Shares.
The fund paid dividends of $.18 per share for Institutional Shares and $.14 per
share for Select Shares over the six-month period. Capital gains of $.02 per
share were paid for both Institutional Shares and Select Shares over the
six-month period.
Thank you for your continued confidence in Federated Managed Aggressive Growth
Fund. As always, we welcome your comments and suggestions.
Sincerely,
Glen R. Johnson
President
July 15, 1995
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Financial markets were strong in the first half of 1995, and Federated Managed
Aggressive Growth Fund participated fully in the rallies. For the six months
ended May 31, 1995, an investor in Institutional Shares experienced a total
return of 12.18%*, while an investor in Select Shares received a total return of
11.66%*. The strong financial markets were driven by changing investor
expectations about economic growth. Last year investors were concerned that the
economy was on the verge of overheating. They feared that only very high
interests rates could restrain economic growth and prevent an outburst of
inflation. As growth moderated in early 1995, investors began to realize that
short-term interest rates had risen sufficiently to brake the economy, and
further near-term restraint was unnecessary. Once investors realized that the
economy was decelerating, the bond market rally gathered strength, providing
attractive returns to fixed income investors.
The investment philosophy for the fund is based on the belief that over time an
investor with a diversified portfolio will achieve better returns with the same
risk or the same returns with lower risk than an investor in a single asset
class. By placing limits on the weights for each asset class in the portfolio,
the investment policy ensures proper diversification of the portfolio. Fund
management also believes that investors with diversified portfolios will do even
better if they hold above average positions in asset classes offering good
relative value. Therefore, fund management focuses on value in setting
allocations among the asset classes.
Unfortunately, strong rallies in the stock and bond markets reduced the
underlying value in both markets. The cornerstone of a value investment
philosophy is the belief that investors should take risks only when they are
paid to take those risks. Once the price becomes too rich in relationship to the
underlying fundamentals, an investor is no longer being paid to take risk and a
reduction in the exposure to that asset class is appropriate. Management of the
Federated Managed Aggressive Growth Fund believes that this is the case for both
stocks and bonds and, therefore, moved to defensive positions on both asset
classes late in the second quarter.
As fund management expected, the drop in long-term bond yields caused the stock
market to move to new all-time highs this year. Since the inception of the fund,
a mid-point allocation to equity reserves has been held and invested in
short-term debt. However, by early June, the severe overvaluation of the market
caused fund management to adopt a defensive position on the equity market. This
change involves raising equity reserves to 10%, with the increased allocation
coming from a reduction in the allocation to U.S. large company stocks. This
defensive position reflects management's belief that the equity market is
vulnerable to either stronger or weaker economic growth. While a stronger growth
environment would ease market concerns about recession, it would also lead to
renewed upward pressure on interest rates, which would in turn pressure stock
prices. In contrast, a weaker economy would put severe pressure on corporate
profits, which would also pressure stock prices. Either way, an
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
overvalued stock market is vulnerable and a 10% equity reserve position is
appropriate. In addition to U.S. large company stocks (18% of the fund), the
fund holds sizable positions in both U.S. small company stocks and foreign
stocks. These two areas each represent about 16% of the fund's net assets, and
are held in the belief that they have above average return potential at this
time because they offer good relative value in comparison to large company
stocks.
Since bond prices fall when interest rates rise, and 30% of the fund's assets
are invested in bonds, controlling exposure to interest rate risk is important
to fund performance. As part of its risk control framework, the duration of the
bond portfolio is limited to the range of 3.0 to 9.0 years. This wide duration
range allows the fund to take significant exposure to interest rate changes when
fund management believes conditions are favorable for an interest rate decline.
Although bonds began a bear market in October 1993, the fund adopted a more
constructive outlook on interest rates last summer, expecting that interest
rates would fall. Interest rates have declined substantially since then, as
bonds enjoyed a very strong countertrend rally. However, by late May, the
countertrend bond rally had proceeded far enough to restore risk to the bond
market. Management believes that further gains in bonds are likely to be
limited, especially in comparison to the potential losses once the bear market
resumes. Therefore, the bond duration of the portfolio was reduced to 4.5 years,
a below average, but not minimum, level. The fixed income portion of the fund is
dominated by government bonds, both Treasury bonds and mortgage-backed
securities. Modest positions are also held in high yield corporate and foreign
government bonds.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--50.2%*
- -----------------------------------------------------------------------------------
LARGE COMPANY--17.9%**
------------------------------------------------------------
CONSUMER DURABLES--1.2%
------------------------------------------------------------
1,600 Eastman Kodak Co. $ 96,600
------------------------------------------------------------
2,000 Ford Motor Co. 58,500
------------------------------------------------------------
4,700 Mattel, Inc. 117,500
------------------------------------------------------------ -----------
Total 272,600
------------------------------------------------------------ -----------
CONSUMER NON-DURABLES--1.8%
------------------------------------------------------------
1,000 Avon Products, Inc. 67,375
------------------------------------------------------------
2,200 IBP, Inc. 82,500
------------------------------------------------------------
1,600 Philip Morris Cos., Inc. 116,600
------------------------------------------------------------
1,900 Reebok International, Ltd. 63,650
------------------------------------------------------------
12,400 RJR Nabisco Holding Corp., Conv. Pfd., Series C 75,950
------------------------------------------------------------ -----------
Total 406,075
------------------------------------------------------------ -----------
CONSUMER SERVICES--0.2%
------------------------------------------------------------
1,000 Gannett Co., Inc. 53,500
------------------------------------------------------------ -----------
ELECTRONIC TECHNOLOGY--2.6%
------------------------------------------------------------
2,000 Hewlett-Packard Co. 132,250
------------------------------------------------------------
600 Intel Corp. 67,350
------------------------------------------------------------
600 International Business Machines Corp. 55,950
------------------------------------------------------------
1,200 (a) Litton Industries, Inc. 46,200
------------------------------------------------------------
1,900 Lockheed Martin Corp. 113,050
------------------------------------------------------------
1,100 Raytheon Co. 85,250
------------------------------------------------------------
1,600 Rockwell International Corp. 73,000
------------------------------------------------------------ -----------
Total 573,050
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
------------------------------------------------------------
ENERGY MINERALS--1.8%
------------------------------------------------------------
1,500 Burlington Resources, Inc. $ 62,250
------------------------------------------------------------
2,100 Chevron Corp. 103,162
------------------------------------------------------------
1,100 Mapco, Inc. 64,762
------------------------------------------------------------
1,400 Texaco, Inc. 95,900
------------------------------------------------------------
3,400 USX Marathon Group, Inc. 67,575
------------------------------------------------------------ -----------
Total 393,649
------------------------------------------------------------ -----------
FINANCE--3.0%
------------------------------------------------------------
1,500 American Express Co. 53,437
------------------------------------------------------------
800 AMLI Residential Properties Trust 15,300
------------------------------------------------------------
1,900 Bank of Boston Corp. 69,350
------------------------------------------------------------
1,700 Citicorp 90,950
------------------------------------------------------------
1,300 Dean Witter, Discover & Co. 61,912
------------------------------------------------------------
600 First Interstate Bancorp 50,400
------------------------------------------------------------
2,124 Mellon Bank Corp. 90,801
------------------------------------------------------------
900 NationsBank Corp. 50,963
------------------------------------------------------------
1,400 Providian Corp. 50,925
------------------------------------------------------------
500 (a) The PMI Group, Inc. 20,438
------------------------------------------------------------
2,600 Travelers Group, Inc. 109,850
------------------------------------------------------------ -----------
Total 664,326
------------------------------------------------------------ -----------
HEALTH TECHNOLOGY--1.2%
------------------------------------------------------------
1,400 American Home Products Corp. 103,075
------------------------------------------------------------
1,400 Becton, Dickinson & Co. 80,500
------------------------------------------------------------
1,400 Bristol-Myers Squibb Co. 92,925
------------------------------------------------------------ -----------
Total 276,500
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
------------------------------------------------------------
INDUSTRIAL SERVICES--0.4%
------------------------------------------------------------
2,600 Baker Hughes, Inc. $ 58,500
------------------------------------------------------------
900 (a) Western Atlas, Inc. 40,613
------------------------------------------------------------ -----------
Total 99,113
------------------------------------------------------------ -----------
NON-ENERGY MINERALS--0.5%
------------------------------------------------------------
2,000 Phelps Dodge Corp. 110,250
------------------------------------------------------------ -----------
PROCESS INDUSTRIES--1.1%
------------------------------------------------------------
1,400 Du Pont (E.I.) de Nemours & Co. 95,025
------------------------------------------------------------
1,100 Eastman Chemical Co. 66,000
------------------------------------------------------------
3,200 Praxair, Inc. 79,600
------------------------------------------------------------ -----------
Total 240,625
------------------------------------------------------------ -----------
PRODUCER MANUFACTURING--2.0%
------------------------------------------------------------
1,000 Caterpillar, Inc. 60,250
------------------------------------------------------------
600 Deere & Co. 51,900
------------------------------------------------------------
1,400 (a) FMC Corp. 90,125
------------------------------------------------------------
1,100 General Electric Co. 63,800
------------------------------------------------------------
700 Loews Corp. 83,212
------------------------------------------------------------
1,800 Textron, Inc. 109,575
------------------------------------------------------------ -----------
Total 458,862
------------------------------------------------------------ -----------
RETAIL TRADE--0.8%
------------------------------------------------------------
2,500 American Stores Co. 65,312
------------------------------------------------------------
2,100 Sears, Roebuck & Co. 118,388
------------------------------------------------------------ -----------
Total 183,700
------------------------------------------------------------ -----------
TECHNOLOGY SERVICES--0.5%
------------------------------------------------------------
2,700 General Motors Corp., Class E 114,750
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
------------------------------------------------------------
UTILITIES--0.8%+
------------------------------------------------------------
1,700 AT & T Corp. $ 86,275
------------------------------------------------------------
1,100 Enron Corp. 40,150
------------------------------------------------------------
2,500 MCI Communications Corp. 50,625
------------------------------------------------------------ -----------
Total 177,050
------------------------------------------------------------ -----------
TOTAL LARGE COMPANY (IDENTIFIED COST, $3,621,426) 4,024,050
------------------------------------------------------------ -----------
SMALL COMPANY--15.5%**
------------------------------------------------------------
COMMERCIAL SERVICES--0.8%
------------------------------------------------------------
2,200 Castle (A.M.) & Co. 33,275
------------------------------------------------------------
1,600 (a) CDI Corp. 35,800
------------------------------------------------------------
2,500 (a) Comdata Holdings Corp. 31,250
------------------------------------------------------------
1,400 (a) Devon Group, Inc. 37,625
------------------------------------------------------------
2,200 (a) Super Rite Foods Holdings Corp. 35,200
------------------------------------------------------------ -----------
Total 173,150
------------------------------------------------------------ -----------
CONSUMER DURABLES--1.1%
------------------------------------------------------------
800 Barnes Group, Inc. 34,100
------------------------------------------------------------
2,400 (a) Champion Enterprises, Inc. 40,200
------------------------------------------------------------
1,900 Coachmen Industries, Inc. 26,125
------------------------------------------------------------
1,500 (a) Cobra Golf, Inc. 40,500
------------------------------------------------------------
1,000 Harman International Industries, Inc. 36,125
------------------------------------------------------------
1,800 Standard Motor Products, Inc. 35,550
------------------------------------------------------------
1,000 Toro Co. 27,625
------------------------------------------------------------ -----------
Total 240,225
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
CONSUMER NON-DURABLES--0.3%
------------------------------------------------------------
2,000 Hudson Foods, Inc., Class A $ 27,500
------------------------------------------------------------
2,700 (a) Mondavi Robert Corp., Class A 45,562
------------------------------------------------------------ -----------
Total 73,062
------------------------------------------------------------ -----------
CONSUMER SERVICES--0.6%
------------------------------------------------------------
1,100 Plenum Publishing Corp. 35,750
------------------------------------------------------------
1,199 Pulitzer Publishing Co. 51,107
------------------------------------------------------------
1,900 (a) United Video Satellite Group, Inc., Class A 49,400
------------------------------------------------------------ -----------
Total 136,257
------------------------------------------------------------ -----------
ELECTRONIC TECHNOLOGY--1.8%
------------------------------------------------------------
2,100 (a) Burr Brown Corp. 47,250
------------------------------------------------------------
800 (a) Electronics for Imaging, Inc. 36,700
------------------------------------------------------------
2,800 GenCorp, Inc. 36,050
------------------------------------------------------------
1,200 (a) International Rectifier Corp. 32,250
------------------------------------------------------------
1,000 (a) Kemet Corp. 48,000
------------------------------------------------------------
1,400 (a) SCI Systems, Inc. 29,050
------------------------------------------------------------
1,300 (a) Tech-Sym Corp. 33,475
------------------------------------------------------------
900 Tektronix, Inc. 41,400
------------------------------------------------------------
900 (a) Tencor Instruments 60,525
------------------------------------------------------------
800 Watkins Johnson Co. 35,800
------------------------------------------------------------ -----------
Total 400,500
------------------------------------------------------------ -----------
ENERGY MINERALS--0.5%
------------------------------------------------------------
1,100 Penn Virginia Corp. 35,200
------------------------------------------------------------
2,200 Phoenix Resource Cos., Inc. 70,675
------------------------------------------------------------ -----------
Total 105,875
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
FINANCE--3.7%
------------------------------------------------------------
2,200 (a) Acceptance Insurance Cos., Inc. $ 30,800
------------------------------------------------------------
1,000 Allied Group, Inc. 28,375
------------------------------------------------------------
1,300 American Bankers Insurance Group, Inc. 38,350
------------------------------------------------------------
1,800 (a) American Travellers Corp. 32,400
------------------------------------------------------------
800 Associated Banc Corp. 30,000
------------------------------------------------------------
1,400 Bankers First Corp. 37,800
------------------------------------------------------------
1,200 Centura Bank, Inc. 31,050
------------------------------------------------------------
3,100 City National Corp. 34,487
------------------------------------------------------------
900 Cullen Frost Bankers, Inc. 35,550
------------------------------------------------------------
3,300 CWM Mortgage Holdings, Inc. 38,362
------------------------------------------------------------
1,800 Foothill Group, Inc., Class A 44,550
------------------------------------------------------------
4,200 Hibernia Corp., Class A 35,175
------------------------------------------------------------
900 Irwin Financial Corp. 30,037
------------------------------------------------------------
1,500 Money Stores, Inc. 46,312
------------------------------------------------------------
1,600 (a) Mutual Assurance, Inc. 42,800
------------------------------------------------------------
2,000 North Fork Bancorp, Inc. 35,500
------------------------------------------------------------
3,000 Peoples Heritage Financial Group 43,125
------------------------------------------------------------
800 Protective Life Corp. 39,700
------------------------------------------------------------
1,200 Queens County Bancorp, Inc. 39,000
------------------------------------------------------------
1,900 (a) St. Frances Capital Corp. 36,338
------------------------------------------------------------
1,500 Student Loan Corp. 38,813
------------------------------------------------------------
1,900 Webb (Del) Corp. 41,325
------------------------------------------------------------
900 WestAmerica Bancorporation 31,950
------------------------------------------------------------ -----------
Total 841,799
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
HEALTH SERVICES--0.6%
------------------------------------------------------------
2,500 Bindley Western Industries, Inc. $ 38,750
------------------------------------------------------------
2,300 (a) Maxicare Health Plans, Inc. 35,362
------------------------------------------------------------
2,200 (a) Sun Healthcare Group, Inc. 36,575
------------------------------------------------------------
2,000 (a) United American Healthcare Corp. 34,750
------------------------------------------------------------ -----------
Total 145,437
------------------------------------------------------------ -----------
HEALTH TECHNOLOGY--0.4%
------------------------------------------------------------
3,000 (a) AMSCO International, Inc. 37,500
------------------------------------------------------------
1,000 (a) Bio Rad Laboratories, Inc., Class A 30,000
------------------------------------------------------------
4,800 Kinetic Concepts, Inc. 33,600
------------------------------------------------------------ -----------
Total 101,100
------------------------------------------------------------ -----------
INDUSTRIAL SERVICES--0.7%
------------------------------------------------------------
800 Butler Manufacturing Co. 32,400
------------------------------------------------------------
10,000 (a) EnviroSource, Inc. 40,000
------------------------------------------------------------
1,800 Granite Construction, Inc. 38,700
------------------------------------------------------------
2,000 (a) Western Waste Industries 38,500
------------------------------------------------------------ -----------
Total 149,600
------------------------------------------------------------ -----------
NON-ENERGY MINERALS--0.4%
------------------------------------------------------------
1,500 Brush Wellman, Inc. 32,625
------------------------------------------------------------
2,300 (a) Magma Copper Co. 33,062
------------------------------------------------------------
800 Texas Industries, Inc. 30,100
------------------------------------------------------------ -----------
Total 95,787
------------------------------------------------------------ -----------
PROCESS INDUSTRIES--0.9%
------------------------------------------------------------
1,500 (a) Bush Boake Allen, Inc. 42,562
------------------------------------------------------------
1,200 Chesapeake Corp. 34,200
------------------------------------------------------------
1,000 (a) Cytec Industries, Inc. 36,875
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
------------------------------------------------------------
1,200 First Mississippi Corp. $ 27,750
------------------------------------------------------------
800 Pittway Corp., Class A 35,800
------------------------------------------------------------
900 Springs Industries, Inc., Class A 35,438
------------------------------------------------------------ -----------
Total 212,625
------------------------------------------------------------ -----------
PRODUCER MANUFACTURING--1.1%
------------------------------------------------------------
1,000 AGCO Corp. 37,875
------------------------------------------------------------
600 Blount, Inc., Class A 22,725
------------------------------------------------------------
1,100 Borg-Warner Automotive, Inc. 27,912
------------------------------------------------------------
3,000 Brenco, Inc. 38,250
------------------------------------------------------------
1,600 JLG Industries, Inc. 40,400
------------------------------------------------------------
800 NACCO Industries, Inc., Class A 48,000
------------------------------------------------------------
2,000 (a) NCI Building System, Inc. 32,750
------------------------------------------------------------ -----------
Total 247,912
------------------------------------------------------------ -----------
RETAIL TRADE--1.0%
------------------------------------------------------------
3,300 (a) Bon-Ton Stores, Inc. 34,237
------------------------------------------------------------
1,900 (a) Friedmans, Inc., Class A 34,438
------------------------------------------------------------
1,700 (a) Regis Corp. Minnesota 29,750
------------------------------------------------------------
3,300 (a) Rhodes, Inc. 28,463
------------------------------------------------------------
1,900 (a) Waban, Inc. 27,788
------------------------------------------------------------
2,500 Wolohan Lumber Co. 34,063
------------------------------------------------------------
2,900 (a) Zale Corp. 33,531
------------------------------------------------------------ -----------
Total 222,270
------------------------------------------------------------ -----------
TECHNOLOGY SERVICES--0.7%
------------------------------------------------------------
1,428 (a) Bell Industries, Inc. 27,310
------------------------------------------------------------
4,000 Computer Language Research, Inc. 35,500
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
TECHNOLOGY SERVICES--CONTINUED
------------------------------------------------------------
6,600 (a) Computervision Corp. $ 37,125
------------------------------------------------------------
1,900 (a) Frame Technology Corp. 46,550
------------------------------------------------------------ -----------
Total 146,485
------------------------------------------------------------ -----------
TRANSPORTATION--0.1%
------------------------------------------------------------
1,000 (a) Landstar System, Inc. 26,500
------------------------------------------------------------ -----------
UTILITIES--0.8%+
------------------------------------------------------------
2,700 Central Maine Power Co. 31,725
------------------------------------------------------------
1,000 Eastern Enterprises 30,000
------------------------------------------------------------
2,800 (a) Public Service Co. New Mexico 39,900
------------------------------------------------------------
1,100 St. Joseph Light & Power Co. 32,313
------------------------------------------------------------
2,300 (a) U.S. Long Distance Corp. 34,500
------------------------------------------------------------ -----------
Total 168,438
------------------------------------------------------------ -----------
TOTAL SMALL COMPANY (IDENTIFIED COST, $3,236,250) 3,487,022
------------------------------------------------------------ -----------
FOREIGN EQUITY--16.8%
------------------------------------------------------------
AUSTRALIA--0.4%
------------------------------------------------------------
2,805 Broken Hill Proprietary Co., Ltd. 35,538
------------------------------------------------------------
16,400 Publishing & Broadcasting 47,823
------------------------------------------------------------ -----------
Total 83,361
------------------------------------------------------------ -----------
BELGIUM--0.2%
------------------------------------------------------------
950 Delhaize-Le Lion 44,359
------------------------------------------------------------ -----------
DENMARK--0.1%
------------------------------------------------------------
300 Novo-Nordisk 31,854
------------------------------------------------------------ -----------
FINLAND--0.1%
------------------------------------------------------------
200 Kone Corp. 'B' 24,244
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
FRANCE--0.7%
------------------------------------------------------------
100 Carrefour Supermarche $ 49,441
------------------------------------------------------------
850 Elf Aquitaine 68,699
------------------------------------------------------------
250 LVMH (Moet-Hennessy) 47,516
------------------------------------------------------------ -----------
Total 165,656
------------------------------------------------------------ -----------
GERMANY--0.8%
------------------------------------------------------------
45 Allianz AG Holding 81,511
------------------------------------------------------------
150 Daimler Benz AG 72,649
------------------------------------------------------------
50 Siemens AG 23,774
------------------------------------------------------------ -----------
Total 177,934
------------------------------------------------------------ -----------
HONG KONG--0.7%
------------------------------------------------------------
14,300 Cheung Kong 70,434
------------------------------------------------------------
2,800 HSBC Holdings PLC 36,379
------------------------------------------------------------
8,500 Hutchison Whampoa 42,965
------------------------------------------------------------ -----------
Total 149,778
------------------------------------------------------------ -----------
INVESTMENT COMPANIES--1.6%
------------------------------------------------------------
3,800 (a) First Iberian Fund 28,738
------------------------------------------------------------
7,800 France Growth Fund, Inc. 80,925
------------------------------------------------------------
6,400 (a) Germany Fund, Inc. 73,600
------------------------------------------------------------
6,700 Italy Fund, Inc. 56,950
------------------------------------------------------------
1,615 Malaysia Fund, Inc. 34,319
------------------------------------------------------------
4,000 (a) Swiss Helvetia Fund 86,000
------------------------------------------------------------ -----------
Total 360,532
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
ITALY--0.1%
------------------------------------------------------------
500 Assicurazioni Generali $ 12,123
------------------------------------------------------------
8,000 Telecom Italia 20,956
------------------------------------------------------------ -----------
Total 33,079
------------------------------------------------------------ -----------
JAPAN--7.0%
------------------------------------------------------------
4,000 Asahi Bank, Ltd. 49,631
------------------------------------------------------------
4,000 Bank of Tokyo, Ltd., Tokyo 70,901
------------------------------------------------------------
3,000 Dai-Ichi Kangyo Bank, Ltd., Tokyo 56,721
------------------------------------------------------------
3,000 Fuji Bank, Ltd., Tokyo 68,774
------------------------------------------------------------
5,000 Hitachi, Ltd. 48,272
------------------------------------------------------------
2,000 Industrial Bank of Japan, Ltd., Tokyo 58,139
------------------------------------------------------------
1,000 Ito Yokado Co. 52,939
------------------------------------------------------------
2,000 Kansai Electric Power 52,703
------------------------------------------------------------
12,000 Kawasaki Heavy Industries 45,093
------------------------------------------------------------
5,000 Kirin Brewery Co., Ltd. 57,607
------------------------------------------------------------
3,000 Matsushita Electric Industrial Co. 46,440
------------------------------------------------------------
2,000 Mitsubishi Bank 47,740
------------------------------------------------------------
3,000 Mitsubishi Corp. 34,316
------------------------------------------------------------
8,000 Mitsubishi Heavy Industries 54,925
------------------------------------------------------------
4,000 Mitsubishi Trust & Banking 64,756
------------------------------------------------------------
6,000 Mitsukoshi, Ltd. 49,773
------------------------------------------------------------
12,000 Nippon Steel Co. 43,108
------------------------------------------------------------
8 Nippon Telegraph & Telephone Corp. 66,174
------------------------------------------------------------
3,000 Nomura Securities Co., Ltd. 53,885
------------------------------------------------------------
4,000 Sakura Bank Ltd., Tokyo 47,740
------------------------------------------------------------
1,000 Seven-Eleven Japan 73,855
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
JAPAN--CONTINUED
------------------------------------------------------------
1,000 Sony Corp. $ 48,213
------------------------------------------------------------
3,000 Sumitomo Bank Ltd., Osaka 62,393
------------------------------------------------------------
13,000 Sumitomo Heavy Industries 43,167
------------------------------------------------------------
4,000 Takeda Chemical Industries 53,412
------------------------------------------------------------
4,000 Tokio Marine & Fire 45,849
------------------------------------------------------------
2,000 Tokyo Electric Power 63,338
------------------------------------------------------------
8,000 Toshiba Corp. 50,387
------------------------------------------------------------
3,000 Toyota Motor Corp. 58,139
------------------------------------------------------------ -----------
Total 1,568,390
------------------------------------------------------------ -----------
MALAYSIA--0.3%
------------------------------------------------------------
3,000 Telekom Malaysia 23,007
------------------------------------------------------------
9,000 Tenaga Nasional Berhad 37,249
------------------------------------------------------------ -----------
Total 60,256
------------------------------------------------------------ -----------
NETHERLANDS--0.6%
------------------------------------------------------------
850 Philips Electronics 33,854
------------------------------------------------------------
600 Royal Dutch Petroleum Co. 76,050
------------------------------------------------------------
200 Unilever NV-Cert 25,161
------------------------------------------------------------ -----------
Total 135,065
------------------------------------------------------------ -----------
NEW ZEALAND--0.0%
------------------------------------------------------------
6,000 Fletcher Challenge, Ltd. 15,954
------------------------------------------------------------ -----------
NORWAY--0.1%
------------------------------------------------------------
400 Orkla Borregaard A.S. 16,819
------------------------------------------------------------ -----------
SINGAPORE--0.2%
------------------------------------------------------------
17,000 Singapore Telecommunications, Ltd. 34,659
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
SPAIN--0.1%
------------------------------------------------------------
600 Empresa Nac de Electridad $ 28,720
------------------------------------------------------------ -----------
SWEDEN--0.3%
------------------------------------------------------------
300 Ericsson LM B-F 21,467
------------------------------------------------------------
2,000 Volvo AB 35,164
------------------------------------------------------------ -----------
Total 56,631
------------------------------------------------------------ -----------
SWITZERLAND--0.6%
------------------------------------------------------------
50 Nestle SA 50,493
------------------------------------------------------------
125 Sandoz AG 83,798
------------------------------------------------------------ -----------
Total 134,291
------------------------------------------------------------ -----------
UNITED KINGDOM--2.9%
------------------------------------------------------------
6,000 Barclays PLC 64,316
------------------------------------------------------------
8,000 British Gas PLC 38,431
------------------------------------------------------------
8,000 British Petroleum PLC 56,408
------------------------------------------------------------
10,000 British Telecom PLC 62,728
------------------------------------------------------------
12,000 Coats Viyella PLC 40,877
------------------------------------------------------------
5,000 Eastern Electricity PLC 50,977
------------------------------------------------------------
4,000 Glaxo Wellcome PLC 46,117
------------------------------------------------------------
16,000 Hanson PLC 60,854
------------------------------------------------------------
4,000 Marks & Spencer PLC 26,362
------------------------------------------------------------
5,000 Midlands Electricity PLC 50,818
------------------------------------------------------------
3,600 RMC Group PLC 63,087
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
UNITED KINGDOM--CONTINUED
------------------------------------------------------------
9,000 Williams Holdings PLC $ 47,737
------------------------------------------------------------
9,000 Wolseley PLC 52,454
------------------------------------------------------------ -----------
Total 661,166
------------------------------------------------------------ -----------
TOTAL FOREIGN EQUITY (IDENTIFIED COST, $3,716,588) 3,782,748
------------------------------------------------------------ -----------
TOTAL STOCKS (IDENTIFIED COST, $10,574,264) 11,293,820
------------------------------------------------------------ -----------
BONDS--25.6%
- -----------------------------------------------------------------------------------
TREASURY--9.0%
------------------------------------------------------------
$ 2,000,000 United States Treasury Note, 6.50%, 5/15/2005
(IDENTIFIED COST, $1,988,750) 2,030,700
------------------------------------------------------------ -----------
MORTGAGE-BACKED SECURITIES--4.0%
------------------------------------------------------------
GOVERNMENT AGENCY--4.0%
------------------------------------------------------------
207,854 Federal Home Loan Mortgage Corp. Pool E58069, 7.00%,
4/1/2009 209,149
------------------------------------------------------------
99,678 Federal Home Loan Mortgage Corp. Pool G40136, 8.00%,
3/1/2002 102,355
------------------------------------------------------------
248,226 Federal National Mortgage Association Pool 305742, 8.50%,
2/1/2025 256,678
------------------------------------------------------------
323,627 Government National Mortgage Association Pool 372858, 7.50%,
1/15/2024 326,322
------------------------------------------------------------ -----------
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST, $860,914) 894,504
------------------------------------------------------------ -----------
HIGH YIELD--5.2%
------------------------------------------------------------
AUTOMOTIVE--0.4%
------------------------------------------------------------
75,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 76,875
------------------------------------------------------------ -----------
BANKING--0.5%
------------------------------------------------------------
100,000 First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 107,500
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
------------------------------------------------------------
BROADCAST RADIO & TV--0.3%
------------------------------------------------------------
$ 50,000 SCI Television, Inc., Sr. Secd. Note, 11.00%, 6/30/2005 $ 52,875
------------------------------------------------------------ -----------
CABLE TELEVISION--0.2%
------------------------------------------------------------
50,000 Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 50,875
------------------------------------------------------------ -----------
CHEMICALS & PLASTICS--0.5%
------------------------------------------------------------
50,000 Arcadian Partners L.P., Sr. Note, Series B, 10.75%, 5/1/2005 52,000
------------------------------------------------------------
75,000 (a) G-I Holdings, Sr. Disc. Note, 10/1/1998 52,125
------------------------------------------------------------ -----------
Total 104,125
------------------------------------------------------------ -----------
CLOTHING & TEXTILES--0.2%
------------------------------------------------------------
50,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 49,250
------------------------------------------------------------ -----------
CONGLOMERATES--0.2%
------------------------------------------------------------
50,000 Sherritt Gordon, Ltd., Sr. Note, 9.75%, 4/1/2003 50,250
------------------------------------------------------------ -----------
CONSUMER PRODUCTS--0.2%
------------------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note, 9.00%,
12/15/2003 47,875
------------------------------------------------------------ -----------
CONTAINER & GLASS PRODUCTS--0.2%
------------------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 51,250
------------------------------------------------------------ -----------
FOOD & DRUG RETAILERS--0.5%
------------------------------------------------------------
50,000 (a)(c) Grand Union Co., Sr. Sub. Note, 12.25%, 7/15/2002 16,125
------------------------------------------------------------
50,000 Pathmark Stores, Inc., Sr. Sub. Note, 9.625%, 5/1/2003 49,125
------------------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 50,000
------------------------------------------------------------ -----------
Total 115,250
------------------------------------------------------------ -----------
FOOD SERVICES--0.2%
------------------------------------------------------------
50,000 Flagstar Corp., Sr. Note, 10.875%, 12/1/2002 46,500
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
------------------------------------------------------------
FOREST PRODUCTS--0.2%
------------------------------------------------------------
$ 50,000 Stone Container Corp., Sr. Note, 9.875%, 2/1/2001 $ 50,125
------------------------------------------------------------ -----------
HEALTHCARE--0.3%
------------------------------------------------------------
50,000 National Medical, Sr. Sub. Note, 10.125%, 3/1/2005 52,938
------------------------------------------------------------ -----------
HOME PRODUCTS & FURNISHINGS--0.2%
------------------------------------------------------------
50,000 American Standard, Inc., Sr. Sub. Disc, Deb., 0/10.50%,
(a) 6/1/2005 37,625
------------------------------------------------------------ -----------
OIL & GAS--0.2%
------------------------------------------------------------
50,000 Falcon Drilling Co., Inc., Sr. Note, 9.75%, 1/15/2001 48,750
------------------------------------------------------------ -----------
RETAILERS--0.2%
------------------------------------------------------------
50,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 48,875
------------------------------------------------------------ -----------
STEEL--0.4%
------------------------------------------------------------
50,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%,
9/1/2004 50,875
------------------------------------------------------------
50,000 Northwestern Steel & Wire Co., Sr. Note, 9.50%, 6/15/2001 46,750
------------------------------------------------------------ -----------
Total 97,625
------------------------------------------------------------ -----------
TELECOMMUNICATIONS & CELLULAR--0.1%
------------------------------------------------------------
50,000 Nextel Communications, Inc., Sr. Disc. Note, 0/11.50%,
(a) 9/1/2003 28,750
------------------------------------------------------------ -----------
UTILITIES--0.2%
------------------------------------------------------------
50,000 California Energy Co., Sr. Disc. Note, 1/15/2004 42,313
------------------------------------------------------------ -----------
TOTAL HIGH YIELD (IDENTIFIED COST, $1,163,156) 1,159,626
------------------------------------------------------------ -----------
OTHER CORPORATE--0.2%
------------------------------------------------------------
ELECTRONIC & ELECTRIC--0.2%
------------------------------------------------------------
40,000 General Instrument Corp., Conv. Jr. Sub. Note, 5.00%,
6/15/2000
(IDENTIFIED COST, $54,300) 54,812
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN--7.2%
------------------------------------------------------------
AUSTRALIAN DOLLAR--0.1%
------------------------------------------------------------
35,000 State Bank of New South Wales, 12.25%, 2/26/2001 $ 28,862
------------------------------------------------------------ -----------
BELGIAN FRANC--0.5%
------------------------------------------------------------
200,000 Belgian Gov't., Foreign Gov't. Guarantee, 10.00%, 4/5/1996 7,159
------------------------------------------------------------
3,000,000 Belgium Kingdom, 7.75%, 10/15/2004 106,551
------------------------------------------------------------ -----------
Total 113,710
------------------------------------------------------------ -----------
CANADIAN DOLLAR--0.3%
------------------------------------------------------------
80,000 Ontario Hydro, 9.00%, 6/24/2002 60,955
------------------------------------------------------------ -----------
DENMARK KRONE--0.2%
------------------------------------------------------------
300,000 Denmark, 8.00%, 5/15/2003 54,330
------------------------------------------------------------ -----------
DEUTSCHE MARK--1.7%
------------------------------------------------------------
150,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 111,218
------------------------------------------------------------
600,000 KFW International Finance, 7.00%, 5/12/2000 120,553
------------------------------------------------------------
210,000 Treuhandanstalt, 7.75%, 10/1/2002 159,421
------------------------------------------------------------ -----------
Total 391,192
------------------------------------------------------------ -----------
FRENCH FRANC--0.3%
------------------------------------------------------------
350,000 France O.A.T., 8.50%, 11/25/2002 75,270
------------------------------------------------------------ -----------
ITALIAN LIRA--0.5%
------------------------------------------------------------
75,000,000 Buoni Poliennali Del Tes, 12.00%, 9/1/1997 46,124
------------------------------------------------------------
100,000,000 Buoni Poliennali Del Tes, 8.50%, 8/1/1999 54,706
------------------------------------------------------------ -----------
Total 100,830
------------------------------------------------------------ -----------
JAPANESE YEN--1.9%
------------------------------------------------------------
11,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 159,557
------------------------------------------------------------
20,000,000 KFW International Finance, 6.00%, 11/29/1999 275,628
------------------------------------------------------------ -----------
Total 435,185
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ ------------------------------------------------------------ -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN--CONTINUED
------------------------------------------------------------
NETHERLAND GUILDER--0.4%
------------------------------------------------------------
150,000 Netherlands Government, 5.75%, 1/15/2004 $ 89,423
------------------------------------------------------------ -----------
SPANISH PESETA--0.3%
------------------------------------------------------------
8,300,000 Spain (Government), 8.30%, 12/15/1998 62,407
------------------------------------------------------------ -----------
SWEDISH KRONA--0.2%
------------------------------------------------------------
400,000 Sweden, 6.00%, 2/9/2000 39,438
------------------------------------------------------------ -----------
UNITED KINGDOM POUND--0.8%
------------------------------------------------------------
100,000 UK Conversion, 9.00%, 3/3/2000 166,945
------------------------------------------------------------ -----------
TOTAL FOREIGN (IDENTIFIED COST, $1,478,442) 1,618,547
------------------------------------------------------------ -----------
TOTAL BONDS (IDENTIFIED COST, $5,545,562) 5,758,189
------------------------------------------------------------ -----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ------------ ------------------------------------------------------------
<C> <C> <S> <C>
CASH EQUIVALENTS--23.3%**
- -----------------------------------------------------------------------------------
TREASURY--12.8%
------------------------------------------------------------
$ 2,900,000 United States Treasury Bill, 6/22/1995 (IDENTIFIED COST,
$2,890,167) 2,891,217
------------------------------------------------------------ -----------
REPURCHASE AGREEMENTS--10.5%***
------------------------------------------------------------
2,355,000 J.P. Morgan & Co., Inc., 6.17%, dated 5/31/1995, due
6/1/1995
(AT AMORTIZED COST) 2,355,000
------------------------------------------------------------ -----------
TOTAL CASH EQUIVALENTS 5,246,217
------------------------------------------------------------ -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $21,364,993)(B) $22,298,226
------------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
The following acronym is used in this portfolio:
PLC--Public Limited Company
(a) Non-income producing.
(b) The cost for federal income tax purposes amounts to $21,364,993. The net
unrealized appreciation on a federal tax cost basis amounts to $933,233, and
is comprised of $1,282,853 appreciation and $349,620 depreciation at May 31,
1995.
(c) On May 31, 1995, the Grand Union Company's plan of reorganization was
confirmed by the U.S. Bankruptcy Court. The distribution of new securities
in exchange for the Fund's notes is pending.
+ The Fund's overall exposure to utility stocks is 1.6%.
* The Fund's overall exposure to stocks is 61.3%, after adjustment for the use
of S & P 500 and S & P Midcap futures contracts.
** The Fund holds cash equivalents as collateral for the eight S & P 500
futures contracts it bought with a market value of $2,133,400. Consequently,
the Fund's exposure to large cap stocks is 27.4% of the Fund. The Fund holds
cash equivalents as collateral for the five S & P Midcap futures contracts
it bought with a market value of $475,250. Consequently, the Fund's exposure
to small cap stocks is 17.6% of the Fund.
*** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations. The investment in the repurchase agreement was through
participation in a joint account with other Federated funds.
Note: The categories of investments are shown as a percentage of net assets
($22,483,282) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------------
Investments in repurchase agreements, at amortized cost $ 2,355,000
- ----------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost, $19,009,993) 19,943,226
- ---------------------------------------------------------------------------------- ----------
Total investments, at amortized cost and value (identified and tax cost, $21,364,993) $22,298,226
- ------------------------------------------------------------------------------------------------
Cash denominated in foreign currencies (identified cost, $4,276) 3,035
- ------------------------------------------------------------------------------------------------
Cash 5,041
- ------------------------------------------------------------------------------------------------
Income receivable 112,137
- ------------------------------------------------------------------------------------------------
Receivable for investments sold 98,332
- ------------------------------------------------------------------------------------------------
Receivable for shares sold 51,556
- ------------------------------------------------------------------------------------------------
Receivable for futures variation margin 42,775
- ------------------------------------------------------------------------------------------------
Receivable for foreign currency sold 867
- ------------------------------------------------------------------------------------------------
Other assets 494
- ------------------------------------------------------------------------------------------------
Deferred expenses 69,878
- ------------------------------------------------------------------------------------------------ ----------
Total assets 22,682,341
- ------------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------------
Payable for investments purchased 190,298
- ----------------------------------------------------------------------------------
Payable for shares redeemed 5,675
- ----------------------------------------------------------------------------------
Payable for foreign currency purchased 854
- ----------------------------------------------------------------------------------
Tax withholding liability 2,232
- ---------------------------------------------------------------------------------- ----------
Total liabilities 199,059
- ------------------------------------------------------------------------------------------------ ----------
NET ASSETS for 2,083,335 shares outstanding $22,483,282
- ------------------------------------------------------------------------------------------------ ----------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------
Paid in capital $20,965,848
- ------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments, translation of assets and liabilities
in foreign currency, and futures contracts 1,079,589
- ------------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments, foreign currency transactions, and futures
contracts 287,532
- ------------------------------------------------------------------------------------------------
Undistributed net investment income 150,313
- ------------------------------------------------------------------------------------------------ ----------
Total Net Assets $22,483,282
- ------------------------------------------------------------------------------------------------ ----------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
- ------------------------------------------------------------------------------------------------
Institutional Shares
($18,158,928 / 1,681,952 shares outstanding) $10.80
- ------------------------------------------------------------------------------------------------ ----------
Select Shares
($4,324,354 / 401,383 shares outstanding) $10.77
- ------------------------------------------------------------------------------------------------ ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $720) $ 334,302
- ---------------------------------------------------------------------------------------------
Dividend (net of foreign taxes withheld of $4,230) 112,973
- --------------------------------------------------------------------------------------------- ----------
Total income 447,275
- ---------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------
Investment advisory fee $ 72,462
- ---------------------------------------------------------------------------------
Administrative personnel and services fee 77,288
- ---------------------------------------------------------------------------------
Custodian and portfolio accounting fees 17,831
- ---------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 23,411
- ---------------------------------------------------------------------------------
Legal fees 1,094
- ---------------------------------------------------------------------------------
Share registration costs 15,276
- ---------------------------------------------------------------------------------
Printing and postage 24,732
- ---------------------------------------------------------------------------------
Insurance premiums 2,548
- ---------------------------------------------------------------------------------
Directors'/Trustees' fees 1,250
- ---------------------------------------------------------------------------------
Auditing fees 6,000
- ---------------------------------------------------------------------------------
Shareholder services fee--Select Shares 3,395
- ---------------------------------------------------------------------------------
Distribution services fee 10,187
- ---------------------------------------------------------------------------------
Miscellaneous 7,274
- --------------------------------------------------------------------------------- --------
Total expenses 262,748
- ---------------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------------------------
Waiver of investment advisory fee $72,462
- -----------------------------------------------------------------------
Waiver of distribution services fee 3,396
- -----------------------------------------------------------------------
Reimbursement of other operating expenses 80,086 155,944
- ----------------------------------------------------------------------- ------- --------
Net expenses 106,804
- --------------------------------------------------------------------------------------------- ----------
Net investment income 340,471
- --------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, AND FUTURES CONTRACTS:
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency transactions, and futures contracts
(identified cost basis) 254,802
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments, translation of assets
and liabilities in foreign currency, and futures contracts 1,645,975
- --------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain (loss) on investments, foreign currency, and futures
contracts 1,900,777
- --------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $2,241,248
- --------------------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
----------------- ---------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------
Net investment income $ 340,471 $ 225,576
- ----------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency
transactions, and futures contracts ($254,802 and $31,171 net
gain, respectively, as computed for federal tax purposes) 254,802 75,474
- ----------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments, translation of assets and liabilities in foreign
currency, and futures contracts 1,645,975 (566,386)
- ---------------------------------------------------------------- ------------- ---------------
Change in assets resulting from operations 2,241,248 (265,336)
- ---------------------------------------------------------------- ------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------
Distributions from net investment income:
- ----------------------------------------------------------------
Institutional Shares (281,696) (107,045)
- ----------------------------------------------------------------
Select Shares (28,797) (9,749)
- ----------------------------------------------------------------
Distributions from net realized gains:
- ----------------------------------------------------------------
Institutional Shares (28,086) --
- ----------------------------------------------------------------
Select Shares (3,092) --
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets resulting from distributions to
shareholders (341,671) (116,794)
- ---------------------------------------------------------------- ------------- ---------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------
Proceeds from sale of Shares 8,793,249 18,841,563
- ----------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 221,972 54,330
- ----------------------------------------------------------------
Cost of Shares redeemed (5,800,271) (1,145,008)
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets resulting from Share transactions 3,214,950 17,750,885
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets 5,114,527 17,368,755
- ----------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------
Beginning of period 17,368,755 --
- ---------------------------------------------------------------- ------------- ---------------
End of period (including undistributed net investment income of
$150,313 and $120,335, respectively) $22,483,282 $17,368,755
- ---------------------------------------------------------------- ------------- ---------------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
------------ ---------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.82 $ 10.00
- ---------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------
Net investment income 0.19 0.17
- ---------------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts 0.99 (0.25)
- --------------------------------------------------------------- --------- -------------
Total from investment operations 1.18 (0.08)
- ---------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------
Distributions to shareholders from net investment income (0.18) (0.10)
- ---------------------------------------------------------------
Distributions from net realized gain (0.02) --
- --------------------------------------------------------------- --------- -------------
Total from distributions (0.20) --
- --------------------------------------------------------------- --------- -------------
NET ASSET VALUE, END OF PERIOD $10.80 $ 9.82
- --------------------------------------------------------------- --------- -------------
TOTAL RETURN (B) 12.18% (0.87%)
- ---------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------
Expenses 1.00%(c) 0.89%(c)
- ---------------------------------------------------------------
Net investment income 3.63%(c) 3.42%(c)
- ---------------------------------------------------------------
Expense waiver/reimbursement 1.58%(c)(d) 1.72%(c)(e)
- ---------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------
Net assets, end of period (000 omitted) $18,159 $15,696
- ---------------------------------------------------------------
Portfolio turnover rate 84% 77%
- ---------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from January 27, 1994
(start of business) to May 24, 1994, the Fund had no investment activity.
(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.
(e) The Adviser waived $6,858 of the investment advisory fee, which represents
0.11% of average net assets, to comply with certain state expense
limitations. The remainder of the waiver/reimbursement was voluntary. This
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)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
FINANCIAL HIGHLIGHTS--SELECT SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
------------ ---------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.80 $ 10.00
- ---------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------------
Net investment income 0.15 0.13
- ---------------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts 0.98 (0.25)
- --------------------------------------------------------------- --------- -------------
Total from investment operations 1.13 (0.12)
- ---------------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------------
Distributions to shareholders from net investment income (0.14) (0.08)
- ---------------------------------------------------------------
Distributions from net realized gain (0.02) --
- --------------------------------------------------------------- --------- -------------
Total from distributions (0.16) --
- --------------------------------------------------------------- --------- -------------
NET ASSET VALUE, END OF PERIOD $10.77 $ 9.80
- --------------------------------------------------------------- --------- -------------
TOTAL RETURN (B) 11.66% (1.20%)
- ---------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------------
Expenses 1.75%(c) 1.64%(c)
- ---------------------------------------------------------------
Net investment income 2.87%(c) 2.67%(c)
- ---------------------------------------------------------------
Expense waiver/reimbursement 1.83%(c)(d) 1.97%(c)(e)
- ---------------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------------
Net assets, end of period (000 omitted) $4,324 $1,673
- ---------------------------------------------------------------
Portfolio turnover rate 84% 77%
- ---------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from January 27, 1994
(start of business) to May 24, 1994, the Fund had no investment activity.
(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.
(e) The Adviser waived $6,858 of the investment advisory fee, which represents
0.11% of average net assets, to comply with certain state expense
limitations. The remainder of the waiver/reimbursement was voluntary. This
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)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Managed Series Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end, management investment
company. The Trust consists of four diversified portfolios. The financial
statements included herein are only those of Federated Managed Aggressive Growth
Fund (the "Fund"). The financial statements of the other portfolio are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Shares (formerly, Institutional Service
Shares) and Select Shares. The Institutional Service Shares changed its name to
Institutional Shares effective June 30, 1995.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government obligations are generally valued at
the mean between the over-the-counter bid and asked prices as furnished by
an independent pricing service. Listed equity securities are valued at the
last sale price reported on national securities exchanges. Unlisted
securities, bonds, corporate bonds and other fixed income securities are
generally valued at the price provided by an independent pricing service.
Short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value. Investments in other regulated investment companies are
valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
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. However, federal taxes may be
imposed on the Fund upon the disposition of certain investments in Passive
Foreign Investment Companies. Withholding taxes on foreign dividends have
been provided for in accordance with the Fund's understanding of the
applicable country's tax rules and rates.
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account an amount
of cash or U.S. government securities equal to a percentage of the contract
value. The Fund agrees to receive from or pay to the broker an amount of
cash equal to a specific dollar amount times the difference between the
closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contract is determined and any
difference between such value and the original futures contract value is
reflected in the "daily variation margin" account. Daily variation margin
adjustments, arising from this "marking to market" process, are recorded by
the Fund as unrealized gains or losses.
Risks of entering into futures contracts include the possibility that a
change in the value of the contract may not correlate with changes in the
value of the underlying securities. Risks may arise
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
from the inability of counterparties to perform under the terms of the
contract. The Fund may decide to close its position on a contract at any
time prior to the contract's expiration. When a contract is closed, the
Fund recognizes a realized gain or loss. For the six months ended May 31,
1995, the Fund had a realized gain of $139,909 on futures contracts.
At May 31, 1995, the Fund had outstanding futures contracts as set forth
below:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CONTRACTS TO APPRECIATION
DATE DELIVER/RECEIVE VALUE (DEPRECIATION)
- ----------------- ---------------------------------- ----------------- -----------------
<S> <C> <C> <C>
June 1995 8 S&P 500 Index Futures Long $129,031
June 1995 5 S&P Midcap Index Future Long 15,775
---------
Net Unrealized Appreciation (Depreciation) on Futures Contracts $144,806
---------
</TABLE>
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in equity and fixed income
securities of non-U.S. issuers. Although the Fund maintains a diversified
investment portfolio, the political or economic developments within a
particular country or region may have an adverse effect on the ability of
domiciled issuers to meet their obligations. Additionally, political or
economic developments may have an effect on the liquidity and volatility of
portfolio securities and currency holdings.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
At May 31, 1995, the foreign portion of the portfolio was diversified with
the following industries:
<TABLE>
<S> <C> <C> <C>
Agency 2.3% Finance 0.5%
Automotive 0.7 Food & Drug Retailers 0.2
Banking 2.5 Health Technology 0.3
Beverage & Tobacco 0.3 Insurance 0.6
Broadcast Radio & TV 0.2 Machinery & Equipment 0.7
Brokerage & Investment Houses 0.2 Pharmaceuticals 0.4
Building & Development 1.2 Manufacturing 0.4
Chemical 0.2 Retailers 1.1
Clothing & Textiles 0.2 Sovereign 4.1
Consumer Non-Durables 0.3 State/Provincial 0.1
Consumer Products 0.2 Steel 0.2
Diversified 0.2 Supranational 0.7
Electric Utilities 1.1 Telecommunications & Cellular 0.9
Electronics & Electric 1.0 Utilities 0.4
Energy 1.0
</TABLE>
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.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
----------------------- ------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------------------- -------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 596,046 $ 6,055,671 1,703,344 $17,093,888
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 20,503 203,518 4,919 49,959
- --------------------------------------------------------
Shares redeemed (532,317) (5,384,351) (110,543) (1,106,095)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Institutional Share
transactions 84,232 $ 874,838 1,597,720 $16,037,752
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
----------------------- ------------------------
SELECT SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------------------- -------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 269,145 $ 2,737,578 174,124 $ 1,747,675
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 1,857 18,454 431 4,371
- --------------------------------------------------------
Shares redeemed (40,356) (415,920) (3,818) (38,913)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Select Share transactions 230,646 $ 2,340,112 170,737 $ 1,713,133
- -------------------------------------------------------- -------- ---------- -------- ----------
Total net change resulting from Fund Share
transactions 314,878 $ 3,214,950 1,768,457 $17,750,885
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, 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 a portion of its fee and reimburse certain operating
expenses of the Fund. The Adviser can modify or terminate this voluntary waiver
and reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund administrative personnel
and services. The FAS fee is based on the level of average aggregate daily net
assets of all funds advised by subsidiaries of Federated Investors for the
period. The administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.
DISTRIBUTION FEE--The Fund has adopted a Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Select Shares. The Plan provides that the Fund may incur
distribution expenses up to .75 of 1% of the average daily net assets of the
Select Shares, annually, to compensate FSC. The distributor may voluntarily
choose to waive a portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of each class of shares for the period. This fee
is to obtain certain services for shareholders and to maintain the shareholder
accounts. For the six months ended May 31, 1995, Institutional Shares did not
incur a shareholder services fee.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. The fee
is based on the size, type, and number of accounts and transactions made by
shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($49,264) and start-up
administrative service expenses ($39,069) were initially borne by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative expenses during the five year period following March 11,
1994 (date the Fund first became effective). For the six months ended May 31,
1995, the Fund paid $7,834 and $5,001, respectively, pursuant to this agreement.
GENERAL--Certain 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 six
months ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $15,061,053
- ------------------------------------------------------------------------------- -----------
SALES $13,159,639
- ------------------------------------------------------------------------------- -----------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue
John F. Donahue
Thomas G. Bigley
Chairman
John T. Conroy, Jr.
Glen R. Johnson
President
William J. Copeland
J. Christopher Donahue
James E. Dowd
Vice President
Lawrence D. Ellis, M.D.
Richard B. Fisher
Edward L. Flaherty, Jr.
Vice President
Glen R. Johnson
Edward C. Gonzales
Vice President and Treasurer
Peter E. Madden
John W. McGonigle
Gregor F. Meyer
Vice President and Secretary
John E. Murray, Jr.
David M. Taylor
Wesley W. Posvar
Assistant Treasurer
Marjorie P. Smuts
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
FEDERATED
MANAGED GROWTH AND
INCOME FUND
[LOGO]
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHARESHOLDERS
Federated Managed
Growth and Income Fund is part of
Managed Series Trust,
a lifecycle investing program
from Federated Investors
MAY 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
56166K404
56166K305
G00516-01 (7/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the first Semi-Annual Report to Shareholders for
Federated Managed Growth and Income Fund. The report covers the six-month period
ended May 31, 1995, and includes the fund's Investment Review, Portfolio of
Investments and Financial Statements. In addition, separate Financial Highlights
tables have been included for both classes of shares of the fund ("Institutional
Shares" and "Select Shares").
The United States had the strongest stock market in the world in the first
quarter of 1995, and the fund's performance reflected this fact. Federated
Managed Growth and Income Fund had holdings in utility stocks, which showed good
gains, and in large-company domestic stocks, which performed extremely well as a
group.
The fund's net assets increased from $47.5 million on November 30, 1994 to $76.8
million on May 31, 1995. The fund's net asset value increased from $9.85 to
$10.67 per share for Institutional Shares and from $9.83 to $10.65 per share for
Select Shares. The fund paid dividends of $.25 per share for Institutional
Shares and $.21 for Select Shares over the six-month period.
Thank you for your confidence in Federated Managed Growth and Income Fund. As
always, we invite your comments and suggestions.
Sincerely,
Glen R. Johnson
President
July 15, 1995
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Financial markets were strong in the first half of 1995, and Federated Managed
Growth and Income Fund participated in the rallies. For the six months ended May
31, 1995, an investor in Institutional Shares experienced a total return of
11.02%*, while an investor in Select Shares received a total return of 10.66%*.
The strong financial markets were driven by changing investor expectations about
economic growth. Last year investors were concerned that the economy was on the
verge of overheating. They feared that only very high interest rates could
restrain economic growth and prevent an outburst of inflation. As growth
moderated in early 1995, investors began to realize that short-term interest
rates had risen sufficiently to brake the economy, and further near-term
restraint was unnecessary. Once investors realized that the economy was
decelerating, the bond market rally gathered strength, providing attractive
returns to fixed income investors.
The investment philosophy for the fund is based on the belief that over time an
investor with a diversified portfolio will achieve better returns with the same
risk or the same returns with lower risk than an investor in a single asset
class. By placing limits on the weights for each asset class in the portfolio,
the investment policy ensures proper diversification of the portfolio. Fund
management also believes that investors with diversified portfolios will do even
better if they hold above average positions in asset classes offering good
relative value. Therefore, fund management focuses on value in setting
allocations among the asset classes.
Unfortunately, strong rallies in the stock and bond markets reduced the
underlying value in both markets. The cornerstone of a value investment
philosophy is the belief that investors should take risks only when they are
paid to take those risks. Once the price becomes too rich in relationship to the
underlying fundamentals, an investor is no longer being paid to take risk and a
reduction in the exposure to that asset class is appropriate. Management of the
Federated Managed Growth and Income Fund believes that this is the case for both
stocks and bonds and, therefore, moved to defensive positions on both asset
classes late in the second quarter.
Since bond prices fall when interest rates rise, and 65% of the fund's net
assets are invested in bonds, controlling exposure to interest rate risk is
important to fund performance. As part of its risk control framework, the
duration of the bond portfolio is limited to the range of 3.0 to 5.0 years. This
duration range means that the sensitivity of the bond portfolio to interest rate
changes is similar to that of intermediate maturity bonds. Although bonds began
a bear market in October 1993, the fund adopted a more constructive outlook on
interest rates last summer, expecting that interest rates would fall. Interest
rates have declined substantially since then, as bonds enjoyed a very strong
countertrend rally. However, by late May, the countertrend bond rally had
proceeded far enough to restore risk to the bond market. Management believes
that further gains in bonds are likely to be limited, especially in comparison
to the potential losses once the bear market resumes. Therefore, the bond
duration of the portfolio was reduced to 3.5 years, a below average, but not
minimum, level. The fixed income portion
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
of the fund is dominated by government bonds, both Treasury bonds and
mortgage-backed securities. Modest positions are also held in investment grade
corporates (7.6%), while only minor amounts are held in high yield and foreign
government bonds.
As fund management expected, the drop in long-term bond yields caused the stock
market to move to new all-time highs this year. Since the inception of the fund,
a mid-point allocation to equity reserves has been held and invested in
short-term debt. However, by early June, the severe overvaluation of the market
caused fund management to adopt a defensive position on the equity market. This
change involves raising equity reserves to 7.5%, with the increased allocation
coming from a reduction in the allocation to U.S. large company stocks. This
defensive position reflects management's belief that the equity market is
vulnerable to either stronger or weaker economic growth. While a stronger growth
environment would ease market concerns about recession, it would also lead to
renewed upward pressure on interest rates, which would in turn pressure stock
prices. In contrast, a weaker economy would put severe pressure on corporate
profits, which would also pressure stock prices. Either way, an overvalued stock
market is vulnerable and a 7.5% equity reserve position is appropriate.
Utilities are a substantial portion of the equity portion of the fund, because
that sector has an above average yield in comparison to industrial stocks at
this time, indicating good value in the utility sector.
FEDERATED MANAGED GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--23.4%*
- -----------------------------------------------------------------------------------
LARGE COMPANY--9.1%**
---------------------------------------------------------------
CONSUMER DURABLES--0.6%
---------------------------------------------------------------
2,800 Eastman Kodak Co. $ 169,050
---------------------------------------------------------------
3,500 Ford Motor Co. 102,375
---------------------------------------------------------------
8,275 Mattel, Inc. 206,875
--------------------------------------------------------------- -----------
Total 478,300
--------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--1.0%
---------------------------------------------------------------
1,700 Avon Products, Inc. 114,537
---------------------------------------------------------------
4,400 IBP, Inc. 165,000
---------------------------------------------------------------
2,800 Philip Morris Cos., Inc. 204,050
---------------------------------------------------------------
3,500 Reebok International, Ltd. 117,250
---------------------------------------------------------------
21,700 RJR Nabisco Holdings Corp., Conv. Pfd., Series C 132,912
--------------------------------------------------------------- -----------
Total 733,749
--------------------------------------------------------------- -----------
CONSUMER SERVICES--0.1%
---------------------------------------------------------------
1,200 Gannett Co., Inc. 64,200
--------------------------------------------------------------- -----------
ELECTRONIC TECHNOLOGY--1.3%
---------------------------------------------------------------
3,800 Hewlett-Packard Co. 251,275
---------------------------------------------------------------
1,000 Intel Corp. 112,250
---------------------------------------------------------------
1,000 International Business Machines Corp. 93,250
---------------------------------------------------------------
2,100 (a) Litton Industries, Inc. 80,850
---------------------------------------------------------------
3,400 Lockheed Martin Corp. 202,300
---------------------------------------------------------------
2,000 Raytheon Co. 155,000
---------------------------------------------------------------
2,900 Rockwell International Corp. 132,312
--------------------------------------------------------------- -----------
Total 1,027,237
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
---------------------------------------------------------------
ENERGY MINERALS--0.9%
---------------------------------------------------------------
2,200 Burlington Resources, Inc. $ 91,300
---------------------------------------------------------------
3,700 Chevron Corp. 181,762
---------------------------------------------------------------
2,000 Mapco, Inc. 117,750
---------------------------------------------------------------
2,300 Texaco, Inc. 157,550
---------------------------------------------------------------
6,000 USX Marathon Group, Inc. 119,250
--------------------------------------------------------------- -----------
Total 667,612
--------------------------------------------------------------- -----------
FINANCE--1.5%
---------------------------------------------------------------
1,900 American Express Co. 67,687
---------------------------------------------------------------
1,600 AMLI Residential Properties Trust, REIT 30,600
---------------------------------------------------------------
3,200 Bank of Boston Corp. 116,800
---------------------------------------------------------------
3,100 Citicorp 165,850
---------------------------------------------------------------
2,300 Dean Witter, Discover & Co. 109,537
---------------------------------------------------------------
1,100 First Interstate Bancorp 92,400
---------------------------------------------------------------
3,648 Mellon Bank Corp. 155,952
---------------------------------------------------------------
1,600 NationsBank Corp. 90,600
---------------------------------------------------------------
2,200 Providian Corp. 80,025
---------------------------------------------------------------
1,000 (a) The PMI Group, Inc. 40,875
---------------------------------------------------------------
4,700 Travelers Group, Inc. 198,575
--------------------------------------------------------------- -----------
Total 1,148,901
--------------------------------------------------------------- -----------
HEALTH TECHNOLOGY--0.6%
---------------------------------------------------------------
2,400 American Home Products Corp. 176,700
---------------------------------------------------------------
2,300 Becton, Dickinson & Co. 132,250
---------------------------------------------------------------
2,300 Bristol-Myers Squibb Co. 152,662
--------------------------------------------------------------- -----------
Total 461,612
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
---------------------------------------------------------------
INDUSTRIAL SERVICES--0.2%
---------------------------------------------------------------
4,600 Baker Hughes, Inc. $ 103,500
---------------------------------------------------------------
1,600 (a) Western Atlas, Inc. 72,200
--------------------------------------------------------------- -----------
Total 175,700
--------------------------------------------------------------- -----------
NON-ENERGY MINERALS--0.3%
---------------------------------------------------------------
3,500 Phelps Dodge Corp. 192,937
--------------------------------------------------------------- -----------
PROCESS INDUSTRIES--0.5%
---------------------------------------------------------------
2,200 Du Pont (E.I.) de Nemours & Co. 149,325
---------------------------------------------------------------
1,600 Eastman Chemical Co. 96,000
---------------------------------------------------------------
5,500 Praxair, Inc. 136,812
--------------------------------------------------------------- -----------
Total 382,137
--------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--1.0%
---------------------------------------------------------------
1,500 Caterpillar, Inc. 90,375
---------------------------------------------------------------
900 Deere & Co. 77,850
---------------------------------------------------------------
2,400 (a) FMC Corp. 154,500
---------------------------------------------------------------
2,100 General Electric Co. 121,800
---------------------------------------------------------------
1,100 Loews Corp. 130,762
---------------------------------------------------------------
3,200 Textron, Inc. 194,800
--------------------------------------------------------------- -----------
Total 770,087
---------------------------------------------------------------
RETAIL TRADE--0.4%
---------------------------------------------------------------
4,600 American Stores Co. 120,175
---------------------------------------------------------------
3,700 Sears, Roebuck & Co. 208,587
--------------------------------------------------------------- -----------
Total 328,762
--------------------------------------------------------------- -----------
TECHNOLOGY SERVICES--0.3%
---------------------------------------------------------------
4,800 General Motors Corp., Class E 204,000
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
---------------------------------------------------------------
UTILITIES--0.4%+
---------------------------------------------------------------
3,500 AT&T Corp. $ 177,625
---------------------------------------------------------------
1,900 Enron Corp. 69,350
---------------------------------------------------------------
4,400 MCI Communications Corp. 89,100
--------------------------------------------------------------- -----------
Total 336,075
--------------------------------------------------------------- -----------
TOTAL LARGE COMPANY (IDENTIFIED COST, $6,087,894) 6,971,309
--------------------------------------------------------------- -----------
SMALL COMPANY--2.1%**
---------------------------------------------------------------
COMMERCIAL SERVICES--0.1%
---------------------------------------------------------------
1,300 Castle (A.M.) & Co. 19,662
---------------------------------------------------------------
700 (a) CDI Corp 15,662
---------------------------------------------------------------
1,300 (a) Comdata Holdings Corp. 16,250
---------------------------------------------------------------
600 (a) Devon Group, Inc. 16,125
---------------------------------------------------------------
1,000 (a) Super Rite Foods Holdings Corp. 16,000
--------------------------------------------------------------- -----------
Total 83,699
--------------------------------------------------------------- -----------
CONSUMER DURABLES--0.1%
---------------------------------------------------------------
400 Barnes Group, Inc. 17,050
---------------------------------------------------------------
800 (a) Champion Enterprises, Inc. 13,400
---------------------------------------------------------------
900 Coachmen Industries, Inc. 12,375
---------------------------------------------------------------
800 (a) Cobra Golf, Inc. 21,600
---------------------------------------------------------------
400 Harman International Industries, Inc. 14,450
---------------------------------------------------------------
800 Standard Motor Products, Inc. 15,800
---------------------------------------------------------------
500 Toro Co. 13,813
--------------------------------------------------------------- -----------
Total 108,488
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
CONSUMER NON-DURABLES--0.0%
---------------------------------------------------------------
600 Hudson Foods, Inc., Class A $ 8,250
---------------------------------------------------------------
1,300 (a) Mondavi Robert Corp., Class A 21,938
--------------------------------------------------------------- -----------
Total 30,188
--------------------------------------------------------------- -----------
CONSUMER SERVICES--0.1%
---------------------------------------------------------------
500 Plenum Publishing Corp. 16,250
---------------------------------------------------------------
501 Pulitzer Publishing Co. 21,355
---------------------------------------------------------------
800 (a) United Video Satellite Group, Inc., Class A 20,800
--------------------------------------------------------------- -----------
Total 58,405
--------------------------------------------------------------- -----------
ELECTRONIC TECHNOLOGY--0.3%
---------------------------------------------------------------
1,050 (a) Burr Brown Corp. 23,625
---------------------------------------------------------------
400 (a) Electronics for Imaging, Inc. 18,350
---------------------------------------------------------------
1,300 GenCorp, Inc. 16,738
---------------------------------------------------------------
700 (a) International Rectifier Corp. 18,813
---------------------------------------------------------------
400 (a) Kemet Corp. 19,200
---------------------------------------------------------------
900 (a) SCI Systems, Inc. 18,675
---------------------------------------------------------------
700 (a) Tech-Sym Corp. 18,025
---------------------------------------------------------------
500 Tektronix, Inc. 23,000
---------------------------------------------------------------
300 (a) Tencor Instruments 20,175
---------------------------------------------------------------
400 Watkins Johnson Co. 17,900
--------------------------------------------------------------- -----------
Total 194,501
--------------------------------------------------------------- -----------
ENERGY MINERALS--0.1%
---------------------------------------------------------------
500 Penn Virginia Corp. 16,000
---------------------------------------------------------------
1,200 Phoenix Resource Cos., Inc. 38,550
--------------------------------------------------------------- -----------
Total 54,550
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
FINANCE--0.5%
---------------------------------------------------------------
1,000 (a) Acceptance Insurance Cos., Inc. $ 14,000
---------------------------------------------------------------
600 Allied Group, Inc. 17,025
---------------------------------------------------------------
500 American Bankers Insurance Group, Inc. 14,750
---------------------------------------------------------------
800 (a) American Travellers Corp. 14,400
---------------------------------------------------------------
400 Associated Banc Corp. 15,000
---------------------------------------------------------------
600 Bankers First Corp. 16,200
---------------------------------------------------------------
600 Centura Banks, Inc. 15,525
---------------------------------------------------------------
1,500 City National Corp. 16,687
---------------------------------------------------------------
400 Cullen Frost Bankers, Inc. 15,800
---------------------------------------------------------------
1,600 CWM Mortgage Holdings, Inc. 18,600
---------------------------------------------------------------
900 Foothill Group, Inc., Class A 22,275
---------------------------------------------------------------
2,200 Hibernia Corp., Class A 18,425
---------------------------------------------------------------
500 Irwin Financial Corp. 16,688
---------------------------------------------------------------
600 Money Stores, Inc. 18,525
---------------------------------------------------------------
600 (a) Mutual Assurance, Inc. 16,050
---------------------------------------------------------------
1,000 North Fork Bancorp, Inc. 17,750
---------------------------------------------------------------
1,200 Peoples Heritage Financial Group 17,250
---------------------------------------------------------------
500 Protective Life Corp. 24,813
---------------------------------------------------------------
500 Queens County Bancorp, Inc. 16,250
---------------------------------------------------------------
900 (a) St. Francis Capital Corp. 17,213
---------------------------------------------------------------
600 Student Loan Corp. 15,525
---------------------------------------------------------------
800 Webb (Del) Corp. 17,400
---------------------------------------------------------------
300 WestAmerica Bancorporation 10,650
--------------------------------------------------------------- -----------
Total 386,801
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
HEALTH SERVICES--0.1%
---------------------------------------------------------------
1,200 Bindley Western Industries, Inc. $ 18,600
---------------------------------------------------------------
900 (a) Maxicare Health Plans, Inc. 13,838
---------------------------------------------------------------
800 (a) Sun Healthcare Group, Inc. 13,300
---------------------------------------------------------------
700 (a) United American Healthcare Corp. 12,163
--------------------------------------------------------------- -----------
Total 57,901
--------------------------------------------------------------- -----------
HEALTH TECHNOLOGY--0.1%
---------------------------------------------------------------
1,800 (a) AMSCO International, Inc. 22,500
---------------------------------------------------------------
600 (a) Bio Rad Laboratories, Inc., Class A 18,000
---------------------------------------------------------------
2,200 Kinetic Concepts, Inc. 15,400
--------------------------------------------------------------- -----------
Total 55,900
--------------------------------------------------------------- -----------
INDUSTRIAL SERVICES--0.1%
---------------------------------------------------------------
400 Butler Manufacturing Co. 16,200
---------------------------------------------------------------
4,400 (a) EnviroSource, Inc. 17,600
---------------------------------------------------------------
800 Granite Construction, Inc. 17,200
---------------------------------------------------------------
1,000 (a) Western Waste Industries 19,250
--------------------------------------------------------------- -----------
Total 70,250
--------------------------------------------------------------- -----------
NON-ENERGY MINERALS--0.1%
---------------------------------------------------------------
1,000 Brush Wellman, Inc. 21,750
---------------------------------------------------------------
1,000 (a) Magma Copper Co. 14,375
---------------------------------------------------------------
500 Texas Industries, Inc. 18,813
--------------------------------------------------------------- -----------
Total 54,938
--------------------------------------------------------------- -----------
PROCESS INDUSTRIES--0.1%
---------------------------------------------------------------
700 (a) Bush Boake Allen, Inc. 19,862
---------------------------------------------------------------
600 Chesapeake Corp. 17,100
---------------------------------------------------------------
500 (a) Cytec Industries, Inc. 18,438
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
---------------------------------------------------------------
600 First Mississippi Corp. $ 13,875
---------------------------------------------------------------
300 Pittway Corp., Class A 13,425
---------------------------------------------------------------
400 Springs Industries, Inc., Class A 15,750
--------------------------------------------------------------- -----------
Total 98,450
--------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--0.1%
---------------------------------------------------------------
600 AGCO Corp. 22,725
---------------------------------------------------------------
300 Blount, Inc., Class A 11,362
---------------------------------------------------------------
600 Borg-Warner Automotive, Inc. 15,225
---------------------------------------------------------------
1,200 Brenco, Inc. 15,300
---------------------------------------------------------------
800 JLG Industries, Inc. 20,200
---------------------------------------------------------------
300 NACCO Industries, Inc., Class A 18,000
---------------------------------------------------------------
900 (a) NCI Building System, Inc. 14,738
--------------------------------------------------------------- -----------
Total 117,550
--------------------------------------------------------------- -----------
RETAIL TRADE--0.1%
---------------------------------------------------------------
1,500 (a) Bon-Ton Stores, Inc. 15,562
---------------------------------------------------------------
900 (a) Friedmans, Inc., Class A 16,313
---------------------------------------------------------------
900 (a) Regis Corp., Minnesota 15,750
---------------------------------------------------------------
1,500 (a) Rhodes, Inc. 12,938
---------------------------------------------------------------
800 (a) Waban, Inc. 11,700
---------------------------------------------------------------
1,100 Wolohan Lumber Co. 14,988
---------------------------------------------------------------
1,300 (a) Zale Corp. 15,031
--------------------------------------------------------------- -----------
Total 102,282
--------------------------------------------------------------- -----------
TECHNOLOGY SERVICES--0.1%
---------------------------------------------------------------
578 (a) Bell Industries, Inc. 11,045
---------------------------------------------------------------
1,900 Computer Language Research, Inc. 16,862
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
TECHNOLOGY SERVICES--CONTINUED
---------------------------------------------------------------
2,600 (a) Computervision Corp. $ 14,625
---------------------------------------------------------------
900 (a) Frame Technology Corp. 22,050
--------------------------------------------------------------- -----------
Total 64,582
--------------------------------------------------------------- -----------
TRANSPORTATION--0.0%
---------------------------------------------------------------
500 (a) Landstar System, Inc. 13,250
--------------------------------------------------------------- -----------
UTILITIES--0.1%+
---------------------------------------------------------------
1,300 Central Maine Power Co. 15,275
---------------------------------------------------------------
500 Eastern Enterprises 15,000
---------------------------------------------------------------
1,300 (a) Public Service Co. New Mexico 18,525
---------------------------------------------------------------
500 St. Joseph Light & Power Co. 14,688
---------------------------------------------------------------
1,100 (a) U.S. Long Distance Corp. 16,500
--------------------------------------------------------------- -----------
Total 79,988
--------------------------------------------------------------- -----------
TOTAL SMALL COMPANY (IDENTIFIED COST, $1,494,344) 1,631,723
--------------------------------------------------------------- -----------
UTILITY--9.6%+
---------------------------------------------------------------
ELECTRIC UTILITIES--3.2%
---------------------------------------------------------------
6,400 Baltimore Gas & Electric Co. 166,400
---------------------------------------------------------------
8,421 Cinergy Corp. 224,209
---------------------------------------------------------------
6,500 CMS Energy Corp. 156,812
---------------------------------------------------------------
7,400 DPL, Inc. 162,800
---------------------------------------------------------------
7,050 DQE, Inc. 172,725
---------------------------------------------------------------
5,000 Florida Progress Corp. 159,375
---------------------------------------------------------------
4,200 FPL Group, Inc. 164,850
---------------------------------------------------------------
5,200 General Public Utilities 156,000
---------------------------------------------------------------
4,900 NIPSCO Industries, Inc. 169,050
---------------------------------------------------------------
7,900 Pacifcorp 156,025
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
UTILITY--CONTINUED
---------------------------------------------------------------
ELECTRIC UTILITIES--CONTINUED
---------------------------------------------------------------
5,800 Peco Energy Co. $ 163,125
---------------------------------------------------------------
7,200 Pinnacle West Capital Corp. 165,600
---------------------------------------------------------------
7,300 Southern Co. 161,513
---------------------------------------------------------------
5,400 Utilicorp United, Inc. 153,900
---------------------------------------------------------------
4,800 Western Resources, Inc. 151,200
--------------------------------------------------------------- -----------
Total 2,483,584
--------------------------------------------------------------- -----------
MAJOR U.S. TELECOMMUNICATIONS--4.4%
---------------------------------------------------------------
9,900 Ameritech Corp. 439,312
---------------------------------------------------------------
8,200 AT&T Corp. 416,150
---------------------------------------------------------------
7,800 Bell Atlantic Corp. 434,850
---------------------------------------------------------------
7,000 BellSouth Corp. 429,625
---------------------------------------------------------------
12,500 GTE Corp. 417,187
---------------------------------------------------------------
14,000 Pacific Telesis Group 374,500
---------------------------------------------------------------
10,100 SBC Communications, Inc. 454,500
---------------------------------------------------------------
10,200 U.S. West, Inc. 420,750
--------------------------------------------------------------- -----------
Total 3,386,874
--------------------------------------------------------------- -----------
NATURAL GAS DISTRIBUTION--0.6%
---------------------------------------------------------------
2,900 Consolidated Natural Gas Co. 115,637
---------------------------------------------------------------
6,200 MCN Corp. 116,250
---------------------------------------------------------------
4,600 Pacific Enterprises 116,150
---------------------------------------------------------------
5,900 UGI Corp. 123,900
--------------------------------------------------------------- -----------
Total 471,937
--------------------------------------------------------------- -----------
OIL/GAS TRANSMISSION--0.8%
---------------------------------------------------------------
3,500 Enron Corp. 127,750
---------------------------------------------------------------
6,000 Panhandle Eastern Corp. 150,750
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
UTILITY--CONTINUED
---------------------------------------------------------------
OIL/GAS TRANSMISSION--CONTINUED
---------------------------------------------------------------
3,700 Sonat, Inc. $ 121,638
---------------------------------------------------------------
5,000 Williams Companies, Inc. 170,000
--------------------------------------------------------------- -----------
Total 570,138
--------------------------------------------------------------- -----------
OTHER TELEPHONE/COMMUNICATIONS--0.6%
---------------------------------------------------------------
12,400 Southern New England Telecommunications 416,950
--------------------------------------------------------------- -----------
TOTAL UTILITIES (IDENTIFIED COST, $6,902,286) 7,329,483
--------------------------------------------------------------- -----------
FOREIGN EQUITY--2.6%
---------------------------------------------------------------
AUSTRALIA--0.1%
---------------------------------------------------------------
2,200 Broken Hill Proprietary Co., Ltd. 27,873
---------------------------------------------------------------
6,400 Publishing & Broadcasting 18,663
--------------------------------------------------------------- -----------
Total 46,536
--------------------------------------------------------------- -----------
BELGIUM--0.0%
---------------------------------------------------------------
300 Delhaize-Le Lion 14,008
--------------------------------------------------------------- -----------
DENMARK--0.0%
---------------------------------------------------------------
200 Novo-Nordisk 21,236
--------------------------------------------------------------- -----------
FINLAND--0.0%
---------------------------------------------------------------
200 Kone Corp. 'B' 24,244
--------------------------------------------------------------- -----------
FRANCE--0.1%
---------------------------------------------------------------
100 Carrefour Supermarche 49,441
---------------------------------------------------------------
400 Elf Aquitaine 32,329
---------------------------------------------------------------
100 LVMH (Moet-Hennessy) 19,006
--------------------------------------------------------------- -----------
Total 100,776
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
GERMANY--0.2%
---------------------------------------------------------------
50 Allianz AG Holding $ 90,568
---------------------------------------------------------------
50 Daimler Benz AG 24,216
---------------------------------------------------------------
50 Siemens AG 23,774
--------------------------------------------------------------- -----------
Total 138,558
--------------------------------------------------------------- -----------
HONG KONG--0.1%
---------------------------------------------------------------
5,400 Cheung Kong Holdings 26,598
---------------------------------------------------------------
1,800 HSBC Holdings PLC 23,386
---------------------------------------------------------------
5,000 Hutchison Whampoa 25,274
--------------------------------------------------------------- -----------
Total 75,258
--------------------------------------------------------------- -----------
INVESTMENT COMPANIES--0.1%
---------------------------------------------------------------
2,400 France Growth Fund, Inc. 24,900
---------------------------------------------------------------
1,500 Italy Fund, Inc. 12,750
---------------------------------------------------------------
2,000 (a) Swiss Helvetia Fund 43,000
--------------------------------------------------------------- -----------
Total 80,650
--------------------------------------------------------------- -----------
ITALY--0.0%
---------------------------------------------------------------
500 Assicurazioni Generali 12,123
---------------------------------------------------------------
5,000 Telecom Italia 13,098
--------------------------------------------------------------- -----------
Total 25,221
--------------------------------------------------------------- -----------
JAPAN--1.1%
---------------------------------------------------------------
2,000 Asahi Bank, Ltd. 24,815
---------------------------------------------------------------
1,000 Bank of Tokyo, Ltd., Tokyo 17,725
---------------------------------------------------------------
1,000 Dai-Ichi Kangyo Bank, Ltd., Tokyo 18,907
---------------------------------------------------------------
3,000 Fuji Bank, Ltd., Tokyo 68,774
---------------------------------------------------------------
2,000 Hitachi, Ltd. 19,309
---------------------------------------------------------------
2,000 Industrial Bank of Japan, Ltd., Tokyo 58,139
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
JAPAN--CONTINUED
---------------------------------------------------------------
1,000 Ito Yokado Co. $ 52,939
---------------------------------------------------------------
1,000 Kansai Electric Power 26,352
---------------------------------------------------------------
4,000 Kawasaki Heavy Industries 15,031
---------------------------------------------------------------
3,000 Kirin Brewery Co., Ltd. 34,564
---------------------------------------------------------------
1,000 Matsushita Electric Industrial Co. 15,480
---------------------------------------------------------------
1,000 Mitsubishi Bank 23,870
---------------------------------------------------------------
2,000 Mitsubishi Corp. 22,877
---------------------------------------------------------------
4,000 Mitsubishi Heavy Industries 27,462
---------------------------------------------------------------
1,000 Mitsubishi Trust & Banking 16,189
---------------------------------------------------------------
3,000 Mitsukoshi, Ltd. 24,886
---------------------------------------------------------------
3,000 Nippon Steel Co. 10,777
---------------------------------------------------------------
7 Nippon Telegraph & Telephone Corp. 57,903
---------------------------------------------------------------
1,000 Nomura Securities, Co., Ltd. 17,962
---------------------------------------------------------------
1,000 Sakura Bank, Ltd., Tokyo 11,935
---------------------------------------------------------------
1,000 Seven-Eleven Japan 73,855
---------------------------------------------------------------
1,000 Sony Corp. 48,213
---------------------------------------------------------------
1,000 Sumitomo Bank, Ltd., Osaka 20,798
---------------------------------------------------------------
6,000 Sumitomo Heavy Industries 19,923
---------------------------------------------------------------
2,000 Takeda Chemical Industries 26,706
---------------------------------------------------------------
3,000 Tokio Marine & Fire 34,387
---------------------------------------------------------------
1,000 Tokyo Electric Power 31,669
---------------------------------------------------------------
3,000 Toshiba Corp. 18,895
---------------------------------------------------------------
1,000 Toyota Motor Corp. 19,380
--------------------------------------------------------------- -----------
Total 859,722
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
MALAYSIA--0.1%
---------------------------------------------------------------
3,000 Telekom Malaysia $ 23,007
---------------------------------------------------------------
5,000 Tenaga Nasional Berhad 20,694
--------------------------------------------------------------- -----------
Total 43,701
--------------------------------------------------------------- -----------
NETHERLANDS--0.1%
---------------------------------------------------------------
500 Philips Electronics 19,914
---------------------------------------------------------------
200 Royal Dutch Petroleum Co. 25,350
---------------------------------------------------------------
200 Unilever NV-Cert 25,161
--------------------------------------------------------------- -----------
Total 70,425
--------------------------------------------------------------- -----------
SINGAPORE--0.0%
---------------------------------------------------------------
10,000 Singapore Telecommunications, Ltd. 20,388
--------------------------------------------------------------- -----------
SPAIN--0.0%
---------------------------------------------------------------
500 Empresa Nac de Electridad 23,933
--------------------------------------------------------------- -----------
SWEDEN--0.1%
---------------------------------------------------------------
400 Ericsson LM B-F 28,622
--------------------------------------------------------------- -----------
SWITZERLAND--0.1%
---------------------------------------------------------------
50 Nestle SA 50,493
---------------------------------------------------------------
50 Sandoz AG 33,519
--------------------------------------------------------------- -----------
Total 84,012
--------------------------------------------------------------- -----------
UNITED KINGDOM--0.5%
---------------------------------------------------------------
3,000 Barclays PLC 32,158
---------------------------------------------------------------
7,000 British Petroleum PLC 49,357
---------------------------------------------------------------
4,000 British Telecom PLC 25,091
---------------------------------------------------------------
7,000 Coats Viyella PLC 23,845
---------------------------------------------------------------
3,000 Eastern Electricity PLC 30,586
---------------------------------------------------------------
5,000 Glaxo Wellcome PLC 57,645
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
UNITED KINGDOM--CONTINUED
---------------------------------------------------------------
5,000 Hanson PLC $ 19,017
---------------------------------------------------------------
4,000 Marks & Spencer PLC 26,362
---------------------------------------------------------------
3,000 Midlands Electricity PLC 30,491
---------------------------------------------------------------
2,000 RMC Group PLC 35,048
---------------------------------------------------------------
4,000 Williams Holdings PLC 21,216
---------------------------------------------------------------
6,000 Wolseley PLC 34,969
--------------------------------------------------------------- -----------
Total 385,785
--------------------------------------------------------------- -----------
TOTAL FOREIGN EQUITY (IDENTIFIED COST, $2,023,760) 2,043,075
--------------------------------------------------------------- -----------
TOTAL STOCKS (IDENTIFIED COST, $16,508,284) 17,975,590
--------------------------------------------------------------- -----------
BONDS--64.9%
- -----------------------------------------------------------------------------------
TREASURY--32.3%
---------------------------------------------------------------
$ 24,700,000 United States Treasury Note, 6.125%, 5/15/1998
(IDENTIFIED COST $24,628,601) 24,832,886
--------------------------------------------------------------- -----------
MORTGAGE BACKED SECURITIES--17.1%
---------------------------------------------------------------
GOVERNMENT AGENCY--17.1%
---------------------------------------------------------------
394,764 Federal Home Loan Mortgage Corporation, Pool C801177, 7.50%,
5/1/2024 396,485
---------------------------------------------------------------
262,408 Federal Home Loan Mortgage Corporation, Pool D54720, 7.00%,
7/1/2024 257,158
---------------------------------------------------------------
495,951 Federal Home Loan Mortgage Corporation, Pool E00348, 8.00%,
11/1/2009 510,512
---------------------------------------------------------------
387,317 Federal Home Loan Mortgage Corporation, Pool E20105, 7.00%,
4/1/2009 389,730
---------------------------------------------------------------
737,786 Federal Home Loan Mortgage Corporation, Pool E58069, 7.00%,
4/1/2009 742,382
---------------------------------------------------------------
478,453 Federal Home Loan Mortgage Corporation, Pool G40136, 8.00%,
3/1/2002 491,305
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
MORTGAGE BACKED SECURITIES--CONTINUED
---------------------------------------------------------------
GOVERNMENT AGENCY--CONTINUED
---------------------------------------------------------------
$ 518,045 Federal National Mortgage Association, Pool 250083, 7.00%,
7/1/2024 $ 509,943
---------------------------------------------------------------
1,203,083 Federal National Mortgage Association, Pool 250197, 9.50%,
10/1/2024 1,260,591
---------------------------------------------------------------
220,073 Federal National Mortgage Association, Pool 278507, 7.50%,
6/1/2009 224,609
---------------------------------------------------------------
1,010,109 Federal National Mortgage Association, Pool 286192, 6.50%,
6/1/2009 998,412
---------------------------------------------------------------
511,747 Federal National Mortgage Association, Pool 303073, 8.00%,
11/1/2024 523,896
---------------------------------------------------------------
248,226 Federal National Mortgage Association, Pool 305742, 8.50%,
2/1/2025 256,678
---------------------------------------------------------------
240,213 Government National Mortgage Association, Pool 379445, 7.50%,
5/15/2024 241,861
---------------------------------------------------------------
1,100,235 Government National Mortgage Association, Pool 380656, 8.00%,
11/15/2024 1,128,071
---------------------------------------------------------------
1,827,012 Government National Mortgage Association, Pool 386246, 8.50%,
10/15/2024 1,902,358
---------------------------------------------------------------
249,177 Government National Mortgage Association, Pool 390279, 7.00%,
8/15/2024 245,357
---------------------------------------------------------------
3,040,773 Government National Mortgage Association, Pool 391406, 7.50%,
4/15/2024 3,061,633
--------------------------------------------------------------- -----------
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST, $12,715,066) 13,140,981
--------------------------------------------------------------- -----------
HIGH YIELD--2.7%
---------------------------------------------------------------
AUTOMOTIVE--0.1%
---------------------------------------------------------------
50,000 Aftermarket Technology Co., Sr. Sub. Note, 12.00%, 8/1/2004 53,500
---------------------------------------------------------------
50,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 51,312
--------------------------------------------------------------- -----------
Total 104,812
--------------------------------------------------------------- -----------
BANKING--0.1%
---------------------------------------------------------------
75,000 First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 80,625
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
---------------------------------------------------------------
BROADCASTING RADIO & T.V.--0.2%
---------------------------------------------------------------
$ 125,000 SCI Television, Inc., Sr. Secd. Note, 11.00%, 6/30/2005 $ 132,188
--------------------------------------------------------------- -----------
CABLE TELEVISION--0.2%
---------------------------------------------------------------
125,000 Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 127,188
---------------------------------------------------------------
50,000 Rogers Cablesystems Ltd., Sr. Secd. 2nd Priority Note, 10.00%,
3/15/2005 50,812
--------------------------------------------------------------- -----------
Total 178,000
--------------------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.3%
---------------------------------------------------------------
125,000 Arcadian Partners L.P., Sr. Note, Series B, 10.75%, 5/1/2005 130,000
---------------------------------------------------------------
100,000 (a) G-I Holdings, Sr. Disc. Note, 10/1/1998 69,500
--------------------------------------------------------------- -----------
Total 199,500
--------------------------------------------------------------- -----------
CLOTHING & TEXTILES--0.2%
---------------------------------------------------------------
125,000 Westpoint Stevens, Inc., Sr. Sub., Deb., 9.375%, 12/15/2005 123,125
--------------------------------------------------------------- -----------
CONGLOMERATES--0.1%
---------------------------------------------------------------
75,000 Sherritt Gordon Ltd., Sr. Note, 9.75%, 4/1/2003 75,375
--------------------------------------------------------------- -----------
CONSUMER PRODUCTS--0.0%
---------------------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note, 9.00%, 12/15/2003 47,875
--------------------------------------------------------------- -----------
CONTAINER & GLASS PRODUCTS--0.1%
---------------------------------------------------------------
100,000 Owens Illinois, Inc., Sr. Sub Note, 9.75%, 8/15/2004 102,500
--------------------------------------------------------------- -----------
ECOLOGICAL SERVICES & EQUIPMENT--0.1%
---------------------------------------------------------------
50,000 Mid-American Waste Systems, Inc., Sr. Sub Note, 12.25%,
2/15/2003 51,375
--------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.2%
---------------------------------------------------------------
125,000 Pathmark Stores, Inc., Sr. Sub. Note, 9.625%, 5/1/2003 122,813
---------------------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 50,000
--------------------------------------------------------------- -----------
Total 172,813
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
---------------------------------------------------------------
FOOD SERVICES--0.2%
---------------------------------------------------------------
$ 125,000 Flagstar Corp., Sr. Note, 10.875%, 12/1/2002 $ 116,250
--------------------------------------------------------------- -----------
FOREST PRODUCTS--0.2%
---------------------------------------------------------------
125,000 Stone Container Corp., Sr. Note, 9.875%, 2/1/2001 125,313
--------------------------------------------------------------- -----------
HEALTHCARE--0.1%
---------------------------------------------------------------
50,000 National Medical, Sr. Sub. Note, 10.125%, 3/1/2005 52,938
--------------------------------------------------------------- -----------
OIL & GAS--0.0%
---------------------------------------------------------------
50,000 Falcon Drilling Co., Inc., Sr Note, 9.75%, 1/15/2001 48,750
--------------------------------------------------------------- -----------
RETAILERS--0.1%
---------------------------------------------------------------
125,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 122,187
--------------------------------------------------------------- -----------
STEEL--0.0%
---------------------------------------------------------------
50,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 50,375
--------------------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.1%
---------------------------------------------------------------
50,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 53,500
--------------------------------------------------------------- -----------
TELECOMMUNICATIONS & CELLULAR--0.2%
---------------------------------------------------------------
125,000 (a) NEXTEL Communications, Inc., Sr. Disc. Note, 0/11.50%, 9/1/2003 71,875
---------------------------------------------------------------
75,000 (a) PanAmSat Corp., Sr. Sub. Disc. Note, 8/1/2003 54,000
--------------------------------------------------------------- -----------
Total 125,875
--------------------------------------------------------------- -----------
UTILITIES--0.2%
---------------------------------------------------------------
150,000 (a) California Energy Co., Sr. Disc. Note, 1/15/2004 126,750
--------------------------------------------------------------- -----------
TOTAL HIGH YIELD (IDENTIFIED COST, $2,035,602) 2,090,126
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
INVESTMENT GRADE--7.6%
---------------------------------------------------------------
BANKING--0.8%
---------------------------------------------------------------
$ 300,000 Chase Manhattan Corp., Medium Term Note, 9.00%, 2/24/1999 $ 323,196
---------------------------------------------------------------
250,000 Crestar Financial Corp., Sub. Note, 8.75%, 11/15/2004 276,568
--------------------------------------------------------------- -----------
Total 599,764
--------------------------------------------------------------- -----------
BEVERAGE & TOBACCO--0.6%
---------------------------------------------------------------
250,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 238,973
---------------------------------------------------------------
250,000 RJR Nabisco, Inc., Note, 9.25%, 8/5/2013 254,845
--------------------------------------------------------------- -----------
Total 493,818
--------------------------------------------------------------- -----------
CONGOLOMERATES--0.4%
---------------------------------------------------------------
250,000 Leucadia National Corp., Sr. Sub., 10.375%, 6/15/2002 271,250
--------------------------------------------------------------- -----------
FINANCE-AUTOMOTIVE--0.5%
---------------------------------------------------------------
250,000 Ford Motor Credit, Medium Term Note, 5.32%, 9/15/1998 241,953
---------------------------------------------------------------
150,000 GMAC, Medium Term Note, 7.25%, 4/30/1999 152,907
--------------------------------------------------------------- -----------
Total 394,860
--------------------------------------------------------------- -----------
FINANCE-RETAIL--0.2%
---------------------------------------------------------------
150,000 Household Finance Corp., Deb., 6.45%, 2/1/2009 141,749
--------------------------------------------------------------- -----------
FINANCIAL INTERMEDIARIES--1.4%
---------------------------------------------------------------
225,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 249,511
---------------------------------------------------------------
250,000 Equitable Cos., Inc., Sr. Note, 9.00%, 12/15/2004 277,563
---------------------------------------------------------------
250,000 Lehman Brothers, Note, 5.04%, 12/15/1996 244,265
---------------------------------------------------------------
300,000 Merrill Lynch & Co., Inc., Medium Term Note, 7.25%, 6/14/2004 302,649
--------------------------------------------------------------- -----------
Total 1,073,988
--------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.3%
---------------------------------------------------------------
200,000 Hook-Superx, Sr. Note, 10.125%, 6/1/2002 213,020
--------------------------------------------------------------- -----------
FOOD PRODUCTS--0.4%
---------------------------------------------------------------
500,000 (a) Grand Metropolitain Investment Corp., 0%, 1/6/2004 275,230
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
INVESTMENT GRADE--CONTINUED
---------------------------------------------------------------
GOVERNMENT AGENCY--0.6%
---------------------------------------------------------------
$ 250,000 Salliemae, Medium Term Note, 7.66%, 3/16/1998 $ 252,838
---------------------------------------------------------------
200,000 Tennessee Valley Authority, 7.318%, 5/31/1999 202,450
--------------------------------------------------------------- -----------
Total 455,288
--------------------------------------------------------------- -----------
INSURANCE--0.3%
---------------------------------------------------------------
250,000 Sunamerica, Inc., Medium Term Note, 6.58%, 1/15/2002 242,823
--------------------------------------------------------------- -----------
OIL & GAS--0.3%
---------------------------------------------------------------
225,000 Occidental Petroleum, Sr. Note, 11.75%, 3/15/2011 244,355
--------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.3%
---------------------------------------------------------------
250,000 News America Holdings, Sr. Note, 7.50%, 3/1/2000 255,915
--------------------------------------------------------------- -----------
SOVEREIGN GOVERNMENT--0.8%
---------------------------------------------------------------
300,000 (b) Freeport Terminal (Malta), Gtd. Global Note, 7.50%, 3/29/2004 307,338
---------------------------------------------------------------
100,000 Quebec Hydro, Deb., 7.375%, 2/1/2003 102,518
---------------------------------------------------------------
200,000 Republic of South Africa, Global Bond Deb., 9.625%, 12/15/1999 202,689
--------------------------------------------------------------- -----------
Total 612,545
--------------------------------------------------------------- -----------
UTILITIES--0.7%
---------------------------------------------------------------
200,000 Duke Power Co., 1st Mtg. Note, 7.00%, 9/1/2005 202,490
---------------------------------------------------------------
200,000 Gulf States Utilities, FMB, 6.75%, 10/1/1998 198,776
---------------------------------------------------------------
125,000 Pedernales Electric Coop, 10.875% 139,788
--------------------------------------------------------------- -----------
Total 541,054
--------------------------------------------------------------- -----------
TOTAL INVESTMENT GRADE (IDENTIFIED COST, $5,583,733) 5,815,659
--------------------------------------------------------------- -----------
OTHER CORPORATE--0.1%
---------------------------------------------------------------
ELECTRONICS & ELECTRIC--0.1%
---------------------------------------------------------------
80,000 (a) General Instrument Corp., Conv. Jr. Sub. Note, 5.00%, 6/15/2000
(IDENTIFIED COST, $108,600) 109,623
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN--5.0%
---------------------------------------------------------------
AUSTRALIAN DOLLAR--0.1%
---------------------------------------------------------------
100,000 State Bank of New South Wales, Deb., 12.25%, 2/26/2001 $ 82,462
--------------------------------------------------------------- -----------
BELGIAN FRANC--0.2%
---------------------------------------------------------------
3,200,000 Belgian Govt., Foreign Gov't. Guarantee, 10.00%, 4/5/1996 114,548
---------------------------------------------------------------
2,000,000 Belgium Kingdom, 7.75%, 10/15/2004 71,034
--------------------------------------------------------------- -----------
Total 185,582
--------------------------------------------------------------- -----------
CANADIAN DOLLAR--0.3%
---------------------------------------------------------------
250,000 Ontario Hydro, 9.00%, 6/24/2002 190,484
--------------------------------------------------------------- -----------
DENMARK KRONE--0.2%
---------------------------------------------------------------
800,000 Denmark, 8.00%, 5/15/2003 144,881
--------------------------------------------------------------- -----------
FRENCH FRANC--0.2%
---------------------------------------------------------------
850,000 France O.A.T., 8.50%, 11/25/2002 182,798
--------------------------------------------------------------- -----------
DEUTSCHE MARK--1.2%
---------------------------------------------------------------
300,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 222,437
---------------------------------------------------------------
1,400,000 KFW International Finance, 7.00%, 5/12/2000 281,291
---------------------------------------------------------------
500,000 Treuhandanstalt, 7.75%, 10/1/2002 379,573
--------------------------------------------------------------- -----------
Total 883,301
--------------------------------------------------------------- -----------
ITALIAN LIRA--0.2%
---------------------------------------------------------------
305,000,000 Buoni Poliennali Del Tes, 12.00%, 9/1/1997 187,569
--------------------------------------------------------------- -----------
JAPANESE YEN--1.4%
---------------------------------------------------------------
42,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 609,217
---------------------------------------------------------------
33,000,000 KFW International Finance, Gtd. Note, 6.00%, 11/29/1999 454,786
--------------------------------------------------------------- -----------
Total 1,064,003
--------------------------------------------------------------- -----------
NETHERLAND GUILDER--0.4%
---------------------------------------------------------------
450,000 Netherlands Government, 5.75%, 1/15/2004 268,270
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN--CONTINUED
---------------------------------------------------------------
SPANISH PESETA--0.2%
---------------------------------------------------------------
21,000,000 Spain (Government), 8.30%, 12/15/1998 $ 157,896
--------------------------------------------------------------- -----------
SWEDISH KRONA--0.1%
---------------------------------------------------------------
1,000,000 Sweden, 6.00%, 2/9/2005 98,596
--------------------------------------------------------------- -----------
UNITED KINGDOM POUND--0.5%
---------------------------------------------------------------
240,000 UK Conversion, 9.00%, 3/3/2000 400,667
--------------------------------------------------------------- -----------
TOTAL FOREIGN (IDENTIFIED COST, $3,530,795) 3,846,509
--------------------------------------------------------------- -----------
TOTAL BONDS (IDENTIFIED COST, $48,602,397) 49,835,784
--------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ------------ ---------------------------------------------------------------
<C> <C> <S> <C>
CASH EQUIVALENTS--11.7%**
- -----------------------------------------------------------------------------------
TREASURY--6.9%
---------------------------------------------------------------
5,350,000 U.S. Treasury Bill, 6/22/1995 (IDENTIFIED COST, $5,331,948) 5,333,756
--------------------------------------------------------------- -----------
REPURCHASE AGREEMENTS--4.8%***
---------------------------------------------------------------
3,680,000 J.P. Morgan & Co., Inc., 6.17%, dated 5/31/1995, due 6/1/1995
(AT AMORTIZED COST) 3,680,000
--------------------------------------------------------------- -----------
TOTAL CASH EQUIVALENTS 9,013,756
--------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $74,122,629) (C) $76,825,130
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
The following acronyms are used in this portfolio:
<TABLE>
<C> <S>
PLC -- Public Limited Company
REIT -- Real Estate Investment Trust
</TABLE>
(a) Non-income producing.
(b) Restricted Securities-Investments in securities not registered under the
Securities Act of 1933. At the end of the period, this security amounted to
$307,338 which represents 0.4% of net assets.
(c) The cost for federal income tax purposes amounts to $74,122,629. The net
unrealized appreciation on a federal tax cost basis amounts to $2,702,501,
and is comprised of $3,017,560 appreciation and $315,059 depreciation at May
31, 1995.
+ The Funds overall exposure to utility stocks is 10.1%.
* The Fund's overall exposure to stocks is 29.6%, after adjustment for the use
of S&P 500 and S&P Midcap futures contracts.
** The Fund holds cash equivalents as collateral for the eighteen S&P 500
futures contracts it bought with a market value of $4,800,150.Consequently,
the Fund's exposure to large cap stocks is 15.3% of the fund. The Fund holds
cash equivalents as collateral for the two S&P Midcap futures contracts it
bought with a market value of $190,100. Consequently, the Fund's exposure to
small cap stocks is 2.4% of the fund.
*** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations. The investment in the repurchase agreement was through
participation in a joint account with other Federated funds.
Note: The categories of investments are shown as a percentage of net assets
($76,823,465) at
May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost, $74,122,629) $76,825,130
- ------------------------------------------------------------------------------------------
Cash denominated in foreign currencies (identified cost, $1,765) 1,750
- ------------------------------------------------------------------------------------------
Cash 12,327
- ------------------------------------------------------------------------------------------
Income receivable 495,654
- ------------------------------------------------------------------------------------------
Receivable for shares sold 122,236
- ------------------------------------------------------------------------------------------
Receivable for futures variation margin 90,000
- ------------------------------------------------------------------------------------------
Receivable for investments sold 44,621
- ------------------------------------------------------------------------------------------
Receivable for foreign currency sold 1,778
- ------------------------------------------------------------------------------------------
Deferred expenses 41,056
- ------------------------------------------------------------------------------------------ -----------
Total assets 77,634,552
- ------------------------------------------------------------------------------------------ -----------
LIABILITIES:
- ------------------------------------------------------------------------------------------
Payable for investments purchased $794,415
- -------------------------------------------------------------------------------
Payable for shares redeemed 2,702
- -------------------------------------------------------------------------------
Payable for foreign currency purchased 1,764
- -------------------------------------------------------------------------------
Tax withholding liability 1,564
- -------------------------------------------------------------------------------
Accrued expenses 10,642
- ------------------------------------------------------------------------------- --------
Total liabilities 811,087
- ------------------------------------------------------------------------------------------ -----------
NET ASSETS for 7,199,498 shares outstanding $76,823,465
- ------------------------------------------------------------------------------------------ -----------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------
Paid in capital $72,471,303
- ------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments, translation of assets and
liabilities in foreign currency, and futures contracts 2,997,329
- ------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments, foreign currency transactions, and
futures contracts 556,680
- ------------------------------------------------------------------------------------------
Undistributed net investment income 798,153
- ------------------------------------------------------------------------------------------ -----------
Total Net Assets $76,823,465
- ------------------------------------------------------------------------------------------ -----------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
- ------------------------------------------------------------------------------------------
Institutional Shares
($67,276,372 / 6,303,361 shares outstanding) $10.67
- ------------------------------------------------------------------------------------------ -----------
Select Shares
($9,547,093 / 896,137 shares outstanding) $10.65
- ------------------------------------------------------------------------------------------ -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $2,086) $1,644,343
- ---------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $1,384) 269,311
- --------------------------------------------------------------------------------------------- ----------
Total income 1,913,654
- ---------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------
Investment advisory fee $221,565
- ---------------------------------------------------------------------------------
Administrative personnel and services fee 77,288
- ---------------------------------------------------------------------------------
Custodian and portfolio accounting fees 25,315
- ---------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 15,863
- ---------------------------------------------------------------------------------
Legal fees 2,006
- ---------------------------------------------------------------------------------
Share registration costs 26,800
- ---------------------------------------------------------------------------------
Directors'/Trustees' fees 1,000
- ---------------------------------------------------------------------------------
Auditing fees 6,000
- ---------------------------------------------------------------------------------
Printing and postage 36,010
- ---------------------------------------------------------------------------------
Insurance premiums 2,668
- ---------------------------------------------------------------------------------
Shareholder services fee--Select Shares 7,922
- ---------------------------------------------------------------------------------
Distribution services fee 23,766
- ---------------------------------------------------------------------------------
Miscellaneous 9,820
- --------------------------------------------------------------------------------- --------
Total expenses 456,023
- ---------------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------------------------
Waiver of investment advisory fee $128,914
- ----------------------------------------------------------------------
Waiver of distribution services fee 7,922 136,836
- ---------------------------------------------------------------------- -------- --------
Net expenses 319,187
- --------------------------------------------------------------------------------------------- ----------
Net investment income 1,594,467
- --------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, AND FUTURES CONTRACTS:
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency transactions, and futures contracts
(identified cost basis) 1,005,351
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments, translation of assets
and liabilities in foreign currency, and futures contracts 3,853,690
- --------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain (loss) on investments, foreign currency, and futures
contracts 4,859,041
- --------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $6,453,508
- --------------------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
----------------- ---------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------
Net investment income $ 1,594,467 $ 1,036,801
- -------------------------------------------------------
Net realized gain (loss) on investments, foreign
currency transactions, and futures contracts
($1,005,351 net gain and $405,899 net loss,
respectively, as computed for federal tax purposes) 1,005,351 (416,902)
- -------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments, translation of assets and liabilities in
foreign currency, and futures contracts 3,853,690 (856,361)
- ------------------------------------------------------- -------------- ----------------
Change in net assets resulting from operations 6,453,508 (236,462)
- ------------------------------------------------------- -------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------
Distributions from net investment income:
- -------------------------------------------------------
Institutional Shares (1,142,671) (576,693)
- -------------------------------------------------------
Select Shares (109,619) (35,879)
- ------------------------------------------------------- -------------- ----------------
Change in net assets resulting from distributions
to shareholders (1,252,290) (612,572)
- ------------------------------------------------------- -------------- ----------------
SHARE TRANSACTIONS--
- -------------------------------------------------------
Proceeds from sale of Shares 31,536,779 52,456,535
- -------------------------------------------------------
Net asset value of Shares issued to shareholders in
payment of distributions declared 593,770 257,127
- -------------------------------------------------------
Cost of Shares redeemed (7,998,580) (4,374,350)
- ------------------------------------------------------- -------------- ----------------
Change in net assets from Share transactions 24,131,969 48,339,312
- ------------------------------------------------------- -------------- ----------------
Change in net assets 29,333,187 47,490,278
- -------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------
Beginning of period 47,490,278 --
- ------------------------------------------------------- -------------- ----------------
End of period (including undistributed net investment
income of $798,153 and $455,224, respectively) $76,823,465 $47,490,278
- ------------------------------------------------------- -------------- ----------------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
------------ ---------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.85 $ 10.00
- ----------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------
Net investment income 0.26 0.25
- ----------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts 0.81 (0.25)
- ---------------------------------------------------------- --------- -------------
Total from investment operations 1.07 0.00
- ----------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------
Distributions to shareholders from net investment income (0.25) (0.15)
- ---------------------------------------------------------- --------- -------------
NET ASSET VALUE, END OF PERIOD $10.67 $ 9.85
- ---------------------------------------------------------- --------- -------------
TOTAL RETURN (B) 11.02% 0.02%
- ----------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------
Expenses 1.00%(c) 0.88%(c)
- ----------------------------------------------------------
Net investment income 5.47%(c) 5.07%(c)
- ----------------------------------------------------------
Expense waiver/reimbursement (d) 0.44%(c) 0.59%(c)
- ----------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------
Net assets, end of period (000 omitted) $67,276 $43,793
- ----------------------------------------------------------
Portfolio turnover rate 113% 132%
- ----------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from January 27, 1994
(start of business) to May 24, 1994, the Fund had no investment activity.
(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)
FEDERATED MANAGED GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS--SELECT SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
------------ ----------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.83 $10.00
- ---------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------
Net investment income 0.21 0.21
- ---------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts 0.82 (0.25)
- --------------------------------------------------------- --------- --------------
Total from investment operations 1.03 (0.04)
- ---------------------------------------------------------
LESS DISTRIBUTIONS
- ---------------------------------------------------------
Distributions to shareholders from net investment
income (0.21) (0.13)
- --------------------------------------------------------- --------- --------------
NET ASSET VALUE, END OF PERIOD $10.65 $ 9.83
- --------------------------------------------------------- --------- --------------
TOTAL RETURN (B) 10.66% (0.40%)
- ---------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------
Expenses 1.75%(c) 1.64%(c)
- ---------------------------------------------------------
Net investment income 4.75%(c) 4.33%(c)
- ---------------------------------------------------------
Expense waiver/reimbursement (d) 0.68%(c) 0.84%(c)
- ---------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------
Net assets, end of period (000 omitted) $9,547 $3,697
- ---------------------------------------------------------
Portfolio turnover rate 113% 132%
- ---------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from January 27, 1994
(start of business) to May 24, 1994, the Fund had no investment activity.
(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)
FEDERATED MANAGED GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Managed Series Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end, management investment
company. The Trust consists of four diversified portfolios. The financial
statements included herein are only those of Federated Managed Growth and Income
Fund (the "Fund"). The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
Fund offers two classes of shares: Institutional Shares (formerly, Institutional
Service Shares) and Select Shares. The Institutional Service Shares changed its
name to Institutional Shares effective June 30, 1995.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government obligations are generally valued at
the mean between the over-the-counter bid and asked prices as furnished by
an independent pricing service. Listed equity securities are valued at the
last sale price reported on national securities exchanges. Unlisted
securities, bonds, corporate bonds and other fixed income securities are
generally valued at the price provided by an independent pricing service.
Short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value. Investments in other regulated investment companies are
valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
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. However, federal taxes may be
imposed on the Fund upon the disposition of certain investments in Passive
Foreign Investment Companies. Withholding taxes on foreign dividends have
been provided for in accordance with the Fund's understanding of the
applicable country's tax rules and rates. At November 30, 1994, the Fund,
for federal tax purposes, had a capital loss carryforward of $405,899,
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 2002 ($405,899).
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account an amount
of cash or U.S. government securities equal to a percentage of the contract
value. The Fund agrees to receive from or pay to the broker an amount of
cash equal to a specific dollar amount times the difference between the
closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contract is determined and any
difference between such value and the original futures contracts value is
reflected in the "daily variation margin" account. Daily variation margin
adjustments,
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
arising from this "marking to market" process, are recorded by the Fund as
unrealized gains or losses.
Risks of entering into futures contracts include the possibility that a
change in the value of the contract may not correlate with changes in the
value of the underlying securities. Risks may arise from the inability of
counterparties to perform under the terms of the contract. The Fund may
decide to close its position on a contract at any time prior to the
contract's expiration. When a contract is closed, the Fund recognizes a
realized gain or loss. For the six months ended May 31, 1995, the Fund had
a realized gain of $72,065 on futures contracts.
At May 31, 1995, the Fund had outstanding futures contracts as set forth
below:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CONTRACTS TO APPRECIATION
DATE DELIVER/RECEIVE VALUE (DEPRECIATION)
- ----------------- ---------------------------------- ----------------- -----------------
<S> <C> <C> <C>
June 1995 18 S&P 500 Index Futures Long $88,650
June 1995 2 S&P Midcap Index Future Long 1,350
---------
Net Unrealized Appreciation (Depreciation) on Futures Contracts $90,000
---------
</TABLE>
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in equity and fixed income
securities of non-U.S. issuers. Although the Fund maintains a diversified
investment portfolio, the political or economic developments within a
particular country or region may have an adverse effect on the ability of
domiciled issuers to meet their obligations. Additionally, political or
economic developments may have an effect on the liquidity and volatility of
portfolio securities and currency holdings.
At May 31, 1995, the foreign portion of the portfolio was diversified with
the following industries:
<TABLE>
<S> <C> <C> <C>
Agency 1.2% Insurance 0.1%
Banking 0.4 Machinery & Equipment 0.1
Beverage & Tobacco 0.1 Retailers 0.4
Building & Development 0.2 Sovereign 2.7
Consumer Non-Durables 0.1 State/Provincial 0.1
Electronics & Electric 0.2 Supranational 0.8
Energy 0.2 Telecomm. & Cellular 0.1
Finance 0.1 Utilities 0.3
Health Technology 0.1
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
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.
RESTRICTED SECURITIES--Restricted Securities are securities that may only
be resold upon registration under Federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Trustees. The Fund will not incur any
registration costs upon such resales. The Fund's restricted securities are
valued at the price provided by dealers in the secondary market or, if no
market prices are available, at the fair value as determined by the Fund's
pricing committee. Additional information on each restricted security held
at May 31, 1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Freeport Terminal (Malta) 6/16/94 $284,100
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
------------------------ ------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 2,529,641 $25,752,274 4,831,900 $48,424,276
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 52,335 519,891 23,521 236,142
- --------------------------------------------------------
Shares redeemed (725,699) (7,394,164) (408,337) (4,090,253)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Institutional Share
transactions 1,856,277 $18,878,001 4,447,084 $44,570,165
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
------------------------- ------------------------
SELECT SHARES SHARES DOLLARS SHARES DOLLARS
- ------------------------------------------------------- ---------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 572,711 $ 5,784,505 402,183 $ 4,032,259
- -------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 7,394 73,879 2,090 20,985
- -------------------------------------------------------
Shares redeemed (60,000) (604,416) (28,241) (284,097)
- ------------------------------------------------------- --------- ---------- -------- ----------
Net change resulting from Select Share transactions 520,105 $ 5,253,968 376,032 $ 3,769,147
- ------------------------------------------------------- --------- ---------- -------- ----------
Total net change resulting from Fund Share
transactions 2,376,382 $24,131,969 4,823,116 $48,339,312
- ------------------------------------------------------- --------- ---------- -------- ----------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, 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 a portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund administrative personnel
and services. The FAS fee is based on the level of average aggregate daily net
assets of all funds advised by subsidiaries of Federated Investors for the
period. The administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.
DISTRIBUTION FEE--The Fund has adopted a Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Select Shares. The Plan provides that the Fund may incur
distribution expenses up to .75 of 1% of the average daily net assets of the
Select Shares, annually, to compensate FSC. The distributor may voluntarily
choose to waive a portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of each class of shares for the period. This fee
is to obtain certain services for shareholders and to maintain the shareholder
accounts. For the six months ended May 31, 1995, Institutional Shares did not
incur a shareholder services fee.
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. The fee
is based on the size, type, and number of accounts and transactions made by
shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($47,500) and start-up
administrative service expenses ($39,068) were initially borne by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative expenses during the five year period following March 11,
1994 (date the Fund first became effective). For the six months ended May 31,
1995, the Fund paid $7,576 and $4,992, respectively, pursuant to this agreement.
GENERAL--Certain 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 six
months ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $57,520,900
- ------------------------------------------------------------------------------- -----------
SALES $34,070,904
- ------------------------------------------------------------------------------- -----------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue
John F. Donahue
Thomas G. Bigley
Chairman
John T. Conroy, Jr.
Glen R. Johnson
President
William J. Copeland
J. Christopher Donahue
James E. Dowd
Vice President
Lawrence D. Ellis, M.D.
Richard B. Fisher
Edward L. Flaherty, Jr.
Vice President
Glen R. Johnson
Edward C. Gonzales
Vice President and Treasurer
Peter E. Madden
John W. McGonigle
Gregor F. Meyer
Vice President and Secretary
John E. Murray, Jr.
David M. Taylor
Wesley W. Posvar
Assistant Treasurer
Marjorie P. Smuts
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
FEDERATED
MANAGED GROWTH
FUND
[LOGO]
----------------------------------------------------------------
----------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
Federated Managed Growth Fund
is part of
Managed Series Trust,
a lifecycle investing program
from Federated Investors.
MAY 31, 1995
FEDERATED SECURITIES CORP.
(LOGO)
- ---------------------------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
56166K602
56166K503
G00515-01 (7/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the first Semi-Annual Report to Shareholders for
Federated Managed Growth Fund. The report covers the six-month period ended May
31, 1995, and includes the fund's Investment Review, Portfolio of Investments
and Financial Statements. In addition, separate Financial Highlights tables have
been included for both classes of shares of the fund ("Institutional Shares" and
"Select Shares").
The United States had the strongest stock market in the world in the first
quarter of 1995, and the fund's performance reflected this fact. Federated
Managed Growth Fund had holdings in utility stocks, which showed good gains, and
in large-company domestic stocks, which performed extremely well as a group.
The fund's net assets increased from $31.9 million on November 30, 1994 to $56.4
million on May 31, 1995. The fund's net asset value increased from $9.82 to
$10.83 per share for Institutional Shares and from $9.81 to $10.82 per share for
Select Shares. The fund paid dividends of $.20 per share for Institutional
Shares and $.16 for Select Shares over the six month period.
Thank you for your confidence in Federated Managed Growth Fund. As always, we
invite your comments and suggestions.
Sincerely,
Glen R. Johnson
President
July 15, 1995
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Financial markets were strong in the first half of 1995, and Federated Managed
Growth Fund participated in the rallies. For the six months ended May 31, 1995,
an investor in Institutional Shares experienced a total return of 12.45%*, while
an investor in Select Shares received a total return of 12.11%*. The strong
financial markets were driven by changing investor expectations about economic
growth. Last year investors were concerned that the economy was on the verge of
overheating. They feared that only very high interest rates could restrain
economic growth and prevent an outburst of inflation. As growth moderated in
early 1995, investors began to realize that short-term interest rates had risen
sufficiently to brake the economy, and further near-term restraint was
unnecessary. Once investors realized that the economy was decelerating, the bond
market rally gathered strength, providing attractive returns to fixed income
investors.
The investment philosophy for the fund is based on the belief that over time an
investor with a diversified portfolio will achieve better returns with the same
risk or the same returns with lower risk than an investor in a single asset
class. By placing limits on the weights for each asset class in the portfolio,
the investment policy ensures proper diversification of the portfolio. Fund
management also believes that investors with diversified portfolios will do even
better if they hold above average positions in asset classes offering good
relative value. Therefore, fund management focuses on value in setting
allocations among the asset classes.
Unfortunately, strong rallies in the stock and bond markets reduced the
underlying value in both markets. The cornerstone of a value investment
philosophy is the belief that investors should take risks only when they are
paid to take those risks. Once the price becomes too rich in relationship to the
underlying fundamentals, an investor is no longer being paid to take risk and a
reduction in the exposure to that asset class is appropriate. Management of the
Federated Managed Growth Fund believes that this is the case for both stocks and
bonds and, therefore, moved to defensive positions in both asset classes late in
the second quarter.
As fund management expected, the drop in long-term bond yields caused the stock
market to move to new all-time highs this year. Since the inception of the fund,
a mid-point allocation to equity reserves has been held and invested in
short-term debt. However, by early June, the severe overvaluation of the market
caused fund management to adopt a defensive position in the equity market. This
change involves raising equity reserves to 7.5%, with the increased allocation
coming from a reduction in the allocation to U.S. large company stocks. This
defensive position reflects management's belief that the equity market is
vulnerable to either stronger or weaker economic growth. While a stronger growth
environment would ease market concerns about recession, it would also lead to
renewed upward pressure on interest rates, which would in turn pressure stock
prices. In contrast, a weaker economy would put severe pressure on corporate
profits, which would also pressure stock prices. Either way, an
* Performance quoted represents past performance. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
overvalued stock market is vulnerable and a 7.5% equity reserve position is
appropriate. In addition to U.S. large company stocks (9.6% of the fund), the
fund holds moderate positions in both U.S. small company stocks and foreign
stocks. These two areas each represent about 10% of the fund's net assets, and
are held in the belief that they have above average return potential at this
time because they offer good relative value in comparison to large company
stocks.
Since bond prices fall when interest rates rise, and 45% of the fund's assets
are invested in bonds, controlling exposure to interest rate risk is important
to fund performance. As part of its risk control framework, the duration of the
bond portfolio is limited to the range of 3.0 to 7.0 years. This duration range
means that the sensitivity of the bond portfolio to interest rate changes is in
line with the sensitivity of the overall investment grade bond market. Although
bonds began a bear market in October 1993, the fund adopted a more constructive
outlook on interest rates last summer, expecting that interest rates would fall.
Interest rates have declined substantially since then, as bonds enjoyed a very
strong countertrend rally. However, by late May, the countertrend bond rally had
proceeded far enough to restore risk to the bond market. Management believes
that further gains in bonds are likely to be limited, especially in comparison
to the potential losses once the bear market resumes. Therefore, the bond
duration of the portfolio was reduced to 4.0 years, a below average, but not
minimum, level. The fixed income portion of the fund is dominated by government
bonds, both Treasury bonds and mortgage-backed securities. Modest positions are
also held in high yield corporate and foreign government bonds.
FEDERATED MANAGED GROWTH FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--33.0%*
- -----------------------------------------------------------------------------------
LARGE COMPANY--9.6%**
---------------------------------------------------------------
CONSUMER DURABLES--0.6%
---------------------------------------------------------------
2,100 Eastman Kodak Co. $ 126,788
---------------------------------------------------------------
2,600 Ford Motor Co. 76,050
---------------------------------------------------------------
6,125 Mattel, Inc. 153,125
--------------------------------------------------------------- -----------
Total 355,963
--------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--1.1%
---------------------------------------------------------------
1,300 Avon Products, Inc. 87,587
---------------------------------------------------------------
4,500 IBP, Inc. 168,750
---------------------------------------------------------------
2,100 Philip Morris Cos., Inc. 153,038
---------------------------------------------------------------
2,600 Reebok International, Ltd. 87,100
---------------------------------------------------------------
16,400 RJR Nabisco Holdings Corp., Conv. Pfd., Series C, $0.6012 100,450
--------------------------------------------------------------- -----------
Total 596,925
--------------------------------------------------------------- -----------
CONSUMER SERVICES--0.1%
---------------------------------------------------------------
1,400 Gannett Co., Inc. 74,900
--------------------------------------------------------------- -----------
ELECTRONIC TECHNOLOGY--1.3%
---------------------------------------------------------------
2,800 Hewlett-Packard Co. 185,150
---------------------------------------------------------------
800 Intel Corp. 89,800
---------------------------------------------------------------
800 International Business Machines Corp. 74,600
---------------------------------------------------------------
1,600 (a) Litton Industries, Inc. 61,600
---------------------------------------------------------------
2,600 Lockheed Martin Corp. 154,700
---------------------------------------------------------------
1,300 Raytheon Co. 100,750
---------------------------------------------------------------
1,900 Rockwell International Corp. 86,688
--------------------------------------------------------------- -----------
Total 753,288
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
---------------------------------------------------------------
ENERGY MINERALS--1.0%
---------------------------------------------------------------
2,500 Burlington Resources, Inc. $ 103,750
---------------------------------------------------------------
2,800 Chevron Corp. 137,550
---------------------------------------------------------------
1,500 Mapco, Inc. 88,312
---------------------------------------------------------------
1,700 Texaco, Inc. 116,450
---------------------------------------------------------------
4,500 USX Marathon Group, Inc. 89,438
--------------------------------------------------------------- -----------
Total 535,500
--------------------------------------------------------------- -----------
FINANCE--1.6%
---------------------------------------------------------------
1,400 American Express Co. 49,875
---------------------------------------------------------------
1,200 AMLI Residential Properties Trust, REIT 22,950
---------------------------------------------------------------
2,500 Bank of Boston Corp. 91,250
---------------------------------------------------------------
2,300 Citicorp 123,050
---------------------------------------------------------------
1,700 Dean Witter, Discover & Co. 80,963
---------------------------------------------------------------
800 First Interstate Bancorp. 67,200
---------------------------------------------------------------
2,802 Mellon Bank Corp. 119,785
---------------------------------------------------------------
1,200 NationsBank Corp. 67,950
---------------------------------------------------------------
2,300 Providian Corp. 83,662
---------------------------------------------------------------
1,000 (a) The PMI Group, Inc. 40,875
---------------------------------------------------------------
3,500 Travelers Group, Inc. 147,875
--------------------------------------------------------------- -----------
Total 895,435
--------------------------------------------------------------- -----------
HEALTH TECHNOLOGY--0.6%
---------------------------------------------------------------
1,850 American Home Products Corp. 136,206
---------------------------------------------------------------
1,700 Becton, Dickinson & Co. 97,750
---------------------------------------------------------------
1,700 Bristol-Myers Squibb Co. 112,837
--------------------------------------------------------------- -----------
Total 346,793
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
---------------------------------------------------------------
INDUSTRIAL SERVICES--0.2%
---------------------------------------------------------------
3,400 Baker Hughes, Inc. $ 76,500
---------------------------------------------------------------
1,200 (a) Western Atlas, Inc. 54,150
--------------------------------------------------------------- -----------
Total 130,650
--------------------------------------------------------------- -----------
NON-ENERGY MINERALS--0.3%
---------------------------------------------------------------
2,600 Phelps Dodge Corp. 143,325
--------------------------------------------------------------- -----------
PROCESS INDUSTRIES--0.6%
---------------------------------------------------------------
1,800 DuPont (E.I.) de Nemours & Co. 122,175
---------------------------------------------------------------
1,700 Eastman Chemical Co. 102,000
---------------------------------------------------------------
4,200 Praxair, Inc. 104,475
--------------------------------------------------------------- -----------
Total 328,650
--------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--1.1%
---------------------------------------------------------------
1,600 Caterpillar, Inc. 96,400
---------------------------------------------------------------
700 Deere & Co. 60,550
---------------------------------------------------------------
1,800 (a) FMC Corp. 115,875
---------------------------------------------------------------
1,500 General Electric Co. 87,000
---------------------------------------------------------------
800 Loews Corp. 95,100
---------------------------------------------------------------
2,400 Textron, Inc. 146,100
--------------------------------------------------------------- -----------
Total 601,025
--------------------------------------------------------------- -----------
RETAIL TRADE--0.4%
---------------------------------------------------------------
3,400 American Stores Co. 88,825
---------------------------------------------------------------
2,800 Sears, Roebuck & Co. 157,850
--------------------------------------------------------------- -----------
Total 246,675
--------------------------------------------------------------- -----------
TECHNOLOGY SERVICES--0.3%
---------------------------------------------------------------
3,600 General Motors Corp., Class E 153,000
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
---------------------------------------------------------------
UTILITIES--0.4%+
---------------------------------------------------------------
2,500 AT & T Corp. $ 126,875
---------------------------------------------------------------
1,500 Enron Corp. 54,750
---------------------------------------------------------------
3,300 MCI Communications Corp. 66,825
--------------------------------------------------------------- -----------
Total 248,450
--------------------------------------------------------------- -----------
TOTAL LARGE COMPANY (IDENTIFIED COST, $4,738,372) 5,410,579
--------------------------------------------------------------- -----------
SMALL COMPANY--8.3%**
---------------------------------------------------------------
COMMERCIAL SERVICES--0.4%
---------------------------------------------------------------
3,300 Castle (A.M.) & Co. 49,913
---------------------------------------------------------------
2,100 (a) CDI Corp. 46,987
---------------------------------------------------------------
3,800 (a) Comdata Holdings Corp. 47,500
---------------------------------------------------------------
1,400 (a) Devon Group, Inc. 37,625
---------------------------------------------------------------
3,300 (a) Super Rite Foods Holdings Corp. 52,800
--------------------------------------------------------------- -----------
Total 234,825
--------------------------------------------------------------- -----------
CONSUMER DURABLES--0.6%
---------------------------------------------------------------
1,000 Barnes Group, Inc. 42,625
---------------------------------------------------------------
3,400 (a) Champion Enterprises, Inc. 56,950
---------------------------------------------------------------
2,400 Coachmen Industries, Inc. 33,000
---------------------------------------------------------------
2,000 (a) Cobra Golf, Inc. 54,000
---------------------------------------------------------------
1,100 Harman International Industries, Inc. 39,738
---------------------------------------------------------------
2,500 Standard Motor Products, Inc. 49,375
---------------------------------------------------------------
1,700 Toro Co. 46,962
--------------------------------------------------------------- -----------
Total 322,650
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
CONSUMER NON-DURABLES--0.2%
---------------------------------------------------------------
2,100 Hudson Foods, Inc., Class A $ 28,875
---------------------------------------------------------------
3,600 (a) Mondavi Robert Corp., Class A 60,750
--------------------------------------------------------------- -----------
Total 89,625
--------------------------------------------------------------- -----------
CONSUMER SERVICES--0.3%
---------------------------------------------------------------
1,800 Plenum Publishing Corp. 58,500
---------------------------------------------------------------
1,500 Pulitzer Publishing Co. 63,938
---------------------------------------------------------------
2,400 (a) United Video Satellite Group, Inc., Class A 62,400
--------------------------------------------------------------- -----------
Total 184,838
--------------------------------------------------------------- -----------
ELECTRONIC TECHNOLOGY--1.0%
---------------------------------------------------------------
2,850 (a) Burr Brown Corp. 64,125
---------------------------------------------------------------
1,400 (a) Electronics for Imaging, Inc. 64,225
---------------------------------------------------------------
3,700 GenCorp, Inc. 47,637
---------------------------------------------------------------
1,600 (a) International Rectifier Corp. 43,000
---------------------------------------------------------------
1,700 (a) Kemet Corp. 81,600
---------------------------------------------------------------
2,300 (a) SCI Systems, Inc. 47,725
---------------------------------------------------------------
1,700 (a) Tech-Sym Corp. 43,775
---------------------------------------------------------------
1,000 Tektronix, Inc. 46,000
---------------------------------------------------------------
1,100 (a) Tencor Instruments 73,975
---------------------------------------------------------------
1,200 Watkins Johnson Co. 53,700
--------------------------------------------------------------- -----------
Total 565,762
--------------------------------------------------------------- -----------
ENERGY MINERALS--0.2%
---------------------------------------------------------------
1,200 Penn Virginia Corp. 38,400
---------------------------------------------------------------
2,800 Phoenix Resource Cos., Inc. 89,950
--------------------------------------------------------------- -----------
Total 128,350
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
FINANCIAL--2.0%
---------------------------------------------------------------
2,700 (a) Acceptance Insurance Cos., Inc. $ 37,800
---------------------------------------------------------------
1,700 Allied Group, Inc. 48,238
---------------------------------------------------------------
1,600 American Bankers Insurance Group, Inc. 47,200
---------------------------------------------------------------
2,400 (a) American Travellers Corp. 43,200
---------------------------------------------------------------
1,100 Associated Banc Corp. 41,250
---------------------------------------------------------------
1,900 Bankers First Corp. 51,300
---------------------------------------------------------------
1,700 Centura Banks, Inc. 43,987
---------------------------------------------------------------
3,800 City National Corp. 42,275
---------------------------------------------------------------
1,300 Cullen Frost Bankers, Inc. 51,350
---------------------------------------------------------------
4,300 CWM Mortgage Holdings, Inc. 49,988
---------------------------------------------------------------
2,500 Foothill Group, Inc., Class A 61,875
---------------------------------------------------------------
5,700 Hibernia Corp., Class A 47,737
---------------------------------------------------------------
1,200 Irwin Financial Corp. 40,050
---------------------------------------------------------------
2,000 Money Store, Inc. 61,750
---------------------------------------------------------------
1,900 (a) Mutual Assurance, Inc. 50,825
---------------------------------------------------------------
2,500 North Fork Bancorp, Inc. 44,375
---------------------------------------------------------------
3,600 Peoples Heritage Financial Group 51,750
---------------------------------------------------------------
1,100 Protective Life Corp. 54,588
---------------------------------------------------------------
1,600 Queens County Bancorp, Inc. 52,000
---------------------------------------------------------------
2,500 (a) St. Francis Capital Corp. 47,812
---------------------------------------------------------------
1,600 Student Loan Corp. 41,400
---------------------------------------------------------------
2,600 Webb (Del) Corp. 56,550
---------------------------------------------------------------
1,500 WestAmerica Bancorporation 53,250
--------------------------------------------------------------- -----------
Total 1,120,550
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
HEALTH SERVICES--0.3%
---------------------------------------------------------------
3,200 Bindley Western Industries, Inc. $ 49,600
---------------------------------------------------------------
3,500 (a) Maxicare Health Plans, Inc. 53,813
---------------------------------------------------------------
2,700 (a) Sun Healthcare Group, Inc. 44,887
---------------------------------------------------------------
2,800 (a) United American Healthcare Corp. 48,650
--------------------------------------------------------------- -----------
Total 196,950
--------------------------------------------------------------- -----------
HEALTH TECHNOLOGY--0.2%
---------------------------------------------------------------
3,500 (a) AMSCO International, Inc. 43,750
---------------------------------------------------------------
1,400 (a) Bio Rad Laboratories, Inc., Class A 42,000
---------------------------------------------------------------
6,000 Kinetic Concepts, Inc. 42,000
--------------------------------------------------------------- -----------
Total 127,750
--------------------------------------------------------------- -----------
INDUSTRIAL SERVICES--0.4%
---------------------------------------------------------------
1,000 Butler Manufacturing Co. 40,500
---------------------------------------------------------------
14,000 (a) EnviroSource, Inc. 56,000
---------------------------------------------------------------
2,500 Granite Construction, Inc. 53,750
---------------------------------------------------------------
2,800 Western Waste Industries 53,900
--------------------------------------------------------------- -----------
Total 204,150
--------------------------------------------------------------- -----------
NON-ENERGY MINERALS--0.2%
---------------------------------------------------------------
1,900 Brush Wellman, Inc. 41,325
---------------------------------------------------------------
3,100 (a) Magma Copper Co. 44,563
---------------------------------------------------------------
1,100 Texas Industries, Inc. 41,388
--------------------------------------------------------------- -----------
Total 127,276
--------------------------------------------------------------- -----------
PROCESS INDUSTRIES--0.5%
---------------------------------------------------------------
2,200 (a) Bush Boake Allen, Inc. 62,425
---------------------------------------------------------------
1,600 Chesapeake Corp. 45,600
---------------------------------------------------------------
1,400 (a) Cytec Industries, Inc. 51,625
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
PROCESS INDUSTRIES--CONTINUED
---------------------------------------------------------------
1,700 First Mississippi Corp. $ 39,313
---------------------------------------------------------------
1,100 Pittway Corp., Class A 49,225
---------------------------------------------------------------
1,000 Springs Industries, Inc., Class A 39,375
--------------------------------------------------------------- -----------
Total 287,563
--------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--0.6%
---------------------------------------------------------------
1,250 AGCO Corp. 47,344
---------------------------------------------------------------
1,100 Blount, Inc., Class A 41,662
---------------------------------------------------------------
1,200 Borg-Warner Automotive, Inc. 30,450
---------------------------------------------------------------
4,000 Brenco, Inc. 51,000
---------------------------------------------------------------
2,400 JLG Industries, Inc. 60,600
---------------------------------------------------------------
1,000 NACCO Industries, Inc., Class A 60,000
---------------------------------------------------------------
2,500 (a) NCI Building System, Inc. 40,938
--------------------------------------------------------------- -----------
Total 331,994
--------------------------------------------------------------- -----------
RETAIL TRADE--0.6%
---------------------------------------------------------------
4,400 (a) Bon-Ton Stores, Inc. 45,650
---------------------------------------------------------------
2,600 (a) Friedmans, Inc., Class A 47,125
---------------------------------------------------------------
2,800 (a) Regis Corp. Minnesota 49,000
---------------------------------------------------------------
4,500 (a) Rhodes, Inc. 38,813
---------------------------------------------------------------
3,000 (a) Waban, Inc. 43,875
---------------------------------------------------------------
3,300 Wolohan Lumber Co. 44,962
---------------------------------------------------------------
4,000 (a) Zale Corp. 46,250
--------------------------------------------------------------- -----------
Total 315,675
--------------------------------------------------------------- -----------
TECHNOLOGY SERVICES--0.3%
---------------------------------------------------------------
2,494 (a) Bell Industries, Inc. 47,693
---------------------------------------------------------------
5,200 Computer Language Research, Inc. 46,150
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
---------------------------------------------------------------
TECHNOLOGY SERVICES--CONTINUED
---------------------------------------------------------------
8,200 (a) Computervision Corp. $ 46,125
---------------------------------------------------------------
2,400 (a) Frame Technology Corp. 58,800
--------------------------------------------------------------- -----------
Total 198,768
--------------------------------------------------------------- -----------
TRANSPORTATION--0.1%
---------------------------------------------------------------
1,000 (a) Landstar System, Inc. 26,500
--------------------------------------------------------------- -----------
UTILITIES--0.4%+
---------------------------------------------------------------
4,000 Central Maine Power Co. 47,000
---------------------------------------------------------------
1,500 Eastern Enterprises 45,000
---------------------------------------------------------------
3,600 (a) Public Service Co. New Mexico 51,300
---------------------------------------------------------------
1,600 St. Joseph Light & Power Co. 47,000
---------------------------------------------------------------
3,100 (a) U.S. Long Distance Corp. 46,500
--------------------------------------------------------------- -----------
Total 236,800
--------------------------------------------------------------- -----------
TOTAL SMALL COMPANY (IDENTIFIED COST, $4,356,475) 4,700,026
--------------------------------------------------------------- -----------
UTILITY--5.3%+
---------------------------------------------------------------
ELECTRIC UTILITIES--2.2%
---------------------------------------------------------------
3,200 Baltimore Gas & Electric Co. 83,200
---------------------------------------------------------------
3,339 Cinergy Corp. 88,901
---------------------------------------------------------------
3,500 CMS Energy Corp. 84,437
---------------------------------------------------------------
3,600 DPL, Inc. 79,200
---------------------------------------------------------------
3,450 DQE, Inc. 84,525
---------------------------------------------------------------
2,500 Florida Progress Corp. 79,688
---------------------------------------------------------------
2,100 FPL Group, Inc. 82,425
---------------------------------------------------------------
2,700 General Public Utilities Corp. 81,000
---------------------------------------------------------------
2,400 NIPSCO Industries, Inc. 82,800
---------------------------------------------------------------
4,300 Pacificorp 84,925
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
UTILITY--CONTINUED
---------------------------------------------------------------
ELECTRIC UTILITIES--CONTINUED
---------------------------------------------------------------
3,000 Peco Energy Co. $ 84,375
---------------------------------------------------------------
3,500 Pinnacle West Capital Corp. 80,500
---------------------------------------------------------------
3,800 Southern Co. 84,075
---------------------------------------------------------------
2,900 Utilicorp United, Inc. 82,650
---------------------------------------------------------------
2,600 Western Resources, Inc. 81,900
--------------------------------------------------------------- -----------
Total 1,244,601
--------------------------------------------------------------- -----------
NATURAL GAS DISTRIBUTION--0.3%
---------------------------------------------------------------
1,150 Consolidated Natural Gas Co. 45,856
---------------------------------------------------------------
2,000 MCN Corp. 37,500
---------------------------------------------------------------
1,500 Pacific Enterprises 37,875
---------------------------------------------------------------
1,900 UGI Corp. 39,900
--------------------------------------------------------------- -----------
Total 161,131
--------------------------------------------------------------- -----------
OIL/GAS TRANSMISSION--0.4%
---------------------------------------------------------------
1,200 Enron Corp. 43,800
---------------------------------------------------------------
2,000 Panhandle Eastern Corp. 50,250
---------------------------------------------------------------
1,600 Sonat, Inc. 52,600
---------------------------------------------------------------
1,600 Williams Companies, Inc. 54,400
--------------------------------------------------------------- -----------
Total 201,050
--------------------------------------------------------------- -----------
TELECOMMUNICATIONS--2.4%
---------------------------------------------------------------
3,500 Ameritech Corp. 155,313
---------------------------------------------------------------
3,100 AT& T Corp. 157,325
---------------------------------------------------------------
2,800 Bell Atlantic Corp. 156,100
---------------------------------------------------------------
2,500 BellSouth Corp. 153,437
---------------------------------------------------------------
4,600 GTE Corp. 153,525
---------------------------------------------------------------
5,300 Pacific Telesis Group 141,775
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
UTILITY--CONTINUED
---------------------------------------------------------------
TELECOMMUNICATIONS--CONTINUED
---------------------------------------------------------------
3,400 SBC Communications, Inc. $ 153,000
---------------------------------------------------------------
4,500 Southern New England Telecommunications Corp. 151,313
---------------------------------------------------------------
3,800 U.S. West, Inc. 156,750
--------------------------------------------------------------- -----------
Total 1,378,538
--------------------------------------------------------------- -----------
TOTAL UTILITY (IDENTIFIED COST, $2,821,441) 2,985,320
--------------------------------------------------------------- -----------
FOREIGN EQUITY--9.2%
---------------------------------------------------------------
AUSTRALIA--0.2%
---------------------------------------------------------------
3,300 Broken Hill Proprietary Co. Ltd. 41,810
---------------------------------------------------------------
4,000 National Australia Bank Ltd. 34,073
---------------------------------------------------------------
19,300 Publishing & Broadcasting 56,279
--------------------------------------------------------------- -----------
Total 132,162
--------------------------------------------------------------- -----------
BELGIUM--0.1%
---------------------------------------------------------------
1,100 Delhaize-Le Lion 51,363
--------------------------------------------------------------- -----------
DENMARK--0.1%
---------------------------------------------------------------
500 Novo-Nordisk 53,089
--------------------------------------------------------------- -----------
FINLAND--0.0%
---------------------------------------------------------------
200 Kone Corp., 'B' 24,244
--------------------------------------------------------------- -----------
FRANCE--0.3%
---------------------------------------------------------------
100 Carrefour Supermarche 49,441
---------------------------------------------------------------
1,000 Elf Aquitaine 80,822
---------------------------------------------------------------
300 LVMH (Moet-Hennessy) 57,019
--------------------------------------------------------------- -----------
Total 187,282
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
GERMANY--0.4%
---------------------------------------------------------------
50 Allianz AG Holding $ 90,568
---------------------------------------------------------------
200 Daimler Benz AG 96,865
---------------------------------------------------------------
100 Siemens AG 47,548
--------------------------------------------------------------- -----------
Total 234,981
--------------------------------------------------------------- -----------
HONG KONG--0.4%
---------------------------------------------------------------
16,800 Cheung Kong Holdings 82,748
---------------------------------------------------------------
3,300 HSBC Holdings PLC 42,875
---------------------------------------------------------------
14,000 Hutchison Whampoa 70,766
--------------------------------------------------------------- -----------
Total 196,389
--------------------------------------------------------------- -----------
ITALY--0.2%
---------------------------------------------------------------
3,000 Assicurazioni Generali 72,738
---------------------------------------------------------------
10,000 (a) Telecom Italia 26,196
--------------------------------------------------------------- -----------
Total 98,934
--------------------------------------------------------------- -----------
JAPAN--4.3%
---------------------------------------------------------------
7,000 Asahi Bank, Ltd. 86,854
---------------------------------------------------------------
5,000 Bank of Tokyo, Ltd., Tokyo 88,626
---------------------------------------------------------------
5,000 Dai-Ichi Kangyo Bank, Ltd., Tokyo 94,535
---------------------------------------------------------------
4,000 Fuji Bank, Ltd., Tokyo 91,699
---------------------------------------------------------------
7,000 Hitachi, Ltd. 67,581
---------------------------------------------------------------
3,000 Industrial Bank of Japan, Ltd., Tokyo 87,208
---------------------------------------------------------------
2,000 Ito Yokado Co. 105,879
---------------------------------------------------------------
3,000 Kansai Electric Power 79,055
---------------------------------------------------------------
19,000 Kawasaki Heavy Industries 71,397
---------------------------------------------------------------
7,000 Kirin Brewery Co., Ltd. 80,650
---------------------------------------------------------------
5,000 Matsushita Electric Industrial Co. 77,400
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
JAPAN--CONTINUED
---------------------------------------------------------------
3,000 Mitsubishi Bank $ 71,610
---------------------------------------------------------------
7,000 Mitsubishi Corp. 80,071
---------------------------------------------------------------
11,000 Mitsubishi Heavy Industries 75,521
---------------------------------------------------------------
7,000 Mitsubishi Trust & Banking 113,323
---------------------------------------------------------------
8,000 Mitsukoshi, Ltd. 66,363
---------------------------------------------------------------
20,000 Nippon Steel Co. 71,846
---------------------------------------------------------------
10 Nippon Telegraph & Telephone Corp. 82,718
---------------------------------------------------------------
5,000 Nomura Securities Co., Ltd. 89,808
---------------------------------------------------------------
8,000 Sakura Bank, Ltd., Tokyo 95,480
---------------------------------------------------------------
1,000 Seven-Eleven Japan 73,855
---------------------------------------------------------------
2,000 Sony Corp. 96,425
---------------------------------------------------------------
4,000 Sumitomo Bank, Ltd., Osaka 83,191
---------------------------------------------------------------
17,000 Sumitomo Heavy Industries 56,449
---------------------------------------------------------------
6,000 Takeda Chemical Industries 80,118
---------------------------------------------------------------
7,000 Tokio Marine & Fire 80,236
---------------------------------------------------------------
3,000 Tokyo Electric Power 95,007
---------------------------------------------------------------
11,000 Toshiba Corp. 69,282
---------------------------------------------------------------
5,000 Toyota Motor Corp. 96,898
--------------------------------------------------------------- -----------
Total 2,409,085
--------------------------------------------------------------- -----------
MALAYSIA--0.1%
---------------------------------------------------------------
5,000 Telekom Malaysia Myr1 38,344
---------------------------------------------------------------
10,000 Tenaga Nasional Berhad 41,388
--------------------------------------------------------------- -----------
Total 79,732
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
NETHERLANDS--0.4%
---------------------------------------------------------------
2,000 Philips Electronics $ 79,656
---------------------------------------------------------------
700 Royal Dutch Petroleum Co. 88,725
---------------------------------------------------------------
300 Unilever NV-Cert 37,742
--------------------------------------------------------------- -----------
Total 206,123
--------------------------------------------------------------- -----------
NEW ZEALAND--0.1%
---------------------------------------------------------------
10,000 Fletcher Challenge Ltd. 26,590
--------------------------------------------------------------- -----------
NORWAY--0.1%
---------------------------------------------------------------
700 Orkla Borregaard A.S. 29,434
--------------------------------------------------------------- -----------
SINGAPORE--0.1%
---------------------------------------------------------------
30,000 Singapore Telecommunications, Ltd. 61,163
--------------------------------------------------------------- -----------
SPAIN--0.1%
---------------------------------------------------------------
600 Empresa Nac de Electridad 28,720
--------------------------------------------------------------- -----------
SWEDEN--0.2%
---------------------------------------------------------------
800 Ericsson LM B-F 57,244
---------------------------------------------------------------
2,500 Volvo (AB), Series B 43,955
--------------------------------------------------------------- -----------
Total 101,199
--------------------------------------------------------------- -----------
SWITZERLAND--0.6%
---------------------------------------------------------------
100 Nestle SA 100,986
---------------------------------------------------------------
20 Roche Holdings AG Genusscheine 123,189
---------------------------------------------------------------
150 Sandoz AG 100,557
--------------------------------------------------------------- -----------
Total 324,732
--------------------------------------------------------------- -----------
UNITED KINGDOM--1.7%
---------------------------------------------------------------
8,000 Barclays PLC 85,755
---------------------------------------------------------------
8,000 British Gas PLC 38,431
---------------------------------------------------------------
12,000 British Petroleum PLC 84,612
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------------------
UNITED KINGDOM--CONTINUED
---------------------------------------------------------------
13,000 British Telecom PLC $ 81,547
---------------------------------------------------------------
24,000 Coats Viyella PLC 81,753
---------------------------------------------------------------
8,000 Eastern Electricity PLC 81,563
---------------------------------------------------------------
4,000 Glaxo Wellcome PLC 46,117
---------------------------------------------------------------
20,000 Hanson PLC 76,068
---------------------------------------------------------------
14,000 Marks & Spencer PLC 92,266
---------------------------------------------------------------
6,000 Midlands Electricity PLC 60,981
---------------------------------------------------------------
4,200 RMC Group PLC 73,602
---------------------------------------------------------------
11,000 Williams Holdings PLC 58,345
---------------------------------------------------------------
12,000 Wolseley PLC 69,938
--------------------------------------------------------------- -----------
Total 930,978
--------------------------------------------------------------- -----------
TOTAL FOREIGN EQUITY (IDENTIFIED COST, $5,038,642) 5,176,200
--------------------------------------------------------------- -----------
CLOSED-END REGISTERED INVESTMENT COMPANIES--0.7%
---------------------------------------------------------------
7,000 (a) First Iberian Fund, Inc. 52,938
---------------------------------------------------------------
11,400 France Growth Fund, Inc. 118,275
---------------------------------------------------------------
9,400 Germany Fund, Inc. 108,100
---------------------------------------------------------------
4,800 Italy Fund, Inc. 40,800
---------------------------------------------------------------
2,600 Malaysia Fund, Inc. 55,250
--------------------------------------------------------------- -----------
TOTAL CLOSED-END REGISTERED INVESTMENT COMPANIES
(IDENTIFIED COST, $395,981) 375,363
--------------------------------------------------------------- -----------
TOTAL STOCKS (IDENTIFIED COST, $17,350,911) 18,647,488
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--45.7%
- -----------------------------------------------------------------------------------
TREASURY--22.7%
---------------------------------------------------------------
$ 7,650,000 United States Treasury Note, 6.50%, 4/30/1997 $ 7,738,893
---------------------------------------------------------------
4,740,000 United States Treasury Note, 7.25%, 8/15/2004 5,041,417
--------------------------------------------------------------- -----------
TOTAL TREASURY (IDENTIFIED COST, $12,392,266) 12,780,310
--------------------------------------------------------------- -----------
MORTGAGE-BACKED SECURITIES--7.5%
---------------------------------------------------------------
GOVERNMENT AGENCY--7.5%
---------------------------------------------------------------
297,292 Federal Home Loan Mortgage Corporation, Pool C80177, 7.50%,
5/1/2024 298,588
---------------------------------------------------------------
338,904 Federal Home Loan Mortgage Corporation, Pool G40136, 8.00%,
3/1/2002 348,007
---------------------------------------------------------------
243,193 Federal National Mortgage Association, Pool 250175, 7.00%,
9/1/2009 244,557
---------------------------------------------------------------
975,499 Federal National Mortgage Association, Pool 250212, 8.50%,
3/1/2025 1,008,715
---------------------------------------------------------------
253,340 Federal National Mortgage Association, Pool 303073, 8.00%,
11/1/2024 259,354
---------------------------------------------------------------
248,226 Federal National Mortgage Association, Pool 305742, 8.50%,
2/1/2025 256,678
---------------------------------------------------------------
265,558 Government National Mortgage Association, Pool 371785, 7.00%,
5/15/2024 261,487
---------------------------------------------------------------
1,250,093 Government National Mortgage Association, Pool 372858, 7.50%,
1/15/2024 1,258,669
---------------------------------------------------------------
312,646 Government National Mortgage Association, Pool 380656, 8.00%,
11/15/2024 320,556
--------------------------------------------------------------- -----------
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST, $4,118,376) 4,256,611
--------------------------------------------------------------- -----------
HIGH YIELD--4.8%
---------------------------------------------------------------
AUTOMOTIVE--0.3%
---------------------------------------------------------------
50,000 Aftermarket Technology Co., Sr. Sub. Note, 12.00%, 8/1/2004 53,750
---------------------------------------------------------------
125,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 128,125
--------------------------------------------------------------- -----------
Total 181,875
--------------------------------------------------------------- -----------
BANKING--0.2%
---------------------------------------------------------------
125,000 First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 134,375
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
---------------------------------------------------------------
BROADCAST RADIO & TV--0.1%
---------------------------------------------------------------
$ 75,000 SCI Television, Inc., Sr. Secd. Note, 11.00%, 6/30/2005 $ 79,313
--------------------------------------------------------------- -----------
CABLE T.V.--0.1%
---------------------------------------------------------------
75,000 Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 76,313
--------------------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.6%
---------------------------------------------------------------
75,000 Arcadian Partners L.P., Sr. Note, Series B, 10.75%, 5/1/2005 78,000
---------------------------------------------------------------
200,000 (a) G-I Holdings, Sr. Disc. Note, 10/1/1998 139,000
---------------------------------------------------------------
125,000 (b) Polymer Group, Inc., Sr. Note, 7/15/2002 125,938
--------------------------------------------------------------- -----------
Total 342,938
--------------------------------------------------------------- -----------
CLOTHING & TEXTILES--0.1%
---------------------------------------------------------------
75,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 73,875
--------------------------------------------------------------- -----------
CONGLOMERATES--0.1%
---------------------------------------------------------------
75,000 Sherritt Gordon Ltd., Sr. Note, 9.75%, 4/1/2003 75,375
--------------------------------------------------------------- -----------
CONSUMER PRODUCTS--0.1%
---------------------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note, 9.00%, 12/15/2003 47,875
--------------------------------------------------------------- -----------
CONTAINER & GLASS PRODUCTS--0.3%
---------------------------------------------------------------
100,000 Owens Illinois, Inc., Sr. Sub. Note, 10.50%, 6/15/2002 104,500
---------------------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 51,250
--------------------------------------------------------------- -----------
Total 155,750
--------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.2%
---------------------------------------------------------------
75,000 (a) Grand Union Co., Sr. Sub. Note, 12.25%, 7/15/2002 24,188
---------------------------------------------------------------
75,000 Pathmark Stores, Inc., Sr. Sub. Note, 9.625%, 5/1/2003 73,687
---------------------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 50,000
--------------------------------------------------------------- -----------
Total 147,875
--------------------------------------------------------------- -----------
FOOD PRODUCTS--0.2%
---------------------------------------------------------------
100,000 Curtice-burns Foods, Inc., Sr. Sub. Note, 12.25%, 2/1/2005 107,000
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
---------------------------------------------------------------
FOOD SERVICES--0.1%
---------------------------------------------------------------
$ 75,000 Flagstar Corp., Sr. Note, 10.875%, 12/1/2002 $ 69,750
--------------------------------------------------------------- -----------
FOREST PRODUCTS--0.2%
---------------------------------------------------------------
125,000 Stone Container Corp., Sr. Note, 9.875%, 2/1/2001 125,312
--------------------------------------------------------------- -----------
HEALTHCARE--0.2%
---------------------------------------------------------------
100,000 National Medical, Sr. Sub. Note, 10.125%, 3/1/2005 105,875
--------------------------------------------------------------- -----------
HOME PRODUCTS & FURNISHINGS--0.1%
---------------------------------------------------------------
75,000 (a) American Standard, Inc., Sr. Sub. Disc. Deb., 0/10.50%,
6/1/2005 56,438
--------------------------------------------------------------- -----------
MACHINERY & EQUIPMENT--0.2%
---------------------------------------------------------------
100,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 105,500
--------------------------------------------------------------- -----------
OIL & GAS--0.1%
---------------------------------------------------------------
50,000 Falcon Drilling Co., Inc., Sr. Note, 9.75%, 1/15/2001 48,750
--------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.2%
---------------------------------------------------------------
100,000 Webcraft Technologies, Inc., Sr. Sub. Note, 9.375%, 2/15/2002 90,000
--------------------------------------------------------------- -----------
RETAILERS--0.2%
---------------------------------------------------------------
125,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 122,188
--------------------------------------------------------------- -----------
STEEL--0.3%
---------------------------------------------------------------
125,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 127,188
---------------------------------------------------------------
75,000 Northwestern Steel & Wire Co., Sr. Note, 9.50%, 6/15/2001 70,125
--------------------------------------------------------------- -----------
Total 197,313
--------------------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.3%
---------------------------------------------------------------
50,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 53,750
---------------------------------------------------------------
100,000 Trism, Inc., Sr. Sub. Note, 10.75%, 12/15/2000 99,000
--------------------------------------------------------------- -----------
Total 152,750
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
HIGH YIELD--CONTINUED
---------------------------------------------------------------
TELECOMMUNICATIONS & CELLULAR--0.2%
---------------------------------------------------------------
$ 75,000 (a) NEXTEL Communications, Inc., Sr. Disc. Note, 0/11.50%, 9/1/2003 $ 43,125
---------------------------------------------------------------
75,000 (a) PanAmSat Corp., Sr. Sub. Disc. Note, 8/1/2003 54,000
--------------------------------------------------------------- -----------
Total 97,125
--------------------------------------------------------------- -----------
UTILITIES--0.2%
---------------------------------------------------------------
125,000 (a) California Energy Co., Sr. Disc. Note, 1/15/2004 105,625
--------------------------------------------------------------- -----------
TOTAL HIGH YIELD (IDENTIFIED COST, $2,674,721) 2,699,190
--------------------------------------------------------------- -----------
INVESTMENT GRADE--2.9%
---------------------------------------------------------------
BEVERAGE & TOBACCO--0.5%
---------------------------------------------------------------
300,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 286,767
--------------------------------------------------------------- -----------
CONGLOMERATES--0.4%
---------------------------------------------------------------
250,000 Leucadia National Corp., Sr. Sub., 10.375%, 6/15/2002 271,250
--------------------------------------------------------------- -----------
FINANCIAL INTERMEDIARIES--0.4%
---------------------------------------------------------------
200,000 Equitable Cos., Inc., Sr. Note, 9.00%, 12/15/2004 222,050
--------------------------------------------------------------- -----------
OIL & GAS--0.2%
---------------------------------------------------------------
100,000 Occidental Petroleum, Sr. Note, 11.75%, 3/15/2011 108,602
--------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.4%
---------------------------------------------------------------
250,000 News America Holdings, Sr. Note, 7.50%, 3/1/2000 255,915
--------------------------------------------------------------- -----------
RETAILERS--0.5%
---------------------------------------------------------------
250,000 Penny J.C., Inc., Deb., 9.45%, 7/15/2002 281,005
--------------------------------------------------------------- -----------
SOVEREIGN GOVERNMENT--0.5%
---------------------------------------------------------------
250,000 Freeport Terminal (Malta), Gtd. Global Note, 7.50%, 3/29/2009 256,115
--------------------------------------------------------------- -----------
TOTAL INVESTMENT GRADE (IDENTIFIED COST, $1,590,695) 1,681,704
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
OTHER CORPORATE--0.1%
---------------------------------------------------------------
ELECTRONIC & ELECTRIC--0.1%
---------------------------------------------------------------
$ 60,000 (a) General Instrument Corp., Conv. Jr. Sub. Note, 5.00%, 6/15/2000
(IDENTIFIED COST, $81,450) $ 82,217
--------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
FOREIGN
CURRENCY
PAR AMOUNT
- ------------ ---------------------------------------------------------------
<C> <C> <S> <C>
FOREIGN--7.7%
---------------------------------------------------------------
AUSTRALIAN DOLLAR--0.2%
---------------------------------------------------------------
150,000 State Bank of New South Wales, Deb., 12.25%, 2/26/2001 123,694
--------------------------------------------------------------- -----------
BELGIAN FRANC--0.5%
---------------------------------------------------------------
1,500,000 Belgian Government, Foreign Government Guarantee, 10.00%,
4/5/1996 53,694
---------------------------------------------------------------
6,000,000 Belgium Kingdom, 7.75%, 10/15/2004 213,101
--------------------------------------------------------------- -----------
Total 266,795
--------------------------------------------------------------- -----------
CANADIAN DOLLAR--0.3%
---------------------------------------------------------------
250,000 Ontario Hydro, Local Government Guarantee, 9.00%, 6/24/2002 190,484
--------------------------------------------------------------- -----------
DANISH KRONE--0.3%
---------------------------------------------------------------
800,000 Denmark, 8.00%, 5/15/2003 144,881
--------------------------------------------------------------- -----------
DEUTSCHE MARK--1.5%
---------------------------------------------------------------
400,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 296,582
---------------------------------------------------------------
800,000 KFW International Finance, 7.00%, 5/12/2000 160,738
---------------------------------------------------------------
550,000 Treuhandanstalt, 7.75%, 10/1/2002 417,530
--------------------------------------------------------------- -----------
Total 874,850
--------------------------------------------------------------- -----------
FRENCH FRANC--0.5%
---------------------------------------------------------------
1,400,000 France O.A.T., 8.50%, 11/25/2002 301,078
--------------------------------------------------------------- -----------
ITALIAN LIRA--0.5%
---------------------------------------------------------------
500,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 262,709
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN--CONTINUED
---------------------------------------------------------------
JAPANESE YEN--2.2%
---------------------------------------------------------------
$ 40,000,000 Export-Import Bank Japan, 4.375%, 10/1/2003 $ 526,440
---------------------------------------------------------------
10,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 145,052
---------------------------------------------------------------
42,000,000 KFW International Finance, Gtd. Note, 6.00%, 11/29/1999 578,818
--------------------------------------------------------------- -----------
Total 1,250,310
--------------------------------------------------------------- -----------
NETHERLANDS GUILDER--0.4%
---------------------------------------------------------------
400,000 Netherlands Government, 5.75%, 1/15/2004 238,463
--------------------------------------------------------------- -----------
SPANISH PESETA--0.3%
---------------------------------------------------------------
20,000,000 Spain (Government), 8.30%, 12/15/1998 150,378
--------------------------------------------------------------- -----------
SWEDISH KRONA--0.2%
---------------------------------------------------------------
1,000,000 Sweden, 6.00%, 2/9/2005 98,596
--------------------------------------------------------------- -----------
UNITED KINGDOM POUND--0.8%
---------------------------------------------------------------
275,000 UK Conversion, 9.00%, 3/3/2000 459,098
--------------------------------------------------------------- -----------
TOTAL FOREIGN (IDENTIFIED COST, $4,015,180) 4,361,336
--------------------------------------------------------------- -----------
TOTAL BONDS (IDENTIFIED COST, $24,872,688) 25,861,368
--------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ------------ ---------------------------------------------------------------
<C> <C> <S> <C>
CASH EQUIVALENTS--20.3%
- -----------------------------------------------------------------------------------
$ 9,250,000 U. S. Treasury Bills, 6/22/1995 (identified cost, $9,218,489) 9,222,032
---------------------------------------------------------------
2,220,000 *** J.P. Morgan Securities, Inc., 6.17%, dated 5/31/1995,
due 6/1/1995 (at amortized cost) 2,220,000
--------------------------------------------------------------- -----------
TOTAL CASH EQUIVALENTS 11,442,032
--------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST, $53,662,088) (C) $55,950,888
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
The following acronyms are used in this portfolio:
<TABLE>
<C> <S>
PLC -- Public Limited Company
REIT -- Real Estate Investment Trust
</TABLE>
(a) Non-income producing.
(b) Restricted securities--Investments in securities not registered under the
Securities Act of 1933. At the end of the end of the period, these
securities amounted to ($125,938) 0.2% of net assets.
(c) The cost for federal income tax purposes amounts to $53,662,088. The net
unrealized appreciation on a federal tax basis amounts to $2,288,800, which
is comprised of $2,755,488 appreciation and $466,688 depreciation at May 31,
1995.
+ The Fund's overall exposure to utility stocks is 6.0%.
* The Fund's overall exposure to stocks is 49.3%, after adjustment for the use
of S & P 500 and S & P Midcap futures contracts.
** The Fund holds cash equivalents as collateral for the thirty two S & P 500
futures contracts with a market value of $8,535,875. Consequently, the
Fund's exposure to large cap stocks is 24.7% of the fund. The Fund holds
cash equivalents as collateral for the seven S & P Midcap futures contracts
with a market value of $669,200. Consequently, the Fund's exposure to small
cap stocks is 9.5% of the Fund.
*** The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations. The investment in the repurchase agreement was through
participation in a joint account with other Federated funds.
Note: The categories of investments are shown as a percentage of net assets
($56,444,166) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $53,662,088) $55,950,888
- ------------------------------------------------------------------------------------------
Cash denominated in foreign currencies (identified cost $5,821) 5,755
- ------------------------------------------------------------------------------------------
Cash 5,322
- ------------------------------------------------------------------------------------------
Income receivable 479,707
- ------------------------------------------------------------------------------------------
Receivable for futures variation margin 162,350
- ------------------------------------------------------------------------------------------
Receivable for investments sold 137,665
- ------------------------------------------------------------------------------------------
Receivable for shares sold 91,644
- ------------------------------------------------------------------------------------------
Receivable for foreign currency sold 3,696
- ------------------------------------------------------------------------------------------
Deferred expenses 41,388
- ------------------------------------------------------------------------------------------ -----------
Total assets 56,878,415
- ------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------
Payable for investments purchased $425,754
- -------------------------------------------------------------------------------
Payable for foreign currency repurchased 3,664
- -------------------------------------------------------------------------------
Tax withholding liability 4,305
- -------------------------------------------------------------------------------
Payable for fund shares redeemed 526
- ------------------------------------------------------------------------------- --------
Total liabilities 434,249
- ------------------------------------------------------------------------------------------ -----------
NET ASSETS for 5,211,217 shares of beneficial interest outstanding $56,444,166
- ------------------------------------------------------------------------------------------ -----------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------
Paid-in capital $52,648,939
- ------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments, translation of assets and
liabilities in foreign currency, and futures contracts 2,784,968
- ------------------------------------------------------------------------------------------
Accumulated net realized gain (loss) on investments, foreign currency transactions, and
futures contracts 503,315
- ------------------------------------------------------------------------------------------
Undistributed net investment income 506,944
- ------------------------------------------------------------------------------------------ -----------
Total Net Assets $56,444,166
- ------------------------------------------------------------------------------------------ -----------
NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share:
- ------------------------------------------------------------------------------------------
Institutional Shares ($47,302,119 / 4,366,143 shares of beneficial interest outstanding) $10.83
- ------------------------------------------------------------------------------------------ -----------
Select Shares ($9,142,047 / 845,074 shares of beneficial interest outstanding) $10.82
- ------------------------------------------------------------------------------------------ -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $2,351) $ 977,494
- ---------------------------------------------------------------------------------------------
Dividend (net of foreign taxes withheld of $6,003) 200,331
- --------------------------------------------------------------------------------------------- ----------
Total investment income 1,177,825
- ---------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------
Investment advisory fee $156,474
- ---------------------------------------------------------------------------------
Administrative personnel and services fee 77,288
- ---------------------------------------------------------------------------------
Custodian and portfolio accounting fees 27,748
- ---------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 24,094
- ---------------------------------------------------------------------------------
Legal fees 2,006
- ---------------------------------------------------------------------------------
Fund share registration costs 18,372
- ---------------------------------------------------------------------------------
Auditing fees 6,000
- ---------------------------------------------------------------------------------
Trustees' fees 1,250
- ---------------------------------------------------------------------------------
Printing and postage 30,192
- ---------------------------------------------------------------------------------
Insurance premiums 2,368
- ---------------------------------------------------------------------------------
Shareholder services fee--Select Shares 6,924
- ---------------------------------------------------------------------------------
Distribution services fee 20,771
- ---------------------------------------------------------------------------------
Miscellaneous 12,002
- --------------------------------------------------------------------------------- --------
Total expenses 385,489
- ---------------------------------------------------------------------------------
Deduct--
- ---------------------------------------------------------------------------------
Waiver of investment advisory fee $149,162
- ----------------------------------------------------------------------
Waiver of distribution services fee 6,924 156,086
- ---------------------------------------------------------------------- -------- --------
Net expenses 229,403
- --------------------------------------------------------------------------------------------- ----------
Net investment income 948,422
- --------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, AND FUTURES CONTRACTS:
- ---------------------------------------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency transactions, and futures contracts
(identified cost basis) 565,151
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments, translation of assets
and liabilities in foreign currency, and futures contracts 3,660,415
- --------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain (loss) on investments, foreign currency, and futures
contracts 4,225,566
- --------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $5,173,988
- --------------------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
MAY 31, 1995 PERIOD ENDED
(UNAUDITED) NOVEMBER 30, 1994(A)
----------------- ---------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------
Net investment income $ 948,422 $ 547,410
- ----------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency
transactions, and futures contracts ($565,151 net gain and
$146,501 net loss, respectively, as computed for federal tax
purposes) 565,151 (55,426)
- ----------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on
investments, translation of assets and liabilities in foreign
currency, and futures contracts 3,660,415 (875,447)
- ---------------------------------------------------------------- ------------- ---------------
Change in assets resulting from operations 5,173,988 (383,463)
- ---------------------------------------------------------------- ------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------
Distributions from net investment income:
- ----------------------------------------------------------------
Institutional Shares (624,232) (281,776)
- ----------------------------------------------------------------
Select Shares (69,394) (19,872)
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets resulting from distributions to
shareholders (693,626) (301,648)
- ---------------------------------------------------------------- ------------- ---------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------
Proceeds from sale of shares 24,427,585 34,167,264
- ----------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 372,308 142,853
- ----------------------------------------------------------------
Cost of shares redeemed (4,761,252) (1,699,843)
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets Fund share transactions 20,038,641 32,610,274
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets 24,519,003 31,925,163
- ----------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------
Beginning of period 31,925,163 --
- ---------------------------------------------------------------- ------------- ---------------
End of period (including undistributed net investment income of
$506,944 and $252,009, respectively) $56,444,166 $31,925,163
- ---------------------------------------------------------------- ------------- ---------------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994(A)
------------ ------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.82 $10.00
- ----------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------------
Net investment income 0.22 0.20
- ----------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments, foreign
currency transactions, and futures contracts 0.99 (0.26)
- ---------------------------------------------------------------------- -------- -----------
Total from investment operations 1.21 (0.06)
- ----------------------------------------------------------------------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------------
Distributions to shareholders from net investment income (0.20) (0.12)
- ----------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.83 $ 9.82
- ---------------------------------------------------------------------- -------- -----------
TOTAL RETURN (B) 12.45% (0.59%)
- ----------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------------
Expenses 1.00%(c) 0.89%(c)
- ----------------------------------------------------------------------
Net investment income 4.65%(c) 4.28%(c)
- ----------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.72%(c) 0.90%(c)
- ----------------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------------
Net assets, end of period (000 omitted) $47,302 $28,973
- ----------------------------------------------------------------------
Portfolio turnover rate 60% 71%
- ----------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from January 27, 1994
(start of business) to May 24, 1994, the Fund had no investment activity.
(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)
FEDERATED MANAGED GROWTH FUND
FINANCIAL HIGHLIGHTS--SELECT SHARES
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30,
(UNAUDITED) 1994(A)
------------ -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.81 $ 10.00
- --------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------------------
Net investment income 0.18 0.15
- --------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments, foreign
currency transactions, and futures contracts 0.99 (0.24)
- -------------------------------------------------------------------- -------- -----------
Total from investment operations 1.17 (0.09)
- --------------------------------------------------------------------
LESS DISTRIBUTIONS
- --------------------------------------------------------------------
Distributions to shareholders from net investment income (0.16) (0.10)
- --------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $10.82 $ 9.81
- -------------------------------------------------------------------- -------- -----------
TOTAL RETURN (B) 12.11% (0.90%)
- --------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------------------
Expenses 1.75%(c) 1.70%(c)
- --------------------------------------------------------------------
Net investment income 3.90%(c) 3.53%(c)
- --------------------------------------------------------------------
Expense waiver/reimbursement (d) 0.97%(c) 1.15%(c)
- --------------------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------------------
Net assets, end of period (000 omitted) $9,142 $2,952
- --------------------------------------------------------------------
Portfolio turnover rate 60% 71%
- --------------------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from January 27, 1994
(start of business) to May 24, 1994, the Fund had no investment activity.
(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)
FEDERATED MANAGED GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Managed Series Trust (the "Trust") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end, management investment
company. The Trust consists of four diversified portfolios. The financial
statements included herein are only those of Federated Managed Growth Fund (the
"Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held. The Fund offers
two classes of shares: Institutional Shares (formerly, Institutional Service
Shares) and Select Shares. The Institutional Service Shares changed its name to
Institutional Shares effective June 30, 1995.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--U.S. government obligations are generally valued at
the mean between the over-the-counter bid and asked prices as furnished by
an independent pricing service. Listed equity securities are valued at the
last sale price reported on national securities exchanges. Unlisted
securities, bonds, corporate bonds and other fixed income securities are
generally valued at the price provided by an independent pricing service.
Short-term securities with remaining maturities of sixty days or less at
the time of purchase may be valued at amortized cost, which approximates
fair market value. Investments in other regulated investment companies are
valued at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
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").
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
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. However, federal taxes may be
imposed on the Fund upon the disposition of certain investments in Passive
Foreign Investment Companies. Withholding taxes on foreign dividends have
been provided for in accordance with the Fund's understanding of the
applicable country's tax rules and rates. At November 30, 1994, the Fund,
for federal tax purposes, had a capital loss carryforward of $146,501,
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 2002 ($146,501).
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account an amount
of cash or U.S. government securities equal to a percentage of the contract
value. The Fund agrees to receive from or pay to the broker an amount of
cash equal to a specific dollar amount times the difference between the
closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contract is determined and any
difference between such value and the original futures contract value is
reflected in the "daily variation margin" account. Daily variation margin
adjustments,
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
arising from this "marking to market" process, are recorded by the Fund as
unrealized gains or losses.
Risks of entering into futures contracts include the possibility that a
change in the value of the contract may not correlate with changes in the
value of the underlying securities. Risks may arise from the inability of
counterparties to perform under the terms of the contract. The Fund may
decide to close its position on a contract at any time prior to the
contract's expiration. When a contract is closed, the Fund recognizes a
realized gain or loss. For the six months ended May 31, 1995, the Fund had
a realized gain of $336,389 on futures contracts.
At May 31, 1995, the Fund had outstanding futures contracts as set forth
below:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CONTRACTS TO APPRECIATION
DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
- ----------------- ---------------------------------- ----------------- -----------------
<S> <C> <C> <C>
June 1995 31 S&P 500 Index Futures Long $465,861
June 1995 7 S&P Midcap Index Future Long 22,125
September
1995 1 S&P 500 Index Futures Long 4,050
---------
Net Unrealized Appreciation (Depreciation) on Futures Contracts $492,036
---------
</TABLE>
DOLLAR ROLL TRANSACTIONS--The Fund enters into dollar roll transactions,
with respect to mortgage securities issued by GNMA, FNMA, and FHLMC, in
which the Fund loans mortgage securities to financial institutions and
simultaneously agrees to accept substantially similar (same type, coupon
and maturity) securities at a later date at an agreed upon price. Dollar
roll transactions are short-term financing arrangements which will not
exceed twelve months. The Fund will use the proceeds generated from the
transactions to invest in short-term investments, which may enhance the
Fund's current yield and total return.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in equity and fixed income
securities of non-U.S. issuers. Although the Fund maintains a diversified
investment portfolio, the political or economic developments within a
particular country or region may have an adverse effect on the ability of
domiciled issuers to meet their obligations. Additionally, political or
economic developments may have an effect on the liquidity and volatility of
portfolio securities and currency holdings.
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
At May 31, 1995, the foreign portion of the portfolio was diversified with
the following industries:
<TABLE>
<S> <C> <C> <C>
Agency 0.3% Energy 0.5%
Automotive 0.4 Food & Drug Retailers 0.1
Banking 1.7 Health Technology & Service 0.6
Beverage & Tobacco 0.1 Insurance 0.4
Broadcasting Radio & TV 0.1 Machinery & Equipment 0.4
Brokerage & Investments 0.2 Retail 0.7
Building & Development 0.5 Sovereign 4.6
Chemical 0.1 State/Provincial 0.2
Clothing & Textiles 0.1 Steel 0.1
Consumer Products 0.1 Supranational 0.3
Diversified 0.5 Telecomm. & Cellular 0.6
Electronics & Electric 0.9 Utilities 0.7
</TABLE>
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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Trustees. The Fund will not incur any
registration costs upon such resales. The Fund's restricted securities are
valued at the price provided by dealers in the secondary market or, if no
market prices are available, at the fair value as determined by the Fund's
pricing committee. Additional information on each restricted security held
at May 31, 1995 is as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
- ----------------------------- ----------------------------- -----------------------------
<S> <C> <C>
Polymer Group, Inc. 8/5/94 $126,250
</TABLE>
OTHER--Investment transactions are accounted for on the trade date.
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
------------------------ ------------------------
INSTITUTIONAL SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,747,422 $17,842,689 3,096,651 $31,041,322
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 31,880 318,495 12,494 125,915
- --------------------------------------------------------
Shares redeemed (363,940) (3,685,388) (158,363) (1,579,515)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Institutional Share
transactions 1,415,362 $14,475,796 2,950,782 $29,587,722
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
MAY 31, 1995 NOVEMBER 30, 1994(A)
------------------------ ------------------------
SELECT SHARES SHARES DOLLARS SHARES DOLLARS
- -------------------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 645,032 $ 6,584,896 311,261 $ 3,125,942
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 5,374 53,813 1,680 16,938
- --------------------------------------------------------
Shares redeemed (106,343) (1,075,864) (11,931) (120,328)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Select Share transactions 544,063 5,562,845 301,010 $ 3,022,552
- -------------------------------------------------------- -------- ---------- -------- ----------
Total net change resulting from Fund Share
transactions 1,959,425 $20,038,641 3,251,792 $32,610,274
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
(a) For the period from January 27, 1994 (start of business) to November 30,
1994.
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Management, 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 a portion of its fee and reimburse certain operating
expenses of the Fund. The Adviser can modify or terminate this voluntary waiver
and reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund administrative personnel
and services. The FAS fee is based on the level of average aggregate daily net
assets of all funds advised by subsidiaries of Federated Investors for the
period. The administrative fee received during the period of the Administrative
Services Agreement shall be at least $125,000 per portfolio and $30,000 per each
additional class of shares.
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
DISTRIBUTION FEE--The Fund has adopted a Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Select Shares. The Plan provides that the Fund may incur
distribution expenses up to .75 of 1% of the average daily net assets of the
Select Shares, annually, to compensate FSC. The distributor may voluntarily
choose to waive a portion of its fee. The distributor can modify or terminate
this voluntary waiver at any time at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of each class of shares for the period. This fee
is to obtain certain services for shareholders and to maintain the shareholder
accounts. For the six months ended May 31, 1995, Institutional Shares did not
incur a shareholder services fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. The fee
is based on the size, type and number of accounts and transactions made by
shareholders.
ORGANIZATIONAL EXPENSES--Organizational expenses ($49,406) and start-up
administrative service expenses ($39,068) were initially borne by the Adviser.
The Fund has agreed to reimburse the Adviser for the organizational expenses and
start-up administrative expenses during the five year period following March 11,
1994 (date the Fund first became effective). For the six months ended May 31,
1995, the Fund paid $7,896 and $5,001, respectively, pursuant to this agreement.
GENERAL--Certain 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 six
months ended May 31, 1995, were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $42,487,239
- ------------------------------------------------------------------------------- -----------
SALES $23,756,099
- ------------------------------------------------------------------------------- -----------
</TABLE>
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue
John F. Donahue
Thomas G. Bigley
Chairman
John T. Conroy, Jr.
Glen R. Johnson
President
William J. Copeland
J. Christopher Donahue
James E. Dowd
Vice President
Lawrence D. Ellis, M.D.
Richard B. Fisher
Edward L. Flaherty, Jr.
Vice President
Glen R. Johnson
Edward C. Gonzales
Vice President and Treasurer
Peter E. Madden
John W. McGonigle
Gregor F. Meyer
Vice President and Secretary
John E. Murray, Jr.
David M. Taylor
Wesley W. Posvar
Assistant Treasurer
Marjorie P. Smuts
G. Andrew Bonnewell
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including, the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
