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, 1996
FEDERATED INVESTORS
(LOGO)Z
- ---------------------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 56166K800
Cusip 56166K701
G00514-01 (7/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Federated
Managed Aggressive Growth Fund for the six-month period from December 1, 1995
through May 31, 1996. Included in this report is the fund's investment review,
followed by a complete listing of the fund's holdings 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").
After rapid 1995 gains, the U.S. stock market, which accounted for 40% of the
fund's assets, progressed at a slower rate. The international stock market,
where 20% of fund assets were invested, improved in 1996. The U.S. bond market,
where 20% of the fund's assets were invested, was impacted by rising rates that
caused bond prices to fall.
In this environment, Institutional Shares delivered a total return of 8.38%*
through a share price increase of 4%, dividends of $0.21 per share, and capital
gains of $0.26 per share. Select Shares produced a total return of 7.85%*
through a share price increase of 4%, dividends of $0.17 per share, and capital
gains of $0.26 per share. The fund's net assets increased by 54% over the six
months, to end the period at $58.3 million.
Thank you for pursuing your long-term goals through Federated Managed Aggressive
Growth Fund. As always, we welcome your comments and suggestions.
Sincerely,
LOGO
Glen R. Johnson
President
July 15, 1996
* 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1996
For the six-month period ended May 31, 1996, an investor in Federated Managed
Aggressive Growth Fund Institutional Shares experienced a total return of
8.38%*, while an investor in Select Shares received a total return of 7.85%.*
The driving force for the financial markets last year was a belief that growth
would be slow in 1996. However, over the six-month reporting period, the economy
proved surprisingly resilient. After a weak holiday spending pattern, economic
activity began to accelerate noticeably in late winter, partially driven by a
rebound in interest sensitive activity such as housing and by renewed strength
in consumer spending. The stronger economic growth and the collapse of budget
negotiations on reducing the federal deficit shocked the financial markets.
Interest rates reversed course and rose rapidly through the spring. Stock
prices, which had been moving up quickly on lower interest rates, began to
falter and made much slower progress in late winter and spring.
ASSET ALLOCATION AS OF MAY 31, 1996
Federated Managed Aggressive Growth Fund operates on an investment philosophy
that, over time, an investor with a diversified portfolio has the potential to
achieve better returns with the same risk, or the same returns with lower risk,
than an investor in a single asset category. Therefore, to ensure proper
diversification of its portfolio, the fund's investment policies require
management to allocate the portfolio among as many as ten asset categories and
limit the weight of each asset category. In allocating the fund's portfolio
among asset categories, fund management analyzes the relative value offered by
each category under prevailing market conditions. Fund management seeks to
improve the fund's performance by weighting most heavily the asset categories
that management believes will provide the best relative value. The following
table shows the allocation of the portfolio among different asset categories at
May 31, 1996.
* 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.
- --------------------------------------------------------------------------------
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1996
- ---------------------------------------- ------------------------ ------------------------
<S> <C> <C>
BONDS(1) 0-40 28
U.S. Treasury Securities 0-32.5 8
Mortgage-Backed Securities 0-12.5 5
Investment Grade Corporate Bonds 0-12.5 3
High Yield Corporate Bonds 0-16 5
Foreign Bonds 0-16 7
EQUITIES(1) 60-100 72
Large Company Stocks(2) 0-100 26
Small Company Stocks(2) 0-40 15
Foreign Stocks 0-40 19
Equity Reserves(2) 0-20 12
</TABLE>
(1) Bonds convertible into equity securities at a price below the closing price
of the underlying equity securities on May 31, 1996 have been included under
the appropriate equity asset category.
(2) Large company stocks include Standard & Poor's 500+ futures contracts and
small company stocks include Russell 2000++ futures contracts. Equity
reserves have been reduced by the amount of cash equivalents maintained to
cover the fund's obligations under these futures contracts.
In essence, investors have the choice of buying fairly valued bonds or
overvalued stocks. The cornerstone of a value investment philosophy is the
belief that investors should take risks only when offered the chance for higher
returns. Higher prices, without a change in the underlying fundamentals, reduce
potential returns from investments. Implementing this philosophy, bonds were
approximately 10% more of the fund's assets than normal throughout the reporting
period, as the level of stock prices made potential future returns less
attractive than normal. Throughout the reporting period, fund management
believed that stocks and bonds were richly priced relative to their fundamentals
and defensive positions were appropriate in both sectors.
+ Standard & Poor's 500 Index is an unmanaged broad-based index measuring
changes in stock market conditions based on the average performance of 500
widely held common stocks. Investments cannot be made in an index.
++ Russell 2000 Index is an unmanaged, broadly diversified index consisting of
approximately 2,000 small capitalization common stocks that can be used to
compare to the total returns of funds whose portfolios are invested primarily
in small capitalization common stocks. Investments cannot be made in an
index.
- --------------------------------------------------------------------------------
STRUCTURE OF THE BOND PORTFOLIO
Fund management established a defensive bond position by reducing interest rate
risk, since bond prices fall when interest rates rise. The fund's investment
policies limit the duration of its bond portfolio to a range of three to nine
years. A portfolio with its duration in this range can have a sensitivity to
interest rate changes much higher than that of the overall investment grade bond
market. Bond prices peaked for the period in early February 1996 and fell
rapidly in the spring as economic statistics began to indicate a stronger pulse
to economic activity. Anticipating upward cyclical pressure on interest rates,
fund management maintained the duration of the fund's bond portfolio at 4.5, a
below average level. In this way, the fund was less sensitive to the negative
impact of rising interest rates on the value of the portfolio.
The bond portion is well diversified, with exposure in several different
sectors. The largest bond sector is the U.S. Treasury portion, which provides a
high quality foundation for the bond portfolio. The modest allocation to high
yield bonds proved rewarding as the strengthening economy reduced concerns about
credit risk in the corporate sector and led to strong relative performance by
high yield bonds.
STRUCTURE OF THE EQUITY PORTFOLIO
To enhance the defensive posture of the stock portfolio, the fund holds a
slightly above normal level of equity reserves. Since its inception, the fund
held a mid-point allocation to equity reserves and invested in short-term debt.
However, by early June 1995, 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.
Fund management also reduced the small cap allocation at the beginning of 1996
to a neutral level from a slightly above normal level. This action was taken
because the extended nature of the recent advance made the stock market
unusually vulnerable to a correction. Small cap stocks usually undergo a more
serious decline than large cap stocks in corrections. While this move detracted
from performance in the six-month period ended May 31, 1996, fund management
continues to believe a neutral position is appropriate under current market
conditions.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--56.2%
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY STOCKS--22.8%
--------------------------------------------------------------
BASIC INDUSTRY--1.7%
--------------------------------------------------------------
8,700 Allegheny Ludlum Corp. $ 174,000
--------------------------------------------------------------
2,000 Aluminum Co. of America 123,250
--------------------------------------------------------------
5,100 Barrick Gold Corp. 160,650
--------------------------------------------------------------
4,200 Du Pont (E.I.) de Nemours & Co. 334,950
--------------------------------------------------------------
1,400 Eastman Chemical Co. 93,800
--------------------------------------------------------------
2,900 International Paper Co. 115,638
-------------------------------------------------------------- -----------
Total 1,002,288
-------------------------------------------------------------- -----------
CONSUMER DURABLES--0.6%
--------------------------------------------------------------
3,400 Ford Motor Co. 124,100
--------------------------------------------------------------
7,925 Mattel, Inc. 215,956
-------------------------------------------------------------- -----------
Total 340,056
-------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--1.9%
--------------------------------------------------------------
2,500 Avon Products, Inc. 231,250
--------------------------------------------------------------
1,700 CPC International, Inc. 117,513
--------------------------------------------------------------
9,900 IBP, Inc. 271,013
--------------------------------------------------------------
1,700 Kimberly-Clark Corp. 123,888
--------------------------------------------------------------
3,050 Philip Morris Cos., Inc. 303,094
--------------------------------------------------------------
1,900 Tambrands, Inc. 87,638
-------------------------------------------------------------- -----------
Total 1,134,396
-------------------------------------------------------------- -----------
ENERGY MINERALS--2.2%
--------------------------------------------------------------
4,000 Chevron Corp. 239,000
--------------------------------------------------------------
1,300 Exxon Corp. 110,175
--------------------------------------------------------------
5,800 Occidental Petroleum Corp. 150,075
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
ENERGY MINERALS--CONTINUED
--------------------------------------------------------------
800 Royal Dutch Petroleum Co. $ 120,000
--------------------------------------------------------------
2,800 Texaco, Inc. 234,500
--------------------------------------------------------------
8,500 USX-Marathon Group 185,938
--------------------------------------------------------------
5,000 Union Pacific Resources Group, Inc. 128,750
--------------------------------------------------------------
1,900 (b) Western Atlas, Inc. 116,375
-------------------------------------------------------------- -----------
Total 1,284,813
-------------------------------------------------------------- -----------
FINANCE--3.7%
--------------------------------------------------------------
4,746 Allstate Corp. 200,519
--------------------------------------------------------------
2,400 CIGNA Corp. 275,700
--------------------------------------------------------------
2,600 Chase Manhattan Corp. 182,000
--------------------------------------------------------------
2,200 Chubb Corp. 102,575
--------------------------------------------------------------
4,500 Citicorp 378,000
--------------------------------------------------------------
3,000 Dean Witter, Discover & Co. 177,750
--------------------------------------------------------------
3,124 Mellon Bank Corp. 178,459
--------------------------------------------------------------
2,500 Merrill Lynch & Co., Inc., STRYPES, $3.12 137,500
--------------------------------------------------------------
2,800 Providian Corp. 122,150
--------------------------------------------------------------
1,700 Sunamerica, Inc., Conv. Pfd., Series E, $3.10 124,100
--------------------------------------------------------------
2,400 Travelers/AEtna Group, Inc. 65,400
--------------------------------------------------------------
4,950 Travelers Group, Inc. 205,425
-------------------------------------------------------------- -----------
Total 2,149,578
-------------------------------------------------------------- -----------
HEALTH CARE--2.5%
--------------------------------------------------------------
2,500 Abbott Laboratories 107,813
--------------------------------------------------------------
3,800 American Home Products Corp. 203,300
--------------------------------------------------------------
1,000 Bausch & Lomb, Inc. 43,000
--------------------------------------------------------------
3,700 Becton, Dickinson & Co. 314,500
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
HEALTH CARE--CONTINUED
--------------------------------------------------------------
3,800 Bristol-Myers Squibb Co. $ 324,425
--------------------------------------------------------------
2,000 Columbia/HCA Healthcare Corp. 107,750
--------------------------------------------------------------
2,800 Merck & Co., Inc. 180,950
--------------------------------------------------------------
3,100 Smithkline Beecham, ADR 158,100
-------------------------------------------------------------- -----------
Total 1,439,838
-------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--2.3%
--------------------------------------------------------------
1,900 (b) FMC Corp. 127,775
--------------------------------------------------------------
2,000 General Electric Co. 165,500
--------------------------------------------------------------
3,000 Loews Corp. 239,250
--------------------------------------------------------------
3,500 Philips Electronics N.V. ADR 122,938
--------------------------------------------------------------
4,600 Textron, Inc. 389,850
--------------------------------------------------------------
17,100 (c) Westinghouse Electric Corp., PEPS, Series C, $1.3 292,838
-------------------------------------------------------------- -----------
Total 1,338,151
-------------------------------------------------------------- -----------
RETAIL TRADE--0.9%
--------------------------------------------------------------
2,600 Nordstrom, Inc. 132,600
--------------------------------------------------------------
5,700 Sears, Roebuck & Co. 289,988
--------------------------------------------------------------
4,400 Wal-Mart Stores, Inc. 113,850
-------------------------------------------------------------- -----------
Total 536,438
-------------------------------------------------------------- -----------
SERVICES--0.4%
--------------------------------------------------------------
4,400 Baker Hughes, Inc. 138,050
--------------------------------------------------------------
1,400 Gannett Co., Inc. 97,650
-------------------------------------------------------------- -----------
Total 235,700
-------------------------------------------------------------- -----------
TECHNOLOGY--4.1%
--------------------------------------------------------------
80,000 Analog Devices, Conv. Bond, 3.50%, 12/1/2000 94,766
--------------------------------------------------------------
2,600 (b) Applied Materials, Inc. 96,850
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
TECHNOLOGY--CONTINUED
--------------------------------------------------------------
1,000 (b) DST Systems, Inc. $ 34,875
--------------------------------------------------------------
3,000 (b) Digital Equipment Corp. 156,375
--------------------------------------------------------------
4,900 General Motors Corp., Class E 276,238
--------------------------------------------------------------
2,800 Hewlett-Packard Co. 298,900
--------------------------------------------------------------
3,000 Intel Corp. 226,500
--------------------------------------------------------------
2,400 International Business Machines Corp. 256,200
--------------------------------------------------------------
1,200 (b) Litton Industries, Inc. 55,650
--------------------------------------------------------------
2,900 Lockheed Martin Corp. 243,238
--------------------------------------------------------------
2,500 Raytheon Co. 133,125
--------------------------------------------------------------
4,800 Rockwell International Corp. 280,200
--------------------------------------------------------------
2,700 (b) Seagate Technology, Inc. 158,625
--------------------------------------------------------------
80,000 (c) Solectron Corp., Conv. Bond, 6.00%, 3/1/2006 77,757
-------------------------------------------------------------- -----------
Total 2,389,299
-------------------------------------------------------------- -----------
TRANSPORTATION--0.3%
--------------------------------------------------------------
2,000 (b) Southern Pacific Rail Corp. 48,750
--------------------------------------------------------------
1,700 Union Pacific Corp. 119,213
-------------------------------------------------------------- -----------
Total 167,963
-------------------------------------------------------------- -----------
(D) UTILITIES--2.2%
--------------------------------------------------------------
5,100 AT&T Corp. 318,113
--------------------------------------------------------------
4,000 CMS Energy Corp. 115,000
--------------------------------------------------------------
2,100 Columbia Gas System, Inc. 102,638
--------------------------------------------------------------
3,100 Enron Corp. 124,000
--------------------------------------------------------------
1,200 FPL Group, Inc. 51,300
--------------------------------------------------------------
3,000 GTE Corp. 128,250
--------------------------------------------------------------
6,000 MCI Communications Corp. 174,750
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
(D) UTILITIES--CONTINUED
--------------------------------------------------------------
2,700 Pacific Gas & Electric Co. $ 62,775
--------------------------------------------------------------
4,600 Southern Co. 106,375
--------------------------------------------------------------
5,200 TECO Energy, Inc. 122,850
-------------------------------------------------------------- -----------
Total 1,306,051
-------------------------------------------------------------- -----------
TOTAL LARGE-CAP STOCKS 13,324,571
-------------------------------------------------------------- -----------
(A) SMALL-COMPANY STOCKS--14.5%
--------------------------------------------------------------
BASIC INDUSTRY--1.0%
--------------------------------------------------------------
2,079 Brush Wellman, Inc. 38,981
--------------------------------------------------------------
1,600 Cambrex Corp. 76,800
--------------------------------------------------------------
1,500 Carpenter Technology Corp. 54,188
--------------------------------------------------------------
2,100 Chesapeake Corp. 55,913
--------------------------------------------------------------
1,000 (b) Cytec Industries, Inc. 89,500
--------------------------------------------------------------
5,300 (b) Fibreboard Corp. 132,500
--------------------------------------------------------------
3,000 First Mississippi Corp. 74,250
--------------------------------------------------------------
1,200 Texas Industries, Inc. 75,150
-------------------------------------------------------------- -----------
Total 597,282
-------------------------------------------------------------- -----------
CONSUMER DURABLES--0.9%
--------------------------------------------------------------
1,500 Barnes Group, Inc. 73,125
--------------------------------------------------------------
2,400 (b) Champion Enterprises, Inc. 97,200
--------------------------------------------------------------
3,400 Coachmen Industries, Inc. 125,375
--------------------------------------------------------------
1,350 Harman International Industries, Inc. 70,875
--------------------------------------------------------------
3,800 (b) Redman Industries, Inc. 83,125
--------------------------------------------------------------
3,100 (b) Toll Brothers, Inc. 51,925
-------------------------------------------------------------- -----------
Total 501,625
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
CONSUMER NON-DURABLES--0.4%
--------------------------------------------------------------
3,600 Hudson Foods, Inc., Class A $ 48,150
--------------------------------------------------------------
3,500 (b) Mondavi Robert Corp., Class A 104,125
--------------------------------------------------------------
8,600 (b) Morningstar Group, Inc. 98,900
-------------------------------------------------------------- -----------
Total 251,175
-------------------------------------------------------------- -----------
ENERGY MINERALS--0.3%
--------------------------------------------------------------
9,240 Mercury Air Group, Inc. 89,513
--------------------------------------------------------------
7,900 (b) Tesoro Petroleum Corp. 88,875
-------------------------------------------------------------- -----------
Total 178,388
-------------------------------------------------------------- -----------
FINANCE--2.5%
--------------------------------------------------------------
3,700 (b) ACC Consumer Finance Corp. 30,525
--------------------------------------------------------------
1,300 Alex Brown, Inc. 75,075
--------------------------------------------------------------
1,700 Allied Group, Inc. 67,575
--------------------------------------------------------------
1,500 American Bankers Insurance Group, Inc. 58,125
--------------------------------------------------------------
3,000 (b) American Travellers Corp. 64,875
--------------------------------------------------------------
3,700 CWM Mortgage Holdings, Inc. 65,675
--------------------------------------------------------------
4,900 City National Corp. 75,338
--------------------------------------------------------------
1,000 Cullen Frost Bankers, Inc. 51,500
--------------------------------------------------------------
3,600 (b) Electro Rent Corp. 89,100
--------------------------------------------------------------
4,000 FirstBank Puerto Rico 82,000
--------------------------------------------------------------
6,200 Hibernia Corp., Class A 68,200
--------------------------------------------------------------
1,600 Irwin Financial Corp. 66,000
--------------------------------------------------------------
5,625 Money Stores, Inc. 147,656
--------------------------------------------------------------
3,700 North Fork Bancorp, Inc. 90,188
--------------------------------------------------------------
1,000 PHH Corp. 55,375
--------------------------------------------------------------
3,000 Peoples Heritage Financial Group 59,625
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
FINANCE--CONTINUED
--------------------------------------------------------------
1,400 Queens County Bancorp, Inc. $ 67,025
--------------------------------------------------------------
2,400 St. Francis Capital Corp. 61,800
--------------------------------------------------------------
1,700 Student Loan Corp. 60,988
--------------------------------------------------------------
2,900 (b) United Insurance Cos., Inc. 62,713
--------------------------------------------------------------
1,100 WestAmerica Bancorporation 53,075
-------------------------------------------------------------- -----------
Total 1,452,433
-------------------------------------------------------------- -----------
HEALTH CARE--1.8%
--------------------------------------------------------------
6,000 Amrion, Inc. 107,250
--------------------------------------------------------------
3,800 Bindley Western Industries, Inc. 65,075
--------------------------------------------------------------
1,900 (b) Bio Rad Laboratories, Inc., Class A 97,850
--------------------------------------------------------------
2,600 (b) Cardiogenesis Corp. 62,100
--------------------------------------------------------------
2,600 (b) Foxmeyer Health Corp. 45,175
--------------------------------------------------------------
2,300 (b) Heartport, Inc. 89,700
--------------------------------------------------------------
3,239 ICN Pharmaceuticals, Inc. 85,834
--------------------------------------------------------------
1,000 (b) KeraVision, Inc. 16,500
--------------------------------------------------------------
7,600 Kinetic Concepts, Inc. 129,200
--------------------------------------------------------------
3,100 (b) Maxicare Health Plans, Inc. 75,950
--------------------------------------------------------------
7,000 (b) Oec-Medical Systems, Inc. 85,750
--------------------------------------------------------------
9,300 (b) PolyMedica Industries, Inc. 86,025
--------------------------------------------------------------
3,600 (b) Rotech Medical Corp. 77,400
--------------------------------------------------------------
2,200 Sibia Neurosciences, Inc. 21,450
--------------------------------------------------------------
1,600 (b) UroCor, Inc. 22,800
-------------------------------------------------------------- -----------
Total 1,068,059
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
PRODUCER MANUFACTURING--0.8%
--------------------------------------------------------------
2,600 AGCO Corp. $ 78,325
--------------------------------------------------------------
1,950 Blount International, Inc., Class A 64,838
--------------------------------------------------------------
4,100 Brenco, Inc. 53,813
--------------------------------------------------------------
1,000 (b) Cable Design Technologies, Class A 45,500
--------------------------------------------------------------
1,300 JLG Industries, Inc. 102,863
--------------------------------------------------------------
1,100 NACCO Industries, Inc., Class A 61,600
--------------------------------------------------------------
2,300 (b) NCI Building System, Inc. 78,775
-------------------------------------------------------------- -----------
Total 485,714
-------------------------------------------------------------- -----------
RETAIL TRADE--0.7%
--------------------------------------------------------------
1,600 Amre, Inc. 42,800
--------------------------------------------------------------
2,300 (b) CompUSA, Inc. 100,625
--------------------------------------------------------------
2,200 (b) Eckerd Corp. 50,050
--------------------------------------------------------------
1,900 (b) MSC Industrial Direct Co. 66,263
--------------------------------------------------------------
4,900 Pier 1 Imports, Inc. 77,175
--------------------------------------------------------------
2,200 (b) Waban, Inc. 58,850
-------------------------------------------------------------- -----------
Total 395,763
-------------------------------------------------------------- -----------
SERVICES--2.0%
--------------------------------------------------------------
2,500 (b) American Buildings Co. 76,875
--------------------------------------------------------------
1,600 Butler Manufacturing Co. 60,400
--------------------------------------------------------------
3,875 Castle (A.M.) & Co. 109,953
--------------------------------------------------------------
1,900 (b) Devon Group, Inc. 57,000
--------------------------------------------------------------
2,700 Granite Construction, Inc. 59,738
--------------------------------------------------------------
2,400 (b) Newpark Resources, Inc. 87,000
--------------------------------------------------------------
9,600 (b) Parker Drilling Co. 68,400
--------------------------------------------------------------
3,200 (b) Premier Parks, Inc. 64,800
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
SERVICES--CONTINUED
--------------------------------------------------------------
6,500 (b) Prepaid Legal Services, Inc. $ 135,688
--------------------------------------------------------------
6,700 (b) Pride Petroleum Services, Inc. 115,575
--------------------------------------------------------------
2,800 (b) Right Management Consultants 100,800
--------------------------------------------------------------
1,650 (b) USA Waste Services, Inc. 48,675
--------------------------------------------------------------
6,600 Wackenhut Corp., Class B 152,625
-------------------------------------------------------------- -----------
Total 1,137,529
-------------------------------------------------------------- -----------
TECHNOLOGY--3.2%
--------------------------------------------------------------
2,000 (b) Alphanet Solutions, Inc. 20,750
--------------------------------------------------------------
2,549 (b) Bell Industries, Inc. 56,078
--------------------------------------------------------------
3,800 (b) Black Box Corp. 78,850
--------------------------------------------------------------
2,300 (b) Burr Brown Corp. 48,300
--------------------------------------------------------------
6,600 (b) Computervision Corp. 76,725
--------------------------------------------------------------
5,900 (b) Digital Systems Int., Inc. 130,538
--------------------------------------------------------------
1,600 (b) Electronics for Imaging, Inc. 128,000
--------------------------------------------------------------
900 (b) Forte Software, Inc. 58,275
--------------------------------------------------------------
5,100 II-VI, Inc. 79,050
--------------------------------------------------------------
2,400 (b) International Rectifier Corp. 62,400
--------------------------------------------------------------
4,500 (b) JDA Software Group, Inc. 106,313
--------------------------------------------------------------
2,000 (b) Kemet Corp. 44,500
--------------------------------------------------------------
2,100 National Data Corp. 79,275
--------------------------------------------------------------
3,900 Novadigm, Inc. 70,200
--------------------------------------------------------------
3,300 (b) OzEmail Ltd., ADR 47,025
--------------------------------------------------------------
2,000 (b) Photronic Labs, Inc. 59,500
--------------------------------------------------------------
3,900 (b) S3, Inc. 55,088
--------------------------------------------------------------
1,600 (b) SCI Systems, Inc. 72,000
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY STOCKS--CONTINUED
--------------------------------------------------------------
TECHNOLOGY--CONTINUED
--------------------------------------------------------------
2,000 (b) Tech-Sym Corp. $ 68,250
--------------------------------------------------------------
1,800 (b) Tencor Instruments 40,500
--------------------------------------------------------------
3,200 (b) Tollgrade Communications, Inc. 78,400
--------------------------------------------------------------
4,300 Trident International, Inc. 97,825
--------------------------------------------------------------
1,500 Watkins Johnson Co. 45,938
--------------------------------------------------------------
3,300 (b) Whitmann-Hart, Inc. 123,750
--------------------------------------------------------------
1,200 Wyle Labs 51,000
--------------------------------------------------------------
1,200 (b) Xylan Corp. 76,050
-------------------------------------------------------------- -----------
Total 1,854,580
-------------------------------------------------------------- -----------
TRANSPORTATION--0.3%
--------------------------------------------------------------
3,900 (b) America West Airlines, Inc., Class B 79,463
--------------------------------------------------------------
1,500 (b) Continental Airlines, Inc., Class B 85,313
-------------------------------------------------------------- -----------
Total 164,776
-------------------------------------------------------------- -----------
(D) UTILITIES--0.6%
--------------------------------------------------------------
1,900 Eastern Enterprises 64,838
--------------------------------------------------------------
2,200 Interstate Power Co. 70,400
--------------------------------------------------------------
4,300 (b) Public Service Co. New Mexico 80,625
--------------------------------------------------------------
500 Tele Danmark 12,438
--------------------------------------------------------------
1,700 Teppco Partners, L.P. 62,688
--------------------------------------------------------------
3,000 Trescomm International, Inc. 52,500
-------------------------------------------------------------- -----------
Total 343,489
-------------------------------------------------------------- -----------
TOTAL SMALL-CAP STOCKS 8,430,813
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--18.9%
--------------------------------------------------------------
ARGENTINA--0.2%
--------------------------------------------------------------
845 Banco Frances del Rio de la Plata S.A., ADR $ 23,766
--------------------------------------------------------------
4,056 Compania Naviera Perez Companc SA, Class B 25,888
--------------------------------------------------------------
802 IRSA Inversiones y Representaciones S.A., GDR 26,165
--------------------------------------------------------------
1,000 YPF Sociedad Anonima, ADR 22,000
-------------------------------------------------------------- -----------
Total 97,819
-------------------------------------------------------------- -----------
AUSTRALIA--0.4%
--------------------------------------------------------------
3,600 Lend Lease Corp., Ltd. 56,317
--------------------------------------------------------------
10,000 News Corp., Ltd. 56,110
--------------------------------------------------------------
35,000 (b) Sydney Harbour Casino Holdings, Inc. 52,798
--------------------------------------------------------------
10,500 Woodside Petroleum Ltd. 60,089
-------------------------------------------------------------- -----------
Total 225,314
-------------------------------------------------------------- -----------
BELGIUM--0.1%
--------------------------------------------------------------
900 Delhaize-Le Lion 45,631
-------------------------------------------------------------- -----------
BRAZIL--0.3%
--------------------------------------------------------------
2,232,000 Banco Bradesco S.A., Preference 25,934
--------------------------------------------------------------
66,000 Banco Itau S.A., Preference 26,742
--------------------------------------------------------------
49,000 Cia Cervejaria Brahma, Preference 29,205
--------------------------------------------------------------
937,000 (d) Companhia Energetica de Minas Gerais, Preference 24,826
--------------------------------------------------------------
714,000 (b) Lojas Renner S.A., Preference 29,323
--------------------------------------------------------------
5,999 (b) Telecomunicacoes de Sao Paulo S.A. Rights, 06/19/1996 304
--------------------------------------------------------------
140,000 Telecomunicacoes de Sao Paulo S.A., Preference 29,590
--------------------------------------------------------------
22,014,000 Usinas Siderurgicas de Minas Gerais, Pfd. 24,017
-------------------------------------------------------------- -----------
Total 189,941
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
CHILE--0.1%
--------------------------------------------------------------
400 (b) Banco de A. Edwards, ADR $ 7,900
--------------------------------------------------------------
200 (b) Chilectra S.A., ADR 11,100
--------------------------------------------------------------
100 Compania Telecomunicacion Chile, ADR 9,125
--------------------------------------------------------------
300 (b) Santa Isabel S.A., ADR 7,950
--------------------------------------------------------------
200 Sociedad Quimica Y Minera De Chile, ADR 10,350
-------------------------------------------------------------- -----------
Total 46,425
-------------------------------------------------------------- -----------
CHINA--0.1%
--------------------------------------------------------------
1,650 (b) Guangshen Railway Co. Ltd., Class H, ADR 32,588
-------------------------------------------------------------- -----------
COLOMBIA--0.1%
--------------------------------------------------------------
800 Banco Ganadero SA, ADR 18,100
--------------------------------------------------------------
900 Banco Industrial Colombiano, ADR 17,100
-------------------------------------------------------------- -----------
Total 35,200
-------------------------------------------------------------- -----------
FINLAND--0.1%
--------------------------------------------------------------
1,060 Nokia AB-A 46,123
-------------------------------------------------------------- -----------
FRANCE--1.2%
--------------------------------------------------------------
900 AXA 51,028
--------------------------------------------------------------
470 Accor SA 67,734
--------------------------------------------------------------
1,025 Compagnie Financiere de Paribas, Class A 62,259
--------------------------------------------------------------
1,500 Credit Commerical De France 72,251
--------------------------------------------------------------
180 Ecco Sa 43,176
--------------------------------------------------------------
400 LVMH (Moet-Hennessy) 97,031
--------------------------------------------------------------
670 Lafarge-Coppee 44,118
--------------------------------------------------------------
2,600 Lagardere Groupe 70,564
--------------------------------------------------------------
525 Lyonnaise des Eaux SA 50,880
--------------------------------------------------------------
660 Rhone-Poulenc Rorer, Inc. 42,735
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
FRANCE--CONTINUED
--------------------------------------------------------------
1,650 Schneider SA $ 76,348
--------------------------------------------------------------
520 Total SA-B 37,590
-------------------------------------------------------------- -----------
Total 715,714
-------------------------------------------------------------- -----------
GERMANY, FEDERAL REPUBLIC OF--1.4%
--------------------------------------------------------------
195 BASF AG 54,181
--------------------------------------------------------------
220 (c) Commerzbank AG, Frankfurt 45,845
--------------------------------------------------------------
900 Deutsche Bank, AG 42,258
--------------------------------------------------------------
2,400 Dresdner Bank Ag, Frankfurt 60,157
--------------------------------------------------------------
181 Gea AG, Vorzugsaktien 56,221
--------------------------------------------------------------
115 Henkel KGAA, Vorzugsaktien 48,344
--------------------------------------------------------------
140 Hochtief AG 61,927
--------------------------------------------------------------
121 Kaufhof Holding AG 42,620
--------------------------------------------------------------
70 Linde AG 44,954
--------------------------------------------------------------
140 Mannesmann AG 48,560
--------------------------------------------------------------
1,400 (d) RWE AG 55,275
--------------------------------------------------------------
800 Schering Ag 60,341
--------------------------------------------------------------
945 Schwarz Pharma 57,344
--------------------------------------------------------------
1,000 Siemens AG 56,081
--------------------------------------------------------------
1,100 (d) Veba AG 57,559
--------------------------------------------------------------
55 Wella AG, Vorzugsaktien 29,663
-------------------------------------------------------------- -----------
Total 821,330
-------------------------------------------------------------- -----------
HONG KONG--0.6%
--------------------------------------------------------------
39,000 Amoy Properties Ltd. 48,389
--------------------------------------------------------------
5,000 Cheung Kong 36,996
--------------------------------------------------------------
51,000 Goldlion Holdings Ltd. 41,856
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
HONG KONG--CONTINUED
--------------------------------------------------------------
2,429 HSBC Holdings PLC $ 36,730
--------------------------------------------------------------
22,410 Hong Kong Telecom 41,563
--------------------------------------------------------------
30,000 (b)(c) Shanghai Industrial Holdings LTD 36,447
--------------------------------------------------------------
5,000 Sun Hung Kai Properties 51,051
--------------------------------------------------------------
5,500 Swire Pacific Ltd. A 48,870
-------------------------------------------------------------- -----------
Total 341,902
-------------------------------------------------------------- -----------
INDIA--0.2%
--------------------------------------------------------------
1,700 (b) Bombay Suburban Electric Supply, GDR 33,150
--------------------------------------------------------------
800 (b)(c) Hindalco Industries, GDR 35,600
--------------------------------------------------------------
2,600 (b)(c) Mahindra and Mahindra , GDR 28,600
--------------------------------------------------------------
1,600 (b)(c) Steel Authority of India, GDR 22,800
-------------------------------------------------------------- -----------
Total 120,150
-------------------------------------------------------------- -----------
INDONESIA--0.4%
--------------------------------------------------------------
17,000 PT Astra International 25,509
--------------------------------------------------------------
23,000 PT Citra Marga Nusaphala Persada 37,471
--------------------------------------------------------------
47,000 PT Great River Industries 52,390
--------------------------------------------------------------
13,000 PT Hero Supermarket 13,098
--------------------------------------------------------------
5,000 PT Semen Gresik 16,559
--------------------------------------------------------------
26,000 PT Steady Safe Trans Service 34,555
--------------------------------------------------------------
12,000 Tambang Timah 23,666
--------------------------------------------------------------
32,000 Tjiwi Kimia 33,955
-------------------------------------------------------------- -----------
Total 237,203
-------------------------------------------------------------- -----------
ITALY--0.4%
--------------------------------------------------------------
8,000 Banca Popolare Milano 40,887
--------------------------------------------------------------
5,100 Imi Istituto Mobiliare 41,708
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
ITALY--CONTINUED
--------------------------------------------------------------
595 (b) La Rinascente S.P.A. Warrants, 12/31/1999 $ 446
--------------------------------------------------------------
42,000 (b) Telecom Italia Mobile 89,781
--------------------------------------------------------------
6,000 (b) Unicem S.P.A. 46,562
-------------------------------------------------------------- -----------
Total 219,384
-------------------------------------------------------------- -----------
JAPAN--6.7%
--------------------------------------------------------------
3,000 Asatsu, Inc. 123,056
--------------------------------------------------------------
3,000 Bridgestone Corp. 52,222
--------------------------------------------------------------
5,000 Casio Computer Co 47,685
--------------------------------------------------------------
13 DDI Corp. 112,667
--------------------------------------------------------------
5,000 Dai Nippon Printing Co. Ltd. 92,593
--------------------------------------------------------------
12,000 Hitachi Cable 102,111
--------------------------------------------------------------
9,000 JGC Corp. 115,000
--------------------------------------------------------------
4,000 Jaccs 36,259
--------------------------------------------------------------
8,000 Japan Radio Co. 112,593
--------------------------------------------------------------
4,000 Kokuyo Co. 107,037
--------------------------------------------------------------
9,000 Kuraray Co. Ltd. 102,500
--------------------------------------------------------------
1,000 Kyocera Corp. 68,519
--------------------------------------------------------------
5,000 Kyowa Hakko Kogyo Co. 49,074
--------------------------------------------------------------
6,000 Maeda Road Construction Co. 100,556
--------------------------------------------------------------
20,000 Marubeni Corp. 109,074
--------------------------------------------------------------
9,000 Matsuzakaya Co., Ltd. 112,500
--------------------------------------------------------------
11,000 Mitsubishi Electric Corp. 75,370
--------------------------------------------------------------
11,000 Mitsubishi Heavy Industries Ltd. 94,620
--------------------------------------------------------------
5,000 Mitsui Fudosan Co. 63,426
--------------------------------------------------------------
7,000 Mitsui Marine & Fire Insurance Co. 54,120
--------------------------------------------------------------
34,000 (b) NKK Corp. 99,481
--------------------------------------------------------------
</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
--------------------------------------------------------------
8,000 Nichiei Construction $ 92,593
--------------------------------------------------------------
16,000 Nihon Cement Co., Ltd. 116,889
--------------------------------------------------------------
12,000 Nippon Comsys Corp. 153,333
--------------------------------------------------------------
2,000 Nippon Electric Glass Co., Ltd. 34,815
--------------------------------------------------------------
20,000 Nippon Zeon Co 120,741
--------------------------------------------------------------
8,000 Nitto Denko Corp 131,111
--------------------------------------------------------------
5,000 Nomura Securities Co. Ltd. 94,444
--------------------------------------------------------------
3,000 Noritsu Koki Co. Ltd. 133,333
--------------------------------------------------------------
34,000 Renown 139,778
--------------------------------------------------------------
22,000 Sanyo Electric Co 130,981
--------------------------------------------------------------
7,000 (c) Sumitomo Trust & Banking 97,222
--------------------------------------------------------------
10,000 Takashimaya Co 162,963
--------------------------------------------------------------
8,000 Tokio Marine and Fire Insurance Co. 103,704
--------------------------------------------------------------
16,000 Tokyo Tatemono Co., Ltd. 100,593
--------------------------------------------------------------
17,000 Toshiba Corp. 118,213
--------------------------------------------------------------
10,000 Toyoda Machine Works 111,111
--------------------------------------------------------------
11,000 Wako Securities Co., Ltd. 90,444
--------------------------------------------------------------
1,000 Xebio Co. Ltd. 37,315
--------------------------------------------------------------
7,000 Yamatake-Honeywell 125,093
-------------------------------------------------------------- -----------
Total 3,925,139
-------------------------------------------------------------- -----------
KOREA, REPUBLIC OF--0.4%
--------------------------------------------------------------
1,500 Chonggu Housing & Construction 45,117
--------------------------------------------------------------
1,800 Kookmin Bank 35,180
--------------------------------------------------------------
1,000 (d) Korea Electric Power Corp. 38,327
--------------------------------------------------------------
3,000 Korea Exchange Bank 39,216
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
KOREA, REPUBLIC OF--CONTINUED
--------------------------------------------------------------
1,500 (b) Korea Housing Bank $ 42,360
--------------------------------------------------------------
900 (b) Korea Mobile Telecomm Corp., GDR 51,750
-------------------------------------------------------------- -----------
Total 251,950
-------------------------------------------------------------- -----------
MALAYSIA--0.6%
--------------------------------------------------------------
26,000 Eastern and Oriental Berhad 55,197
--------------------------------------------------------------
4,000 Malayan Banking Berhad 37,973
--------------------------------------------------------------
1,000 Malayan United Industries Bhd 849
--------------------------------------------------------------
12,000 Malaysian Pacific Industries 49,509
--------------------------------------------------------------
29,000 TA Enterprise Berhad 45,071
--------------------------------------------------------------
14,000 (b) Technology Resources Industries Bhd 46,545
--------------------------------------------------------------
12,000 (d) Tenaga Nasional Berhad 50,951
--------------------------------------------------------------
15,000 UMW Holdings Bhd 49,269
-------------------------------------------------------------- -----------
Total 335,364
-------------------------------------------------------------- -----------
MEXICO--0.3%
--------------------------------------------------------------
3,300 Cemex SA, Class B, ADR 26,916
--------------------------------------------------------------
15,000 (b) Cifra SA de CV, Class B 22,391
--------------------------------------------------------------
2,000 Empresas ICA Sociedad Controladora S.A., ADR 28,750
--------------------------------------------------------------
8,000 Fomento Economico Mexicano, SA de C.V., Class B 23,658
--------------------------------------------------------------
3,100 (b)(c) Grupo Financiero Bancomer, S.A. de C.V., Class B, ADR 28,415
--------------------------------------------------------------
600 Pan American Beverage, Class A 25,200
--------------------------------------------------------------
700 Telefonos de Mexico, Class L, ADR 23,100
-------------------------------------------------------------- -----------
Total 178,430
-------------------------------------------------------------- -----------
NETHERLANDS--0.5%
--------------------------------------------------------------
5,850 Elsevier NV 90,791
--------------------------------------------------------------
763 International Nederlanden 62,827
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
NETHERLANDS--CONTINUED
--------------------------------------------------------------
2,463 Koninklijke PTT Nederland NV $ 89,144
--------------------------------------------------------------
1,500 PolyGram NV 87,848
-------------------------------------------------------------- -----------
Total 330,610
-------------------------------------------------------------- -----------
PAKISTAN--0.0%
--------------------------------------------------------------
400 (b) Hub Power Co., GDR 10,200
-------------------------------------------------------------- -----------
PHILIPPINES--0.2%
--------------------------------------------------------------
94,000 Aboitiz Equity Ventures, Inc. 19,030
--------------------------------------------------------------
66,600 (b) Filinvest Land, Inc. 26,711
--------------------------------------------------------------
32,000 (b) Marsman & Company Inc 17,112
--------------------------------------------------------------
78,000 Metro Pacific Corp. 20,856
--------------------------------------------------------------
1,600 (b) Philippine Commercial International Bank 20,626
-------------------------------------------------------------- -----------
Total 104,335
-------------------------------------------------------------- -----------
SINGAPORE--0.3%
--------------------------------------------------------------
17,000 Hotel Properties Ltd. 30,053
--------------------------------------------------------------
11,000 Parkway Holdings Ltd. 32,020
--------------------------------------------------------------
3,000 Singapore Airlines Ltd. 30,884
--------------------------------------------------------------
2,000 Singapore Press Holdings Ltd. 37,487
--------------------------------------------------------------
10,000 Straits Steamship Land Ltd. 32,233
--------------------------------------------------------------
2,500 (b) Straits Steamship Land Ltd. Warrants, 12/12/2000 3,248
--------------------------------------------------------------
3,000 United Overseas Bank Ltd. 27,263
-------------------------------------------------------------- -----------
Total 193,188
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
SPAIN--0.2%
--------------------------------------------------------------
235 Acerinox SA $ 25,936
--------------------------------------------------------------
1,500 Repsol SA 51,296
--------------------------------------------------------------
630 Zardoya-Otis SA 62,625
-------------------------------------------------------------- -----------
Total 139,857
-------------------------------------------------------------- -----------
SWEDEN--0.3%
--------------------------------------------------------------
620 Astra AB, Class A 28,378
--------------------------------------------------------------
5,000 Stora Kopparbergs, Class A 66,609
--------------------------------------------------------------
4,000 Svedala Industri 76,805
-------------------------------------------------------------- -----------
Total 171,792
-------------------------------------------------------------- -----------
SWITZERLAND--0.7%
--------------------------------------------------------------
41 ABB AG 49,010
--------------------------------------------------------------
600 CS Holding AG-Registered 51,778
--------------------------------------------------------------
50 Ciba-Giegy AG-Registered 55,014
--------------------------------------------------------------
45 Nestle SA 50,699
--------------------------------------------------------------
450 (b) Oerlikon-Buhrle Holding AG 46,744
--------------------------------------------------------------
6 Roche Holding AG 46,025
--------------------------------------------------------------
75 Sulzer AG--Reg 47,643
--------------------------------------------------------------
165 Zurich Versicherungsgesellschaft 43,508
-------------------------------------------------------------- -----------
Total 390,421
-------------------------------------------------------------- -----------
THAILAND--0.1%
--------------------------------------------------------------
800 Advanced Information Services 13,204
--------------------------------------------------------------
1,200 Bangkok Bank Public Co., Ltd. 17,437
--------------------------------------------------------------
4,200 (b) Industrial Finance Corporation of Thailand 18,905
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
THAILAND--CONTINUED
--------------------------------------------------------------
3,200 Krung Thai Bank PLC $ 16,299
--------------------------------------------------------------
1,400 (b)(d) PTT Exploration and Production Public Co. 20,896
-------------------------------------------------------------- -----------
Total 86,741
-------------------------------------------------------------- -----------
UNITED KINGDOM--3.0%
--------------------------------------------------------------
8,000 Allied Domecq PLC 60,375
--------------------------------------------------------------
4,100 Anglian Water PLC 38,122
--------------------------------------------------------------
8,000 Associated British Ports Holdings PLC 35,394
--------------------------------------------------------------
8,000 BTR PLC 34,837
--------------------------------------------------------------
3,400 Barclays PLC 39,569
--------------------------------------------------------------
2,500 Boc Group PLC 36,030
--------------------------------------------------------------
3,800 Boots Co. PLC 35,921
--------------------------------------------------------------
4,400 British Petroleum Co. PLC 37,843
--------------------------------------------------------------
12,800 British Steel PLC 33,770
--------------------------------------------------------------
7,400 British Telecommunication PLC 40,767
--------------------------------------------------------------
12,000 Bunzl PLC 43,701
--------------------------------------------------------------
4,291 Cadbury Schweppes PLC 32,184
--------------------------------------------------------------
15,100 Caradon PLC 54,405
--------------------------------------------------------------
6,250 Carlton Communications PLC 46,829
--------------------------------------------------------------
6,500 Chubb Security 34,852
--------------------------------------------------------------
4,700 Compass Group 42,098
--------------------------------------------------------------
6,500 General Electric Co. PLC 37,471
--------------------------------------------------------------
8,171 Grand Metropolitan PLC 55,208
--------------------------------------------------------------
3,960 Imperial Chemical Industries PLC 52,162
--------------------------------------------------------------
9,100 Inchcape PLC 42,870
--------------------------------------------------------------
13,200 Ladbroke Group PLC 38,763
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
UNITED KINGDOM--CONTINUED
--------------------------------------------------------------
8,500 Marks & Spencer PLC $ 60,921
--------------------------------------------------------------
4,800 (d) National Power Co. PLC 38,717
--------------------------------------------------------------
4,800 Peninsular & Oriental Steam Navigation Co. 38,977
--------------------------------------------------------------
2,632 RTZ Corp. PLC 40,991
--------------------------------------------------------------
4,800 Rank Organisation PLC 38,047
--------------------------------------------------------------
4,900 Reckitt & Colman PLC 52,527
--------------------------------------------------------------
3,300 Reuters Holdings PLC 38,354
--------------------------------------------------------------
31,600 Rugby Group PLC 58,518
--------------------------------------------------------------
10,400 Sainsbury PLC 63,902
--------------------------------------------------------------
8,900 (d) Scottish Power PLC 43,790
--------------------------------------------------------------
27,500 Sedgwick Group PLC 63,498
--------------------------------------------------------------
2,700 (d) Shell Transport & Trading Co. 38,577
--------------------------------------------------------------
2,900 Siebe PLC 38,873
--------------------------------------------------------------
3,473 Smithkline Beecham PLC 35,360
--------------------------------------------------------------
6,000 Sun Alliance Group PLC 37,006
--------------------------------------------------------------
4,000 Thames Water PLC 36,665
--------------------------------------------------------------
12,700 Tomkins PLC 50,284
--------------------------------------------------------------
17,500 Vodafone Group PLC 69,289
--------------------------------------------------------------
1,800 Zeneca Group 38,159
-------------------------------------------------------------- -----------
Total 1,755,626
-------------------------------------------------------------- -----------
TOTAL FOREIGN EQUITY 11,048,377
-------------------------------------------------------------- -----------
TOTAL STOCKS (IDENTIFIED COST $28,011,381) 32,803,761
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--27.0%
- ------------------------------------------------------------------------------------
TREASURY--7.8%
-----------------------------------------------------------------
TREASURY SECURITIES--7.8%
-----------------------------------------------------------------
635,000 United States Treasury Note 5.00%, 02/15/1999 $ 613,366
-----------------------------------------------------------------
500,000 United States Treasury Note 6.375% 03/31/2001 494,515
-----------------------------------------------------------------
1,105,000 United States Treasury Note 6.375%, 08/15/2002 1,086,303
-----------------------------------------------------------------
2,025,000 United States Treasury Note 6.50%, 05/15/2005 1,976,076
-----------------------------------------------------------------
350,000 United States Treasury Note 7.50% 02/15/2005 364,284
----------------------------------------------------------------- -----------
TOTAL TREASURY SECURITIES 4,534,544
----------------------------------------------------------------- -----------
MORTGAGE-BACKED SECURITIES--4.6%
-----------------------------------------------------------------
GOVERNMENT AGENCY--4.6%
-----------------------------------------------------------------
497,784 Federal Home Loan Mortgage Corp. Pool D64883, 7.50%, 10/1/2025 488,376
-----------------------------------------------------------------
178,979 Federal Home Loan Mortgage Corp. Pool E58069, 7.00%, 04/01/2009 175,733
-----------------------------------------------------------------
501,089 Federal Home Loan Mortgage Corp. Pool E61371, 6.50%, 10/1/2010 481,351
-----------------------------------------------------------------
90,150 Federal National Mortgage Association Pool 250072, 7.00%,
5/1/2001 89,980
-----------------------------------------------------------------
226,126 Federal National Mortgage Association Pool 318287, 8.00%,
7/1/2023 227,537
-----------------------------------------------------------------
485,000 (g) Federal National Mortgage Association, 7.00%, 15 Year, 6/01/2011 477,114
-----------------------------------------------------------------
255,236 Government National Mortgage Association Pool 281657, 9.00%,
10/15/2019 270,228
-----------------------------------------------------------------
478,916 Government National Mortgage Association Pool 415962, 8.00%,
7/15/2025 480,645
----------------------------------------------------------------- -----------
TOTAL MORTGAGE-BACKED SECURITIES 2,690,964
----------------------------------------------------------------- -----------
INVESTMENT GRADE BONDS--3.0%
-----------------------------------------------------------------
BANKING--0.4%
-----------------------------------------------------------------
250,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 254,160
----------------------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.4%
-----------------------------------------------------------------
250,000 (c) Bayer Corp., Deb., 6.50%, 10/1/2002 242,993
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
-----------------------------------------------------------------
FINANCIAL INTERMEDIARIES--0.8%
-----------------------------------------------------------------
100,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 $ 108,455
-----------------------------------------------------------------
150,000 DLJ, Note, 6.875%, 11/1/2005 141,947
-----------------------------------------------------------------
200,000 Green Tree Financial Corp, Sr. Sub. Note, 10.25%, 6/1/2002 227,550
----------------------------------------------------------------- -----------
Total 477,952
----------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.5%
-----------------------------------------------------------------
250,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 267,885
----------------------------------------------------------------- -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.5%
-----------------------------------------------------------------
250,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 275,400
----------------------------------------------------------------- -----------
SOVEREIGN GOVERNMENT--0.4%
-----------------------------------------------------------------
250,000 Republic of Colombia, Note, 7.25%, 2/15/2003 234,728
----------------------------------------------------------------- -----------
TOTAL INVESTMENT GRADE BONDS 1,753,118
----------------------------------------------------------------- -----------
HIGH YIELD BONDS--5.1%
-----------------------------------------------------------------
AUTOMOTIVE--0.1%
-----------------------------------------------------------------
50,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 49,500
----------------------------------------------------------------- -----------
BANKING--0.1%
-----------------------------------------------------------------
25,000 (c) First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 27,313
-----------------------------------------------------------------
25,000 (c) First Nationwide Holdings, Sr. Note, 12.50%, 4/15/2003 26,063
----------------------------------------------------------------- -----------
Total 53,376
----------------------------------------------------------------- -----------
BEVERAGE & TOBACCO--0.1%
-----------------------------------------------------------------
25,000 Dr Pep Btlg Hldgs, Sr. Disc. Note, 11.63%, 2/15/2003 21,375
----------------------------------------------------------------- -----------
BROADCAST RADIO & TV--0.5%
-----------------------------------------------------------------
37,000 (c) Chancellor Broadcasting Co., Sr. Sub. Note, 12.50%, 10/1/2004 40,885
-----------------------------------------------------------------
25,000 (c) Granite Broadcasting Corp, Sr. Sub. Note, 9.375%, 12/1/2005 23,063
-----------------------------------------------------------------
25,000 Pegasus Media , Note, 12.50%, 7/1/2005 27,125
-----------------------------------------------------------------
50,000 SCI Television, Sr. Secd. Note, 11.00%, 6/30/2005 52,875
-----------------------------------------------------------------
50,000 (c) SFX Broadcasting, Sr. Sub. Note, 10.75%, 5/15/2006 50,000
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
BROADCAST RADIO & TV--CONTINUED
-----------------------------------------------------------------
50,000 Sinclair Broadcast Group, Sr. Sub. Note, 10.00%, 9/30/2005 $ 48,625
-----------------------------------------------------------------
50,000 Young Broadcasting Corp., Sr. Sub. Note, 10.125%, 2/15/2005 48,875
----------------------------------------------------------------- -----------
Total 291,448
----------------------------------------------------------------- -----------
BUSINESS EQUIPMENT & SERVICES--0.1%
-----------------------------------------------------------------
50,000 (c) Knoll Inc., Sr. Sub. Note, 10.875%, 3/15/2006 51,250
-----------------------------------------------------------------
25,000 Monarch Acquisition Corp., Sr. Note, 12.50%, 7/1/2003 26,875
----------------------------------------------------------------- -----------
Total 78,125
----------------------------------------------------------------- -----------
CABLE TELEVISION--0.5%
-----------------------------------------------------------------
50,000 CF Cable TV Inc., Sr. Secd. 2nd Priority Note, 11.625%, 2/15/2005 54,250
-----------------------------------------------------------------
100,000 (c) CS Wireless Systems, Inc., Unit, 3/1/2006 53,000
-----------------------------------------------------------------
25,000 Cablevision Systems Corp., Sr. Sub. Note, 9.875%, 5/15/2006 24,938
-----------------------------------------------------------------
25,000 Cai Wireless Systems, Sr. Note, 12.25%, 9/15/2002 26,438
-----------------------------------------------------------------
50,000 (c) Charter Communications SE, Sr. Note, 11.25%, 3/15/2006 51,250
-----------------------------------------------------------------
50,000 Comcast UK Cable, Deb., 11/15/2007 29,875
-----------------------------------------------------------------
25,000 EchoStar Satellite Broadcasting Corp., Sr. Secd. Disc. Note,
(c) 3/15/2004 16,688
-----------------------------------------------------------------
100,000 International Cabletel, Sr. Note, 4/15/2005 65,625
-----------------------------------------------------------------
25,000 (c) UIH Australia/Pacific, Sr. Disc. Note, 5/15/2006 12,875
----------------------------------------------------------------- -----------
Total 334,939
----------------------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.4%
-----------------------------------------------------------------
25,000 Arcadian Partners LP, Sr. Note, Series B, 10.75%, 5/1/2005 27,125
-----------------------------------------------------------------
25,000 Foamex Capital Corp., Sr. Sub. Deb., 11.875%, 10/1/2004 25,375
-----------------------------------------------------------------
23,000 G-I Holdings, Sr. Disc. Note, 10/1/1998 18,573
-----------------------------------------------------------------
50,000 Harris Chemical, Sr. Secd. Disc. Note, 10.25%, 7/15/2001 50,750
-----------------------------------------------------------------
50,000 Polymer Group, Sr. Note, 12.25% 7/15/2002 54,500
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
CHEMICALS & PLASTICS--CONTINUED
-----------------------------------------------------------------
25,000 (c) RBX Corp., Sr. Sub. Note, 11.25%, 10/15/2005 $ 23,938
-----------------------------------------------------------------
50,000 Viridian Inc., Note, 9.75%, 4/1/2003 51,750
----------------------------------------------------------------- -----------
Total 252,011
----------------------------------------------------------------- -----------
CLOTHING & TEXTILES--0.1%
-----------------------------------------------------------------
25,000 Dan River Inc, Sr. Sub. Note, 10.125%, 12/15/2003 24,344
-----------------------------------------------------------------
50,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 48,750
----------------------------------------------------------------- -----------
Total 73,094
----------------------------------------------------------------- -----------
CONSUMER PRODUCTS--0.2%
-----------------------------------------------------------------
50,000 Herff Jones, Inc., Sr. Sub. Note, 11.00%, 8/15/2005 53,000
-----------------------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note, 9.0%, 12/15/2003 47,063
-----------------------------------------------------------------
25,000 (c) Simmons Company, Sr. Sub. Note, 10.75%, 4/15/2006 25,125
----------------------------------------------------------------- -----------
Total 125,188
----------------------------------------------------------------- -----------
CONTAINER & GLASS PRODUCTS--0.1%
-----------------------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 51,000
----------------------------------------------------------------- -----------
ECOLOGICAL SERVICES & EQUIPMENT--0.1%
-----------------------------------------------------------------
25,000 Mid-american Waste System, Sr. Sub. Note, 12.25%, 2/15/2003 14,875
----------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.2%
-----------------------------------------------------------------
25,000 Carr Gottstein Foods Co., Sr. Sub. Note, 12.00%, 11/15/2005 26,000
-----------------------------------------------------------------
884 Grand Union Co. 5,967
-----------------------------------------------------------------
50,000 Pathmark Stores Inc, Sr. Sub. Note, 9.625%, 5/1/2003 47,625
-----------------------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 47,938
-----------------------------------------------------------------
25,000 Smith's Food & Drug , Sr. Sub. Note, 11.25%, 5/15/2007 25,438
----------------------------------------------------------------- -----------
Total 152,968
----------------------------------------------------------------- -----------
FOOD PRODUCTS--0.1%
-----------------------------------------------------------------
25,000 Curtice-burns Foods, Inc., Sr. Sub. Note, 12.25%, 2/1/2005 24,750
-----------------------------------------------------------------
25,000 Specialty Foods Corp., Sr. Sub. Note, 11.25%, 8/15/2003 20,125
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
FOOD PRODUCTS--CONTINUED
-----------------------------------------------------------------
25,000 Van de Kamp's, Inc., Sr. Sub. Note, 12.00%, 9/15/2005 $ 26,813
----------------------------------------------------------------- -----------
Total 71,688
----------------------------------------------------------------- -----------
FOOD SERVICES--0.1%
-----------------------------------------------------------------
50,000 Flagstar Corp, Sr. Note, 10.875%, 12/1/2002 45,000
----------------------------------------------------------------- -----------
FOREST PRODUCTS--0.3%
-----------------------------------------------------------------
50,000 Repap New Brunswick, 2nd Priority Sr. Secd. Note, 10.625%,
4/15/2005 46,750
-----------------------------------------------------------------
50,000 Riverwood International, Sr. Sub. Note, 10.875%, 4/1/2008 49,875
-----------------------------------------------------------------
50,000 Stone Container, Sr. Note, 11.5%, 10/1/2004 50,938
----------------------------------------------------------------- -----------
Total 147,563
----------------------------------------------------------------- -----------
HEALTHCARE--0.1%
-----------------------------------------------------------------
25,000 (c) Dade International, Inc., Sr. Sub. Note, 11.125%, 5/1/2006 25,813
-----------------------------------------------------------------
50,000 Tenet Healthcare, Sr. Sub. Note, 10.125%, 3/1/2005 53,375
----------------------------------------------------------------- -----------
Total 79,188
----------------------------------------------------------------- -----------
HOTELS, MOTELS, INNS & CASINOS--0.1%
-----------------------------------------------------------------
50,000 (c) Courtyard by Marriott II , Sr. Secd. Note, 10.75%, 2/1/2008 49,563
----------------------------------------------------------------- -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.1%
-----------------------------------------------------------------
25,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%, 7/15/2005 28,125
----------------------------------------------------------------- -----------
LEISURE & ENTERTAINMENT--0.2%
-----------------------------------------------------------------
100,000 (c) Amf Group Inc., Sr. Sub. Disc. Note, 0/12.25%, 3/15/2006 54,500
-----------------------------------------------------------------
50,000 Six Flags Theme Parks, Sr. Sub. Disc. Note, 12.25%, 6/15/2005 42,875
----------------------------------------------------------------- -----------
Total 97,375
----------------------------------------------------------------- -----------
MACHINERY & EQUIPMENT--0.1%
-----------------------------------------------------------------
50,000 (c) Alvey Systems, Inc., Sr. Sub. Note, 11.375%, 1/31/2003 51,750
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
OIL & GAS--0.1%
-----------------------------------------------------------------
25,000 (c) Benton Oil & Gas Co., Sr. Note, 11.625%, 5/1/2003 $ 25,875
-----------------------------------------------------------------
50,000 Falcon Drilling Company, Sr. Note, 9.75%, 1/15/2001 51,750
----------------------------------------------------------------- -----------
Total 77,625
----------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.2%
-----------------------------------------------------------------
25,000 (c) Adams Outdoor Advertising L.P., Sr. Note, 10.75%, 3/15/2006 25,500
-----------------------------------------------------------------
50,000 Garden State Newspapers, Inc., Sr. Sub. Note, 12.00%, 7/1/2004 52,000
-----------------------------------------------------------------
500 (c) K-III Communications Corp., Pfd., Series C, 10.00% 46,750
----------------------------------------------------------------- -----------
Total 124,250
----------------------------------------------------------------- -----------
RETAILERS--0.1%
-----------------------------------------------------------------
50,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 47,625
----------------------------------------------------------------- -----------
SERVICES--0.1%
-----------------------------------------------------------------
25,000 Coinmach Corp., Sr. Note, 11.75%, 11/15/2005 26,000
----------------------------------------------------------------- -----------
STEEL--0.2%
-----------------------------------------------------------------
25,000 Bayou Steel Corp., 1st Mtg. Note, 10.25%, 3/1/2001 23,000
-----------------------------------------------------------------
50,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 46,000
-----------------------------------------------------------------
50,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 51,625
----------------------------------------------------------------- -----------
Total 120,625
----------------------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.2%
-----------------------------------------------------------------
25,000 Ameritruck Distribution, Sr. Sub. Note, 12.25%, 11/15/2005 24,844
-----------------------------------------------------------------
50,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 52,750
-----------------------------------------------------------------
25,000 Great Dane Holdings, Sr. Sub. Deb., 12.75%, 8/1/2001 24,125
-----------------------------------------------------------------
25,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 24,875
----------------------------------------------------------------- -----------
Total 126,594
----------------------------------------------------------------- -----------
TELECOMMUNICATIONS & CELLULAR--0.5%
-----------------------------------------------------------------
50,000 (c) American Communications , Sr. Disc. Note, 12.75% 4/1/2006 26,375
-----------------------------------------------------------------
50,000 Arch Communications, Sr. Disc. Note, 3/15/2008 28,250
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
TELECOMMUNICATIONS & CELLULAR--CONTINUED
-----------------------------------------------------------------
25,000 Fonorola, Inc., Sr. Secd. Note, 12.5%, 8/15/2002 $ 27,250
-----------------------------------------------------------------
50,000 (c) Millicom International, Sr. Sub. Disc. Note, 6/1/2006 26,375
-----------------------------------------------------------------
25,000 MobileMedia Communications, Inc., Sr. Sub. Note, 9.375%,
11/1/2007 23,750
-----------------------------------------------------------------
50,000 Nextel Communications, Inc., Sr. Disc. Note, 11.50%, 9/1/2003 34,625
-----------------------------------------------------------------
25,000 (c) Nextlink Communications, L.L.C., Sr. Note, 12.5%, 4/15/2006 25,313
-----------------------------------------------------------------
25,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 25,563
-----------------------------------------------------------------
75,000 Panamsat, L.p., Sr. Sub. Disc. Note, 8/1/2003 64,500
-----------------------------------------------------------------
25,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 24,750
----------------------------------------------------------------- -----------
Total 306,751
----------------------------------------------------------------- -----------
(D) UTILITIES--0.2%
-----------------------------------------------------------------
50,000 California Energy Co., Sr. Disc. Note, 10.25% 1/15/2004 48,250
-----------------------------------------------------------------
500 El Paso Electric Company, PIK Pfd., Series A, 11.40% 50,625
----------------------------------------------------------------- -----------
Total 98,875
----------------------------------------------------------------- -----------
TOTAL HIGH YIELD BONDS 2,996,496
----------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN BONDS--7.1%
---------------------------------------------------------------
AUSTRALIA--0.3%
---------------------------------------------------------------
89,000 Queensland Treas Global, Local Gov't. Guarantee, 8%, 5/14/2003 67,621
---------------------------------------------------------------
57,000 Queensland Treas Global, Local Gov't. Guarantee, 8%, 8/14/2001 44,148
---------------------------------------------------------------
60,000 State Bank Of New South, 12.25%, 2/26/2001 53,606
--------------------------------------------------------------- -----------
Total 165,375
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
---------------------------------------------------------------
BELGIUM--0.3%
---------------------------------------------------------------
514,000 Belgian Govt., Bond, 6.50%, 3/31/2005 $ 16,328
---------------------------------------------------------------
4,000,000 Belgium Kingdom, 7.75%, 10/15/2004 138,112
--------------------------------------------------------------- -----------
Total 154,440
--------------------------------------------------------------- -----------
CANADA--0.4%
---------------------------------------------------------------
204,000 Canada Government, Deb., 6.50%, 6/1/2004 139,033
---------------------------------------------------------------
155,000 Ontario Hydro, 9.00%, 6/24/2002 121,713
--------------------------------------------------------------- -----------
Total 260,746
--------------------------------------------------------------- -----------
DENMARK--0.4%
---------------------------------------------------------------
753,000 Denmark--Bullet, Bond, 8.00%, 3/15/2006 132,313
---------------------------------------------------------------
500,000 Denmark, 8.00%, 5/15/2003 89,852
--------------------------------------------------------------- -----------
Total 222,165
--------------------------------------------------------------- -----------
FRANCE--0.5%
---------------------------------------------------------------
90,000 France O.A.T., Bond, 7.50%, 4/25/2005 115,226
---------------------------------------------------------------
324,000 France O.A.T., Bond, 7.25%, 4/25/2006 66,054
---------------------------------------------------------------
600,000 KFW International Finance, 7.00%, 5/12/1999 122,739
--------------------------------------------------------------- -----------
Total 304,019
--------------------------------------------------------------- -----------
GERMANY, FEDERAL REPUBLIC OF--1.2%
---------------------------------------------------------------
150,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 102,985
---------------------------------------------------------------
150,000 KFW International Finance, Bank Guarantee, 6.75%, 6/20/2005 99,089
---------------------------------------------------------------
435,000 Treuhandanstalt, 7.75%, 10/1/2002 312,909
---------------------------------------------------------------
288,000 Treuhandanstalt, Foreign Gov't. Guarantee, 6.875%, 6/11/2003 197,316
--------------------------------------------------------------- -----------
Total 712,299
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
---------------------------------------------------------------
ITALY--0.6%
---------------------------------------------------------------
150,000,000 BTPS, Bond, 10.5%, 11/1/2000 $ 102,753
---------------------------------------------------------------
380,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 248,243
--------------------------------------------------------------- -----------
Total 350,996
--------------------------------------------------------------- -----------
JAPAN--1.0%
---------------------------------------------------------------
28,000,000 Export-Import Bank Japan, 4.375%, 10/1/2003 280,396
---------------------------------------------------------------
11,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 121,151
---------------------------------------------------------------
20,000,000 KFW International Finance, 6.00%, 11/29/1999 211,368
--------------------------------------------------------------- -----------
Total 612,915
--------------------------------------------------------------- -----------
NETHERLANDS--0.5%
---------------------------------------------------------------
130,000 Lkb-Global Bd, Bank Guarantee, 6.00%, 1/25/2006 81,442
---------------------------------------------------------------
250,000 Netherlands Government, 5.75%, 1/15/2004 143,119
---------------------------------------------------------------
90,000 Netherlands Government, 6.00%, 1/15/2006 51,259
--------------------------------------------------------------- -----------
Total 275,820
--------------------------------------------------------------- -----------
NEW ZEALAND--0.1%
---------------------------------------------------------------
61,000 New Zealand Government, 8.00%, 2/15/2001 39,709
---------------------------------------------------------------
55,000 New Zealand Government, Bond, 8.00%, 7/15/1998 36,637
--------------------------------------------------------------- -----------
Total 76,346
--------------------------------------------------------------- -----------
NORWAY--0.3%
---------------------------------------------------------------
641,000 NGB 9% 1/31/99, Bond, 9.00%, 1/31/1999 106,925
---------------------------------------------------------------
330,000 Norwegian Government, Bond, 7.00%, 5/31/2001 52,589
---------------------------------------------------------------
247,000 Norwegian Govt., Foreign Gov't. Guarantee, 5.75%, 11/30/2004 35,318
--------------------------------------------------------------- -----------
Total 194,832
--------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
---------------------------------------------------------------
SPAIN--0.4%
---------------------------------------------------------------
16,000,000 Spanish Government, 10.00%, 2/28/2005 $ 130,863
---------------------------------------------------------------
3,410,000 Spanish Govt, Bond, 9.40%, 4/30/1999 27,484
---------------------------------------------------------------
8,540,000 Spanish Govt., Deb., 10.10%, 2/28/2001 70,376
--------------------------------------------------------------- -----------
Total 228,723
--------------------------------------------------------------- -----------
SWEDEN--0.2%
---------------------------------------------------------------
800,000 Sweden, 6.00%, 2/9/2005 101,564
--------------------------------------------------------------- -----------
UNITED KINGDOM--0.9%
---------------------------------------------------------------
86,000 (d) British Gas PLC, 8.875%, 7/8/2008 130,523
---------------------------------------------------------------
38,000 U.K. Treasury, Deb., 8.50%, 12/7/2005 60,396
---------------------------------------------------------------
160,000 UK Conversion, 9.00%, 3/3/2000 260,499
---------------------------------------------------------------
30,000 UK Treasury, Bond, 8.00%, 12/7/2015 44,848
--------------------------------------------------------------- -----------
Total 496,266
--------------------------------------------------------------- -----------
TOTAL FOREIGN BONDS 4,156,506
--------------------------------------------------------------- -----------
TOTAL BONDS (IDENTIFIED COST $16,420,610) 8,906,120
--------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------- -----------------------------------------------------------------
<C> <C> <S> <C>
CASH EQUIVALENTS--16.5%
- ------------------------------------------------------------------------------------
TREASURY SECURITIES--5.0%
-----------------------------------------------------------------
$3,000,000 US TBill 10/17/1996 (identified cost $2,942,212) 2,943,300
----------------------------------------------------------------- -----------
(E) REPURCHASE AGREEMENTS--11.5%
-----------------------------------------------------------------
6,215,000 BT Securities Corporation, 5.340%, 6/3/1996 6,215,000
-----------------------------------------------------------------
485,000 (f) UBS Securities, Inc., 5.310%, 6/17/1996 485,000
----------------------------------------------------------------- -----------
TOTAL REPURCHASE AGREEMENTS (AT AMORTIZED COST) 6,700,000
----------------------------------------------------------------- -----------
TOTAL CASH EQUIVALENTS 9,643,300
----------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $54,074,205)(H) $58,578,689
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
(a) The Fund purchases Index futures contracts to efficiently manage cash flows
resulting from shareholder purchases and redemptions, dividend and capital
gain payments to shareholders and corporate actions while maintaining
exposure to stocks and minimizing trading costs. The total market value of
open Index futures contracts is $2,218,700 at May 31, 1996, which represents
3.8% of net assets. Taking into consideration these open Index futures
contracts, the Fund's effective, total exposure to stocks is 60.0%. The Fund
holds cash equivalents as collateral for five S&P 500 Futures contracts with
a market value of $1,676,075. Consequently, the Fund's exposure to large cap
stocks is 25.7% of the fund. The fund holds cash equivalents as collateral
for three Russell 2000 Futures contracts with a market value of $542,625.
Consequently, the Fund's exposure to small cap stocks is 15.4% of the fund.
(b) Non-Income producing security.
(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At the end of the period, these securities
amounted to $1,666,656 which represents 2.9% of net assets.
(d) The utility stocks are shown in the asset category in which they were
purchased. The Fund's total exposure to utility stocks is 3.9% of net
assets.
(e) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations. The investment in the repurchase agreements were through
participation in a joint account with other Federated funds.
(f) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(g) Includes securities with a market value of $477,114 subject to dollar roll
transactions.
(h) The cost of investments for federal tax purposes amounts to $54,074,205. The
net unrealized appreciation of investments on a federal tax basis amounts to
$4,504,484 which is comprised of $5,296,958 appreciation and $792,474
depreciation at May 31, 1996.
Note: The categories of investments are shown as a percentage of net assets
($58,344,752) at May 31, 1996.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
ADR -- American Depository Receipt
GDR -- Global Depository Receipts
LP -- Limited Partnership
LTD -- Limited
PEPS -- Participating Equity Preferred Stock
PIK -- Payment in Kind
PLC -- Public Limited Company
STRYPES -- Structured Yield Product Exchangeable for Stock
TBA -- To Be Announced
TRANs -- Tax and Revenue Anticipation Notes
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $54,074,205) $58,578,689
- ------------------------------------------------------------------------------------------
Cash denominated in foreign currencies (identified cost, $2,606) 2,637
- ------------------------------------------------------------------------------------------
Income receivable 393,578
- ------------------------------------------------------------------------------------------
Receivable for investments sold 469,317
- ------------------------------------------------------------------------------------------
Receivable for shares sold 211,564
- ------------------------------------------------------------------------------------------
Deferred expenses 30,821
- ------------------------------------------------------------------------------------------ -----------
Total assets 59,686,606
- ------------------------------------------------------------------------------------------
LIABILITIES:
- ------------------------------------------------------------------------------------------
Payable for investments purchased $607,827
- -------------------------------------------------------------------------------
Payable for dollar roll transactions 475,565
- -------------------------------------------------------------------------------
Payable for taxes withheld 5,902
- -------------------------------------------------------------------------------
Payable for daily variation margin 15,450
- -------------------------------------------------------------------------------
Net payable for forward currency exchange contracts 240
- -------------------------------------------------------------------------------
Accrued expenses 236,870
- ------------------------------------------------------------------------------- --------
Total liabilities 1,341,854
- ------------------------------------------------------------------------------------------ -----------
Net Assets for 4,841,219 shares outstanding $58,344,752
- ------------------------------------------------------------------------------------------ -----------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------
Paid in capital $52,523,942
- ------------------------------------------------------------------------------------------
Net unrealized appreciation of investments' translation of assets and liabilities
in foreign currency, and futures contracts 4,575,453
- ------------------------------------------------------------------------------------------
Accumulated net realized gain on investments, foreign currency transactions, and futures
contracts 948,701
- ------------------------------------------------------------------------------------------
Undistributed net investment income 296,656
- ------------------------------------------------------------------------------------------ -----------
Total Net Assets $58,344,752
- ------------------------------------------------------------------------------------------ -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ------------------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- ------------------------------------------------------------------------------------------
$35,048,299 / 2,906,207 shares outstanding $ 12.06
- ------------------------------------------------------------------------------------------ -----------
SELECT SHARES:
- ------------------------------------------------------------------------------------------
$23,296,453 / 1,935,012 shares outstanding $ 12.04
- ------------------------------------------------------------------------------------------ -----------
</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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $13,873) $ 236,227
- ------------------------------------------------------------------------------------------------
Interest (net of dollar roll expense of $969) (net of foreign taxes withheld of $1,202) 733,951
- ------------------------------------------------------------------------------------------------ ---------
Total income 970,178
- ------------------------------------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------------------------------------
Investment advisory fee $ 176,925
- -----------------------------------------------------------------------------------
Administrative personnel and services fee 77,501
- -----------------------------------------------------------------------------------
Custodian fees 33,214
- -----------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 33,844
- -----------------------------------------------------------------------------------
Directors'/Trustees' fees 1,464
- -----------------------------------------------------------------------------------
Auditing fees 6,588
- -----------------------------------------------------------------------------------
Legal fees 2,013
- -----------------------------------------------------------------------------------
Portfolio accounting fees 35,685
- -----------------------------------------------------------------------------------
Distribution services fee--Select Shares 63,901
- -----------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 37,675
- -----------------------------------------------------------------------------------
Shareholder services fee--Select Shares 21,300
- -----------------------------------------------------------------------------------
Share registration costs 22,326
- -----------------------------------------------------------------------------------
Printing and postage 27,019
- -----------------------------------------------------------------------------------
Insurance premiums 2,196
- -----------------------------------------------------------------------------------
Miscellaneous 11,346
- ----------------------------------------------------------------------------------- ---------
Total expenses 552,997
- -----------------------------------------------------------------------------------
Waivers and reimbursements--
- -----------------------------------------------------------------------------------
Waiver of investment advisory fee $(176,925)
- -----------------------------------------------------------------------
Reimbursement of other operating expenses by Adviser (16,258)
- -----------------------------------------------------------------------
Waiver of distribution services fee--Select Shares (21,300)
- -----------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (30,140)
- ----------------------------------------------------------------------- ---------
Total waivers (244,623)
- ----------------------------------------------------------------------------------- ---------
Net expenses 308,374
- ------------------------------------------------------------------------------------------------ ---------
Net investment income 661,804
- ------------------------------------------------------------------------------------------------ ---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, AND FUTURES CONTRACTS:
- ------------------------------------------------------------------------------------------------
Net realized gain on investments, foreign currency transactions, and futures contracts 1,229,498
- ------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments, translation of assets and liabilities
in foreign currency, and futures contracts 1,897,422
- ------------------------------------------------------------------------------------------------ ---------
Net realized and unrealized gain on investments, foreign currency, and futures contracts 3,126,920
- ------------------------------------------------------------------------------------------------ ---------
Change in net assets resulting from operations $3,788,724
- ------------------------------------------------------------------------------------------------ ---------
</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
(UNAUDITED) YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
----------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------------------
OPERATIONS--
- ---------------------------------------------------------------
Net investment income $ 661,804 $ 794,962
- ---------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency
transactions, and futures contracts ($1,229,498 and $888,863,
net gains respectively, as computed for federal tax purposes) 1,229,498 651,763
- ---------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments translation of assets and liabilities in foreign
currency, and future contracts 1,897,422 3,244,417
- --------------------------------------------------------------- -------------- --------------
Change in net assets resulting from operations 3,788,724 4,691,142
- --------------------------------------------------------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------------------
Distributions from net investment income
- ---------------------------------------------------------------
Institutional Shares (498,176) (547,698)
- ---------------------------------------------------------------
Select Shares (209,229) (101,587)
- ---------------------------------------------------------------
Distributions from net realized gains on investments, foreign
currency transactions, and futures contracts
- ---------------------------------------------------------------
Institutional Shares (600,532) (28,086)
- ---------------------------------------------------------------
Select Shares (289,253) (3,092)
- --------------------------------------------------------------- -------------- --------------
Change in net assets resulting from distributions
to shareholders (1,597,190) (680,463)
- --------------------------------------------------------------- -------------- --------------
SHARE TRANSACTIONS--
- ---------------------------------------------------------------
Proceeds from sale of shares 23,463,344 24,745,587
- ---------------------------------------------------------------
Net asset value of shares issued to shareholders in payment
of distributions declared 1,286,691 492,403
- ---------------------------------------------------------------
Cost of shares redeemed (6,550,307) (8,663,934)
- --------------------------------------------------------------- -------------- --------------
Change in net assets resulting from share transactions 18,199,728 16,574,056
- --------------------------------------------------------------- -------------- --------------
Change in net assets 20,391,262 20,584,735
- ---------------------------------------------------------------
NET ASSETS:
- ---------------------------------------------------------------
Beginning of period 37,953,490 17,368,755
- --------------------------------------------------------------- -------------- --------------
End of period (including undistributed net investment income of
$296,656 and $342,257, respectively) $58,344,752 $ 37,953,490
- --------------------------------------------------------------- -------------- --------------
</TABLE>
(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 YEAR ENDED NOVEMBER 30,
(UNAUDITED) ------------------------------
MAY 31, 1996 1995 1994(A)
------------ ------------------ --------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.59 $ 9.82 $10.00
- --------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------------------
Net investment income 0.17 0.35 0.17
- --------------------------------------------------------
Net realized and unrealized gain (loss) on
investments, foreign currency transactions, and
futures contracts 0.77 1.77 (0.25)
- -------------------------------------------------------- --------- ------------ -------
Total from investment operations 0.94 2.12 (0.08)
- -------------------------------------------------------- --------- ------------ -------
LESS DISTRIBUTIONS
- --------------------------------------------------------
Distributions from net investment income (0.21) (0.33) (0.10)
- --------------------------------------------------------
Distributions from net realized gain on investments,
foreign currency transactions, and futures contracts (0.26) (0.02) --
- -------------------------------------------------------- --------- ------------ -------
Total distributions (0.47) (0.35) (0.10)
- -------------------------------------------------------- --------- ------------ -------
NET ASSET VALUE, END OF PERIOD $12.06 $11.59 $ 9.82
- -------------------------------------------------------- --------- ------------ -------
TOTAL RETURN (B) 8.38% 21.96% (0.87%)
- --------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------------------
Expenses 1.06%* 1.00% 0.89%*
- --------------------------------------------------------
Net investment income 3.07%* 3.42% 3.42%*
- --------------------------------------------------------
Expense waiver/reimbursement (c) 1.03%* 1.71% 1.72%*(d)
- --------------------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------------------
Net assets, end of period (000 omitted) $35,048 $25,611 $15,696
- --------------------------------------------------------
Average commissions rate paid $0.0021 -- --
- --------------------------------------------------------
Portfolio turnover 57% 139% 77%
- --------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) 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 YEAR ENDED NOVEMBER 30,
(UNAUDITED) -------------------------------------------
MAY 31, 1996 1995 1994(A)
------------ ------------------ ----------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.59 $ 9.80 $10.00
- --------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------
Net investment income 0.14 0.17 0.13
- --------------------------------------------
Net realized and unrealized gain (loss) on
investments, foreign currency
transactions, and futures contracts 0.74 1.89 (0.25)
- -------------------------------------------- --------- ------------ --------------
Total from investment operations 0.88 2.06 (0.12)
- -------------------------------------------- --------- ------------ --------------
LESS DISTRIBUTIONS
- --------------------------------------------
Distributions from net investment income (0.17) (0.25) (0.08)
- --------------------------------------------
Distributions from net realized gain on
investments, foreign currency
transactions, and futures contracts (0.26) (0.02) --
- -------------------------------------------- --------- ------------ --------------
Total distributions (0.43) (0.27) (0.08)
- -------------------------------------------- --------- ------------ --------------
NET ASSET VALUE, END OF PERIOD $12.04 $11.59 $ 9.80
- -------------------------------------------- --------- ------------ --------------
TOTAL RETURN (B) 7.85% 21.36% (1.20%)
- --------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------
Expenses 1.77%* 1.75% 1.64%*
- --------------------------------------------
Net investment income 2.39%* 2.65% 2.67%*
- --------------------------------------------
Expense waiver/reimbursement (c) 1.07%* 1.71% 1.97%*(d)
- --------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------
Net assets, end of period (000 omitted) $23,296 $12,342 $1,673
- --------------------------------------------
Average commissions rate paid $0.0021 -- --
- --------------------------------------------
Portfolio turnover 57% 139% 77%
- --------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) 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, 1996 (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 portfolios. The financial statements
included herein are only those of Federated Managed Aggressive Growth Fund (the
"Fund"), a diversified portfolio. 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 and Select
Shares.
The investment objective of the Fund is to seek capital appreciation.
(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 securities, listed corporate bonds,
other fixed income and asset-backed securities, and unlisted and private
placement securities are generally valued at the mean of the latest bid and
asked price as furnished by an independent pricing service. Foreign
government and corporate bonds are valued at the last sales price reported
on a national exchange. If the last sales price is not available the
securities are valued at the mean of the latest bid and ask price as
furnished by an independent pricing service. Listed foreign and domestic
equity securities are valued at the last sale price reported on a national
securities exchange. Short-term foreign and domestic securities are valued
at the prices provided by an independent pricing service. However,
short-term foreign and domestic 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.
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
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Certain dividends from foreign securities may be recorded after the
ex-dividend date based upon when information becomes available to the Fund.
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.
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.
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 over a period of five years from
the Fund's commencement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in 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, 1996, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF % OF
INDUSTRY NET ASSETS INDUSTRY NET ASSETS
---------------------------- ---------- ---------------------------- ----------
<S> <C> <C> <C>
Agency 0.7% Leisure & Tourism 0.5%
Automobile 0.1% Machinery & Engineering 1.1%
Banking 1.7% Merchandising 0.8%
Basic Industry 0.3% Metals-Non Ferrous 0.2%
Beverage & Tobacco 0.4% Metals-Steel 0.4%
Broadcasting & Publishing 0.5% Mining 0.0%
Building Materials 0.6% Miscellaneous Materials 0.1%
Business & Public Relations 0.7% Multi-Industry 0.7%
Chemicals 0.7% Pharmaceuticals 0.2%
Construction & Housing 0.8% Producer manufacturing 0.2%
Corporate 0.3% Real Estate 1.0%
Electrical & Electronics 1.2% Recreation, Other 0.2%
Electronic Components 0.9% Soverign 5.0%
Energy Equipment 0.1% State/Provincial 0.3%
Energy Minerals 0.2% Supernational 0.2%
Energy Sources 0.4% Technology 0.1%
Financial Service 0.5% Telecommunications 1.0%
Food & Household Products 0.7% Textiles & Apparel 0.4%
Forest Products & Care 0.3% Transportation-Airline 0.1%
Health & Personal Care 0.6% Transportation-Road 0.2%
Industrial Components 0.3% Transportation-Shipping 0.1%
Insurance 0.6% Utilities 0.8%
Wholesale & International 0.3%
</TABLE>
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock index futures contract with a broker, the
Fund is required to deposit in a segregated account a specified amount of
cash or U.S. government securities. Futures contracts are valued daily and
unrealized gains or losses are recorded in a "variation margin" account.
Daily, the Fund receives from or pays to the broker a specified amount of
cash based upon changes in the variation margin account. When a contract is
closed, the Fund recognizes a realized gain or loss. Futures contracts have
market risks, including the risk that the change in the value of the
contract may not correlate with changes in the value of the underlying
securities. For the period ended May 31, 1996, the Fund had realized gains
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
of $469,694 on future contracts. At May 31, 1996, the Fund had outstanding
futures contracts as set forth below:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CONTRACTS TO TOTAL APPRECIATION
DATE DELIVER/RECEIVE FACE VALUE POSITION (DEPRECIATION)
----------------- ----------------- ----------- ---------- ---------------
<S> <C> <C> <C> <C>
June 1996 3 Russell 2000 479,625 Long $63,000
September 1996 3 S&P 500 1,001,525 Long 7,600
June 1996 2 S&P 500 665,400 Long 1,550
------------
Net Unrealized Appreciation on Futures Contracts $72,150
</TABLE>
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The
fund may enter into these contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date as a hedge or cross-
hedge against either specific transactions or portfolio positions. The
objective of the Fund's foreign currency hedging transactions is to reduce
the risk that the U.S. dollar value of the Fund's foreign currency
denominated securities will decline in value due to changes in foreign
currency exchange rates. All foreign currency exchange contracts are
"marked-to-market" daily at the applicable translation rates resulting in
unrealized gains or losses. Realized gains or losses are recorded at the
time the foreign currency exchange contract is offset by entering into a
closing transaction or by delivery or receipt of the currency. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At May 31, 1996, the Fund had outstanding foreign currency commitments as
set forth below:
<TABLE>
<CAPTION>
IN UNREALIZED
SETTLEMENT DATE CONTRACTS TO EXCHANGE CONTRACTS APPRECIATION
UNSETTLED TRANSACTIONS DELIVER/RECEIVE FOR AT VALUE (DEPRECIATION)
---------------------- ------------------------------- -------- --------- --------------
<S> <C> <C> <C> <C>
Contracts Purchased
June 3, 1996 40,197,297 Indonesia Rupiah $17,282 17,234 $ (48)
June 3, 1996 581,930 Philippine Peso $22,262 22,228 (34)
Contracts Sold
June 4, 1996 12,772,427 Indonesia Rupiah $ 5,491 5,476 15
June 6, 1996 32,676,698 Indonesia Rupiah $14,006 14,009 (3)
June 5, 1996 39,972,891 Italian Lira $25,723 25,893 (170)
----------
Net Unrealized Depreciation on Foreign Exchange Contracts (240)
</TABLE>
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
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
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 of
portfolio securities, 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.
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 sells 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.
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 Board of 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, 1996 is
as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------ --------------- -----------
<S> <C> <C>
Westinghouse Electric Corp., PEPS 9/7/95-3/14/95 $ 292,838
Solectron Corp., Conv. Bond 2/15/96-3/13/96 77,757
Commerzbank AG, Frankfurt 11/17/95 45,845
Shanghai Industrial Holdings LTD 5/23/96 36,447
Hindalco Industries 1/22/96 33,600
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE COST
------------------------------------------------------ --------------- -----------
<S> <C> <C>
Mahindra and Mahindra 1/22/96-2/2/96 $ 28,600
Steel Authority 4/22/96-4/23/96 22,800
Sumitomo Trust & Banking 3/21/96 97,222
Group Financiero Bancomer, S.A. 11/6/96-1/17/96 28,415
Bayer Corp. 5/21/96 242,993
First Nationwide Holdings 12.25% 5/21/96 27,313
First Nationwide Holdings 12.5% 4/12/96 26,063
Chancellor Broadcasting 7/14/96 40,885
Granite Broadcasting Corp. 3/22/96 23,063
SFX Broadcasting 5/23/96 50,000
Knoll Inc. 2/27/96 51,250
CS Wireless Systems, Inc. 2/16/96 53,000
Charter Communications SE 3/22/96 51,250
EchoStar Satellite Broadcasting Corp. 3/19/96 16,688
UH Australia/Pacific 5/18/96 12,875
RBX Corp. 2/14/96 23,938
Simmons Company 4/15/96 25,125
Dade International 4/30/96 25,813
Courtyard by Marriott II 1/12/96 49,563
AMF Group Inc. 3/7/96 54,500
Alvey Systems,Inc. 1/19/96 51,750
Benton Oil & Gas 4/29/96 25,875
Adams Outdoor Advertising L.P. 3/5/96 25,500
K-III Communications Corp. 2/12/96 46,750
American Communications 3/21/96 26,375
Millicom International 5/24/96 27,250
Nextlink Communications 4/18/96 25,313
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
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.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
----------------------- ------------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------- -------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,094,337 $12,787,897 1,317,111 $14,153,127
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 73,930 841,951 39,301 411,923
- --------------------------------------------------------
Shares redeemed (471,678) (5,549,403) (744,515) (7,759,093)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Institutional share
transactions 696,589 $ 8,080,445 611,897 $ 6,805,957
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
------------------------ ------------------------
SELECT SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 916,153 $10,675,447 970,853 $10,592,460
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 39,044 444,740 7,409 80,480
- --------------------------------------------------------
Shares redeemed (85,497) (1,000,904) (83,687) (904,841)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Select share transactions 869,700 $10,119,283 894,575 $ 9,768,099
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from share transactions 1,566,289 $18,199,728 1,506,472 $16,574,056
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
(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 0.75% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a sub-advisory agreement between the Adviser and Federated
Global Research Corp., Federated Global Research Corp. receives an allocable
portion of the Fund's advisory fee. Such allocation is based on the amount of
foreign securities which Federated Global Research Corp. manages for the Fund.
The fee is paid by the Adviser out of its resources and is not an incremental
Fund expense.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ 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 AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
DISTRIBUTION SERVICES 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 of up to 0.75% of average daily net assets of Select
shares, annually, to compensate FSC. The distributor may voluntarily choose to
waive any 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 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC") serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational and start-up administrative service
expense of ($88,333) were borne initially by the Adviser. The Fund has agreed to
reimburse the Adviser for the organizational and start-up administrative
expenses during the five year period following effective date. For the period
ended May 31, 1996, the Fund paid $12,835, pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1996, were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $37,076,737
- ------------------------------------------------------------------------------- -----------
SALES $21,394,704
- ------------------------------------------------------------------------------- -----------
</TABLE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. John W. McGonigle
Glen R. Johnson Executive Vice President and Secretary
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Executive Vice President and Treasurer
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
J. Crilley Kelly
Assistant Secretary
</TABLE>
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, 1996
FEDERATED INVESTORS
(LOGO)Z
- ---------------------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
CUSIP 56166K503
CUSIP 56166K602
G00515-01 (7/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Federated
Managed Growth Fund for the six-month period from December 1, 1995 through May
31, 1996. Included in this report is the fund's investment review, followed by a
complete listing of the fund's holdings 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").
After rapid 1995 gains, the U.S. stock market, which accounted for 31.8% of the
fund's net assets at May 31, 1996, progressed at a slower rate. The
international stock market, where 11.8% of fund assets were invested, improved
in 1996. The U.S. bond market, where 38.1% of the fund's assets were invested,
was impacted by rising rates that caused bond prices to fall.
In this environment, Institutional Shares delivered a total return of 5.78%*
through a share price increase of $0.17, dividends of $0.20 per share, and
capital gains of $0.14 per share. Select Shares produced a total return of
5.45%* through a share price increase of $0.17, dividends of $0.18 per share,
and capital gains of $0.14 per share. The fund's net assets increased to end the
period at $154.1 million.
Thank you for pursuing your long-term goals through Federated Managed Growth
Fund. As always, we invite your comments and suggestions.
Sincerely,
LOGO
Glen R. Johnson
President
July 15, 1996
* 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1996
For the six-month period ended May 31, 1996, an investor in Federated Managed
Growth Fund Institutional Shares experienced a total return of 5.78%,* while an
investor in Select Shares received a total return of 5.45%.* The driving force
for the financial markets last year was a belief that growth could be slow in
1996. However, over the six-month reporting period, the economy proved
surprisingly resilient. After a weak holiday spending pattern, economic activity
began to accelerate noticeably in late winter, partially driven by a rebound in
interest sensitive activity such as housing and by renewed strength in consumer
spending. The stronger economic growth and the collapse of budget negotiations
on reducing the federal deficit shocked the financial markets. Interest rates
reversed course and rose rapidly through the spring. Stock prices, which had
been moving up quickly on lower interest rates, began to falter and made much
slower progress in late winter and spring.
ASSET ALLOCATION AS OF MAY 31, 1996
Federated Managed Growth Fund operates on an investment philosophy that, over
time, an investor with a diversified portfolio has the potential to achieve
better returns with the same risk, or the same returns with lower risk, than an
investor in a single asset category. Therefore, to ensure proper diversification
of its portfolio, the fund's investment policies require management to allocate
the portfolio among as many as ten asset categories and limit the weight of each
asset category. In allocating the fund's portfolio among asset categories, fund
management analyzes the relative value offered by each category under prevailing
market conditions. Fund management seeks to improve the fund's performance by
weighting most heavily the asset categories that management believes will
provide the best relative value. The following table shows the allocation of the
portfolio among different asset categories at May 31, 1996.
* 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.
- --------------------------------------------------------------------------------
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1996
- ---------------------------------------- ------------------------ ------------------------
<S> <C> <C>
BONDS(1) 30-50 45
U.S. Treasury Securities 0-45 17
Mortgage-Backed Securities 0-15 10
Investment Grade Corporate Bonds 0-15 3
High Yield Corporate Bonds 0-15 8
Foreign Bonds 0-15 7
EQUITIES(1) 50-70 57
Large Company Stocks(2) 0-70 26
Utility Stocks 0-7.5 3
Small Company Stocks(2) 0-21 8
Foreign Stocks 0-21 12
Equity Reserves(2) 0-15 8
</TABLE>
(1) Bonds convertible into equity securities at a price below the closing price
of the underlying equity securities on May 31, 1996 have been included under
the appropriate equity asset category.
(2) Large company stocks include Standard & Poor's 500+ futures contracts and
small company stocks include Russell 2000++ futures contracts. Equity
reserves have been reduced by the amount of cash equivalents maintained to
cover the fund's obligations under these futures contracts.
In essence, investors have the choice of buying fairly valued bonds or
overvalued stocks. The cornerstone of a value investment philosophy is the
belief that investors should take risks only when offered the chance for higher
returns. Higher prices, without a change in the underlying fundamentals, reduce
potential returns from investments. Implementing this philosophy, bonds were
approximately 5% more of the fund's assets than normal throughout the reporting
period, as the level of stock prices made potential future returns less
attractive than normal. Throughout the reporting period, fund management
believed that stocks and bonds were richly priced relative to their fundamentals
and defensive positions were appropriate in both sectors.
+ Standard & Poor's 500 Index is an unmanaged broad-based index measuring
changes in stock market conditions based on the average performance of 500
widely held common stocks. Investments cannot be made in an index.
++ Russell 2000 Index is an unmanaged, broadly diversified index consisting of
approximately 2,000 small capitalization common stocks that can be used to
compare to the total returns of funds whose portfolios are invested primarily
in small capitalization common stocks. Investments cannot be made in an
index.
- --------------------------------------------------------------------------------
STRUCTURE OF THE BOND PORTFOLIO
Fund management established a defensive bond position by reducing interest rate
risk, since bond prices fall when interest rates rise. The fund's investment
policies limit the duration of its bond portfolio to a range of three to seven
years. A portfolio with its duration in this range has a sensitivity to interest
rate changes similar to that of the overall investment grade bond market. Bond
prices peaked for the period in early February 1996 and fell rapidly in the
spring as economic statistics began to indicate a stronger pulse to economic
activity. Anticipating upward cyclical pressure on interest rates, fund
management maintained the duration of the fund's bond portfolio at 4.0, a below
average level. In this way, the fund was less sensitive to the negative impact
of rising interest rates on the value of the portfolio.
The bond portion is well diversified, with exposure in several different
sectors. The largest bond sector is the U.S. Treasury portion, which provides a
high quality foundation for the bond portfolio. A moderate foreign bond position
was held because foreign bonds offered very attractive yields, after adjustment
for inflation. The allocation to high yield corporate bonds was modestly
increased at the beginning of 1996. This change proved rewarding as the
strengthening economy reduced concerns about credit risk in the corporate sector
and led to strong relative performance by high yield bonds.
STRUCTURE OF THE EQUITY PORTFOLIO
To enhance the defensive posture of the stock portfolio, the fund holds slightly
above normal levels of equity reserves. Since its inception, the fund held a
mid-point allocation to equity reserves and invested in short-term debt.
However, by early June 1995, 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.
Fund management reduced positions in two equity sectors at the beginning of
1996. Strong performance by utilities in late 1995 caused fund management to
reduce the utility sector weight at the beginning of 1996. As utilities trailed
significantly the rise in large cap stocks over the reporting period, the
reduction in position aided performance by reducing the drag from this poor
performing sector.
Fund management also reduced the small cap allocation at the beginning of 1996
to a neutral level from a slightly above normal level. This action was taken
because the extended nature of the recent market advance made the stock market
unusually vulnerable to a correction. Small cap stocks usually undergo a more
serious decline than large cap stocks in corrections. While this move detracted
from performance in the six-month period ended May 31, 1996, fund management
continues to believe a neutral position is appropriate under current market
conditions.
FEDERATED MANAGED GROWTH FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--43.6%
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY--22.4%
--------------------------------------------------------------
BASIC INDUSTRY--1.8%
--------------------------------------------------------------
22,300 Allegheny Ludlum Corp. $ 446,000
--------------------------------------------------------------
4,600 Aluminum Co. of America 283,475
--------------------------------------------------------------
12,600 Barrick Gold Corp. 396,900
--------------------------------------------------------------
11,000 Du Pont (E.I.) de Nemours & Co. 877,250
--------------------------------------------------------------
3,700 Eastman Chemical Co. 247,900
--------------------------------------------------------------
7,300 International Paper Co. 291,088
-------------------------------------------------------------- -----------
Total 2,542,613
-------------------------------------------------------------- -----------
CONSUMER DURABLES--0.6%
--------------------------------------------------------------
8,700 Ford Motor Co. 317,550
--------------------------------------------------------------
20,950 Mattel, Inc. 570,888
-------------------------------------------------------------- -----------
Total 888,438
-------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--1.8%
--------------------------------------------------------------
6,600 Avon Products, Inc. 610,500
--------------------------------------------------------------
5,000 CPC International, Inc. 345,625
--------------------------------------------------------------
27,900 IBP, Inc. 763,763
--------------------------------------------------------------
4,400 Kimberly-Clark Corp. 320,650
--------------------------------------------------------------
6,850 Philip Morris Cos., Inc. 680,719
--------------------------------------------------------------
4,900 Tambrands, Inc. 226,013
-------------------------------------------------------------- -----------
Total 2,947,270
-------------------------------------------------------------- -----------
ENERGY MINERALS--2.3%
--------------------------------------------------------------
10,700 Chevron Corp. 639,325
--------------------------------------------------------------
3,400 Exxon Corp. 288,150
--------------------------------------------------------------
18,100 Occidental Petroleum Corp. 468,338
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY--CONTINUED
--------------------------------------------------------------
ENERGY MINERALS--CONTINUED
--------------------------------------------------------------
2,100 Royal Dutch Petroleum Co. $ 315,000
--------------------------------------------------------------
7,500 Texaco, Inc. 628,125
--------------------------------------------------------------
25,100 USX-Marathon Group 549,063
--------------------------------------------------------------
13,100 Union Pacific Resources Group, Inc. 337,325
--------------------------------------------------------------
4,900 (b) Western Atlas, Inc. 300,125
-------------------------------------------------------------- -----------
Total 3,525,451
-------------------------------------------------------------- -----------
FINANCE--3.6%
--------------------------------------------------------------
12,213 Allstate Corp. 515,999
--------------------------------------------------------------
6,200 CIGNA Corp. 712,225
--------------------------------------------------------------
6,900 Chase Manhattan Corp. 483,000
--------------------------------------------------------------
6,800 Chubb Corp. 317,050
--------------------------------------------------------------
12,500 Citicorp 1,050,000
--------------------------------------------------------------
7,800 Dean Witter, Discover & Co. 462,150
--------------------------------------------------------------
7,202 Mellon Bank Corp. 411,414
--------------------------------------------------------------
6,100 Merrill Lynch & Co., Inc., STRYPES, $3.12 335,500
--------------------------------------------------------------
7,800 Providian Corp. 340,275
--------------------------------------------------------------
4,500 Sunamerica, Inc., Conv. Pfd., Series E, $3.10 328,500
--------------------------------------------------------------
6,200 Travelers/Aetna, Inc. 168,950
--------------------------------------------------------------
11,850 Travelers Group, Inc. 491,775
-------------------------------------------------------------- -----------
Total 5,616,838
-------------------------------------------------------------- -----------
HEALTH CARE--2.5%
--------------------------------------------------------------
6,500 Abbott Laboratories 280,313
--------------------------------------------------------------
11,900 American Home Products Corp. 636,650
--------------------------------------------------------------
3,000 Bausch & Lomb, Inc. 129,000
--------------------------------------------------------------
9,900 Becton, Dickinson & Co. 841,500
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY--CONTINUED
--------------------------------------------------------------
HEALTH CARE--CONTINUED
--------------------------------------------------------------
10,100 Bristol-Myers Squibb Co. $ 862,288
--------------------------------------------------------------
5,000 Columbia/HCA Healthcare Corp. 269,375
--------------------------------------------------------------
7,400 Merck & Co., Inc. 478,225
--------------------------------------------------------------
5,800 Smithkline Beecham, ADR 295,800
-------------------------------------------------------------- -----------
Total 3,793,151
-------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--2.3%
--------------------------------------------------------------
5,300 (b) FMC Corp. 356,425
--------------------------------------------------------------
5,500 General Electric Co. 455,125
--------------------------------------------------------------
7,800 Loews Corp. 622,050
--------------------------------------------------------------
8,300 Philips Electronics N.V. ADR 291,538
--------------------------------------------------------------
13,000 Textron, Inc. 1,101,750
--------------------------------------------------------------
45,000 (c) Westinghouse Electric Corp., PEPS, Series C, $1.3 770,625
-------------------------------------------------------------- -----------
Total 3,597,513
-------------------------------------------------------------- -----------
RETAIL TRADE--0.9%
--------------------------------------------------------------
7,400 Nordstrom, Inc. 377,400
--------------------------------------------------------------
15,200 Sears, Roebuck & Co. 773,300
--------------------------------------------------------------
11,200 Wal-Mart Stores, Inc. 289,800
-------------------------------------------------------------- -----------
Total 1,440,500
-------------------------------------------------------------- -----------
SERVICES--0.4%
--------------------------------------------------------------
12,200 Baker Hughes, Inc. 382,775
--------------------------------------------------------------
4,200 Gannett Co., Inc. 292,950
-------------------------------------------------------------- -----------
Total 675,725
-------------------------------------------------------------- -----------
TECHNOLOGY--3.8%
--------------------------------------------------------------
6,700 (b) Applied Materials, Inc. 249,575
--------------------------------------------------------------
3,200 (b) DST Systems, Inc. 111,600
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY--CONTINUED
--------------------------------------------------------------
TECHNOLOGY--CONTINUED
--------------------------------------------------------------
7,700 (b) Digital Equipment Corp. $ 401,363
--------------------------------------------------------------
13,700 General Motors Corp., Class E 772,338
--------------------------------------------------------------
7,500 Hewlett-Packard Co. 800,625
--------------------------------------------------------------
7,800 Intel Corp. 588,900
--------------------------------------------------------------
6,000 International Business Machines Corp. 640,500
--------------------------------------------------------------
3,000 Litton Industries, Inc. 139,125
--------------------------------------------------------------
7,900 Lockheed Martin Corp. 662,613
--------------------------------------------------------------
6,400 Raytheon Co. 340,800
--------------------------------------------------------------
12,200 Rockwell International Corp. 712,175
--------------------------------------------------------------
7,000 (b) Seagate Technology, Inc. 411,250
-------------------------------------------------------------- -----------
Total 5,830,864
-------------------------------------------------------------- -----------
TRANSPORTATION--0.3%
--------------------------------------------------------------
5,100 (b) Southern Pacific Rail Corp. 124,313
--------------------------------------------------------------
4,300 Union Pacific Corp. 301,538
-------------------------------------------------------------- -----------
Total 425,851
-------------------------------------------------------------- -----------
(D) UTILITIES--2.1%
--------------------------------------------------------------
13,300 AT&T Corp. 829,588
--------------------------------------------------------------
10,100 CMS Energy Corp. 290,375
--------------------------------------------------------------
3,300 Columbia Gas System, Inc. 161,288
--------------------------------------------------------------
7,900 Enron Corp. 316,000
--------------------------------------------------------------
2,000 FPL Group, Inc. 85,500
--------------------------------------------------------------
7,800 GTE Corp. 333,450
--------------------------------------------------------------
15,000 MCI Communications Corp. 436,875
--------------------------------------------------------------
6,900 Pacific Gas & Electric Co. 160,425
--------------------------------------------------------------
12,100 Southern Co. 279,813
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) LARGE-COMPANY--CONTINUED
--------------------------------------------------------------
(D) UTILITIES--CONTINUED
--------------------------------------------------------------
12,900 TECO Energy, Inc. $ 304,763
-------------------------------------------------------------- -----------
Total 3,198,077
-------------------------------------------------------------- -----------
Total Large-Company 34,482,291
-------------------------------------------------------------- -----------
(A) SMALL-COMPANY-6.7%
--------------------------------------------------------------
BASIC INDUSTRY--0.4%
--------------------------------------------------------------
1,677 Brush Wellman, Inc. 31,444
--------------------------------------------------------------
1,800 Cambrex Corp. 86,400
--------------------------------------------------------------
1,800 Carpenter Technology Corp. 65,025
--------------------------------------------------------------
1,900 Chesapeake Corp. 50,588
--------------------------------------------------------------
1,400 (b) Cytec Industries, Inc. 125,300
--------------------------------------------------------------
5,200 (b) Fibreboard Corp. 130,000
--------------------------------------------------------------
2,420 First Mississippi Corp. 59,895
--------------------------------------------------------------
1,240 Texas Industries, Inc. 77,655
-------------------------------------------------------------- -----------
Total 626,307
-------------------------------------------------------------- -----------
CONSUMER DURABLES--0.4%
--------------------------------------------------------------
1,480 Barnes Group, Inc. 72,150
--------------------------------------------------------------
3,400 (b) Champion Enterprises, Inc. 137,700
--------------------------------------------------------------
3,330 Coachmen Industries, Inc. 122,794
--------------------------------------------------------------
1,455 Harman International Industries, Inc. 76,388
--------------------------------------------------------------
4,400 (b) Redman Industries, Inc. 96,250
--------------------------------------------------------------
4,200 (b) Toll Brothers, Inc. 70,350
-------------------------------------------------------------- -----------
Total 575,632
-------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--0.2%
--------------------------------------------------------------
3,040 Hudson Foods, Inc., Class A 40,660
--------------------------------------------------------------
3,740 (b) Mondavi Robert Corp., Class A 111,265
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY--CONTINUED
--------------------------------------------------------------
CONSUMER NON-DURABLES--CONTINUED
--------------------------------------------------------------
9,500 (b) Morningstar Group, Inc. $ 109,250
-------------------------------------------------------------- -----------
Total 261,175
-------------------------------------------------------------- -----------
ENERGY MINERALS--0.1%
--------------------------------------------------------------
10,120 Mercury Air Group, Inc. 98,038
--------------------------------------------------------------
10,100 (b) Tesoro Petroleum Corp. 113,625
-------------------------------------------------------------- -----------
Total 211,663
-------------------------------------------------------------- -----------
FINANCE--1.1%
--------------------------------------------------------------
4,800 (b) ACC Consumer Finance Corp. 39,600
--------------------------------------------------------------
1,500 Alex Brown, Inc. 86,625
--------------------------------------------------------------
1,900 Allied Group, Inc. 75,525
--------------------------------------------------------------
1,980 American Bankers Insurance Group, Inc. 76,725
--------------------------------------------------------------
4,490 (b) American Travellers Corp. 97,096
--------------------------------------------------------------
4,920 CWM Mortgage Holdings, Inc., REIT 87,330
--------------------------------------------------------------
3,550 City National Corp. 54,581
--------------------------------------------------------------
1,400 Cullen Frost Bankers, Inc. 72,100
--------------------------------------------------------------
4,600 (b) Electro Rent Corp. 113,850
--------------------------------------------------------------
3,410 FirstBank Puerto Rico 69,905
--------------------------------------------------------------
6,400 Hibernia Corp., Class A 70,400
--------------------------------------------------------------
1,680 Irwin Financial Corp. 69,300
--------------------------------------------------------------
7,500 Money Stores, Inc. 196,875
--------------------------------------------------------------
2,500 North Fork Bancorp, Inc. 60,938
--------------------------------------------------------------
1,500 PHH Corp. 83,063
--------------------------------------------------------------
3,600 Peoples Heritage Financial Group 71,550
--------------------------------------------------------------
1,880 Queens County Bancorp, Inc. 90,005
--------------------------------------------------------------
3,100 St. Francis Capital Corp. 79,825
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY--CONTINUED
--------------------------------------------------------------
FINANCE--CONTINUED
--------------------------------------------------------------
1,990 Student Loan Corp. $ 71,391
--------------------------------------------------------------
3,400 (b) United Insurance Cos., Inc. 73,525
--------------------------------------------------------------
1,760 WestAmerica Bancorporation 84,920
-------------------------------------------------------------- -----------
Total 1,725,129
-------------------------------------------------------------- -----------
HEALTH CARE--.9%
--------------------------------------------------------------
7,000 Amrion, Inc. 125,125
--------------------------------------------------------------
4,580 Bindley Western Industries, Inc. 78,433
--------------------------------------------------------------
2,320 (b) Bio Rad Laboratories, Inc., Class A 119,480
--------------------------------------------------------------
4,600 (b) Cardiogenesis Corp. 79,350
--------------------------------------------------------------
2,640 (b) Foxmeyer Health Corp. 45,870
--------------------------------------------------------------
3,000 (b) Heartport, Inc. 117,000
--------------------------------------------------------------
3,948 ICN Pharmaceuticals, Inc. 104,622
--------------------------------------------------------------
1,200 (b) KeraVision, Inc. 19,800
--------------------------------------------------------------
9,140 Kinetic Concepts, Inc. 155,380
--------------------------------------------------------------
4,520 (b) Maxicare Health Plans, Inc. 110,740
--------------------------------------------------------------
8,100 (b) Oec-Medical Systems, Inc. 99,225
--------------------------------------------------------------
10,200 (b) PolyMedica Industries, Inc. 94,350
--------------------------------------------------------------
4,200 (b) Rotech Medical Corp. 90,300
--------------------------------------------------------------
2,500 Sibia Neurosciences, Inc. 24,375
--------------------------------------------------------------
2,100 (b) UroCor, Inc. 29,925
-------------------------------------------------------------- -----------
Total 1,293,975
-------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--0.4%
--------------------------------------------------------------
3,300 AGCO Corp. 99,413
--------------------------------------------------------------
2,210 Blount International, Inc., Class A 73,483
--------------------------------------------------------------
5,900 Brenco, Inc. 77,438
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY--CONTINUED
--------------------------------------------------------------
PRODUCER MANUFACTURING--CONTINUED
--------------------------------------------------------------
960 (b) Cable Design Technologies, Class A $ 43,680
--------------------------------------------------------------
2,000 JLG Industries, Inc. 158,250
--------------------------------------------------------------
1,100 NACCO Industries, Inc., Class A 61,600
--------------------------------------------------------------
3,020 (b) NCI Building System, Inc. 103,435
-------------------------------------------------------------- -----------
Total 617,299
-------------------------------------------------------------- -----------
RETAIL TRADE--0.4%
--------------------------------------------------------------
2,600 Amre, Inc. 69,550
--------------------------------------------------------------
2,700 (b) CompUSA, Inc. 118,125
--------------------------------------------------------------
3,380 (b) Eckerd Corp. 76,895
--------------------------------------------------------------
3,020 (b) MSC Industrial Direct Co. 105,323
--------------------------------------------------------------
7,610 Pier 1 Imports, Inc. 119,858
--------------------------------------------------------------
3,880 (b) Waban, Inc. 103,790
-------------------------------------------------------------- -----------
Total 593,541
-------------------------------------------------------------- -----------
SERVICES--1.0%
--------------------------------------------------------------
3,000 (b) American Buildings Co. 92,250
--------------------------------------------------------------
2,110 Butler Manufacturing Co. 79,653
--------------------------------------------------------------
5,375 Castle (A.M.) & Co. 152,516
--------------------------------------------------------------
2,070 (b) Devon Group, Inc. 62,100
--------------------------------------------------------------
3,980 Granite Construction, Inc. 88,058
--------------------------------------------------------------
8,400 (b) Mastec, Inc. 262,500
--------------------------------------------------------------
2,900 (b) Newpark Resources, Inc. 105,125
--------------------------------------------------------------
13,300 (b) Parker Drilling Co. 94,763
--------------------------------------------------------------
4,000 (b) Premier Parks, Inc. 81,000
--------------------------------------------------------------
7,300 (b) Prepaid Legal Services, Inc. 152,388
--------------------------------------------------------------
7,800 (b) Pride Petroleum Services, Inc. 134,550
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY--CONTINUED
--------------------------------------------------------------
SERVICES--CONTINUED
--------------------------------------------------------------
3,100 (b) Right Management Consultants $ 111,600
--------------------------------------------------------------
1,635 (b) USA Waste Services, Inc. 48,233
--------------------------------------------------------------
4,800 Wackenhut Corp., Class B 111,000
-------------------------------------------------------------- -----------
Total 1,575,736
-------------------------------------------------------------- -----------
TECHNOLOGY--1.5%
--------------------------------------------------------------
2,400 (b) Alphanet Solutions, Inc. 24,900
--------------------------------------------------------------
2,932 (b) Bell Industries, Inc. 64,504
--------------------------------------------------------------
4,400 (b) Black Box Corp. 91,300
--------------------------------------------------------------
3,150 (b) Burr Brown Corp. 66,150
--------------------------------------------------------------
8,200 (b) Computervision Corp. 95,325
--------------------------------------------------------------
6,500 (b) Digital Systems Int., Inc. 143,813
--------------------------------------------------------------
2,800 (b) Electronics for Imaging, Inc. 224,000
--------------------------------------------------------------
1,000 (b) Forte Software, Inc. 64,750
--------------------------------------------------------------
5,900 II-VI, Inc. 91,450
--------------------------------------------------------------
3,200 (b) International Rectifier Corp. 83,200
--------------------------------------------------------------
5,600 (b) JDA Software Group, Inc. 132,300
--------------------------------------------------------------
3,400 (b) Kemet Corp. 75,650
--------------------------------------------------------------
2,500 National Data Corp. 94,375
--------------------------------------------------------------
1,200 Novadigm, Inc. 21,600
--------------------------------------------------------------
4,500 (b) OzEmail Ltd., ADR 64,125
--------------------------------------------------------------
2,400 (b) Photronic Labs, Inc. 71,400
--------------------------------------------------------------
4,600 (b) S3, Inc. 64,975
--------------------------------------------------------------
2,300 (b) SCI Systems, Inc. 103,500
--------------------------------------------------------------
1,900 (b) Tech-Sym Corp. 64,838
--------------------------------------------------------------
2,200 (b) Tencor Instruments 49,500
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(A) SMALL-COMPANY--CONTINUED
--------------------------------------------------------------
TECHNOLOGY--CONTINUED
--------------------------------------------------------------
3,700 (b) Tollgrade Communications, Inc. $ 90,650
--------------------------------------------------------------
4,500 Trident International, Inc. 102,375
--------------------------------------------------------------
1,500 Watkins Johnson Co. 45,938
--------------------------------------------------------------
4,000 (b) Whitmann-Hart, Inc. 150,000
--------------------------------------------------------------
1,700 Wyle Labs 72,250
--------------------------------------------------------------
1,300 (b) Xylan Corp. 82,388
-------------------------------------------------------------- -----------
Total 2,235,256
-------------------------------------------------------------- -----------
TRANSPORTATION--0.2%
--------------------------------------------------------------
4,440 (b) America West Airlines, Inc., Class B 90,465
--------------------------------------------------------------
2,110 (b) Continental Airlines, Inc., Class B 120,006
-------------------------------------------------------------- -----------
Total 210,471
-------------------------------------------------------------- -----------
(D) UTILITIES--0.3%
--------------------------------------------------------------
2,270 Eastern Enterprises 77,464
--------------------------------------------------------------
2,415 Interstate Power Co. 77,280
--------------------------------------------------------------
4,800 Public Service Co. New Mexico 90,000
--------------------------------------------------------------
600 Tele Danmark 14,925
--------------------------------------------------------------
2,000 Teppco Partners, L.P. 73,750
--------------------------------------------------------------
3,600 Trescomm International, Inc. 63,000
-------------------------------------------------------------- -----------
Total 396,419
-------------------------------------------------------------- -----------
Total Small-Company 10,322,603
-------------------------------------------------------------- -----------
(D) UTILITY STOCKS--2.7%
--------------------------------------------------------------
ELECTRIC UTILITIES: CENTRAL--1.00%
--------------------------------------------------------------
3,400 CMS Energy Corp. 97,750
--------------------------------------------------------------
3,439 Cinergy Corp. 101,880
--------------------------------------------------------------
4,200 DPL, Inc. 94,500
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(D) UTILITY STOCKS--CONTINUED
--------------------------------------------------------------
ELECTRIC UTILITIES: CENTRAL--CONTINUED
--------------------------------------------------------------
3,550 DQE, Inc. $ 95,406
--------------------------------------------------------------
2,000 Duke Power Co. 96,500
--------------------------------------------------------------
2,200 FPL Group, Inc. 94,050
--------------------------------------------------------------
3,100 General Public Utilities 103,850
--------------------------------------------------------------
3,600 Illinova Corp. 94,500
--------------------------------------------------------------
2,600 NIPSCO Industries, Inc. 96,850
--------------------------------------------------------------
4,800 Pacificorp 96,600
--------------------------------------------------------------
3,800 Peco Energy Co. 93,575
--------------------------------------------------------------
3,400 Pinnacle West Capital Corp. 90,100
--------------------------------------------------------------
4,100 Southern Co. 94,813
--------------------------------------------------------------
6,600 TECO Energy, Inc. 155,925
--------------------------------------------------------------
2,400 Texas Utilities Co. 98,100
--------------------------------------------------------------
3,500 Utilicorp United, Inc. 95,813
-------------------------------------------------------------- -----------
Total 1,600,212
-------------------------------------------------------------- -----------
MAJOR U.S. TELECOMMUNICATIONS--1.4%
--------------------------------------------------------------
3,800 AT&T Corp. 237,025
--------------------------------------------------------------
4,300 Ameritech Corp. 242,950
--------------------------------------------------------------
3,900 Bell Atlantic Corp. 243,263
--------------------------------------------------------------
6,500 BellSouth Corp. 264,063
--------------------------------------------------------------
5,600 GTE Corp. 239,400
--------------------------------------------------------------
8,300 MCI Communications Corp. 241,738
--------------------------------------------------------------
4,600 NYNEX Corp. 212,175
--------------------------------------------------------------
4,900 SBC Communications, Inc. 241,938
--------------------------------------------------------------
7,300 U.S. West, Inc. 238,163
-------------------------------------------------------------- -----------
Total 2,160,715
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(D) UTILITY STOCKS--CONTINUED
--------------------------------------------------------------
NATURAL GAS DISTRIBUTION--0.1%
--------------------------------------------------------------
3,300 MCN Corp. $ 78,375
--------------------------------------------------------------
2,800 Pacific Enterprises 73,850
-------------------------------------------------------------- -----------
Total 152,225
-------------------------------------------------------------- -----------
OIL/GAS TRANSMISSION--0.2%
--------------------------------------------------------------
2,000 Enron Corp. 80,000
--------------------------------------------------------------
2,400 Panenergy Corp. 77,100
--------------------------------------------------------------
1,500 Williams Companies, Inc. 75,375
-------------------------------------------------------------- -----------
Total 232,475
-------------------------------------------------------------- -----------
Total Utility 4,145,627
-------------------------------------------------------------- -----------
FOREIGN EQUITY--11.8%
--------------------------------------------------------------
ARGENTINA--0.1%
--------------------------------------------------------------
1,430 Banco Frances del Rio de la Plata S.A., ADR 40,219
--------------------------------------------------------------
7,237 Compania Naviera Perez Companc SA, Class B 46,191
--------------------------------------------------------------
1,405 IRSA Inversiones y Representaciones S.A., GDR 45,838
--------------------------------------------------------------
1,800 YPF Sociedad Anonima, ADR 39,600
-------------------------------------------------------------- -----------
Total 171,848
-------------------------------------------------------------- -----------
AUSTRALIA--0.3%
--------------------------------------------------------------
6,400 Lend Lease Corp., Ltd. 100,120
--------------------------------------------------------------
17,000 News Corp., Ltd. 95,387
--------------------------------------------------------------
60,000 (b) Sydney Harbour Casino Holdings, Inc. 90,510
--------------------------------------------------------------
17,500 Woodside Petroleum Ltd. 100,148
-------------------------------------------------------------- -----------
Total 386,165
-------------------------------------------------------------- -----------
BELGIUM--0.0%
--------------------------------------------------------------
1,000 Delhaize-Le Lion 50,702
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
BRAZIL--0.2%
--------------------------------------------------------------
3,640,000 Banco Bradesco S.A., Preference $ 42,293
--------------------------------------------------------------
113,000 Banco Itau S.A., Preference 45,786
--------------------------------------------------------------
80,000 Cia Cervejaria Brahma, Preference 47,681
--------------------------------------------------------------
1,523,000 (d) Companhia Energetica de Minas Gerais, Preference 40,352
--------------------------------------------------------------
1,157,000 (b) Lojas Renner S.A., Preference 47,517
--------------------------------------------------------------
10,071 (b) Telecomunicacoes de Sao Paulo S.A. Rights, 06/19/1996 510
--------------------------------------------------------------
235,000 Telecomunicacoes de Sao Paulo S.A., Preference 49,669
--------------------------------------------------------------
35,784,000 Usinas Siderurgicas de Minas Gerais, Pfd. 39,040
-------------------------------------------------------------- -----------
Total 312,848
-------------------------------------------------------------- -----------
CHILE--.1%
--------------------------------------------------------------
600 (b) Banco de A. Edwards, ADR 11,850
--------------------------------------------------------------
300 (b) Chilectra S.A., ADR 16,650
--------------------------------------------------------------
200 Compania Telecomunicacion Chile, ADR 18,250
--------------------------------------------------------------
600 (b) Santa Isabel S.A., ADR 15,900
--------------------------------------------------------------
300 Sociedad Quimica Y Minera De Chile, ADR 15,525
-------------------------------------------------------------- -----------
Total 78,175
-------------------------------------------------------------- -----------
CHINA--0.0%
--------------------------------------------------------------
2,700 Guangshen Railway Co. Ltd., Class H, ADR 53,325
-------------------------------------------------------------- -----------
COLOMBIA--0.0%
--------------------------------------------------------------
1,400 Banco Ganadero SA, ADR 31,675
--------------------------------------------------------------
1,500 Banco Industrial Colombiano, ADR 28,500
-------------------------------------------------------------- -----------
Total 60,175
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
FINLAND--0.0%
--------------------------------------------------------------
1,720 Nokia AB-A $ 74,841
-------------------------------------------------------------- -----------
FRANCE--0.7%
--------------------------------------------------------------
1,400 AXA 79,377
--------------------------------------------------------------
745 Accor SA 107,365
--------------------------------------------------------------
1,537 Compagnie Financiere de Paribas, Class A 93,359
--------------------------------------------------------------
2,400 Credit Commerical De France 115,601
--------------------------------------------------------------
300 Ecco Sa 71,961
--------------------------------------------------------------
600 LVMH (Moet-Hennessy) 145,546
--------------------------------------------------------------
1,080 Lafarge-Coppee 71,116
--------------------------------------------------------------
4,300 Lagardere Groupe 116,702
--------------------------------------------------------------
805 Lyonnaise des Eaux SA 78,016
--------------------------------------------------------------
1,100 Rhone-Poulenc Rorer, Inc. 71,225
--------------------------------------------------------------
2,600 Schneider SA 120,306
--------------------------------------------------------------
840 Total SA-B 60,723
-------------------------------------------------------------- -----------
Total 1,131,297
-------------------------------------------------------------- -----------
GERMANY, FEDERAL REPUBLIC OF--0.9%
--------------------------------------------------------------
300 BASF AG 83,355
--------------------------------------------------------------
355 (c) Commerzbank AG, Frankfurt 73,978
--------------------------------------------------------------
1,380 Deutsche Bank, AG 64,795
--------------------------------------------------------------
3,800 Dresdner Bank Ag, Frankfurt 95,249
--------------------------------------------------------------
270 Gea AG, Vorzugsaktien 83,866
--------------------------------------------------------------
175 Henkel KGAA, Vorzugsaktien 73,567
--------------------------------------------------------------
240 Hochtief AG 106,160
--------------------------------------------------------------
185 Kaufhof Holding AG 65,162
--------------------------------------------------------------
105 Linde AG 67,431
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
GERMANY, FEDERAL REPUBLIC OF--CONTINUED
--------------------------------------------------------------
200 Mannesmann AG $ 69,371
--------------------------------------------------------------
2,300 (d) RWE AG 90,809
--------------------------------------------------------------
1,400 Schering Ag 105,596
--------------------------------------------------------------
1,550 Schwarz Pharma 94,056
--------------------------------------------------------------
2,000 Siemens AG 112,163
--------------------------------------------------------------
1,780 (d) Veba AG 93,141
--------------------------------------------------------------
85 Wella AG, Vorzugsaktien 45,842
-------------------------------------------------------------- -----------
Total 1,324,541
-------------------------------------------------------------- -----------
HONG KONG--0.4%
--------------------------------------------------------------
64,000 Amoy Properties Ltd. 79,407
--------------------------------------------------------------
8,000 Cheung Kong 59,194
--------------------------------------------------------------
83,000 Goldlion Holdings Ltd. 68,118
--------------------------------------------------------------
3,751 HSBC Holdings PLC 56,721
--------------------------------------------------------------
35,638 Hong Kong Telecom 66,096
--------------------------------------------------------------
52,000 (b)(c) Shanghai Industrial Holdings LTD 63,174
--------------------------------------------------------------
8,000 Sun Hung Kai Properties 81,682
--------------------------------------------------------------
9,000 Swire Pacific Ltd. A 79,970
-------------------------------------------------------------- -----------
Total 554,362
-------------------------------------------------------------- -----------
INDIA--0.1%
--------------------------------------------------------------
3,100 (b)(c) Bombay Suburban Electric Supply, GDR 60,450
--------------------------------------------------------------
1,300 (b)(c) Hindalco Industries, GDR 57,850
--------------------------------------------------------------
4,200 (b)(c) Mahindra and Mahindra, GDR 46,200
--------------------------------------------------------------
2,050 (b)(c) Steel Authority of India GDR 29,213
-------------------------------------------------------------- -----------
Total 193,713
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
INDONESIA--0.3%
--------------------------------------------------------------
29,000 PT Astra International $ 43,516
--------------------------------------------------------------
36,000 PT Citra Marga Nusaphala Persada 58,650
--------------------------------------------------------------
78,000 PT Great River Industries 86,945
--------------------------------------------------------------
21,000 PT Hero Supermarket 21,158
--------------------------------------------------------------
8,000 PT Semen Gresik 26,495
--------------------------------------------------------------
43,000 PT Steady Safe Trans Service 57,149
--------------------------------------------------------------
19,000 Tambang Timah 37,471
--------------------------------------------------------------
54,000 Tjiwi Kimia 57,299
-------------------------------------------------------------- -----------
Total 388,683
-------------------------------------------------------------- -----------
ITALY--0.2%
--------------------------------------------------------------
13,500 Banca Popolare Milano 68,998
--------------------------------------------------------------
8,400 Imi Istituto Mobiliare 68,696
--------------------------------------------------------------
890 (b) La Rinascente S.P.A. Warrants, 12/31/1999 666
--------------------------------------------------------------
63,000 (b) Telecom Italia Mobile 134,672
--------------------------------------------------------------
9,700 (b) Unicem S.P.A. 75,275
-------------------------------------------------------------- -----------
Total 348,307
-------------------------------------------------------------- -----------
JAPAN--4.2%
--------------------------------------------------------------
5,000 Asatsu, Inc. 205,093
--------------------------------------------------------------
5,000 Bridgestone Corp. 87,037
--------------------------------------------------------------
18,000 Casio Computer Co 171,667
--------------------------------------------------------------
20 DDI Corp. 173,333
--------------------------------------------------------------
9,000 Dai Nippon Printing Co. Ltd. 166,667
--------------------------------------------------------------
22,000 Hitachi Cable 187,204
--------------------------------------------------------------
14,000 JGC Corp. 178,889
--------------------------------------------------------------
8,000 Jaccs 72,519
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
JAPAN--CONTINUED
--------------------------------------------------------------
13,000 Japan Radio Co. $ 182,963
--------------------------------------------------------------
6,000 Kokuyo Co. 160,556
--------------------------------------------------------------
16,000 Kuraray Co. Ltd. 182,222
--------------------------------------------------------------
2,000 Kyocera Corp. 137,037
--------------------------------------------------------------
8,000 Kyowa Hakko Kogyo Co. 78,519
--------------------------------------------------------------
12,000 Maeda Road Construction Co. 201,111
--------------------------------------------------------------
33,000 Marubeni Corp. 179,972
--------------------------------------------------------------
15,000 Matsuzakaya Co., Ltd. 187,500
--------------------------------------------------------------
18,000 Mitsubishi Electric Corp. 123,333
--------------------------------------------------------------
18,000 Mitsubishi Heavy Industries Ltd. 154,833
--------------------------------------------------------------
8,000 Mitsui Fudosan Co. 101,481
--------------------------------------------------------------
11,000 Mitsui Marine & Fire Insurance Co. 85,046
--------------------------------------------------------------
64,000 (b) NKK Corp. 187,259
--------------------------------------------------------------
13,000 Nichiei Construction 150,463
--------------------------------------------------------------
25,000 Nihon Cement Co., Ltd. 182,639
--------------------------------------------------------------
17,000 Nippon Comsys Corp. 217,222
--------------------------------------------------------------
3,000 Nippon Electric Glass Co., Ltd. 52,222
--------------------------------------------------------------
30,000 Nippon Zeon Co. 181,111
--------------------------------------------------------------
12,000 Nitto Denko Corp. 196,667
--------------------------------------------------------------
8,000 Nomura Securities Co. Ltd. 151,111
--------------------------------------------------------------
4,000 Noritsu Koki Co. Ltd. 177,778
--------------------------------------------------------------
50,000 Renown 205,556
--------------------------------------------------------------
32,000 Sanyo Electric Co. 190,518
--------------------------------------------------------------
12,000 (c) Sumitomo Trust & Banking 166,667
--------------------------------------------------------------
14,000 Takashimaya Co. 228,148
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
JAPAN--CONTINUED
--------------------------------------------------------------
12,000 Tokyo Marine and Fire Insurance Co. $ 155,556
--------------------------------------------------------------
26,000 Tokyo Tatemono Co., Ltd. 163,463
--------------------------------------------------------------
21,000 Toshiba Corp. 146,028
--------------------------------------------------------------
20,000 Toyoda Machine Works 222,222
--------------------------------------------------------------
18,000 Wako Securities Co., Ltd. 148,000
--------------------------------------------------------------
3,000 Xebio Co. Ltd. 111,944
--------------------------------------------------------------
10,000 Yamatake-Honeywell 178,704
-------------------------------------------------------------- -----------
Total 6,430,260
-------------------------------------------------------------- -----------
KOREA, REPUBLIC OF--0.3%
--------------------------------------------------------------
2,500 Chonggu Housing & Construction 75,195
--------------------------------------------------------------
2,999 Kookmin Bank 58,614
--------------------------------------------------------------
1,700 (d) Korea Electric Power Corp. 65,156
--------------------------------------------------------------
4,900 Korea Exchange Bank 64,052
--------------------------------------------------------------
2,400 (b) Korea Housing Bank 67,775
--------------------------------------------------------------
1,400 (b) Korea Mobile Telecomm Corp., GDR 80,500
-------------------------------------------------------------- -----------
Total 411,292
-------------------------------------------------------------- -----------
MALAYSIA--0.4%
--------------------------------------------------------------
42,000 Eastern and Oriental Berhad 89,165
--------------------------------------------------------------
8,000 Malayan Banking Berhad 75,946
--------------------------------------------------------------
19,000 Malaysian Pacific Industries 78,390
--------------------------------------------------------------
46,000 TA Enterprise Berhad 71,492
--------------------------------------------------------------
23,000 (b) Technology Resources Industries Bhd 76,467
--------------------------------------------------------------
19,000 (d) Tenaga Nasional Berhad 80,673
--------------------------------------------------------------
23,000 UMW Holdings Bhd 75,546
-------------------------------------------------------------- -----------
Total 547,679
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
MEXICO--0.2%
--------------------------------------------------------------
5,900 Cemex SA, Class B, ADR $ 48,122
--------------------------------------------------------------
24,000 (b) Cifra SA de CV, Class B 35,826
--------------------------------------------------------------
3,600 Empresas ICA Sociedad Controladora S.A., ADR 51,750
--------------------------------------------------------------
5,500 (b)(c) Grupo Financiero Bancomer, S.A. de C.V., Class B, ADR 50,414
--------------------------------------------------------------
1,300 Pan American Beverage, Class A 54,600
--------------------------------------------------------------
1,400 Telefonos de Mexico, Class L, ADR 46,200
-------------------------------------------------------------- -----------
Total 286,912
-------------------------------------------------------------- -----------
NETHERLANDS--0.3%
--------------------------------------------------------------
9,200 Elsevier NV 142,782
--------------------------------------------------------------
1,272 International Nederlanden 104,740
--------------------------------------------------------------
3,951 Koninklijke PTT Nederland NV 143,000
--------------------------------------------------------------
2,300 PolyGram NV 134,700
-------------------------------------------------------------- -----------
Total 525,222
-------------------------------------------------------------- -----------
PAKISTAN--0.0%
--------------------------------------------------------------
700 (b) Hub Power Co., GDR 17,850
-------------------------------------------------------------- -----------
PHILIPPINES--0.1%
--------------------------------------------------------------
153,000 (b) Aboitiz Equity Ventures, Inc. 30,974
--------------------------------------------------------------
108,150 (b) Filinvest Land, Inc. 43,376
--------------------------------------------------------------
52,000 (b) Marsman & Company Inc 27,807
--------------------------------------------------------------
127,000 Metro Pacific Corp. 33,957
--------------------------------------------------------------
2,700 (b) Philippine Commercial International Bank 34,807
-------------------------------------------------------------- -----------
Total 170,921
-------------------------------------------------------------- -----------
SINGAPORE--0.2%
--------------------------------------------------------------
28,000 Hotel Properties Ltd. 49,499
--------------------------------------------------------------
18,000 Parkway Holdings Ltd. 52,396
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
SINGAPORE--CONTINUED
--------------------------------------------------------------
5,000 Singapore Airlines Ltd. $ 51,473
--------------------------------------------------------------
3,000 Singapore Press Holdings Ltd. 56,230
--------------------------------------------------------------
16,000 Straits Steamship Land Ltd. 51,573
--------------------------------------------------------------
4,000 (b) Straits Steamship Land Ltd. Warrants, 12/12/2000 5,197
--------------------------------------------------------------
5,000 United Overseas Bank Ltd. 45,438
-------------------------------------------------------------- -----------
Total 311,806
-------------------------------------------------------------- -----------
SPAIN--0.2%
--------------------------------------------------------------
360 Acerinox SA 39,731
--------------------------------------------------------------
3,000 Repsol SA 102,592
--------------------------------------------------------------
1,000 Zardoya-Otis SA 99,405
-------------------------------------------------------------- -----------
Total 241,728
-------------------------------------------------------------- -----------
SWEDEN--0.2%
--------------------------------------------------------------
1,020 Astra AB, Class A 46,686
--------------------------------------------------------------
7,950 Stora Kopparbergs, Class A 105,908
--------------------------------------------------------------
6,800 Svedala Industri 130,569
-------------------------------------------------------------- -----------
Total 283,163
-------------------------------------------------------------- -----------
SWITZERLAND--0.4%
--------------------------------------------------------------
63 ABB AG 75,308
--------------------------------------------------------------
1,000 CS Holding AG- Registered 86,296
--------------------------------------------------------------
100 Ciba-Giegy AG- Registered 110,028
--------------------------------------------------------------
90 Nestle SA 101,398
--------------------------------------------------------------
800 (b) Oerlikon-Buhrle Holding AG 83,100
--------------------------------------------------------------
10 Roche Holding AG 76,708
--------------------------------------------------------------
125 Sulzer AG--Reg 79,405
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- -------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------------------------
SWITZERLAND--CONTINUED
--------------------------------------------------------------
253 Zurich Versicherungsgesellschaft $ 66,712
-------------------------------------------------------------- -----------
Total 678,955
-------------------------------------------------------------- -----------
THAILAND--0.1%
--------------------------------------------------------------
1,300 Advanced Information Services 21,456
--------------------------------------------------------------
1,900 Bangkok Bank Public Co., Ltd. 27,608
--------------------------------------------------------------
6,600 (b) Industrial Finance Corporation of Thailand 29,709
--------------------------------------------------------------
5,000 Krung Thai Bank PLC 25,468
--------------------------------------------------------------
2,200 (b)(d) PTT Exploration and Production Public Co. 32,836
-------------------------------------------------------------- -----------
Total 137,077
-------------------------------------------------------------- -----------
UNITED KINGDOM--1.9%
--------------------------------------------------------------
13,000 Allied Domecq PLC 98,109
--------------------------------------------------------------
6,700 Anglian Water PLC 62,297
--------------------------------------------------------------
12,900 Associated British Ports Holdings PLC 57,073
--------------------------------------------------------------
15,000 BTR PLC 65,318
--------------------------------------------------------------
5,600 Barclays PLC 65,173
--------------------------------------------------------------
4,100 Boc Group PLC 59,089
--------------------------------------------------------------
6,200 Boots Co. PLC 58,608
--------------------------------------------------------------
7,200 British Petroleum Co. PLC 61,925
--------------------------------------------------------------
21,000 British Steel PLC 55,404
--------------------------------------------------------------
12,100 British Telecommunication PLC 66,660
--------------------------------------------------------------
20,000 Bunzl PLC 72,834
--------------------------------------------------------------
7,151 Cadbury Schweppes PLC 53,635
--------------------------------------------------------------
23,200 Caradon PLC 83,589
--------------------------------------------------------------
11,250 Carlton Communications PLC 84,292
--------------------------------------------------------------
10,600 Chubb Security 56,836
--------------------------------------------------------------
</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
--------------------------------------------------------------
7,700 Compass Group $ 68,969
--------------------------------------------------------------
10,500 General Electric Co. PLC 60,530
--------------------------------------------------------------
12,563 Grand Metropolitan PLC 84,882
--------------------------------------------------------------
2,640 Imperial Chemical Industries PLC 34,775
--------------------------------------------------------------
14,800 Inchcape PLC 69,723
--------------------------------------------------------------
21,400 Ladbroke Group PLC 62,844
--------------------------------------------------------------
13,500 Marks & Spencer PLC 96,757
--------------------------------------------------------------
7,800 (d) National Power Co. PLC 62,915
--------------------------------------------------------------
8,500 Peninsular & Oriental Steam Navigation Co. 69,022
--------------------------------------------------------------
5,200 RMC Group PLC 81,026
--------------------------------------------------------------
4,249 RTZ Corp. PLC 66,175
--------------------------------------------------------------
8,800 Rank Organisation PLC 69,754
--------------------------------------------------------------
7,500 Reckitt & Colman PLC 80,399
--------------------------------------------------------------
10,600 Redland PLC 65,952
--------------------------------------------------------------
7,600 Reuters Holdings PLC 88,331
--------------------------------------------------------------
48,600 Rugby Group PLC 90,000
--------------------------------------------------------------
16,500 Sainsbury PLC 101,383
--------------------------------------------------------------
13,700 (d) Scottish Power PLC 67,407
--------------------------------------------------------------
42,200 Sedgwick Group PLC 97,440
--------------------------------------------------------------
4,500 (d) Shell Transport & Trading Co. 64,296
--------------------------------------------------------------
4,700 Siebe PLC 63,002
--------------------------------------------------------------
5,619 Smithkline Beecham PLC 57,209
--------------------------------------------------------------
9,800 Sun Alliance Group PLC 60,443
--------------------------------------------------------------
</TABLE>
FEDERATED MANAGED 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
-----------------------------------------------------------------
6,000 Thames Water PLC $ 54,998
-----------------------------------------------------------------
19,300 Tomkins PLC 76,416
-----------------------------------------------------------------
28,000 Vodafone Group PLC 110,863
-----------------------------------------------------------------
3,000 Zeneca Group 63,598
----------------------------------------------------------------- -----------
Total 2,969,951
----------------------------------------------------------------- -----------
Total Foreign Equity 18,141,798
----------------------------------------------------------------- -----------
Total Stocks (identified cost $58,773,921) 67,092,319
----------------------------------------------------------------- -----------
BONDS--45.4%
- ------------------------------------------------------------------------------------
TREASURY--17.4%
-----------------------------------------------------------------
2,765,000 United States Treasury Note 5.625%, 11/30/2000 2,660,289
-----------------------------------------------------------------
1,000,000 United States Treasury Note 5.875%, 04/30/1998 993,910
-----------------------------------------------------------------
1,500,000 United States Treasury Note 6.125% 03/31/1998 1,498,230
-----------------------------------------------------------------
3,455,000 United States Treasury Note 6.125%, 07/31/2000 3,396,507
-----------------------------------------------------------------
1,425,000 United States Treasury Note 6.25%, 08/31/2000 1,406,404
-----------------------------------------------------------------
9,165,000 United States Treasury Note 6.375%, 08/15/2002 9,009,928
-----------------------------------------------------------------
7,740,000 United States Treasury Note 6.50% 04/30/1997 7,790,542
----------------------------------------------------------------- -----------
Total Treasury 26,755,810
----------------------------------------------------------------- -----------
MORTGAGE-BACKED SECURITIES--9.8%
-----------------------------------------------------------------
GOVERNMENT AGENCY--9.8%
-----------------------------------------------------------------
870,483 Federal Home Loan Mortgage Corp., 9.50%, 06/01/2021 924,061
-----------------------------------------------------------------
464,357 Federal Home Loan Mortgage Corp., 9.50%, 04/01/2021 492,938
-----------------------------------------------------------------
697,043 Federal Home Loan Mortgage Corp., 8.00%, 10/1/2010 709,234
-----------------------------------------------------------------
967,643 Federal Home Loan Mortgage Corp., 7.00%, 1/1/2011 950,090
-----------------------------------------------------------------
1,044,376 Federal Home Loan Mortgage Corp., 7.00%, 2/1/2026 998,528
-----------------------------------------------------------------
1,310,000 (e) Federal Home Loan Mortgage Corp., 7.50%, 6/1/2026 1,285,241
-----------------------------------------------------------------
306,513 Federal National Mortgage Association, 7.00%, 5/1/2001 305,934
-----------------------------------------------------------------
220,544 Federal National Mortgage Association, 7.00%, 09/01/2009 216,934
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--CONTINUED
-----------------------------------------------------------------
GOVERNMENT AGENCY--CONTINUED
-----------------------------------------------------------------
631,929 Federal National Mortgage Association, 8.50%, 03/01/2025 $ 646,337
-----------------------------------------------------------------
501,841 Federal National Mortgage Association, 6.00%, 1/1/2003 481,607
-----------------------------------------------------------------
483,794 Federal National Mortgage Association, 8.00%, 11/01/2024 484,844
-----------------------------------------------------------------
154,079 Federal National Mortgage Association, 8.50%, 02/01/2025 157,592
-----------------------------------------------------------------
907,765 Federal National Mortgage Association, 7.50%, 7/1/2025 890,036
-----------------------------------------------------------------
510,740 Federal National Mortgage Association, 6.50%, 10/1/2025 473,707
-----------------------------------------------------------------
1,192,840 Federal National Mortgage Association, 6.50%, 10/1/2025 1,106,347
-----------------------------------------------------------------
200,000 (e) Federal National Mortgage Association, 6.50%, 6/1/2011 192,122
-----------------------------------------------------------------
930,000 (e) Federal National Mortgage Association, 7.00%, 6/1/2011 914,878
-----------------------------------------------------------------
492,554 Federal National Mortgage Association 7.00%, 8/1/2025 470,468
-----------------------------------------------------------------
873,530 Government National Mortgage Association, 9.00%, 02/15/2020 924,841
-----------------------------------------------------------------
253,053 Government National Mortgage Association, 7.00%, 05/15/2024 240,955
-----------------------------------------------------------------
301,921 Government National Mortgage Association, 8.00%, 11/15/2024 302,766
-----------------------------------------------------------------
507,267 Government National Mortgage Association, 7.00%, 3/15/2026 483,015
-----------------------------------------------------------------
482,957 Government National Mortgage Association, 8.00%, 5/15/2025 484,309
-----------------------------------------------------------------
411,753 Government National Mortgage Association, 8.00%, 8/15/2025 412,906
-----------------------------------------------------------------
509,246 Government National Mortgage Association, 7.50%, 3/15/2026 498,766
----------------------------------------------------------------- -----------
Total Mortgage-Backed Securities 15,048,456
----------------------------------------------------------------- -----------
HIGH YIELD BONDS--7.8%
-----------------------------------------------------------------
AEROSPACE & DEFENSE--0.0%
-----------------------------------------------------------------
50,000 Tracor, Inc., Sr. Sub. Note, 10.875%, 8/15/2001 52,500
----------------------------------------------------------------- -----------
AUTOMOTIVE--0.2%
-----------------------------------------------------------------
100,000 Aftermarket Technology Co., Sr. Sub. Note, 12.00%, 8/1/2004 107,250
-----------------------------------------------------------------
100,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 99,000
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR SHARES DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
AUTOMOTIVE--CONTINUED
-----------------------------------------------------------------
50,000 JPS Automotive Products Corp., Sr. Note, 11.125%, 6/15/2001 $ 51,250
----------------------------------------------------------------- -----------
Total 257,500
----------------------------------------------------------------- -----------
BANKING--0.1%
-----------------------------------------------------------------
125,000 First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 136,563
-----------------------------------------------------------------
50,000 (c) First Nationwide Holdings, Sr. Note, 12.50%, 4/15/2003 52,125
----------------------------------------------------------------- -----------
Total 188,688
----------------------------------------------------------------- -----------
BEVERAGE & TOBACCO--0.1%
-----------------------------------------------------------------
100,000 Dimon Incorporated, Sr. Note, 8.875%, 6/1/2006 101,250
-----------------------------------------------------------------
100,000 Dr Pep Btlg Hldgs, Sr. Disc. Note, 11.625%, 2/15/2003 85,500
----------------------------------------------------------------- -----------
Total 186,750
----------------------------------------------------------------- -----------
BROADCAST RADIO & TV--0.8%
-----------------------------------------------------------------
100,000 Argyle Television, Sr. Sub. Note, 9.75%, 11/1/2005 95,500
-----------------------------------------------------------------
38,000 (c) Chancellor Broadcasting Co., Sr. Sub. Note, 12.50%, 10/1/2004 41,990
-----------------------------------------------------------------
1,000 Chancellor Radio Broadcasting Co., 12.25% Sr. Cumulative Exch.
Pfd. Stock 100,500
-----------------------------------------------------------------
50,000 (c) Granite Broadcasting Corp, Sr. Sub. Note, 9.375%, 12/1/2005 46,125
-----------------------------------------------------------------
100,000 Heritage Media Corp., Sr. Sub. Note, 8.75%, 2/15/2006 95,500
-----------------------------------------------------------------
50,000 (c) Park Communications, Inc., Sr. Note, (PIK) 13.75%, 5/15/2004 52,750
-----------------------------------------------------------------
100,000 Pegasus Media , Note, 12.50%, 7/1/2005 108,500
-----------------------------------------------------------------
175,000 SCI Television, Sr. Secd. Note, 11.00%, 6/30/2005 185,063
-----------------------------------------------------------------
100,000 (c) SFX Broadcasting, Sr. Sub. Note, 10.75%, 5/15/2006 100,000
-----------------------------------------------------------------
150,000 Sinclair Broadcast Group, Sr. Sub. Note, 10.00%, 9/30/2005 145,875
-----------------------------------------------------------------
100,000 Sullivan Broadcasting, Sr. Sub. Note, 10.25%, 12/15/2005 95,250
-----------------------------------------------------------------
150,000 Young Broadcasting Corp., Sr. Sub. Note, 10.125%, 2/15/2005 146,625
----------------------------------------------------------------- -----------
Total 1,213,678
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES--0.2%
-----------------------------------------------------------------
150,000 (c) Knoll Inc., Sr. Sub. Note, 10.875%, 3/15/2006 $ 153,750
-----------------------------------------------------------------
100,000 Monarch Acquisition Corp., Sr. Note, 12.50%, 7/1/2003 107,500
-----------------------------------------------------------------
100,000 United Stationers Supply, Sr. Sub. Note, 12.75%, 5/1/2005 108,500
----------------------------------------------------------------- -----------
Total 369,750
----------------------------------------------------------------- -----------
CABLE TELEVISION--0.8%
-----------------------------------------------------------------
100,000 CF Cable TV Inc., Sr. Secd. 2nd Priority Note, 11.625%, 2/15/2005 108,500
-----------------------------------------------------------------
100,000 (c) CS Wireless Systems, Inc., Unit, 11.375%, 3/1/2006 53,000
-----------------------------------------------------------------
100,000 Cablevision Systems Corp., Sr. Sub. Note, 9.875%, 5/15/2006 99,750
-----------------------------------------------------------------
50,000 CAI Wireless Systems, Sr. Note, 12.25%, 9/15/2002 52,875
-----------------------------------------------------------------
50,000 (c) Charter Communications SE, Sr. Note, 11.25%, 3/15/2006 51,250
-----------------------------------------------------------------
175,000 Comcast UK Cable Partners, Deb., 11.20%, 11/15/2007 104,563
-----------------------------------------------------------------
100,000 Diamond Cable Comm. Plc, Sr. Disc. Note, 11.75%, 12/15/2005 60,750
-----------------------------------------------------------------
100,000 (c) EchoStar Satellite Broadcasting Corp., Sr. Secd. Disc. Note,
13.125%, 3/15/2004 66,750
-----------------------------------------------------------------
100,000 Insight Communication Co., Sr. Sub. Note, 11.25%, 3/1/2000 102,000
-----------------------------------------------------------------
100,000 International Cabletel, Sr. Note, 11.50%, 2/1/2006 59,250
-----------------------------------------------------------------
100,000 International Cabletel, Sr. Note, 0/12.75%, 4/15/2005 65,625
-----------------------------------------------------------------
150,000 People's Choice--TV, Unit, 13.125%, 6/1/2004 91,875
-----------------------------------------------------------------
50,000 Rogers Cablesystems Inc., Sr. Secd. 2nd Priority Note, 10.00%,
12/1/2007 50,375
-----------------------------------------------------------------
50,000 Rogers Cablesystems Ltd., Sr. Secd. 2nd Priority Note, 10.00%,
3/15/2005 50,750
-----------------------------------------------------------------
275,000 Telewest PLC, Sr. Disc. Deb., 0/11.00% 10/1/2007 166,375
-----------------------------------------------------------------
100,000 (c) UIH Australia/Pacific, Sr. Disc. Note, 14.00%, 5/15/2006 51,500
----------------------------------------------------------------- -----------
Total 1,235,188
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR SHARES DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
CHEMICALS & PLASTICS--0.5%
-----------------------------------------------------------------
75,000 Arcadian Partners LP, Sr. Note, Series B, 10.75%, 5/1/2005 $ 81,375
-----------------------------------------------------------------
100,000 Crain Industries Inc., Sr. Sub. Note, 13.50%, 8/15/2005 105,250
-----------------------------------------------------------------
50,000 Foamex L.P., Sr. Note, 11.25%, 10/1/2002 51,250
-----------------------------------------------------------------
69,000 G-I Holdings, Sr. Disc. Note, 11.375%, 10/1/1998 55,718
-----------------------------------------------------------------
150,000 Harris Chemical, Sr. Secd. Disc. Note, 0/10.25%, 7/15/2001 152,250
-----------------------------------------------------------------
125,000 Polymer Group, Sr. Note, 12.25%, 7/15/2002 136,250
-----------------------------------------------------------------
100,000 (c) RBX Corp., Sr. Sub. Note, 11.25%, 10/15/2005 95,750
-----------------------------------------------------------------
50,000 Uniroyal Technology Corporation, Sr. Secd. Note, 11.75%, 6/1/2003 46,625
-----------------------------------------------------------------
75,000 Viridian Inc., Note, 9.75%, 4/1/2003 77,625
----------------------------------------------------------------- -----------
Total 802,093
----------------------------------------------------------------- -----------
CLOTHING & TEXTILES--0.2%
-----------------------------------------------------------------
100,000 Dan River Inc, Sr. Sub. Note, 10.125%, 12/15/2003 97,375
-----------------------------------------------------------------
150,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 146,250
----------------------------------------------------------------- -----------
Total 243,625
----------------------------------------------------------------- -----------
CONSUMER PRODUCTS--0.3%
-----------------------------------------------------------------
50,000 American Safety Razor Co., Sr. Note, 9.875%, 8/1/2005 51,000
-----------------------------------------------------------------
75,000 Herff Jones, Inc., Sr. Sub. Note, 11.00%, 8/15/2005 79,500
-----------------------------------------------------------------
100,000 Hosiery Corp. Of America, Sr. Sub. Note, 13.75%, 8/1/2002 107,500
-----------------------------------------------------------------
50 Hosiery Corp. of America 250
-----------------------------------------------------------------
50,000 Icon Health & Fitness, Inc., Sr. Sub. Note, 13.00%, 7/15/2002 56,000
-----------------------------------------------------------------
100,000 Playtex Family Products Corp., Sr. Sub. Note, 9.00%,12/15/2003 94,125
-----------------------------------------------------------------
50,000 (c) Simmons Company, Sr. Sub. Note, 10.75%, 4/15/2006 50,250
-----------------------------------------------------------------
25,000 (c) Twin Laboratories Inc., Sr. Sub. Note, 10.25%, 5/15/2006 25,563
----------------------------------------------------------------- -----------
Total 464,188
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR SHARES DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
CONTAINER & GLASS PRODUCTS--0.2%
-----------------------------------------------------------------
150,000 Owens Illinois, Inc., Sr. Sub. Note, 10.50%, 6/15/2002 $ 155,438
-----------------------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 51,000
-----------------------------------------------------------------
50,000 (c) Packaging Resources Inc., Sr. Secd. Note, 11.625%, 5/1/2003 50,875
-----------------------------------------------------------------
100,000 Plastic Containers, Inc., Sr. Secd. Note, 10.75%, 4/1/2001 99,875
----------------------------------------------------------------- -----------
Total 357,188
----------------------------------------------------------------- -----------
COSMETICS & TOILETRIES--0.0%
-----------------------------------------------------------------
50,000 Revlon Consumer Products Corp., Sr. Sub. Note, 10.50%, 2/15/2003 50,875
----------------------------------------------------------------- -----------
ECOLOGICAL SERVICES & EQUIPMENT--0.1%
-----------------------------------------------------------------
120 ICF Kaiser International, Warrants 75
-----------------------------------------------------------------
75,000 ICF Kaiser International , Sr. Sub. Note, 12.00%, 12/31/2003 70,875
-----------------------------------------------------------------
100,000 Mid-american Waste System, Sr. Sub. Note, 12.25%, 2/15/2003 59,500
----------------------------------------------------------------- -----------
Total 130,450
----------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.2%
-----------------------------------------------------------------
100,000 Carr Gottstein Foods Co., Sr. Sub. Note, 12.00%, 11/15/2005 104,000
-----------------------------------------------------------------
1,325 Grand Union Co. 8,944
-----------------------------------------------------------------
50,000 Pathmark Stores Inc, Sr. Sub. Note, 9.625%, 5/1/2003 47,625
-----------------------------------------------------------------
150,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 143,813
-----------------------------------------------------------------
50,000 Smith's Food & Drug , Sr. Sub. Note, 11.25%, 5/15/2007 50,875
----------------------------------------------------------------- -----------
Total 355,257
----------------------------------------------------------------- -----------
FOOD PRODUCTS--0.2%
-----------------------------------------------------------------
100,000 Curtice-burns Foods, Inc., Sr. Sub. Note, 12.25%, 2/1/2005 99,000
-----------------------------------------------------------------
50,000 Specialty Foods Corp., Sr. Note, 11.125%, 10/1/2002 46,500
-----------------------------------------------------------------
50,000 Specialty Foods Corp., Sr. Sub. Note, 11.25%, 8/15/2003 40,250
-----------------------------------------------------------------
100,000 Van de Kamp's, Inc., Sr. Sub. Note, 12.00%, 9/15/2005 107,250
----------------------------------------------------------------- -----------
Total 293,000
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
FOOD SERVICES--0.1%
-----------------------------------------------------------------
50,000 Americold Corporation, Sr. Sub. Note, 12.875%, 5/1/2008 $ 50,750
-----------------------------------------------------------------
125,000 Flagstar Corp, Sr. Note, 10.875%, 12/1/2002 112,500
----------------------------------------------------------------- -----------
Total 163,250
----------------------------------------------------------------- -----------
FOREST PRODUCTS--0.2%
-----------------------------------------------------------------
25,000 (c) Four M Corporation, Sr. Secd. Note, 12.00%, 6/1/2006 25,625
-----------------------------------------------------------------
50,000 Repap New Brunswick, 2nd Priority Sr. Secd. Note, 10.625%,
4/15/2005 46,750
-----------------------------------------------------------------
100,000 Riverwood International, Sr. Sub. Note, 10.875%, 4/1/2008 99,750
-----------------------------------------------------------------
100,000 S. D. Warren Co., Sr. Sub. Note, 12.00%, 12/15/2004 106,000
-----------------------------------------------------------------
75,000 Stone Container, Sr. Note, 11.50%, 10/1/2004 76,406
----------------------------------------------------------------- -----------
Total 354,531
----------------------------------------------------------------- -----------
HEALTHCARE--0.2%
-----------------------------------------------------------------
50,000 Amerisource, Sr. Deb., 11.25%, 7/15/2005 56,375
-----------------------------------------------------------------
100,000 (c) Dade International, Inc., Sr. Sub. Note, 11.125%, 5/1/2006 103,250
-----------------------------------------------------------------
50,000 Tenet Healthcare Corp., Sr. Note, 8.625%, 12/1/2003 51,250
-----------------------------------------------------------------
100,000 Tenet Healthcare, Sr. Sub. Note, 10.125%, 3/1/2005 106,750
----------------------------------------------------------------- -----------
Total 317,625
----------------------------------------------------------------- -----------
HOTELS, MOTELS, INNS & CASINOS--0.1%
-----------------------------------------------------------------
100,000 Courtyard by Marriott II , Sr. Secd. Note, 10.75%, 2/1/2008 99,125
----------------------------------------------------------------- -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.2%
-----------------------------------------------------------------
100,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%, 7/15/2005 112,500
-----------------------------------------------------------------
50,000 Fairfield Manufacturing Co., Inc., Sr. Sub. Note, 11.375%,
7/1/2001 51,000
-----------------------------------------------------------------
50,000 Pace Industries, Inc., Sr. Note, 10.625%, 12/1/2002 56,250
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
INDUSTRIAL PRODUCTS & EQUIPMENT--CONTINUED
-----------------------------------------------------------------
100,000 Spreckels Inds, Inc., Sr. Secd. Note, 11.50%, 9/1/2000 $ 103,500
----------------------------------------------------------------- -----------
Total 323,250
----------------------------------------------------------------- -----------
LEISURE & ENTERTAINMENT--0.3%
-----------------------------------------------------------------
100,000 (c) AMF Group Inc., Sr. Sub. Note, 10.875%, 3/15/2006 99,500
-----------------------------------------------------------------
100,000 (c) AMF Group Inc., Sr. Sub. Disc. Note, 0/12.25%, 3/15/2006 54,500
-----------------------------------------------------------------
100,000 Affinity Group, Inc., Sr. Sub. Note, 11.50%, 10/15/2003 101,750
-----------------------------------------------------------------
25,000 (c) Cobblestone Golf Group, Sr. Note, 11.50%, 6/1/2003 25,563
-----------------------------------------------------------------
100,000 Premier Parks, Sr. Note, 12.00%, 8/15/2003 107,250
-----------------------------------------------------------------
150,000 Six Flags Theme Parks, Sr. Sub. Disc. Note, 12.25%, 6/15/2005 128,625
----------------------------------------------------------------- -----------
Total 517,188
----------------------------------------------------------------- -----------
MACHINERY & EQUIPMENT--0.1%
-----------------------------------------------------------------
100,000 (c) Alvey Systems, Inc., Sr. Sub. Note, 11.375%, 1/31/2003 103,500
-----------------------------------------------------------------
100,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 107,000
----------------------------------------------------------------- -----------
Total 210,500
----------------------------------------------------------------- -----------
OIL & GAS--0.3%
-----------------------------------------------------------------
50,000 (c) Benton Oil & Gas Co., Sr. Note, 11.625%, 5/1/2003 51,750
-----------------------------------------------------------------
100,000 Clark USA, Inc., Sr. Note, Series B, 10.875%, 12/1/2005 104,125
-----------------------------------------------------------------
100,000 (c) Coda Energy, Inc., Sr. Sub. Note, 10.50%, 4/1/2006 100,250
-----------------------------------------------------------------
50,000 Falcon Drilling Co., Inc., Sr. Note, 8.875%, 3/15/2003 49,375
-----------------------------------------------------------------
50,000 Falcon Drilling Company, Sr. Note, 9.75%, 1/15/2001 51,750
-----------------------------------------------------------------
50,000 Giant Industries, Sr. Sub. Note, 9.75%, 11/15/2003 49,625
-----------------------------------------------------------------
100,000 United Meridian Corp., Sr. Sub. Note, 10.375%, 10/15/2005 103,250
----------------------------------------------------------------- -----------
Total 510,125
----------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.3%
-----------------------------------------------------------------
100,000 (c) Adams Outdoor Advertising L.P., Sr. Note, 10.75%, 3/15/2006 102,000
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR SHARES DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
PRINTING & PUBLISHING--CONTINUED
-----------------------------------------------------------------
100,000 Garden State Newspapers, Inc., Sr. Sub. Note, 12.00%, 7/1/2004 $ 104,000
-----------------------------------------------------------------
100,000 Hollinger Intl Publishing, Sr. Sub. Note, 9.25%, 2/1/2006 93,500
-----------------------------------------------------------------
500 K-III Communications Corp., PIK Pfd., Series B, 11.625%, 5/1/2005 50,750
-----------------------------------------------------------------
100,000 (c) K-III Communications Corp., Sr. Note, 8.50%, 2/1/2006 92,750
----------------------------------------------------------------- -----------
Total 443,000
----------------------------------------------------------------- -----------
REAL ESTATE--0.1%
-----------------------------------------------------------------
100,000 Trizec Finance, Ltd., Sr. Note, 10.875%, 10/15/2005 101,250
----------------------------------------------------------------- -----------
RETAILERS--0.1%
-----------------------------------------------------------------
125,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 119,063
-----------------------------------------------------------------
25,000 (c) Hills Stores Company, Sr. Note, 12.50%, 7/1/2003 25,750
----------------------------------------------------------------- -----------
Total 144,813
----------------------------------------------------------------- -----------
SERVICES--0.1%
-----------------------------------------------------------------
100,000 Coinmach Corp., Sr. Note, 11.75%, 11/15/2005 104,000
----------------------------------------------------------------- -----------
STEEL--0.3%
-----------------------------------------------------------------
75,000 Armco, Inc., Sr. Note, 9.375%, 11/1/2000 74,813
-----------------------------------------------------------------
50,000 (c) Bar Technologies, Inc., Unit, 13.5%, 4/1/2001 50,875
-----------------------------------------------------------------
50,000 Bayou Steel Corp., 1st Mtg. Note, 10.25%, 3/1/2001 46,000
-----------------------------------------------------------------
100,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 92,000
-----------------------------------------------------------------
125,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 129,063
----------------------------------------------------------------- -----------
Total 392,751
----------------------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.4%
-----------------------------------------------------------------
50,000 Ameritruck Distribution, Sr. Sub. Note, 12.25%, 11/15/2005 49,688
-----------------------------------------------------------------
100,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 105,500
-----------------------------------------------------------------
50,000 Great Dane Holdings, Sr. Sub. Deb., 12.75%, 8/1/2001 48,250
-----------------------------------------------------------------
75,000 OMI Corporation, Sr. Note, 10.25%, 11/1/2003 73,875
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
SURFACE TRANSPORTATION--CONTINUED
-----------------------------------------------------------------
100,000 Sea Containers, Sr. Note, 9.5%, 7/1/2003 $ 99,000
-----------------------------------------------------------------
100,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 99,500
-----------------------------------------------------------------
100,000 Trism, Inc., Sr. Sub. Note, 10.75%, 12/15/2000 95,500
----------------------------------------------------------------- -----------
Total 571,313
----------------------------------------------------------------- -----------
TECHNOLOGY--0.3%
-----------------------------------------------------------------
200,000 Analog Devices, Conv. Bond, 3.50%, 12/1/2000 236,916
-----------------------------------------------------------------
200,000 (c) Solectron Corp., Conv. Bond, 6.00%, 3/1/2006 194,392
----------------------------------------------------------------- -----------
Total 431,308
----------------------------------------------------------------- -----------
TELECOMMUNICATIONS & CELLULAR--0.6%
-----------------------------------------------------------------
100,000 (c) American Communications , Sr. Disc. Note, 12.75%, 4/1/2006 52,750
-----------------------------------------------------------------
175,000 Arch Communications, Sr. Disc. Note, 10.875%, 3/15/2008 98,875
-----------------------------------------------------------------
250,000 (c) Brooks Fiber Properties, 0/10.875%, Sr. Disc. Note, 3/1/2006 137,813
-----------------------------------------------------------------
150,000 Cellular Comm. Intl., Inc, Unit, 13.25%, 8/15/2000 96,750
-----------------------------------------------------------------
25,000 Fonorola, Inc., Sr. Secd. Note, 12.50%, 8/15/2002 27,250
-----------------------------------------------------------------
200,000 (c) Millicom International, Sr. Sub. Disc. Note, 13.50%, 6/1/2006 105,500
-----------------------------------------------------------------
25,000 MobileMedia Communications, Inc., Sr. Sub. Note, 9.375%,
11/1/2007 23,750
-----------------------------------------------------------------
75,000 Nextel Communications, Inc., Sr. Disc. Note, 0/11.50%, 9/1/2003 51,938
-----------------------------------------------------------------
50,000 (c) Nextlink Communications, L.L.C., Sr. Note, 12.5%, 4/15/2006 50,625
-----------------------------------------------------------------
50,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 51,125
-----------------------------------------------------------------
75,000 Panamsat, L.P., Sr. Sub. Disc. Note, 11.375%, 8/1/2003 64,500
-----------------------------------------------------------------
50,000 ProNet Inc., Sr. Sub. Note, 10.875%, 9/15/2006 50,000
-----------------------------------------------------------------
50,000 Pronet, Inc., Sr. Sub. Note, 11.875%, 6/15/2005 53,250
-----------------------------------------------------------------
100,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 99,000
----------------------------------------------------------------- -----------
Total 963,126
----------------------------------------------------------------- -----------
UTILITIES--0.2%
-----------------------------------------------------------------
125,000 California Energy Co., Sr. Disc. Note, 10.25%, 1/15/2004 120,625
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- ----------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
UTILITIES--CONTINUED
-----------------------------------------------------------------
1,000 El Paso Electric Company, PIK Pfd., Series A, 11.40% $ 101,250
----------------------------------------------------------------- -----------
Total 221,875
----------------------------------------------------------------- -----------
Total High Yield Bonds 12,069,760
----------------------------------------------------------------- -----------
INVESTMENT GRADE BONDS--3.1%
-----------------------------------------------------------------
BANKING--0.6%
-----------------------------------------------------------------
250,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 254,160
-----------------------------------------------------------------
250,000 Bayerische Landesbank, Note, 6.20%, 2/9/2006 231,370
-----------------------------------------------------------------
250,000 National Bank of Canada, Sub. Note, 8.125%, 8/15/2004 257,870
----------------------------------------------------------------- -----------
Total 743,400
----------------------------------------------------------------- -----------
BEVERAGE & TOBACCO--0.0%
-----------------------------------------------------------------
50,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 47,399
----------------------------------------------------------------- -----------
CABLE TELEVISION--0.2%
-----------------------------------------------------------------
250,000 TKR Cable, Inc., Sr. Note, 10.50%, 10/30/2007 272,168
----------------------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.2%
-----------------------------------------------------------------
250,000 (c) Bayer Corp., Deb., 6.50%, 10/1/2002 242,993
----------------------------------------------------------------- -----------
CONGLOMERATES--0.2%
-----------------------------------------------------------------
250,000 Leucadia National Corp., Sr. Sub., 10.375%, 6/15/2002 268,750
----------------------------------------------------------------- -----------
FINANCIAL INTERMEDIARIES--0.6%
-----------------------------------------------------------------
200,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 216,910
-----------------------------------------------------------------
300,000 DLJ, Note, 6.875%, 11/1/2005 283,893
-----------------------------------------------------------------
250,000 Green Tree Financial Corp, Sr. Sub. Note, 10.25%, 6/1/2002 284,438
-----------------------------------------------------------------
100,000 Salomon Inc., Sr. Note, 7.02%, 9/25/1998 100,037
----------------------------------------------------------------- -----------
Total 885,278
----------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.2%
-----------------------------------------------------------------
250,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 267,885
----------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------- -------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
--------------------------------------------------------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.2%
--------------------------------------------------------------
250,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 $ 275,400
-------------------------------------------------------------- ------------
INSURANCE--0.2%
--------------------------------------------------------------
250,000 Sunamerica Inc, Medium Term Note, 7.34%, 8/30/2005 245,705
-------------------------------------------------------------- ------------
PRINTING & PUBLISHING--0.2%
--------------------------------------------------------------
250,000 News America Holdings, Sr. Note, 7.50%, 3/1/2000 252,805
-------------------------------------------------------------- ------------
RETAILERS--0.2%
--------------------------------------------------------------
250,000 Penney (J.C.) Co., Inc., Deb., 9.45%, 7/15/2002 269,915
-------------------------------------------------------------- ------------
SERVICES--0.1%
--------------------------------------------------------------
200,000 (c) Loewen Group Int'l, Sr. Note, 8.25%, 4/15/2003 198,500
-------------------------------------------------------------- ------------
SOVEREIGN GOVERNMENT--0.2%
--------------------------------------------------------------
250,000 (c) Freeport Terminal (Malta), Gtd. Global Note, 7.50%, 3/29/2004 244,473
-------------------------------------------------------------- ------------
Total Investment Grade 4,214,671
-------------------------------------------------------------- ------------
FOREIGN BONDS--7.3%
--------------------------------------------------------------
AUSTRALIAN DOLLAR--0.3%
--------------------------------------------------------------
224,000 Queensland Treas Global, Local Gov't. Guarantee, 8%, 5/14/2003 170,191
--------------------------------------------------------------
283,000 Queensland Treas Global, Local Gov't. Guarantee, 8%, 8/14/2001 219,192
--------------------------------------------------------------
150,000 State Bank Of New South, 12.25%, 2/26/2001 134,014
-------------------------------------------------------------- ------------
Total 523,397
-------------------------------------------------------------- ------------
BELGIAN FRANC--0.3%
--------------------------------------------------------------
2,570,000 Belgian Govt., Bond, 6.50%, 3/31/2005 81,640
--------------------------------------------------------------
9,000,000 Belgium Kingdom, 7.75%, 10/15/2004 310,753
-------------------------------------------------------------- ------------
Total 392,393
-------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------- -------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
--------------------------------------------------------------
CANADIAN DOLLAR--0.5%
--------------------------------------------------------------
569,000 Canada Government, Deb., 6.50%, 6/1/2004 $ 387,794
--------------------------------------------------------------
400,000 Ontario Hydro, 9.00%, 6/24/2002 314,097
-------------------------------------------------------------- ------------
Total 701,891
-------------------------------------------------------------- ------------
DANISH KRONE--0.3%
--------------------------------------------------------------
1,356,000 Denmark--Bullet, Bond, 8.00%, 3/15/2006 238,269
--------------------------------------------------------------
1,200,000 Denmark, 8.00%, 5/15/2003 215,644
-------------------------------------------------------------- ------------
Total 443,913
-------------------------------------------------------------- ------------
FRENCH FRANC--0.5%
--------------------------------------------------------------
800,000 KFW International Finance, 7.00%, 5/12/2000 163,652
--------------------------------------------------------------
209,000 France O.A.T., Bond, 7.50%, 4/25/2005 267,580
--------------------------------------------------------------
1,352,000 France O.A.T., Bond, 7.25%, 4/25/2006 275,631
-------------------------------------------------------------- ------------
Total 706,863
-------------------------------------------------------------- ------------
DEUTSCHE MARK--1.3%
--------------------------------------------------------------
400,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 274,626
--------------------------------------------------------------
500,000 KFW Intl Finance, Bank Guarantee, 6.75%, 6/20/2005 330,298
--------------------------------------------------------------
1,050,000 Treuhandanstalt, 7.75%, 10/1/2002 755,298
--------------------------------------------------------------
960,000 Treuhandanstalt, Foreign Gov't. Guarantee, 6.875%, 6/11/2003 657,720
-------------------------------------------------------------- ------------
Total 2,017,942
-------------------------------------------------------------- ------------
ITALIAN LIRA--0.6%
--------------------------------------------------------------
265,000,000 BTPS, Bond, 10.5%, 11/1/2000 181,530
--------------------------------------------------------------
1,225,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 800,256
-------------------------------------------------------------- ------------
Total 981,786
-------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------- -------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
--------------------------------------------------------------
JAPANESE YEN--1.0%
--------------------------------------------------------------
100,000,000 Export-Import Bank Japan, 4.375%, 10/1/2003 $ 1,001,416
--------------------------------------------------------------
10,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 110,137
--------------------------------------------------------------
42,000,000 KFW International Finance, 6.00%, 11/29/1999 443,874
-------------------------------------------------------------- ------------
Total 1,555,427
-------------------------------------------------------------- ------------
NETHERLANDS GUILDER--0.4%
--------------------------------------------------------------
220,000 Lkb-global Bd, Bank Guarantee, 6%, 1/25/2006 137,824
--------------------------------------------------------------
650,000 Netherlands Government, 5.75%, 1/15/2004 372,108
--------------------------------------------------------------
300,000 Netherlands Government, 6%, 1/15/2006 170,864
-------------------------------------------------------------- ------------
Total 680,796
-------------------------------------------------------------- ------------
NEW ZEALAND DOLLAR--0.2%
--------------------------------------------------------------
205,000 New Zealand Government, 8.00%, 2/15/2001 133,449
--------------------------------------------------------------
270,000 New Zealand Government, Bond, 8%, 7/15/1998 179,856
-------------------------------------------------------------- ------------
Total 313,305
-------------------------------------------------------------- ------------
NORWEGIAN KRONE--0.4%
--------------------------------------------------------------
1,429,000 NGB 9% 1/31/99, Bond, 9%, 1/31/1999 238,371
--------------------------------------------------------------
1,620,000 Norwegian Government, Bond, 7%, 5/31/2001 258,163
--------------------------------------------------------------
1,215,000 Norwegian Govt., Foreign Gov't. Guarantee, 5.75%, 11/30/2004 173,731
-------------------------------------------------------------- ------------
Total 670,265
-------------------------------------------------------------- ------------
SPANISH PESETA--0.4%
--------------------------------------------------------------
40,000,000 Spanish Government, 10.00%, 2/28/2005 327,271
--------------------------------------------------------------
16,740,000 Spanish Government, Bond, 9.4%, 4/30/1999 134,919
--------------------------------------------------------------
15,030,000 Spanish Government., Deb., 10.10%, 2/28/2001 123,859
-------------------------------------------------------------- ------------
Total 586,049
-------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------- -------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- -----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
--------------------------------------------------------------
SWEDISH KRONA--0.3%
--------------------------------------------------------------
1,000,000 Stadshypotekskas, Foreign Gov't. Guarantee, Series 1551, 7.5%,
3/17/1999 $ 149,398
--------------------------------------------------------------
2,400,000 Sweden, 6.00%, 2/9/2005 304,691
-------------------------------------------------------------- ------------
Total 454,089
-------------------------------------------------------------- ------------
UNITED KINGDOM POUND--0.8%
--------------------------------------------------------------
252,000 British Gas PLC, 8.875%, 7/8/2008 382,462
--------------------------------------------------------------
145,000 U.K. Treasury, Deb., 8.50%, 12/7/2005 230,460
--------------------------------------------------------------
375,000 UK Conversion, 9.00%, 3/3/2000 610,545
--------------------------------------------------------------
60,000 UK Treasury, Bond, 8.00%, 12/7/2015 89,697
-------------------------------------------------------------- ------------
Total 1,313,164
-------------------------------------------------------------- ------------
TOTAL FOREIGN BONDS 11,351,280
-------------------------------------------------------------- ------------
TOTAL BONDS (IDENTIFIED COST $70,309,333) 69,439,977
-------------------------------------------------------------- ------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ------------- --------------------------------------------------------------
<C> <C> <S> <C>
(A)CASH EQUIVALENTS--12.3%
- -----------------------------------------------------------------------------------
TREASURY SECURITIES--4.5%
--------------------------------------------------------------
$ 7,000,000 U. S. Treasury Bill, 10/17/1996 (identified cost, 6,864,331) $ 6,867,700
-------------------------------------------------------------- ------------
(F) REPURCHASE AGREEMENTS--7.8%
--------------------------------------------------------------
9,595,000 BT Securities Corporation, 5.34%, dated 5/31/1996, due
6/3/1996 9,595,000
--------------------------------------------------------------
1,310,000 (g) Swiss Bank Capital Markets, 5.30%, dated 5/13/1996,
due 6/13/1996 1,310,000
--------------------------------------------------------------
1,130,000 (g) UBS Securities, Inc., 5.31%, dated 5/16/1996, due 6/17/1996 1,130,000
-------------------------------------------------------------- ------------
TOTAL REPURCHASE AGREEMENTS (AT AMORTIZED COST) 12,035,000
-------------------------------------------------------------- ------------
TOTAL CASH EQUIVALENTS 18,902,700
-------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $147,982,585)(H) $155,434,996
-------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
(a) The Fund purchases Index futures contracts to efficiently manage cash flows
resulting from shareholder purchases and redemptions, dividend and capital
gain payments to shareholders and corporate actions while maintaining
exposure to stocks and minimizing trading costs. The total market value of
open Index futures contracts is $5,975,375 at May 31, 1996, which represents
3.9% of net assets. Taking into considerstion these open Index futures
contracts, the Fund's effective, total exposure to stocks is 47.5%. The Fund
holds cash equivalents as collateral for the fourteen S&P 500 futures
contracts with a market value of $4,709,250. Consequently, the Fund's
exposure to large cap stocks is 25.4% of the fund. The Fund holds cash
equivalents as collateral for the seven Russell 2000 futures contracts with
a market value of $1,266,125. Consequently, the Fund's exposure to small cap
stocks is 7.5% of the Fund.
(b) Non-income producing security.
(c) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At May 31, 1996, these securities amounted to
$4,272,608 which represents 2.8% of net assets.
(d) The Fund's overall exposure to utility stocks is 5.7%.
(e) Indicates securities subject to dollar roll transactions with at total
market value of $2,392,241.
(f) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated Funds.
(g) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(h) The cost of investments for federal tax purposes amounts to $147,982,585.
The net unrealized appreciation of investments on a federal tax basis
amounts to $7,452,411 which is comprised of $9,532,546 appreciation and
$2,080,135 depreciation at May 31, 1996.
Note: The categories of investments are shown as a percentage of net assets
($154,084,480) at May 31, 1996.
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
ADR -- American Depositary Receipt
GDR -- Global Depository Receipts
LP -- Limited Partnership
PEPS -- Participating Equity Preferred Stock
PIK -- Payment in Kind
PLC -- Public Limited Company
REIT -- Real Estate Investment Trust
STRYPES -- Structured Yield Product Exchangeable for Stock
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $147,982,585) $155,434,996
- -----------------------------------------------------------------------------------------
Cash denominated in foreign currencies (identified cost $3,980) 3,980
- -----------------------------------------------------------------------------------------
Income receivable 1,360,730
- -----------------------------------------------------------------------------------------
Receivable for investments sold 887,180
- -----------------------------------------------------------------------------------------
Receivable for shares sold 425,721
- -----------------------------------------------------------------------------------------
Prepaid expenses 6,423
- -----------------------------------------------------------------------------------------
Deferred expenses 36,461
- ----------------------------------------------------------------------------------------- ------------
Total assets 158,155,491
- -----------------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------------
Payable for investments purchased $1,455,928
- ----------------------------------------------------------------------------
Payable to Bank 167,367
- ----------------------------------------------------------------------------
Payable for dollar roll transactions 2,391,710
- ----------------------------------------------------------------------------
Payable for taxes withheld 11,971
- ----------------------------------------------------------------------------
Payable for daily variation margin 43,750
- ----------------------------------------------------------------------------
Net payable for forward foreign currency exchange contracts 285
- ---------------------------------------------------------------------------- ----------
Total liabilities 4,071,011
- ----------------------------------------------------------------------------------------- ------------
NET ASSETS for 13,187,383 shares outstanding $154,084,480
- ----------------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------
Paid in capital $143,227,726
- -----------------------------------------------------------------------------------------
Net unrealized appreciation of investments, translation of assets and liabilities in
foreign currency, and futures contracts 7,629,611
- -----------------------------------------------------------------------------------------
Accumulated net realized gain on investments, foreign currency transactions, and futures
contracts 2,264,587
- -----------------------------------------------------------------------------------------
Undistributed net investment income 962,556
- ----------------------------------------------------------------------------------------- ------------
Total Net Assets $154,084,480
- ----------------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
- -----------------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- -----------------------------------------------------------------------------------------
$108,888,062 / 9,313,278 shares outstanding $11.69
- ----------------------------------------------------------------------------------------- ------------
SELECT SHARES:
- -----------------------------------------------------------------------------------------
$45,196,418 / 3,874,105 shares outstanding $11.67
- ----------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------
Dividend (net of foreign taxes withheld of $23,038) $ 533,049
- ---------------------------------------------------------------------------------------------
Interest (net of dollar roll expense of $5,641 and foreign taxes withheld of $4,855) 2,529,762
- --------------------------------------------------------------------------------------------- ----------
Total income 3,062,811
- ---------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------
Investment advisory fee $ 458,405
- -------------------------------------------------------------------------------
Administrative personnel and services fee 77,501
- -------------------------------------------------------------------------------
Custodian fees 63,601
- -------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 39,893
- -------------------------------------------------------------------------------
Directors'/Trustees' fees 1,464
- -------------------------------------------------------------------------------
Auditing fees 6,588
- -------------------------------------------------------------------------------
Legal fees 2,013
- -------------------------------------------------------------------------------
Portfolio accounting fees 41,931
- -------------------------------------------------------------------------------
Distribution services fee--Select Shares 135,456
- -------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 107,650
- -------------------------------------------------------------------------------
Shareholder services fee--Select Shares 45,152
- -------------------------------------------------------------------------------
Share registration costs 30,195
- -------------------------------------------------------------------------------
Printing and postage 32,019
- -------------------------------------------------------------------------------
Insurance premiums 2,562
- -------------------------------------------------------------------------------
Miscellaneous 11,529
- ------------------------------------------------------------------------------- ----------
Total expenses 1,055,959
- -------------------------------------------------------------------------------
Waivers--
- -------------------------------------------------------------------------------
Waiver of investment advisory fee $(153,805)
- -------------------------------------------------------------------
Waiver of distribution services fee--Select Shares (45,152)
- -------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (86,120)
- ------------------------------------------------------------------- ---------
Total waivers (285,077)
- ------------------------------------------------------------------------------- ----------
Net expenses 770,882
- --------------------------------------------------------------------------------------------- ----------
Net investment income 2,291,929
- --------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, AND FUTURE CONTRACTS:
- ---------------------------------------------------------------------------------------------
Net realized gain on investments, foreign currency transactions, and future contracts 2,688,188
- ---------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments, translation of assets and liabilities
in foreign currency, and future contracts 1,707,697
- --------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain on investments, foreign currency, and futures contracts 4,395,885
- --------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $6,687,814
- --------------------------------------------------------------------------------------------- ----------
</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
(UNAUDITED) YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
----------------- ---------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------
Net investment income $ 2,291,929 $ 2,388,609
- ----------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency
transactions, and futures contracts ($2,688,188 and $2,146,546
net gains, respectively, as computed for federal tax purposes) 2,688,188 1,792,344
- ----------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments, translation of assets and liabilities in foreign
currency, and futures contracts 1,707,697 6,797,361
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets resulting from operations 6,687,814 10,978,314
- ---------------------------------------------------------------- ------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------
Distributions from net investment income
- ----------------------------------------------------------------
Institutional Shares (1,631,979) (1,589,524)
- ----------------------------------------------------------------
Select Shares (582,882) (320,621)
- ----------------------------------------------------------------
Distributions from net realized gains on investments, foreign
currency transactions, and futures contracts
- ----------------------------------------------------------------
Institutional Shares (1,417,081) --
- ----------------------------------------------------------------
Select Shares (583,800) --
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets resulting from distributions to
shareholders (4,215,742) (1,910,145)
- ---------------------------------------------------------------- ------------- ---------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------
Proceeds from sale of shares 63,028,839 63,762,378
- ----------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 2,561,529 1,014,253
- ----------------------------------------------------------------
Cost of shares redeemed (9,648,575) (10,099,348)
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets resulting from share transactions 55,941,793 54,677,283
- ---------------------------------------------------------------- ------------- ---------------
Change in net assets 58,413,865 63,745,452
- ----------------------------------------------------------------
NET ASSETS:
- ----------------------------------------------------------------
Beginning of period 95,670,615 31,925,163
- ---------------------------------------------------------------- ------------- ---------------
End of period (including undistributed net investment income of
$962,556 and $885,488, respectively) $ 154,084,480 $ 95,670,615
- ---------------------------------------------------------------- ------------- ---------------
</TABLE>
(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 YEAR ENDED
ENDED NOVEMBER 30,
(UNAUDITED) -----------------
MAY 31, 1996 1995 1994(A)
------------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.52 $ 9.82 $10.00
- -------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------
Net investment income 0.17 0.40 0.20
- -------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments, foreign
currency transactions, and futures contracts 0.34 1.70 (0.26)
- ------------------------------------------------------------------------- -------- ----- ------
Total from investment operations 0.51 2.10 (0.06)
- -------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------
Distributions from net investment income (0.20) (0.40) (0.12)
- -------------------------------------------------------------------------
Distributions from net realized gain on investments, foreign currency
transactions, and futures contracts (0.14) -- --
- ------------------------------------------------------------------------- -------- ----- ------
Total distributions (0.34) (0.40) (0.12)
- ------------------------------------------------------------------------- -------- ----- ------
NET ASSET VALUE, END OF PERIOD $11.69 $11.52 $ 9.82
- ------------------------------------------------------------------------- -------- ----- ------
TOTAL RETURN (B) 5.78% 21.79% (0.59%)
- -------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------
Expenses 1.05%* 1.00% 0.89%*
- -------------------------------------------------------------------------
Net investment income 3.96%* 4.29% 4.28%*
- -------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.45%* 0.76% 0.90%*
- -------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------
Net assets, end of period (000 omitted) $108,888 $68,313 $28,973
- -------------------------------------------------------------------------
Average commission rate paid $.0025 -- --
- -------------------------------------------------------------------------
Portfolio turnover rate 55% 106% 71%
- -------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) 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 YEAR ENDED
ENDED NOVEMBER 30,
(UNAUDITED) -----------------
MAY 31, 1996 1995 1994(A)
------------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.50 $ 9.81 $10.00
- -------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------------------
Net investment income 0.16 0.23 0.15
- -------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments, foreign
currency transactions, and futures contracts 0.33 1.79 (0.24)
- ------------------------------------------------------------------------- -------- ----- ------
Total from investment operations 0.49 2.02 (0.09)
- -------------------------------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------------------------------
Distributions from net investment income (0.18) (0.33) (0.10)
- -------------------------------------------------------------------------
Distributions from net realized gain on investments, foreign currency
transactions, and futures contracts (0.14) -- --
- ------------------------------------------------------------------------- -------- ----- ------
Total distributions (0.32) (0.33) (0.10)
- ------------------------------------------------------------------------- -------- ----- ------
NET ASSET VALUE, END OF PERIOD $11.67 $11.50 $ 9.81
- ------------------------------------------------------------------------- -------- ----- ------
TOTAL RETURN (B) 5.45% 20.95% (0.90%)
- -------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------------------
Expenses 1.75%* 1.75% 1.70%*
- -------------------------------------------------------------------------
Net investment income 3.26%* 3.48% 3.53%*
- -------------------------------------------------------------------------
Expense waiver/reimbursement (c) 0.50%* 0.76% 1.15%*
- -------------------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------------------
Net assets, end of period (000 omitted) $45,196 $27,353 $2,952
- -------------------------------------------------------------------------
Average commission rate paid $.0025 -- --
- -------------------------------------------------------------------------
Portfolio turnover 55% 106% 71%
- -------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) 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, 1996 (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 portfolios. The financial statements
included herein are only those of Federated Managed Growth Fund (the "Fund"), a
diversified portfolio. 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 and Select Shares.
The investment objective of the Fund is to seek capital appreciation.
(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 securities, listed corporate bonds,
other fixed income and asset-backed securities, and unlisted securities and
private placement securities are generally valued at the mean of the latest
bid and asked price as furnished by an independent pricing service. Foreign
government and corporate bonds are valued at the last sales price reported
on a national exchange. If the last sales price is not available the
securities are valued at the mean of the latest bid and ask price as
furnished by an independent pricing service. Listed foreign and domestic
equity securities are valued at the last sale price reported on a national
securities exchange. Short-term foreign and domestic securities are valued
at the prices provided by an independent pricing service. However,
short-term foreign and domestic 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.
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
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
"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.
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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Certain dividends from foreign securities may be recorded after the
ex-dividend date based upon when information becomes available to the Fund.
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 interest and dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax
rules and rates.
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.
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 over a period of five years from
the Fund's commencement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in 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, 1996, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF % OF
NET NET
INDUSTRY ASSETS INDUSTRY ASSETS
-------------------------------------- ------ -------------------------------------- ------
<S> <C> <C> <C>
Agency 0.9 Insurance 0.4
Automobile 0.1 Leisure & Tourism 0.3
Banking 1.3 Machinery & Engineering 0.8
Basic Industry 0.3 Merchandising 0.5
Beverages & Tobacco 0.2 Metals 0.3
Broadcasting & Publishing 0.3 Miscellaneous Materials & Commodities 0.1
Building Materials & Components 0.4 Multi-Industry 0.4
Business & Public Services 0.5 Pharmaceuticals 0.1
Chemicals 0.4 Producer manufacturing 0.2
Construction & Housing 0.5 Real Estate 0.6
Electrical & Electronics 0.8 Recreation, Other Consumer Goods 0.1
Electronic Components 0.6 Sovereign 4.9
Energy Equipment & Services 0.1 State/Provincial 0.2
Energy Sources 0.5 Supranational 0.1
Financial Services 0.3 Telecommunications 0.6
Food & Household Products 0.4 Textiles & Apparel 0.3
Forest Products & Paper 0.2 Transportation 0.2
Health & Personal Care 0.4 Utilities--Electrical & Gas 0.6
Industrial Components 0.2 Wholesale & International Trade 0.2
</TABLE>
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock index futures contract with a broker, the
Fund is required to deposit in a segregated account a specified amount of
cash or U.S. government securities. Futures contracts are valued daily and
unrealized gains or losses are recorded in a "variation margin" account.
Daily, the Fund receives from or pays to the broker a specified amount of
cash based upon changes in the variation margin account. When a contract is
closed, the Fund recognizes a realized gain or loss. For the period ended
May 31, 1996, the Fund had realized gains on future contracts of $874,961.
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities.
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
At May 31, 1996, the Fund had outstanding futures contracts as set forth
below:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION CONTRACTS TO TOTAL FACE APPRECIATION
DATE DELIVER/RECEIVE VALUE POSITION (DEPRECIATION)
---------------------------- ----------------- ----------- -------- ---------------
<S> <C> <C> <C> <C>
September 1996 14 S&P 500 4,662,712 Long $ 46,537
June 1996 7 Rusell 2000 1,130,772 Long 135,353
----------
Net Unrealized Appreciation on Futures Contracts $ 181,890
</TABLE>
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The
Fund may enter into these contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date as a hedge or cross-
hedge against either specific transactions or portfolio positions. The
objective of the Fund's foreign currency hedging transactions is to reduce
the risk that the U.S. dollar value of the Fund's foreign currency
denominated securities will decline in value due to changes in foreign
currency exchange rates. All foreign currency exchange contracts are
"marked-to-market" daily at the applicable translation rates resulting in
unrealized gains or losses. Realized gains or losses are recorded at the
time the foreign currency exchange contract is offset by entering into a
closing transaction or by delivery or receipt of the currency. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At May 31, 1996, the Fund had outstanding foreign exchange contracts as set
forth below:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
SETTLEMENT DATE DELIVER/RECEIVE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
------------------------ ------------------------------ ------------------ --------- ---------------
<S> <C> <C> <C> <C>
Contracts Purchased:
June 3, 1996 64,315,674 Indonesian Rupiah $27,651 $27,574 $ (77)
Contracts Sold:
June 3, 1996 3,505 Deutsche Mark $2,282 $ 2,296 (14)
June 4, 1996 17,029,903 Indonesian Rupiah $7,322 $ 7,302 20
June 6, 1996 39,461,363 Indonesian Rupiah $16,914 $16,918 (4)
June 5, 1996 49,197,404 Italian Lira $31,658 $31,868 (210)
--------
Net Unrealized Depreciation on Foreign Exchange Contracts (285)
</TABLE>
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
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
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 of
portfolio securities, 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.
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 sells 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.
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 Board of 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, 1996 is
as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE(S) COST
---------------------------------------------------------- ---------------- -----------
<S> <C> <C>
Westinghouse Electric Corp., PEPS, Series C 9/27/95-9/28/95 $ 760,587
Commerzbank AG, Frankfurt 11/17/95 87,459
Shanghai Industrial Holdings Ltd. 5/23/96 49,439
Bombay Suburban Electric Supply 2/29/96 44,640
Hindalco Industries GDR 1/22/96 39,325
Mahindra and Mahindra, GDR 1/22/96-2/2/96 31,500
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE(S) COST
---------------------------------------------------------- ---------------- -----------
<S> <C> <C>
Steel Authority of India, GDR 4/22/96-4/23/96 32,044
Sumitomo Trust & Banking 3/21/96 158,268
Grupo Financiero Bancomer, S.A. 11/6/95-12/1/95 33,772
First Nationwide Holdings, Sr. Note 4/12/96-6/17/96 49,432
Chancellor Broadcasting Co., Sr. Sub. Note 1/22/96 100,000
Granite Broadcasting Corp, Sr. Sub. Note 3/22/96-7/3/96 47,125
Park Communications Inc., Sr. Note 5/6/96 50,000
SFX Broadcasting, Sr. Sub. Note 5/23/96 100,000
Knoll Inc., Sr. Sub. Note 2/22/96-2/27/96 133,719
CS Wireless Systems, Inc. 2/16/96 59,141
Charter Communications SE, Sr. Note 3/22/96 50,000
EchoStar Satellite Broadcasting Corp., Sr. Secd. Disc Note 3/19/96 61,827
UIH Australia/Pacific, Sr. Disc. Note 5/8/96 51,167
RBX Corp., Sr. Note 10/6/95-5/31/96 98,625
Simmons Company, Sr. Sub. Note 4/15/96 50,000
Twin Laboratories Inc., Sr. Sub. Note 5/2/96 25,000
Packaging Resources Inc., Sr. Secd. Note 5/10/96-6/18/96 50,000
Four M Corporation, Sr. Secd. Note 5/23/96-6/13/96 25,000
Dade International, Inc., Sr. Sub. Note 4/30/96-6/13/96 102,344
AMF Group Inc., Sr. Sub. Note 3/7/96 56,629
AMF Group Inc., Sr. Sub. Disc. Note 3/7/96 100,000
Cobblestone Golf Group, Sr. Note 5/29/96-6/20/96 25,000
Alvry Systems, Inc., Sr. Sub. Note 1/19/96-6/11/96 100,934
Benton Oil & Gas Co., Sr. Note 4/29/96 50,000
Coda Energy, Inc., Sr. Sub. Note 3/26/96-6/10/96 100,375
Adams Outdoor Advertising L.P., Sr. Note 3/5/96-3/27/96 101,375
K-III Communications Corp., Pfd. 5/28/96 50,500
Hills Stores Company, Sr. Note 4/17/96-5/31/96 98,625
Bar Technologies, Inc., Unit 3/28/96 49,206
Solectron Corp., Conv. Bond 2/15/96/-7/9/96 197,625
American Communications, Sr. Disc. Note 3/21/96 55,068
Brooks Fiber Properties, Sr. Disc. Note 2/16/96 151,215
Milicom International, Sr. Sub. Disc. Note 5/24/96 105,825
Nextlink Communications, L.L.C., Sr. Disc. Note 4/18/96 50,000
Bayer Corp., Deb. 5/21/96 245,903
Loewen Group Int'l, Sr. Note 3/20/96 200,000
Freeport Terminal (Malta), Gtd. Global Note 5/12/95 245,525
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
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 shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1996
------------------------ ------------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 3,800,075 $43,652,191 3,678,939 $39,452,689
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 133,545 1,511,806 72,763 769,585
- --------------------------------------------------------
Shares redeemed (550,019) (6,348,619) (772,807) (8,225,144)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Institutional share
transactions 3,383,601 $38,815,378 2,978,895 $31,997,130
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1996
------------------------ ------------------------
SELECT SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,689,388 $19,376,648 2,233,281 $24,309,689
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 92,836 1,049,723 22,609 244,668
- --------------------------------------------------------
Shares redeemed (287,557) (3,299,956) (177,462) (1,874,204)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Select share transactions 1,494,667 $17,126,415 2,078,428 $22,680,153
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from share transactions 4,878,268 $55,941,793 5,057,323 $54,677,283
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
(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 0.75% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a sub-advisory agreement between the Adviser and Federated
Global Research Corp., Federated Global Research Corp. receives an allocable
portion of the Fund's advisory fee. Such
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
allocation is based on the amount of foreign securities which Federated Global
Research Corp. manages for the Fund. This fee is paid by the Adviser out of its
resources and is not an incremental fund expense.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ 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 SERVICES 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 0.75% of average daily net assets of Select Shares,
annually, to compensate FSC. The distributor may voluntarily choose to waive any
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 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC") serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational and start-up administrative service
expenses of $75,027 were borne initially by the Adviser. The Fund has agreed to
reimburse the Adviser for the organizational and start-up administrative
expenses during the five year period following the Fund's effective date. For
the period ended May 31, 1996, the Fund paid $12,897 pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1996, were as follows:
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------
PURCHASES $112,490,493
- ------------------------------------------------------------------------------ ------------
SALES $ 62,983,693
- ------------------------------------------------------------------------------ ------------
</TABLE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. John W. McGonigle
Glen R. Johnson Executive Vice President and Secretary
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Executive Vice President and Treasurer
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
J. Crilley Kelly
Assistant Secretary
</TABLE>
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
& INCOME FUND
[LOGO]
----------------------------------------------------------------
----------------------------------------------------------------
----------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
Federated Managed
Growth & Income Fund is part of
Managed Series Trust,
a lifecycle investing program
from Federated Investors.
MAY 31, 1996
FEDERATED INVESTORS
(LOGO)Z
- ---------------------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
Cusip 56166K305
Cusip 56166K404
G00516-01 (7/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Federated
Managed Growth and Income Fund for the six-month period from December 1, 1995
through May 31, 1996. Included in this report is the fund's investment review,
followed by a complete listing of the fund's holdings 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").
After a very strong 1995, the U.S. bond market was impacted by rising rates in
1996, which caused bond prices to fall. However, the fund's holdings of
intermediate-maturity U.S. bonds, which accounted for approximately 60% of fund
assets, were impacted somewhat less than bonds with longer maturities. After
rapid 1995 gains the U.S. stock market, where 23% of the fund's assets were
invested, progressed at a slower rate.
In this environment, Institutional Shares delivered a total return of 2.44%*
through dividends of $0.28 per share and capital gains of $0.16 per share.
Select Shares produced a total return of 2.10%* through dividends of $0.24 per
share and capital gains of $0.16 per share. The fund's net assets increased to
end the period at $170.3 million.
Thank you for pursuing your financial goals through Federated Managed Growth and
Income Fund. As always, we invite your comments and suggestions.
Sincerely,
LOGO
Glen R. Johnson
President
July 15, 1996
* 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1996
For the six-month period ended May 31, 1996, an investor in Federated Managed
Growth and Income Fund Institutional Shares experienced a total return of
2.44%,* while an investor in Select Shares received a total return of 2.10%.*
The driving force for the financial markets last year was a belief that growth
would be slow in 1996. However, over the six-month reporting period, the economy
proved surprisingly resilient. After a weak holiday spending pattern, economic
activity began to accelerate noticeably in late winter, partially driven by a
rebound in interest sensitive activity such as housing and by renewed strength
in consumer spending. The stronger economic growth and the collapse of budget
negotiations on reducing the federal deficit shocked the financial markets.
Interest rates reversed course and rose rapidly through the spring. Stock
prices, which had been moving up quickly on lower interest rates, began to
falter and made much slower progress in late winter and spring.
ASSET ALLOCATION AS OF MAY 31, 1996
Federated Managed Growth and Income Fund operates on an investment philosophy
that, over time, an investor with a diversified portfolio has the potential to
achieve better returns with the same risk, or the same returns with lower risk,
than an investor in a single asset category. Therefore, to ensure proper
diversification of its portfolio, the fund's investment policies require
management to allocate the portfolio among as many as ten asset categories and
limit the weight of each asset category. In allocating the fund's portfolio
among asset categories, fund management analyzes the relative value offered by
each category under prevailing market conditions. Fund management seeks to
improve the fund's performance by weighting most heavily the asset categories
that management believes will provide the best relative value. The following
table shows the allocation of the portfolio among different asset categories at
May 31, 1996.
* 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.
- --------------------------------------------------------------------------------
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1996
- ---------------------------------------- ------------------------ ------------------------
<S> <C> <C>
BONDS(1) 50-70 64
U.S. Treasury Securities 0-70 25
Mortgage-Backed Securities 0-35 25
Investment Grade Corporate Bonds 0-35 7
High Yield Corporate Bonds 0-7.5 2
Foreign Bonds 0-7.5 5
EQUITIES(1) 30-50 37
Large Company Stocks 0-50 10
Utility Stocks 0-20 10
Small Company Stocks 0-7.5 3
Foreign Stocks 0-7.5 5
Equity Reserves 0-15 9
</TABLE>
(1) Bonds convertible into equity securities at a price below the closing price
of the underlying equity securities on May 31, 1996 have been included under
the appropriate equity asset category.
In essence, investors have the choice of buying fairly valued bonds or
overvalued stocks. The cornerstone of a value investment philosophy is the
belief that investors should take risks only when offered the chance for higher
returns. Higher prices, without a change in the underlying fundamentals, reduce
potential returns from investments. Implementing this philosophy, bonds were
approximately 5% more of the fund's assets than normal throughout the reporting
period, as the level of stock prices made potential future returns less
attractive than normal. Throughout the reporting period, fund management
believed that stocks and bonds were richly priced relative to their fundamentals
and defensive positions were appropriate in both sectors.
- --------------------------------------------------------------------------------
STRUCTURE OF THE BOND PORTFOLIO
Fund management established a defensive bond position by reducing interest rate
risk, since bond prices fall when interest rates rise. The fund's investment
policies limit the duration of its bond portfolio to a range of three to five
years. A portfolio with its duration in this range has a sensitivity to interest
rate changes similar to that of intermediate maturity bonds. Bond prices peaked
for the period in early February 1996 and fell rapidly in the spring as economic
statistics began to indicate a stronger pulse to economic activity. Anticipating
upward cyclical pressure on interest rates, fund management maintained the
duration of the fund's bond portfolio at 3.5, a below average level. In this
way, the fund was less sensitive to the negative impact of rising interest rates
on the value of the portfolio.
The bond portion emphasizes mortgage-backed securities and U.S. Treasurys, the
high quality portion of the bond market. A modest foreign bond position was held
for diversification purposes, since foreign bonds tend to be volatile at
different times than U.S. bonds. The mortgage-backed sector weight was above
normal throughout the period, which helped performance as the stable income flow
provided by these securities proved to be a defensive characteristic in the
rising rate environment.
STRUCTURE OF THE EQUITY PORTFOLIO
To enhance the defensive posture of the stock portfolio, the fund holds a
slightly above normal level of equity reserves. Since its inception, the fund
held a mid-point allocation to equity reserves and invested in short-term debt.
However, by early June 1995, 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.
Equity portfolio returns were adversely impacted by the poor relative
performance of utility stocks in the first few months of 1996. However, the
relative value of utilities as indicated by their above normal yield advantage
over industrial stocks makes fund management believe a slightly above normal
weight in utilities is appropriate.
FEDERATED MANAGED GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--28.1%
- ----------------------------------------------------------------------------------
LARGE COMPANY--9.5%
------------------------------------------------------------
BASIC INDUSTRY--0.8%
------------------------------------------------------------
11,700 Allegheny Ludlum Corp. $ 234,000
------------------------------------------------------------
2,500 Aluminum Co. of America 154,063
------------------------------------------------------------
6,600 Barrick Gold Corp. 207,900
------------------------------------------------------------
5,200 Du Pont (E.I.) de Nemours & Co. 414,700
------------------------------------------------------------
2,000 Eastman Chemical Co. 134,000
------------------------------------------------------------
4,000 International Paper Co. 159,500
------------------------------------------------------------ ------------
Total 1,304,163
------------------------------------------------------------ ------------
CONSUMER DURABLES--0.2%
------------------------------------------------------------
4,500 Ford Motor Co. 164,250
------------------------------------------------------------
10,025 Mattel, Inc. 273,181
------------------------------------------------------------ ------------
Total 437,431
------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--0.9%
------------------------------------------------------------
3,200 Avon Products, Inc. 296,000
------------------------------------------------------------
2,200 CPC International, Inc. 152,075
------------------------------------------------------------
11,800 IBP, Inc. 323,025
------------------------------------------------------------
2,300 Kimberly-Clark Corp. 167,613
------------------------------------------------------------
4,600 Philip Morris Cos., Inc. 457,125
------------------------------------------------------------
2,500 Tambrands, Inc. 115,313
------------------------------------------------------------ ------------
Total 1,511,151
------------------------------------------------------------ ------------
ENERGY MINERALS--1.0%
------------------------------------------------------------
4,800 Chevron Corp. 286,800
------------------------------------------------------------
1,700 Exxon Corp. 144,075
------------------------------------------------------------
8,000 Occidental Petroleum Corp. 207,000
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
------------------------------------------------------------
ENERGY MINERALS--CONTINUED
------------------------------------------------------------
1,100 Royal Dutch Petroleum Co. $ 165,000
------------------------------------------------------------
3,100 Texaco, Inc. 259,625
------------------------------------------------------------
11,600 USX-Marathon Group 253,750
------------------------------------------------------------
6,600 Union Pacific Resources Group, Inc. 169,950
------------------------------------------------------------
2,700 (a) Western Atlas, Inc. 165,375
------------------------------------------------------------ ------------
Total 1,651,575
------------------------------------------------------------ ------------
FINANCE--1.7%
------------------------------------------------------------
6,230 Allstate Corp. 263,218
------------------------------------------------------------
2,900 CIGNA Corp. 333,138
------------------------------------------------------------
3,500 Chase Manhattan Corp. 245,000
------------------------------------------------------------
3,000 Chubb Corp. 139,875
------------------------------------------------------------
5,300 Citicorp 445,200
------------------------------------------------------------
4,100 Dean Witter, Discover & Co. 242,925
------------------------------------------------------------
4,688 Mellon Bank Corp. 267,802
------------------------------------------------------------
3,200 Merrill Lynch & Co., Inc., STRYPES, $3.12 176,000
------------------------------------------------------------
3,700 Providian Corp. 161,413
------------------------------------------------------------
2,400 Sunamerica, Inc., Conv. Pfd., Series E, $3.10 175,200
------------------------------------------------------------
3,100 Travelers /Aetna Inc. 84,475
------------------------------------------------------------
8,400 Travelers Group, Inc. 348,600
------------------------------------------------------------ ------------
Total 2,882,846
------------------------------------------------------------ ------------
HEALTH CARE--1.3%
------------------------------------------------------------
3,500 Abbott Laboratories 150,938
------------------------------------------------------------
6,000 American Home Products Corp. 321,000
------------------------------------------------------------
1,000 Bausch & Lomb, Inc. 43,000
------------------------------------------------------------
4,600 Becton, Dickinson & Co. 391,000
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
------------------------------------------------------------
HEALTH CARE--CONTINUED
------------------------------------------------------------
4,700 Bristol-Myers Squibb Co. $ 401,263
------------------------------------------------------------
2,800 Columbia/HCA Healthcare Corp. 150,850
------------------------------------------------------------
3,600 Merck & Co., Inc. 232,650
------------------------------------------------------------
9,900 Smithkline Beecham, ADR 504,900
------------------------------------------------------------ ------------
Total 2,195,601
------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--1.0%
------------------------------------------------------------
2,400 (a) FMC Corp. 161,400
------------------------------------------------------------
3,200 General Electric Co. 264,800
------------------------------------------------------------
3,600 Loews Corp. 287,100
------------------------------------------------------------
4,400 Philips Electronics N.V. ADR 154,550
------------------------------------------------------------
5,300 Textron, Inc. 449,175
------------------------------------------------------------
21,900 (b) Westinghouse Electric Corp., PEPS, Series C, $1.3 375,038
------------------------------------------------------------ ------------
Total 1,692,063
------------------------------------------------------------ ------------
RETAIL TRADE--0.4%
------------------------------------------------------------
3,400 Nordstrom, Inc. 173,400
------------------------------------------------------------
7,200 Sears, Roebuck & Co. 366,300
------------------------------------------------------------
5,800 Wal-Mart Stores, Inc. 150,075
------------------------------------------------------------ ------------
Total 689,775
------------------------------------------------------------ ------------
SERVICES--0.2%
------------------------------------------------------------
5,900 Baker Hughes, Inc. 185,113
------------------------------------------------------------
2,000 Gannett Co., Inc. 139,500
------------------------------------------------------------ ------------
Total 324,613
------------------------------------------------------------ ------------
TECHNOLOGY--1.8%
------------------------------------------------------------
100,000 Analog Devices, Conv. Bond, 3.5%, 12/1/2000 118,458
------------------------------------------------------------
3,400 (a) Applied Materials, Inc. 126,650
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
------------------------------------------------------------
TECHNOLOGY--CONTINUED
------------------------------------------------------------
1,500 (a) DST Systems, Inc. $ 52,313
------------------------------------------------------------
3,900 (a) Digital Equipment Corp. 203,288
------------------------------------------------------------
5,500 General Motors Corp., Class E 310,063
------------------------------------------------------------
3,000 Hewlett-Packard Co. 320,250
------------------------------------------------------------
4,100 Intel Corp. 309,550
------------------------------------------------------------
3,000 International Business Machines Corp. 320,250
------------------------------------------------------------
1,600 (a) Litton Industries, Inc. 74,200
------------------------------------------------------------
4,600 Lockheed Martin Corp. 385,825
------------------------------------------------------------
3,300 Raytheon Co. 175,725
------------------------------------------------------------
6,100 Rockwell International Corp. 356,088
------------------------------------------------------------
3,500 (a) Seagate Technology, Inc. 205,625
------------------------------------------------------------
100,000 (b) Solectron Corp., Conv. Bond, 6.00%, 3/1/2006 97,196
------------------------------------------------------------ ------------
Total 3,055,481
------------------------------------------------------------ ------------
TRANSPORTATION--0.1%
------------------------------------------------------------
2,600 (a) Southern Pacific Rail Corp. 63,375
------------------------------------------------------------
2,200 Union Pacific Corp. 154,275
------------------------------------------------------------ ------------
Total 217,650
------------------------------------------------------------ ------------
(C) UTILITIES--0.1%
------------------------------------------------------------
2,100 Columbia Gas System, Inc. 102,638
------------------------------------------------------------
3,500 Pacific Gas & Electric Co. 81,375
------------------------------------------------------------ ------------
Total 184,013
------------------------------------------------------------ ------------
TOTAL LARGE COMPANY 16,146,362
------------------------------------------------------------ ------------
SMALL COMPANY--2.8%
------------------------------------------------------------
BASIC INDUSTRY--0.1%
------------------------------------------------------------
1,000 Cambrex Corp. 48,000
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
BASIC INDUSTRY--CONTINUED
------------------------------------------------------------
1,000 Carpenter Technology Corp. $ 36,125
------------------------------------------------------------
700 (a) Cytec Industries, Inc. 62,650
------------------------------------------------------------
1,000 (a) Fibreboard Corp. 25,000
------------------------------------------------------------
1,380 First Mississippi Corp. 34,155
------------------------------------------------------------
660 Texas Industries, Inc. 41,333
------------------------------------------------------------ ------------
Total 247,263
------------------------------------------------------------ ------------
CONSUMER DURABLES--0.2%
------------------------------------------------------------
820 Barnes Group, Inc. 39,975
------------------------------------------------------------
1,200 (a) Champion Enterprises, Inc. 48,600
------------------------------------------------------------
1,770 Coachmen Industries, Inc. 65,269
------------------------------------------------------------
820 Harman International Industries, Inc. 43,050
------------------------------------------------------------
2,200 (a) Redman Industries, Inc. 48,125
------------------------------------------------------------
2,000 (a) Toll Brothers, Inc. 33,500
------------------------------------------------------------ ------------
Total 278,519
------------------------------------------------------------ ------------
CONSUMER NON-DURABLES--0.1%
------------------------------------------------------------
1,960 (a) Mondavi Robert Corp., Class A 58,310
------------------------------------------------------------
5,000 (a) Morningstar Group, Inc. 57,500
------------------------------------------------------------ ------------
Total 115,810
------------------------------------------------------------ ------------
ENERGY MINERALS--0.0%
------------------------------------------------------------
3,590 Mercury Air Group, Inc. 34,778
------------------------------------------------------------ ------------
FINANCE--0.5%
------------------------------------------------------------
1,800 (a) ACC Consumer Finance Corp. 14,850
------------------------------------------------------------
800 Alex Brown, Inc. 46,200
------------------------------------------------------------
900 Allied Group, Inc. 35,775
------------------------------------------------------------
1,120 American Bankers Insurance Group, Inc. 43,400
------------------------------------------------------------
</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--CONTINUED
------------------------------------------------------------
2,410 (a) American Travellers Corp. $ 52,116
------------------------------------------------------------
2,180 CWM Mortgage Holdings, Inc. 38,695
------------------------------------------------------------
400 City National Corp. 6,150
------------------------------------------------------------
600 Cullen Frost Bankers, Inc. 30,900
------------------------------------------------------------
2,000 (a) Electro Rent Corp. 49,500
------------------------------------------------------------
1,890 FirstBank Puerto Rico 38,745
------------------------------------------------------------
3,200 Hibernia Corp., Class A 35,200
------------------------------------------------------------
920 Irwin Financial Corp. 37,950
------------------------------------------------------------
2,750 Money Stores, Inc. 72,188
------------------------------------------------------------
1,500 North Fork Bancorp, Inc. 36,563
------------------------------------------------------------
800 PHH Corp. 44,300
------------------------------------------------------------
1,700 Peoples Heritage Financial Group 33,788
------------------------------------------------------------
1,020 Queens County Bancorp, Inc. 48,833
------------------------------------------------------------
1,600 St. Francis Capital Corp. 41,200
------------------------------------------------------------
1,110 Student Loan Corp. 39,821
------------------------------------------------------------
2,000 (a) United Insurance Cos., Inc. 43,250
------------------------------------------------------------
940 WestAmerica Bancorporation 45,355
------------------------------------------------------------ ------------
Total 834,779
------------------------------------------------------------ ------------
HEALTH CARE--0.4%
------------------------------------------------------------
2,500 Amrion, Inc. 44,688
------------------------------------------------------------
2,520 Bindley Western Industries, Inc. 43,155
------------------------------------------------------------
1,180 (a) Bio Rad Laboratories, Inc., Class A 60,770
------------------------------------------------------------
1,800 (a) Cardiogenesis Corp. 31,050
------------------------------------------------------------
1,560 (a) Foxmeyer Health Corp. 27,105
------------------------------------------------------------
1,300 (a) Heartport, Inc. 50,700
------------------------------------------------------------
</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 CARE--CONTINUED
------------------------------------------------------------
911 ICN Pharmaceuticals, Inc. $ 24,142
------------------------------------------------------------
600 (a) KeraVision, Inc. 9,900
------------------------------------------------------------
4,660 Kinetic Concepts, Inc. 79,220
------------------------------------------------------------
2,280 (a) Maxicare Health Plans, Inc. 55,860
------------------------------------------------------------
4,400 (a) Oec-Medical Systems, Inc. 53,900
------------------------------------------------------------
5,400 (a) PolyMedica Industries, Inc. 49,950
------------------------------------------------------------
2,200 (a) Rotech Medical Corp. 47,300
------------------------------------------------------------
1,200 Sibia Neurosciences, Inc. 11,700
------------------------------------------------------------
800 (a) UroCor, Inc. 11,400
------------------------------------------------------------ ------------
Total 600,840
------------------------------------------------------------ ------------
PRODUCER MANUFACTURING--0.2%
------------------------------------------------------------
1,800 AGCO Corp. 54,225
------------------------------------------------------------
1,240 Blount International, Inc., Class A 41,230
------------------------------------------------------------
3,300 Brenco, Inc. 43,313
------------------------------------------------------------
740 (a) Cable Design Technologies, Class A 33,670
------------------------------------------------------------
1,100 JLG Industries, Inc. 87,038
------------------------------------------------------------
600 NACCO Industries, Inc., Class A 33,600
------------------------------------------------------------
1,580 (a) NCI Building System, Inc. 54,115
------------------------------------------------------------ ------------
Total 347,191
------------------------------------------------------------ ------------
RETAIL TRADE--0.1%
------------------------------------------------------------
800 Amre, Inc. 21,400
------------------------------------------------------------
1,820 (a) Eckerd Corp. 41,405
------------------------------------------------------------
1,580 (a) MSC Industrial Direct Co. 55,103
------------------------------------------------------------
3,890 Pier 1 Imports, Inc. 61,268
------------------------------------------------------------ ------------
Total 179,176
------------------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
SERVICES--0.4%
------------------------------------------------------------
1,600 (a) American Buildings Co. $ 49,200
------------------------------------------------------------
1,190 Butler Manufacturing Co. 44,923
------------------------------------------------------------
2,875 Castle (A.M.) & Co. 81,578
------------------------------------------------------------
1,130 (a) Devon Group, Inc. 33,900
------------------------------------------------------------
2,170 Granite Construction, Inc. 48,011
------------------------------------------------------------
2,900 (a) Mastec, Inc. 90,625
------------------------------------------------------------
1,300 (a) Newpark Resources, Inc. 47,125
------------------------------------------------------------
1,600 (a) Premier Parks, Inc. 32,400
------------------------------------------------------------
2,600 (a) Prepaid Legal Services, Inc. 54,275
------------------------------------------------------------
4,200 (a) Pride Petroleum Services, Inc. 72,450
------------------------------------------------------------
1,600 (a) Right Management Consultants 57,600
------------------------------------------------------------
1,065 (a) USA Waste Services, Inc. 31,418
------------------------------------------------------------
1,900 Wackenhut Corp., Class B 43,938
------------------------------------------------------------ ------------
Total 687,443
------------------------------------------------------------ ------------
TECHNOLOGY--0.6%
------------------------------------------------------------
1,100 (a) Alphanet Solutions, Inc. 11,413
------------------------------------------------------------
1,760 (a) Bell Industries, Inc. 38,739
------------------------------------------------------------
2,400 (a) Black Box Corp. 49,800
------------------------------------------------------------
1,350 (a) Burr Brown Corp. 28,350
------------------------------------------------------------
3,400 (a) Computervision Corp. 39,525
------------------------------------------------------------
3,400 (a) Digital Systems Int., Inc. 75,225
------------------------------------------------------------
800 (a) Electronics for Imaging, Inc. 64,000
------------------------------------------------------------
600 (a) Forte Software, Inc. 38,850
------------------------------------------------------------
3,200 II-VI, Inc. 49,600
------------------------------------------------------------
1,800 (a) International Rectifier Corp. 46,800
------------------------------------------------------------
</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--CONTINUED
------------------------------------------------------------
2,400 (a) JDA Software Group, Inc. $ 56,700
------------------------------------------------------------
1,100 (a) Kemet Corp. 24,475
------------------------------------------------------------
1,300 National Data Corp. 49,075
------------------------------------------------------------
3,000 Novadigm, Inc. 54,000
------------------------------------------------------------
1,800 (a) OzEmail Ltd., ADR 25,650
------------------------------------------------------------
1,200 (a) Photronic Labs, Inc. 35,700
------------------------------------------------------------
1,000 (a) S3, Inc. 14,125
------------------------------------------------------------
1,200 (a) SCI Systems, Inc. 54,000
------------------------------------------------------------
1,100 (a) Tech-Sym Corp. 37,538
------------------------------------------------------------
800 (a) Tencor Instruments 18,000
------------------------------------------------------------
2,000 (a) Tollgrade Communications, Inc. 49,000
------------------------------------------------------------
2,000 Trident International, Inc. 45,500
------------------------------------------------------------
800 Watkins Johnson Co. 24,500
------------------------------------------------------------
1,700 (a) Whitmann-Hart, Inc. 63,750
------------------------------------------------------------
1,000 Wyle Labs 42,500
------------------------------------------------------------
700 (a) Xylan Corp. 44,363
------------------------------------------------------------ ------------
Total 1,081,178
------------------------------------------------------------ ------------
TRANSPORTATION--0.1%
------------------------------------------------------------
2,360 (a) America West Airlines, Inc., Class B 48,085
------------------------------------------------------------
990 (a) Continental Airlines, Inc., Class B 56,306
------------------------------------------------------------ ------------
Total 104,391
------------------------------------------------------------ ------------
(C) UTILITIES--0.1%
------------------------------------------------------------
1,230 Eastern Enterprises 41,974
------------------------------------------------------------
1,285 Interstate Power Co. 41,120
------------------------------------------------------------
2,700 (a) Public Service Co. New Mexico 50,625
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
SMALL COMPANY--CONTINUED
------------------------------------------------------------
(C) UTILITIES--CONTINUED
------------------------------------------------------------
300 Tele Danmark $ 7,463
------------------------------------------------------------
1,100 Teppco Partners, L.P. 40,563
------------------------------------------------------------
1,700 Trescomm International, Inc. 29,750
------------------------------------------------------------ ------------
Total 211,495
------------------------------------------------------------ ------------
TOTAL SMALL COMPANY 4,722,863
------------------------------------------------------------ ------------
(C) UTILITY--10.4%
------------------------------------------------------------
ELECTRIC UTILITIES: CENTRAL--1.4%
------------------------------------------------------------
18,800 CMS Energy Corp. 540,500
------------------------------------------------------------
13,521 Cinergy Corp. 400,560
------------------------------------------------------------
16,900 DPL, Inc. 380,250
------------------------------------------------------------
14,400 Illinova Corp. 378,000
------------------------------------------------------------
10,400 NIPSCO Industries, Inc. 387,400
------------------------------------------------------------
13,900 Utilicorp United, Inc. 380,513
------------------------------------------------------------ ------------
Total 2,467,223
------------------------------------------------------------ ------------
ELECTRIC UTILITIES: EAST--0.7%
------------------------------------------------------------
14,200 DQE, Inc. 381,625
------------------------------------------------------------
12,400 General Public Utilities 415,400
------------------------------------------------------------
15,100 Peco Energy Co. 371,838
------------------------------------------------------------ ------------
Total 1,168,863
------------------------------------------------------------ ------------
ELECTRIC UTILITIES: SOUTH--1.3%
------------------------------------------------------------
8,100 Duke Power Co. 390,825
------------------------------------------------------------
10,000 FPL Group, Inc. 427,500
------------------------------------------------------------
22,500 Southern Co. 520,313
------------------------------------------------------------
20,600 TECO Energy, Inc. 486,675
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
(C) UTILITY--CONTINUED
------------------------------------------------------------
ELECTRIC UTILITIES: SOUTH--CONTINUED
------------------------------------------------------------
9,700 Texas Utilities Co. $ 396,488
------------------------------------------------------------ ------------
Total 2,221,801
------------------------------------------------------------ ------------
ELECTRIC UTILITIES: WEST--0.4%
------------------------------------------------------------
19,000 Pacificorp 382,375
------------------------------------------------------------
13,700 Pinnacle West Capital Corp. 363,050
------------------------------------------------------------ ------------
Total 745,425
------------------------------------------------------------ ------------
MAJOR U.S. TELECOMMUNICATIONS--5.5%
------------------------------------------------------------
22,000 AT&T Corp. 1,372,250
------------------------------------------------------------
17,200 Ameritech Corp. 971,800
------------------------------------------------------------
15,400 Bell Atlantic Corp. 960,575
------------------------------------------------------------
26,000 BellSouth Corp. 1,056,250
------------------------------------------------------------
26,200 GTE Corp. 1,120,050
------------------------------------------------------------
40,800 MCI Communications Corp. 1,188,300
------------------------------------------------------------
18,500 NYNEX Corp. 853,313
------------------------------------------------------------
19,500 SBC Communications, Inc. 962,813
------------------------------------------------------------
29,200 U.S. West, Inc. 952,650
------------------------------------------------------------ ------------
Total 9,438,001
------------------------------------------------------------ ------------
NATURAL GAS DISTRIBUTION--0.4%
------------------------------------------------------------
13,100 MCN Corp. 311,125
------------------------------------------------------------
11,300 Pacific Enterprises 298,038
------------------------------------------------------------ ------------
Total 609,163
------------------------------------------------------------ ------------
OIL/GAS TRANSMISSION--0.7%
------------------------------------------------------------
12,600 Enron Corp. 504,000
------------------------------------------------------------
9,500 Panenergy Corp. 305,188
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
(C) UTILITY--CONTINUED
------------------------------------------------------------
OIL/GAS TRANSMISSION--CONTINUED
------------------------------------------------------------
6,000 Williams Companies, Inc. $ 301,500
------------------------------------------------------------ ------------
Total 1,110,688
------------------------------------------------------------ ------------
TOTAL UTILITY 17,761,164
------------------------------------------------------------ ------------
FOREIGN EQUITY--5.4%
------------------------------------------------------------
ARGENTINA--0.1%
------------------------------------------------------------
690 Banco Frances del Rio de la Plata S.A., ADR 19,406
------------------------------------------------------------
3,785 Compania Naviera Perez Companc SA, Class B 24,158
------------------------------------------------------------
702 IRSA Inversiones y Representaciones S.A., GDR 22,903
------------------------------------------------------------
900 YPF Sociedad Anonima, ADR 19,800
------------------------------------------------------------ ------------
Total 86,267
------------------------------------------------------------ ------------
AUSTRALIA--0.1%
------------------------------------------------------------
3,700 Lend Lease Corp., Ltd. 57,882
------------------------------------------------------------
10,000 News Corp., Ltd. 56,110
------------------------------------------------------------
35,000 (a) Sydney Harbour Casino Holdings, Inc. 52,798
------------------------------------------------------------
8,000 Woodside Petroleum Ltd. 45,782
------------------------------------------------------------ ------------
Total 212,572
------------------------------------------------------------ ------------
BELGIUM--0.0%
------------------------------------------------------------
700 Delhaize-Le Lion 35,491
------------------------------------------------------------ ------------
BRAZIL--0.1%
------------------------------------------------------------
1,953,000 Banco Bradesco S.A., Preference 22,694
------------------------------------------------------------
60,000 Banco Itau S.A., Preference 24,311
------------------------------------------------------------
43,000 Cia Cervejaria Brahma, Preference 25,629
------------------------------------------------------------
817,000 Companhia Energetica de Minas Gerais, Preference 21,647
------------------------------------------------------------
628,000 (a) Lojas Renner S.A., Preference 25,792
------------------------------------------------------------
5,399 (a) Telecomunicacoes de Sao Paulo S.A. Rights, 06/19/1996 274
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
BRAZIL--CONTINUED
------------------------------------------------------------
126,000 Telecomunicacoes de Sao Paulo S.A., Preference $ 26,631
------------------------------------------------------------
19,203,000 Usinas Siderurgicas de Minas Gerais, Pfd. 20,967
------------------------------------------------------------ ------------
Total 167,945
------------------------------------------------------------ ------------
CHILE--0.0%
------------------------------------------------------------
300 (a) Banco de A. Edwards, ADR 5,925
------------------------------------------------------------
100 (a) Chilectra S.A., ADR 5,550
------------------------------------------------------------
100 Compania Telecomunicacion Chile, ADR 9,125
------------------------------------------------------------
300 (a) Santa Isabel S.A., ADR 7,950
------------------------------------------------------------
100 Sociedad Quimica Y Minera De Chile, ADR 5,175
------------------------------------------------------------ ------------
Total 33,725
------------------------------------------------------------ ------------
CHINA--0.0%
------------------------------------------------------------
1,350 (a) Guangshen Railway Co. Ltd., Class H, ADR 26,663
------------------------------------------------------------ ------------
COLOMBIA--0.0%
------------------------------------------------------------
700 Banco Ganadero SA, ADR 15,838
------------------------------------------------------------
800 Banco Industrial Colombiano, ADR 15,200
------------------------------------------------------------ ------------
Total 31,038
------------------------------------------------------------ ------------
FINLAND--0.0%
------------------------------------------------------------
920 Nokia AB-A 40,031
------------------------------------------------------------ ------------
FRANCE--0.4%
------------------------------------------------------------
800 AXA 45,358
------------------------------------------------------------
440 Accor SA 63,410
------------------------------------------------------------
871 Compagnie Financiere de Paribas, Class A 52,905
------------------------------------------------------------
1,200 Credit Commerical De France 57,801
------------------------------------------------------------
150 Ecco Sa 35,980
------------------------------------------------------------
300 LVMH (Moet-Hennessy) 72,773
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
FRANCE--CONTINUED
------------------------------------------------------------
610 Lafarge-Coppee $ 40,167
------------------------------------------------------------
2,500 Lagardere Groupe 67,850
------------------------------------------------------------
450 Lyonnaise des Eaux SA 43,612
------------------------------------------------------------
560 Rhone-Poulenc Rorer, Inc. 36,260
------------------------------------------------------------
1,500 Schneider SA 69,407
------------------------------------------------------------
450 Total SA-B 32,530
------------------------------------------------------------ ------------
Total 618,053
------------------------------------------------------------ ------------
GERMANY, FEDERAL REPUBLIC OF--0.4%
------------------------------------------------------------
168 BASF AG 46,660
------------------------------------------------------------
210 (b) Commerzbank AG, Frankfurt 43,762
------------------------------------------------------------
775 Deutsche Bank, AG 36,388
------------------------------------------------------------
2,000 Dresdner Bank Ag, Frankfurt 50,131
------------------------------------------------------------
155 Gea AG, Vorzugsaktien 48,146
------------------------------------------------------------
100 Henkel KGAA, Vorzugsaktien 42,038
------------------------------------------------------------
110 Hochtief AG 48,657
------------------------------------------------------------
105 Kaufhof Holding AG 36,984
------------------------------------------------------------
65 Linde AG 41,743
------------------------------------------------------------
120 Mannesmann AG 41,623
------------------------------------------------------------
700 RWE AG 27,638
------------------------------------------------------------
375 Schering Ag 28,285
------------------------------------------------------------
785 Schwarz Pharma 47,635
------------------------------------------------------------
1,000 Siemens AG 56,081
------------------------------------------------------------
930 Veba AG 48,664
------------------------------------------------------------
50 Wella AG, Vorzugsaktien 26,966
------------------------------------------------------------ ------------
Total 671,401
------------------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
HONG KONG--0.2%
------------------------------------------------------------
37,000 Amoy Properties, Ltd. $ 45,906
------------------------------------------------------------
4,000 Cheung Kong 29,597
------------------------------------------------------------
43,000 Goldlion Holdings Ltd. 35,290
------------------------------------------------------------
1,839 HSBC Holdings PLC 27,809
------------------------------------------------------------
21,365 Hong Kong Telecom 39,625
------------------------------------------------------------
23,000 (a)(b) Shanghai Industrial Holdings Ltd 27,943
------------------------------------------------------------
4,000 Sun Hung Kai Properties 40,841
------------------------------------------------------------
4,500 Swire Pacific Ltd. A 39,985
------------------------------------------------------------ ------------
Total 286,996
------------------------------------------------------------ ------------
INDIA--0.1%
------------------------------------------------------------
1,700 (a)(b) Bombay Suburban Electric Supply, GDR 33,150
------------------------------------------------------------
700 (a)(b) Hindalco Industries, GDR 31,150
------------------------------------------------------------
2,600 (a)(b) Mahindra and Mahindra, GDR 28,600
------------------------------------------------------------
1,200 (a)(b) Steel Authority of India, GDR 17,100
------------------------------------------------------------ ------------
Total 110,000
------------------------------------------------------------ ------------
INDONESIA--0.1%
------------------------------------------------------------
15,000 PT Astra International 22,508
------------------------------------------------------------
18,000 PT Citra Marga Nusaphala Persada 29,325
------------------------------------------------------------
39,000 PT Great River Industries 43,473
------------------------------------------------------------
9,000 PT Hero Supermarket 9,068
------------------------------------------------------------
4,000 PT Semen Gresik 13,248
------------------------------------------------------------
22,000 PT Steady Safe Trans Service 29,239
------------------------------------------------------------
9,000 Tambang Timah 17,749
------------------------------------------------------------
27,000 Tjiwi Kimia 28,650
------------------------------------------------------------ ------------
Total 193,260
------------------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
ITALY--0.1%
------------------------------------------------------------
7,000 Banca Popolare Milano $ 35,777
------------------------------------------------------------
4,300 Imi Istituto Mobiliare 35,166
------------------------------------------------------------
520 (a) La Rinascente S.P.A. Warrants, 12/31/1999 389
------------------------------------------------------------
35,000 (a) Telecom Italia Mobile 74,818
------------------------------------------------------------
5,100 (a) Unicem S.P.A. 39,578
------------------------------------------------------------ ------------
Total 185,728
------------------------------------------------------------ ------------
JAPAN--1.9%
------------------------------------------------------------
3,000 Asatsu, Inc. 123,039
------------------------------------------------------------
2,000 Bridgestone Corp. 34,815
------------------------------------------------------------
12,000 Casio Computer Co 114,444
------------------------------------------------------------
11 DDI Corp. 95,333
------------------------------------------------------------
5,000 Dai Nippon Printing Co. Ltd. 92,593
------------------------------------------------------------
10,000 Hitachi Cable 85,093
------------------------------------------------------------
7,000 JGC Corp. 89,444
------------------------------------------------------------
4,000 Jaccs 36,259
------------------------------------------------------------
7,000 Japan Radio Co. 98,519
------------------------------------------------------------
3,000 Kokuyo Co. 80,278
------------------------------------------------------------
8,000 Kuraray Co., Ltd. 91,111
------------------------------------------------------------
1,000 Kyocera Corp. 68,519
------------------------------------------------------------
4,000 Kyowa Hakko Kogyo Co. 39,259
------------------------------------------------------------
5,000 Maeda Road Construction Co. 83,796
------------------------------------------------------------
17,000 Marubeni Corp. 92,713
------------------------------------------------------------
7,000 Matsuzakaya Co., Ltd. 87,500
------------------------------------------------------------
9,000 Mitsubishi Electric Corp. 61,667
------------------------------------------------------------
9,000 Mitsubishi Heavy Industries, Ltd. 77,417
------------------------------------------------------------
</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
------------------------------------------------------------
4,000 Mitsui Fudosan Co. $ 50,741
------------------------------------------------------------
6,000 Mitsui Marine & Fire Insurance Co. 46,389
------------------------------------------------------------
28,000 (a) NKK Corp. 81,926
------------------------------------------------------------
7,000 Nichiei Construction 81,019
------------------------------------------------------------
13,000 Nihon Cement Co., Ltd. 94,972
------------------------------------------------------------
7,000 Nippon Comsys Corp. 89,444
------------------------------------------------------------
2,000 Nippon Electric Glass Co., Ltd. 34,815
------------------------------------------------------------
14,000 Nippon Zeon Co 84,519
------------------------------------------------------------
4,000 Nitto Denko Corp 65,556
------------------------------------------------------------
4,000 Nomura Securities Co., Ltd. 75,556
------------------------------------------------------------
2,000 Noritsu Koki Co., Ltd. 88,889
------------------------------------------------------------
22,000 Renown 90,444
------------------------------------------------------------
12,000 Sanyo Electric Co 71,444
------------------------------------------------------------
6,000 (b) Sumitomo Trust & Banking 83,333
------------------------------------------------------------
5,000 Takashimaya Co 81,482
------------------------------------------------------------
7,000 Tokio Marine and Fire Insurance Co. 90,741
------------------------------------------------------------
14,000 Tokyo Tatemono Co., Ltd. 88,019
------------------------------------------------------------
17,000 Toshiba Corp. 118,213
------------------------------------------------------------
8,000 Toyoda Machine Works 88,889
------------------------------------------------------------
10,000 Wako Securities Co., Ltd. 82,222
------------------------------------------------------------
1,000 Xebio Co., Ltd. 37,315
------------------------------------------------------------
5,000 Yamatake-Honeywell 89,352
------------------------------------------------------------ ------------
Total 3,167,079
------------------------------------------------------------ ------------
KOREA, REPUBLIC OF--0.1%
------------------------------------------------------------
1,300 Chonggu Housing & Construction 39,102
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
KOREA, REPUBLIC OF--CONTINUED
------------------------------------------------------------
1,500 Kookmin Bank $ 29,317
------------------------------------------------------------
900 Korea Electric Power Corp. 34,495
------------------------------------------------------------
2,600 Korea Exchange Bank 33,987
------------------------------------------------------------
1,200 (a) Korea Housing Bank 33,888
------------------------------------------------------------
700 (a) Korea Mobile Telecomm Corp., GDR 40,250
------------------------------------------------------------ ------------
Total 211,039
------------------------------------------------------------ ------------
MALAYSIA--0.2%
------------------------------------------------------------
22,000 Eastern and Oriental Berhad 46,705
------------------------------------------------------------
3,000 Malayan Banking Berhad 28,480
------------------------------------------------------------
10,000 Malaysian Pacific Industries 41,258
------------------------------------------------------------
25,000 TA Enterprise Berhad 38,854
------------------------------------------------------------
12,000 (a) Technology Resources Industries Bhd 39,896
------------------------------------------------------------
10,000 (c) Tenaga Nasional Berhad 42,459
------------------------------------------------------------
13,000 UMW Holdings Bhd 42,700
------------------------------------------------------------ ------------
Total 280,352
------------------------------------------------------------ ------------
MEXICO--0.1%
------------------------------------------------------------
3,000 Cemex SA, Class B, ADR 24,469
------------------------------------------------------------
12,000 (a) Cifra SA de CV, Class B 17,913
------------------------------------------------------------
1,900 Empresas ICA Sociedad Controladora S.A., ADR 27,313
------------------------------------------------------------
2,800 (a)(b) Grupo Financiero Bancomer, S.A. de C.V., Class B, ADR 25,665
------------------------------------------------------------
700 Pan American Beverage, Class A 29,400
------------------------------------------------------------
600 Telefonos de Mexico, Class L, ADR 19,800
------------------------------------------------------------ ------------
Total 144,560
------------------------------------------------------------ ------------
NETHERLANDS--0.1%
------------------------------------------------------------
5,200 Elsevier NV 80,703
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
NETHERLANDS--CONTINUED
------------------------------------------------------------
610 International Nederlanden $ 50,229
------------------------------------------------------------
1,282 Koninklijke PTT Nederland NV 46,400
------------------------------------------------------------
1,000 PolyGram NV 58,565
------------------------------------------------------------ ------------
Total 235,897
------------------------------------------------------------ ------------
PAKISTAN--0.0%
------------------------------------------------------------
350 (a) Hub Power Co., GDR 8,925
------------------------------------------------------------ ------------
PHILIPPINES--0.1%
------------------------------------------------------------
82,000 (a) Aboitiz Equity Ventures, Inc. 16,601
------------------------------------------------------------
58,050 (a) Filinvest Land, Inc. 23,282
------------------------------------------------------------
28,000 (a) Marsman & Company Inc 14,973
------------------------------------------------------------
68,000 Metro Pacific Corp. 18,182
------------------------------------------------------------
1,400 (a) Philippine Commercial International Bank 18,048
------------------------------------------------------------ ------------
Total 91,086
------------------------------------------------------------ ------------
SINGAPORE--0.1%
------------------------------------------------------------
15,000 Hotel Properties, Ltd. 26,518
------------------------------------------------------------
9,000 Parkway Holdings, Ltd. 26,198
------------------------------------------------------------
3,000 Singapore Airlines Ltd. 30,884
------------------------------------------------------------
2,000 Singapore Press Holdings, Ltd. 37,487
------------------------------------------------------------
9,000 Straits Steamship Land, Ltd. 29,010
------------------------------------------------------------
2,250 (a) Straits Steamship Land, Ltd. Warrants, 12/12/2000 2,923
------------------------------------------------------------
3,000 United Overseas Bank, Ltd. 27,263
------------------------------------------------------------ ------------
Total 180,283
------------------------------------------------------------ ------------
SPAIN--0.1%
------------------------------------------------------------
200 Acerinox SA 22,073
------------------------------------------------------------
1,500 Repsol SA 51,296
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
SPAIN--CONTINUED
------------------------------------------------------------
580 Zardoya-Otis SA $ 57,655
------------------------------------------------------------ ------------
Total 131,024
------------------------------------------------------------ ------------
SWEDEN--0.1%
------------------------------------------------------------
540 Astra AB, Class A 24,716
------------------------------------------------------------
4,400 Stora Kopparbergs, Class A 58,616
------------------------------------------------------------
4,000 Svedala Industri 76,805
------------------------------------------------------------ ------------
Total 160,137
------------------------------------------------------------ ------------
SWITZERLAND--0.2%
------------------------------------------------------------
35 ABB AG 41,838
------------------------------------------------------------
600 CS Holding AG- Registered 51,778
------------------------------------------------------------
50 Ciba-Giegy AG- Registered 55,014
------------------------------------------------------------
50 Nestle SA 56,332
------------------------------------------------------------
400 (a) Oerlikon-Buhrle Holding AG 41,550
------------------------------------------------------------
5 Roche Holding AG 38,354
------------------------------------------------------------
75 Sulzer AG--Reg 47,643
------------------------------------------------------------
142 Zurich Versicherungsgesellschaft 37,443
------------------------------------------------------------ ------------
Total 369,952
------------------------------------------------------------ ------------
THAILAND--0.0%
------------------------------------------------------------
700 Advanced Information Services 11,553
------------------------------------------------------------
1,100 Bangkok Bank Public Co., Ltd. 15,984
------------------------------------------------------------
3,800 (a) Industrial Finance Corporation of Thailand 17,105
------------------------------------------------------------
2,900 Krung Thai Bank PLC 14,771
------------------------------------------------------------
1,300 (a) PTT Exploration and Production Public Co. 19,403
------------------------------------------------------------ ------------
Total 78,816
------------------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
UNITED KINGDOM--0.9%
------------------------------------------------------------
7,500 Allied Domecq PLC $ 56,583
------------------------------------------------------------
3,600 Anglian Water PLC 33,473
------------------------------------------------------------
7,000 Associated British Ports Holdings PLC 30,970
------------------------------------------------------------
10,000 BTR PLC 43,546
------------------------------------------------------------
2,900 Barclays PLC 33,750
------------------------------------------------------------
2,200 Boc Group PLC 31,706
------------------------------------------------------------
3,400 Boots Co. PLC 32,140
------------------------------------------------------------
3,900 British Petroleum Co. PLC 33,543
------------------------------------------------------------
11,200 British Steel PLC 29,549
------------------------------------------------------------
6,300 British Telecommunication PLC 34,707
------------------------------------------------------------
10,300 Bunzl PLC 37,510
------------------------------------------------------------
3,882 Cadbury Schweppes PLC 29,117
------------------------------------------------------------
13,000 Caradon PLC 46,839
------------------------------------------------------------
5,750 Carlton Communications PLC 43,083
------------------------------------------------------------
5,700 Chubb Security 30,563
------------------------------------------------------------
5,100 Compass Group 45,681
------------------------------------------------------------
5,700 General Electric Co. PLC 32,859
------------------------------------------------------------
5,147 Grand Metropolitan PLC 34,776
------------------------------------------------------------
2,200 Imperial Chemical Industries PLC 28,979
------------------------------------------------------------
7,900 Inchcape PLC 37,217
------------------------------------------------------------
11,200 Ladbroke Group PLC 32,890
------------------------------------------------------------
4,000 Marks & Spencer PLC 28,669
------------------------------------------------------------
4,200 National Power Co. PLC 33,877
------------------------------------------------------------
4,400 Peninsular & Oriental Steam Navigation Co. 35,729
------------------------------------------------------------
2,000 RMC Group PLC 31,164
------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ----------- ------------------------------------------------------------ ------------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------------------
UNITED KINGDOM--CONTINUED
------------------------------------------------------------
2,227 RTZ Corp. PLC $ 34,684
------------------------------------------------------------
4,200 Rank Organisation PLC 33,292
------------------------------------------------------------
4,200 Reckitt & Colman PLC 45,023
------------------------------------------------------------
2,900 Reuters Holdings PLC 33,705
------------------------------------------------------------
27,300 Rugby Group PLC 50,556
------------------------------------------------------------
6,000 Sainsbury PLC 36,867
------------------------------------------------------------
7,700 (c) Scottish Power PLC 37,886
------------------------------------------------------------
15,700 Sedgwick Group PLC 36,251
------------------------------------------------------------
2,400 Shell Transport & Trading Co. 34,291
------------------------------------------------------------
2,500 Siebe PLC 33,512
------------------------------------------------------------
2,962 Smithkline Beecham PLC 30,167
------------------------------------------------------------
5,300 Sun Alliance Group PLC 32,689
------------------------------------------------------------
3,200 Thames Water PLC 29,332
------------------------------------------------------------
10,600 Tomkins PLC 41,970
------------------------------------------------------------
10,000 Vodafone Group PLC 39,594
------------------------------------------------------------
1,600 Zeneca Group 33,919
------------------------------------------------------------ ------------
Total 1,472,658
------------------------------------------------------------ ------------
TOTAL FOREIGN EQUITY 9,230,978
------------------------------------------------------------ ------------
TOTAL STOCKS (IDENTIFIED COST $42,485,969) 47,861,367
------------------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--64.1%
- ----------------------------------------------------------------------------------
TREASURY--24.5%
---------------------------------------------------------------
$41,925,000 U.S. Treasury Notes 5.50%-7.75%, 8/31/1997-7/31/2000 $41,707,600
--------------------------------------------------------------- ------------
MORTGAGE-BACKED SECURITIES--24.5%
---------------------------------------------------------------
GOVERNMENT AGENCY--24.5%
---------------------------------------------------------------
437,729 Federal Home Loan Mortgage Corp., 9.50%, 6/1/2021 464,671
---------------------------------------------------------------
124,400 Federal Home Loan Mortgage Corp., 8.00%, 11/1/2021 125,214
---------------------------------------------------------------
367,791 Federal Home Loan Mortgage Corp., 7.50%, 5/1/2024 361,351
---------------------------------------------------------------
973,743 Federal Home Loan Mortgage Corp., 7.00%, 8/1/2025 930,996
---------------------------------------------------------------
813,936 Federal Home Loan Mortgage Corp., 8.00%, 11/1/2022 821,913
---------------------------------------------------------------
244,059 Federal Home Loan Mortgage Corp., 7.00%, 7/1/2024 232,921
---------------------------------------------------------------
1,057,628 Federal Home Loan Mortgage Corp., 6.50%, 9/1/2025 981,933
---------------------------------------------------------------
2,383,714 Federal Home Loan Mortgage Corp., 8.00%, 4/1/2024 2,391,581
---------------------------------------------------------------
1,004,081 Federal Home Loan Mortgage Corp., 7.00%, 2/1/2026 961,116
---------------------------------------------------------------
391,428 Federal Home Loan Mortgage Corp., 8.00%, 11/1/2009 398,654
---------------------------------------------------------------
337,818 Federal Home Loan Mortgage Corp., 7.00%, 4/1/2009 332,288
---------------------------------------------------------------
635,296 Federal Home Loan Mortgage Corp., 7.00%, 4/1/2009 623,771
---------------------------------------------------------------
1,950,000 (d) Federal Home Loan Mortgage Corp., 6.50%, 6/1/2011 1,873,190
---------------------------------------------------------------
844,179 Federal National Mortgage Association, 7.50%, 9/1/2009 845,344
---------------------------------------------------------------
432,724 Federal National Mortgage Association, 7.00%, 5/1/2001 431,906
---------------------------------------------------------------
1,400,728 Federal National Mortgage Association, 7.00%, 7/1/2024 1,337,919
---------------------------------------------------------------
896,634 Federal National Mortgage Association, 9.50%, 10/1/2024 957,148
---------------------------------------------------------------
997,535 Federal National Mortgage Association, 7.50%, 4/1/2026 978,053
---------------------------------------------------------------
203,778 Federal National Mortgage Association, 7.50%, 6/1/2009 203,776
---------------------------------------------------------------
445,004 Federal National Mortgage Association, 8.00%, 11/1/2024 445,970
---------------------------------------------------------------
691,034 Federal National Mortgage Association, 9.00%, 5/1/2025 720,334
---------------------------------------------------------------
154,079 Federal National Mortgage Association, 8.50%, 2/1/2025 157,592
---------------------------------------------------------------
804,102 Federal National Mortgage Association, 8.00%, 7/1/2025 806,506
---------------------------------------------------------------
</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
---------------------------------------------------------------
$ 1,815,530 Federal National Mortgage Association, 7.50%, 7/1/2025 $ 1,780,073
---------------------------------------------------------------
495,647 Federal National Mortgage Association, 7.00%, 7/1/2025 473,422
---------------------------------------------------------------
1,012,601 Federal National Mortgage Association, 6.50%, 9/1/2025 939,177
---------------------------------------------------------------
2,216,273 Federal National Mortgage Association, 6.50%, 10/1/2025 2,055,571
---------------------------------------------------------------
1,001,598 Federal National Mortgage Association, 6.00%, 3/1/2011 939,298
---------------------------------------------------------------
1,971,301 Federal National Mortgage Association, 6.00%, 4/1/2011 1,848,686
---------------------------------------------------------------
614,835 Federal National Mortgage Association, 10.50%, 1/1/2021 677,849
---------------------------------------------------------------
1,500,000 (d) Federal National Mortgage Association, 6.50%, 6/1/2011 1,440,915
---------------------------------------------------------------
999,211 Federal National Mortgage Association, 6.50%, 1/1/2003 976,409
---------------------------------------------------------------
300,037 Government National Mortgage Association, 9.00%, 2/15/2020 3,176,259
---------------------------------------------------------------
1,062,493 Government National Mortgage Association, 8.00%, 11/15/2024 1,065,468
---------------------------------------------------------------
934,597 Government National Mortgage Association, 9.50%, 12/15/2025 998,542
---------------------------------------------------------------
1,234,415 Government National Mortgage Association, 8.50%, 10/15/2024 1,264,868
---------------------------------------------------------------
2,439,147 Government National Mortgage Association, 7.50%, 4/15/2024 2,388,949
---------------------------------------------------------------
2,290,900 Government National Mortgage Association, 6.50%, 3/15/2026 2,115,463
---------------------------------------------------------------
1,246,982 Government National Mortgage Association, 7.00%, 4/15/2026 1,187,363
---------------------------------------------------------------
910,000 (d) Government National Mortgage Association, 9.00%, 6/1/2026 951,505
--------------------------------------------------------------- ------------
TOTAL MORTGAGE-BACKED SECURITIES 41,663,964
--------------------------------------------------------------- ------------
INVESTMENT GRADE BONDS--7.3%
---------------------------------------------------------------
AEROSPACE & DEFENSE--0.2%
---------------------------------------------------------------
250,000 McDonnell Douglas Finance, Note, 9.40%, 10/15/2001 267,205
--------------------------------------------------------------- ------------
AUTOMOTIVE--0.3%
---------------------------------------------------------------
200,000 Chrysler Auburn Hills, Deb., 12.00%, 5/1/2020 286,038
---------------------------------------------------------------
200,000 Chrysler Corp., Deb., 10.95%, 8/1/2017 220,164
--------------------------------------------------------------- ------------
Total 506,202
--------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------------------
BANKING--1.1%
---------------------------------------------------------------
$ 250,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 $ 254,160
---------------------------------------------------------------
400,000 Bayerische Landesbank, Note, 6.20%, 2/9/2006 370,192
---------------------------------------------------------------
330,000 Chase Manhattan, Sub. Note, 8.00%, 5/1/2005 332,591
---------------------------------------------------------------
250,000 Crestar Financial Corp, Sub. Note, 8.75%, 11/15/2004 269,328
---------------------------------------------------------------
300,000 National Bank of Canada, Sub. Note, 8.125%, 8/15/2004 309,444
---------------------------------------------------------------
400,000 Santander Finance Issuances, Bank Guarantee, 7.875%, 4/15/2005 408,916
--------------------------------------------------------------- ------------
Total 1,944,631
--------------------------------------------------------------- ------------
BEVERAGE & TOBACCO--0.2%
---------------------------------------------------------------
150,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 142,196
---------------------------------------------------------------
250,000 RJR Nabisco, Inc., Note, 9.25%, 8/15/2013 252,633
--------------------------------------------------------------- ------------
Total 394,829
--------------------------------------------------------------- ------------
CABLE TELEVISION--0.3%
---------------------------------------------------------------
400,000 TKR Cable, Inc., Sr. Note, 10.50%, 10/30/2007 435,468
--------------------------------------------------------------- ------------
CHEMICALS & PLASTICS--0.3%
---------------------------------------------------------------
450,000 (b) Bayer Corp., Deb., 6.50%, 10/1/2002 437,387
--------------------------------------------------------------- ------------
CONGLOMERATES--0.2%
---------------------------------------------------------------
275,000 Leucadia National, Sr. Sub. Note, 8.25%, 6/15/2005 273,867
--------------------------------------------------------------- ------------
ELECTRONICS--0.2%
---------------------------------------------------------------
300,000 Harris Corp, Deb., 10.375%, 12/1/2018 333,984
--------------------------------------------------------------- ------------
FINANCE--RETAIL--0.1%
---------------------------------------------------------------
150,000 Household Finance, Deb., 6.45%, 2/1/2009 136,998
--------------------------------------------------------------- ------------
FINANCIAL INTERMEDIARIES--1.2%
---------------------------------------------------------------
450,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 488,048
---------------------------------------------------------------
400,000 DLJ, Note, 6.875%, 11/1/2005 378,524
---------------------------------------------------------------
250,000 Green Tree Financial Corp, Sr. Sub. Note, 10.25%, 6/1/2002 284,438
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------------------
FINANCIAL INTERMEDIARIES--CONTINUED
---------------------------------------------------------------
$ 450,000 Lehman Bros Inc, Sr. Sub. Note, 6.125%, 2/1/2001 $ 429,926
---------------------------------------------------------------
300,000 Merrill Lynch, Medium Term Note, 7.25%, 6/14/2004 302,709
---------------------------------------------------------------
225,000 Salomon Inc., Sr. Note, 7.02%, 9/25/1998 225,083
--------------------------------------------------------------- ------------
Total 2,108,728
--------------------------------------------------------------- ------------
FOOD & DRUG RETAILERS--0.2%
---------------------------------------------------------------
300,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 321,462
--------------------------------------------------------------- ------------
FOOD PRODUCTS--0.2%
---------------------------------------------------------------
500,000 Grand Met Investment Corp, 1/6/2004 285,490
--------------------------------------------------------------- ------------
GOVERNMENT AGENCY--0.3%
---------------------------------------------------------------
250,000 Federal National Mortgage Association 7.43%, 8/4/2005 245,120
---------------------------------------------------------------
250,000 Federal National Mortgage Association 8.59%, 2/3/2005 255,703
--------------------------------------------------------------- ------------
Total 500,823
--------------------------------------------------------------- ------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.3%
---------------------------------------------------------------
350,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 385,560
---------------------------------------------------------------
200,000 Varity Corp, Sr. Note, 11.375%, 11/15/1998 204,760
--------------------------------------------------------------- ------------
Total 590,320
--------------------------------------------------------------- ------------
INSURANCE--0.3%
---------------------------------------------------------------
250,000 Continental Corp, Note, 8.25%, 4/15/1999 258,288
---------------------------------------------------------------
250,000 Sunamerica Inc, Medium Term Note, 7.34%, 8/30/2005 245,705
--------------------------------------------------------------- ------------
Total 503,993
--------------------------------------------------------------- ------------
METALS & MINING--0.1%
---------------------------------------------------------------
250,000 Santa Fe Pacific Gold Co, Note, 8.375%, 7/1/2005 242,610
--------------------------------------------------------------- ------------
OIL & GAS--0.2%
---------------------------------------------------------------
350,000 USX Corp., Note, 6.375%, 7/15/1998 347,004
--------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------------------
PRINTING & PUBLISHING--0.2%
---------------------------------------------------------------
$ 400,000 News America Holdings, Sr. Note, 7.50%, 3/1/2000 $ 404,488
--------------------------------------------------------------- ------------
RETAILERS--0.2%
---------------------------------------------------------------
250,000 Penney J C Inc, S.F. Deb., 9.75%, 6/15/2021 278,438
--------------------------------------------------------------- ------------
SERVICES--0.1%
---------------------------------------------------------------
250,000 (b) Loewen Group Int'l, Sr. Note, 8.25%, 4/15/2003 248,125
--------------------------------------------------------------- ------------
SOVEREIGN GOVERNMENT--0.7%
---------------------------------------------------------------
300,000 (b) Freeport Terminal (Malta), Gtd. Global Note, 7.50%, 3/29/2004 293,367
---------------------------------------------------------------
250,000 Quebec Province, Deb., 7.50%, 7/15/2023 235,835
---------------------------------------------------------------
300,000 Republic Of South Africa, Global Bond Deb., 9.625%, 12/15/1999 313,500
---------------------------------------------------------------
400,000 Republic of Colombia, Note, 7.25%, 2/15/2003 375,564
--------------------------------------------------------------- ------------
Total 1,218,266
--------------------------------------------------------------- ------------
UTILITIES--0.4%
---------------------------------------------------------------
200,000 Duke Power Co., 1st Mtg. Note, 7.00%, 9/1/2005 193,162
---------------------------------------------------------------
200,000 Gulf States Util, FMB, 6.75%, 10/1/1998 198,574
---------------------------------------------------------------
125,000 Pedernales Electric Coop, 10.875%, 09/01/17 138,001
---------------------------------------------------------------
150,000 Quebec Hydro, Deb., 7.375%, 2/1/2003 150,833
--------------------------------------------------------------- ------------
Total 680,570
--------------------------------------------------------------- ------------
TOTAL INVESTMENT GRADE BONDS 12,460,888
--------------------------------------------------------------- ------------
HIGH YIELD BONDS--2.6%
---------------------------------------------------------------
AEROSPACE & DEFENSE--0.0%
---------------------------------------------------------------
50,000 Tracor, Inc., Sr. Sub. Note, 10.875%, 8/15/2001 52,500
--------------------------------------------------------------- ------------
AUTOMOTIVE--0.1%
---------------------------------------------------------------
50,000 Aftermarket Technology Co., Sr. Sub. Note, 12.00%, 8/1/2004 53,625
---------------------------------------------------------------
50,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 49,500
--------------------------------------------------------------- ------------
Total 103,125
--------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
BANKING--0.0%
---------------------------------------------------------------
$ 25,000 First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 $ 27,313
---------------------------------------------------------------
25,000 (b) First Nationwide Holdings, Sr. Note, 12.50%, 4/15/2003 26,063
--------------------------------------------------------------- ------------
Total 53,376
--------------------------------------------------------------- ------------
BEVERAGE & TOBACCO--0.0%
---------------------------------------------------------------
25,000 Dr Pep Btlg Hldgs, Sr. Disc. Note, 2/15/2003 21,375
--------------------------------------------------------------- ------------
BROADCAST RADIO & TV--0.3%
---------------------------------------------------------------
38,000 Chancellor Broadcasting Co., Sr. Sub. Note, 12.50%, 10/1/2004 41,990
---------------------------------------------------------------
25,000 (b) Granite Broadcasting Corp, Sr. Sub. Note, 9.375%, 12/1/2005 23,063
---------------------------------------------------------------
50,000 Heritage Media Corp., Sr. Sub. Note, 8.75%, 2/15/2006 47,750
---------------------------------------------------------------
25,000 (b) Park Communications, Inc., Sr. Note, 13.75%, 5/15/2004 26,375
---------------------------------------------------------------
25,000 Pegasus Media , Note, 12.50%, 7/1/2005 27,125
---------------------------------------------------------------
125,000 SCI Television, Sr. Secd. Note, 11.00%, 6/30/2005 132,188
---------------------------------------------------------------
50,000 (b) SFX Broadcasting, Sr. Sub. Note, 10.75%, 5/15/2006 50,000
---------------------------------------------------------------
50,000 Sinclair Broadcast Group, Sr. Sub. Note, 10.00%, 9/30/2005 48,625
---------------------------------------------------------------
50,000 Young Broadcasting Corp., Sr. Sub. Note, 10.125%, 2/15/2005 48,875
--------------------------------------------------------------- ------------
Total 445,991
--------------------------------------------------------------- ------------
BUSINESS EQUIPMENT & SERVICES--0.0%
---------------------------------------------------------------
50,000 (b) Knoll Inc., Sr. Sub. Note, 10.875%, 3/15/2006 51,250
---------------------------------------------------------------
25,000 Monarch Acquisition Corp., Sr. Note, 12.50%, 7/1/2003 26,875
--------------------------------------------------------------- ------------
Total 78,125
--------------------------------------------------------------- ------------
CABLE TELEVISION--0.3%
---------------------------------------------------------------
100,000 (b) CS Wireless Systems, Inc., Unit, 3/1/2006 53,000
---------------------------------------------------------------
50,000 Cablevision Systems Corp., Sr. Sub. Note, 9.875%, 5/15/2006 49,875
---------------------------------------------------------------
50,000 Cai Wireless Systems, Sr. Note, 12.25%, 9/15/2002 52,875
---------------------------------------------------------------
50,000 (b) Charter Communications SE, Sr. Note, 11.25%, 3/15/2006 51,250
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
CABLE TELEVISION--CONTINUED
---------------------------------------------------------------
$ 50,000 Diamond Cable Comm. PLC, Sr. Disc. Note, 12/15/2005 $ 30,375
---------------------------------------------------------------
25,000 EchoStar Satellite Broadcasting Corp., Sr. Secd. Disc. Note,
(b) 3/15/2004 16,688
---------------------------------------------------------------
100,000 International Cabletel, Sr. Note, 0/12.75 4/15/2005 65,625
---------------------------------------------------------------
50,000 Rogers Cablesystems Ltd., Sr. Secd. 2nd Priority Note, 10.00%,
3/15/2005 50,750
---------------------------------------------------------------
125,000 Telewest Plc, Sr. Disc. Deb., 10/1/2007 75,625
---------------------------------------------------------------
50,000 (b) UIH Australia/Pacific, Sr. Disc. Note, 5/15/2006 25,750
--------------------------------------------------------------- ------------
Total 471,813
--------------------------------------------------------------- ------------
CHEMICALS & PLASTICS--0.2%
---------------------------------------------------------------
75,000 Arcadian Partners LP, Sr. Note, Series B, 10.75%, 5/1/2005 81,375
---------------------------------------------------------------
50,000 Crain Industries Inc., Sr. Sub. Note, 13.50%, 8/15/2005 52,625
---------------------------------------------------------------
50,000 Foamex Capital Corp., Sr. Sub. Deb., 11.875%, 10/1/2004 50,750
---------------------------------------------------------------
35,000 G-I Holdings, Sr. Disc. Note, 0%, 10/1/1998 28,263
---------------------------------------------------------------
50,000 Harris Chemical, Sr. Secd. Disc. Note, 0/10.25%, 7/15/2001 50,750
---------------------------------------------------------------
50,000 Polymer Group, Sr. Note, 7/15/2002 54,500
---------------------------------------------------------------
25,000 (b) RBX Corp., Sr. Sub. Note, 11.25%, 10/15/2005 23,938
---------------------------------------------------------------
75,000 Viridian Inc., Note, 9.75%, 4/1/2003 77,625
--------------------------------------------------------------- ------------
Total 419,826
--------------------------------------------------------------- ------------
CLOTHING & TEXTILES--0.1%
---------------------------------------------------------------
25,000 Dan River Inc, Sr. Sub. Note, 10.125%, 12/15/2003 24,344
---------------------------------------------------------------
75,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 73,125
--------------------------------------------------------------- ------------
Total 97,469
--------------------------------------------------------------- ------------
CONSUMER PRODUCTS--0.1%
---------------------------------------------------------------
50,000 Herff Jones, Inc., Sr. Sub. Note, 11.00%, 8/15/2005 53,000
---------------------------------------------------------------
50,000 Icon Health & Fitness, Inc., Sr. Sub. Note, 13.00%, 7/15/2002 56,000
---------------------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note, 9.00%, 12/15/2003 47,063
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
CONSUMER PRODUCTS--CONTINUED
---------------------------------------------------------------
$ 25,000 (b) Simmons Company, Sr. Sub. Note, 10.75%, 4/15/2006 $ 25,125
---------------------------------------------------------------
50,000 (b) Twin Laboratories Inc., Sr. Sub. Note, 10.25%, 5/15/2006 51,125
--------------------------------------------------------------- ------------
Total 232,313
--------------------------------------------------------------- ------------
CONTAINER & GLASS PRODUCTS--0.0%
---------------------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 51,000
---------------------------------------------------------------
25,000 (b) Packaging Resources Inc., Sr. Secd. Note, 11.625%, 5/1/2003 25,438
--------------------------------------------------------------- ------------
Total 76,438
--------------------------------------------------------------- ------------
COSMETICS & TOILETRIES--0.0%
---------------------------------------------------------------
50,000 Revlon Consumer Products Corp., Sr. Sub. Note, 10.50%,
2/15/2003 50,875
--------------------------------------------------------------- ------------
ECOLOGICAL SERVICES & EQUIPMENT--0.0%
---------------------------------------------------------------
50,000 Mid-american Waste System, Sr. Sub. Note, 12.25%, 2/15/2003 29,750
--------------------------------------------------------------- ------------
FOOD & DRUG RETAILERS--0.1%
---------------------------------------------------------------
25,000 Carr Gottstein Foods Co., Sr. Sub. Note, 12.00%, 11/15/2005 26,000
---------------------------------------------------------------
50,000 Pathmark Stores Inc, Sr. Sub. Note, 9.625%, 5/1/2003 47,625
---------------------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 47,938
---------------------------------------------------------------
25,000 Smith's Food & Drug , Sr. Sub. Note, 11.25%, 5/15/2007 25,438
--------------------------------------------------------------- ------------
Total 147,001
--------------------------------------------------------------- ------------
FOOD PRODUCTS--0.1%
---------------------------------------------------------------
25,000 Curtice-burns Foods, Inc., Sr. Sub. Note, 12.25%, 2/1/2005 24,750
---------------------------------------------------------------
50,000 Specialty Foods Corp., Sr. Note, 11.125%, 10/1/2002 46,500
---------------------------------------------------------------
25,000 Van de Kamp's, Inc., Sr. Sub. Note, 12.00%, 9/15/2005 26,813
--------------------------------------------------------------- ------------
Total 98,063
--------------------------------------------------------------- ------------
FOOD SERVICES--0.1%
---------------------------------------------------------------
25,000 Americold Corporation, Sr. Sub. Note, 12.875%, 5/1/2008 25,375
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
FOOD SERVICES--CONTINUED
---------------------------------------------------------------
$ 75,000 Flagstar Corp, Sr. Note, 10.875%, 12/1/2002 $ 67,500
--------------------------------------------------------------- ------------
Total 92,875
--------------------------------------------------------------- ------------
FOREST PRODUCTS--0.1%
---------------------------------------------------------------
50,000 Repap New Brunswick, 2nd Priority Sr. Secd. Note, 10.625%,
4/15/2005 46,750
---------------------------------------------------------------
50,000 Riverwood International, Sr. Sub. Note, 10.875%, 4/1/2008 49,875
---------------------------------------------------------------
50,000 Stone Container, Sr. Note, 11.50%, 10/1/2004 50,938
--------------------------------------------------------------- ------------
Total 147,563
--------------------------------------------------------------- ------------
HEALTHCARE--0.1%
---------------------------------------------------------------
50,000 (b) Dade International, Inc., Sr. Sub. Note, 11.125%, 5/1/2006 51,625
---------------------------------------------------------------
50,000 Tenet Healthcare, Sr. Sub. Note, 10.125%, 3/1/2005 53,375
--------------------------------------------------------------- ------------
Total 105,000
--------------------------------------------------------------- ------------
HOTELS, MOTELS, INNS & CASINOS--0.0%
---------------------------------------------------------------
50,000 (b) Courtyard by Marriott II , Sr. Secd. Note, 10.75%, 2/1/2008 49,563
--------------------------------------------------------------- ------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.0%
---------------------------------------------------------------
25,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%, 7/15/2005 28,125
---------------------------------------------------------------
25,000 Pace Industries, Inc., Sr. Note, 10.625%, 12/1/2002 28,125
--------------------------------------------------------------- ------------
Total 56,250
--------------------------------------------------------------- ------------
LEISURE & ENTERTAINMENT--0.1%
---------------------------------------------------------------
100,000 (b) Amf Group Inc., Sr. Sub. Disc. Note, 0/12.25%, 3/15/2006 54,500
---------------------------------------------------------------
100,000 Six Flags Theme Parks, Sr. Sub. Disc. Note, 6/15/2005 85,750
--------------------------------------------------------------- ------------
Total 140,250
--------------------------------------------------------------- ------------
MACHINERY & EQUIPMENT--0.1%
---------------------------------------------------------------
50,000 (b) Alvey Systems, Inc., Sr. Sub. Note, 11.375%, 1/31/2003 51,750
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
MACHINERY & EQUIPMENT--CONTINUED
---------------------------------------------------------------
$ 50,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 $ 53,500
--------------------------------------------------------------- ------------
Total 105,250
--------------------------------------------------------------- ------------
OIL & GAS--0.1%
---------------------------------------------------------------
50,000 Falcon Drilling Company, Sr. Note, 9.75%, 1/15/2001 51,750
---------------------------------------------------------------
50,000 Giant Industries, Sr. Sub. Note, 9.75%, 11/15/2003 49,625
---------------------------------------------------------------
50,000 United Meridian Corp., Sr. Sub. Note, 10.375%, 10/15/2005 51,625
--------------------------------------------------------------- ------------
Total 153,000
--------------------------------------------------------------- ------------
PRINTING & PUBLISHING--0.1%
---------------------------------------------------------------
25,000 (b) Adams Outdoor Advertising L.P., Sr. Note, 10.75%, 3/15/2006 25,500
---------------------------------------------------------------
50,000 Garden State Newspapers, Inc., Sr. Sub. Note, 12.00%, 7/1/2004 52,000
---------------------------------------------------------------
50,000 Hollinger Intl Publishing, Sr. Sub. Note, 9.25%, 2/1/2006 46,750
---------------------------------------------------------------
500 (b) K-III Communications Corp., Pfd., Series C, 10.00% 46,750
--------------------------------------------------------------- ------------
Total 171,000
--------------------------------------------------------------- ------------
RETAILERS--0.1%
---------------------------------------------------------------
125,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 119,063
--------------------------------------------------------------- ------------
SERVICES--0.0%
---------------------------------------------------------------
25,000 Coinmach Corp., Sr. Note, 11.75%, 11/15/2005 26,000
--------------------------------------------------------------- ------------
STEEL--0.1%
---------------------------------------------------------------
25,000 Bayou Steel Corp., 1st Mtg. Note, 10.25%, 3/1/2001 23,000
---------------------------------------------------------------
50,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 46,000
---------------------------------------------------------------
50,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 51,625
--------------------------------------------------------------- ------------
Total 120,625
--------------------------------------------------------------- ------------
SURFACE TRANSPORTATION--0.1%
---------------------------------------------------------------
25,000 Ameritruck Distribution, Sr. Sub. Note, 12.25%, 11/15/2005 24,844
---------------------------------------------------------------
50,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 52,750
---------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- --------------------------------------------------------------- ------------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
SURFACE TRANSPORTATION--CONTINUED
---------------------------------------------------------------
$ 25,000 Great Dane Holdings, Sr. Sub. Deb., 12.75%, 8/1/2001 $ 24,125
---------------------------------------------------------------
25,000 OMI Corporation, Sr. Note, 10.25%, 11/1/2003 24,625
---------------------------------------------------------------
50,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 49,750
--------------------------------------------------------------- ------------
Total 176,094
--------------------------------------------------------------- ------------
TELECOMMUNICATIONS & CELLULAR--0.2%
---------------------------------------------------------------
50,000 (b) American Communications , Sr. Disc. Note, 4/1/2006 26,375
---------------------------------------------------------------
50,000 Intermedia Communications, Sr. Disc. Note, 5/15/2006 28,125
---------------------------------------------------------------
50,000 (b) Millicom International, Sr. Sub. Disc. Note, 6/1/2006 26,375
---------------------------------------------------------------
25,000 MobileMedia Communications, Inc., Sr. Sub. Note, 9.375%,
11/1/2007 23,750
---------------------------------------------------------------
75,000 Nextel Communications, Inc., Sr. Disc. Note, 0/11.50%, 9/1/2003 51,938
---------------------------------------------------------------
25,000 (b) Nextlink Communications, L.L.C., Sr. Note, 12.50%, 4/15/2006 25,313
---------------------------------------------------------------
50,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 51,125
---------------------------------------------------------------
75,000 Panamsat, LP, Sr. Sub. Disc. Note, 8/1/2003 64,500
---------------------------------------------------------------
50,000 Pronet, Inc., Sr. Sub. Note, 11.875%, 6/15/2005 53,250
---------------------------------------------------------------
50,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 49,500
--------------------------------------------------------------- ------------
Total 400,251
--------------------------------------------------------------- ------------
UTILITIES--0.1%
---------------------------------------------------------------
75,000 California Energy Co., Sr. Disc. Note, 1/15/2004 72,375
---------------------------------------------------------------
500 El Paso Electric Company, PIK Pfd., Series A, 11.40% 50,625
--------------------------------------------------------------- ------------
Total 123,000
--------------------------------------------------------------- ------------
TOTAL HIGH YIELD BONDS 4,363,824
--------------------------------------------------------------- ------------
</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 BONDS--5.2%
--------------------------------------------------------------
AUSTRALIA--0.2%
--------------------------------------------------------------
134,000 Queensland Treas Global, Local Gov't. Guarantee, 8.00%,
5/14/2003 $101,811
--------------------------------------------------------------
175,000 Queensland Treas Global, Local Gov't. Guarantee, 8.00%,
8/14/2001 135,543
--------------------------------------------------------------
150,000 State Bank Of New South, 12.25%, 2/26/2001 134,014
-------------------------------------------------------------- ------------
Total 371,368
-------------------------------------------------------------- ------------
BELGIUM--0.2%
--------------------------------------------------------------
2,112,000 Belgian Govt., Bond, 6.50%, 3/31/2005 67,091
--------------------------------------------------------------
6,000,000 Belgium Kingdom, 7.75%, 10/15/2004 207,168
-------------------------------------------------------------- ------------
Total 274,259
-------------------------------------------------------------- ------------
CANADA--0.3%
--------------------------------------------------------------
290,000 Canada Government, Deb., 6.50%, 6/1/2004 197,646
--------------------------------------------------------------
375,000 Ontario Hydro, 9.00%, 6/24/2002 294,466
-------------------------------------------------------------- ------------
Total 492,112
-------------------------------------------------------------- ------------
DENMARK--0.2%
--------------------------------------------------------------
602,000 Denmark--Bullet, Bond, 8.00%, 3/15/2006 105,780
--------------------------------------------------------------
1,200,000 Denmark, 8.00%, 5/15/2003 215,644
-------------------------------------------------------------- ------------
Total 321,424
-------------------------------------------------------------- ------------
FRANCE--0.3%
--------------------------------------------------------------
123,000 France O.A.T., Bond, 7.50%, 4/25/2005 157,475
--------------------------------------------------------------
1,044,000 France O.A.T., Bond, 7.25%, 4/25/2006 212,839
--------------------------------------------------------------
1,400,000 KFW International Finance, 7.00%, 5/12/2000 286,391
-------------------------------------------------------------- ------------
Total 656,705
-------------------------------------------------------------- ------------
GERMANY, FEDERAL REPUBLIC OF--1.0%
--------------------------------------------------------------
300,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 205,970
--------------------------------------------------------------
350,000 KFW International Finance, Bank Guarantee, 6.75%, 6/20/2005 231,209
--------------------------------------------------------------
</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 BONDS--CONTINUED
--------------------------------------------------------------
GERMANY, FEDERAL REPUBLIC OF--CONTINUED
--------------------------------------------------------------
1,100,000 Treuhandanstalt, 7.75%, 10/1/2002 $ 791,265
--------------------------------------------------------------
744,000 Treuhandanstalt, Foreign Gov't. Guarantee, 6.875%, 6/11/2003 509,733
-------------------------------------------------------------- ------------
Total 1,738,177
-------------------------------------------------------------- ------------
ITALY--0.4%
--------------------------------------------------------------
110,000,000 BTPS, Bond, 10.50%, 11/1/2000 75,352
--------------------------------------------------------------
1,040,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 679,411
-------------------------------------------------------------- ------------
Total 754,763
-------------------------------------------------------------- ------------
JAPAN--0.9%
--------------------------------------------------------------
65,000,000 Export-Import Bank Japan, 4.375%, 10/1/2003 650,920
--------------------------------------------------------------
42,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 462,575
--------------------------------------------------------------
33,000,000 KFW International Finance, 6.00%, 11/29/1999 348,758
-------------------------------------------------------------- ------------
Total 1,462,253
-------------------------------------------------------------- ------------
NETHERLANDS--0.3%
--------------------------------------------------------------
90,000 Lkb-global Bd, Bank Guarantee, 6.00%, 1/25/2006 56,383
--------------------------------------------------------------
700,000 Netherlands Government, 5.75%, 1/15/2004 400,732
--------------------------------------------------------------
210,000 Netherlands Government, 6.00%, 1/15/2006 119,605
-------------------------------------------------------------- ------------
Total 576,720
-------------------------------------------------------------- ------------
NEW ZEALAND--0.1%
--------------------------------------------------------------
143,000 New Zealand Government, 8.00%, 2/15/2001 93,089
--------------------------------------------------------------
105,000 New Zealand Government, Bond, 8.00%, 7/15/1998 69,944
-------------------------------------------------------------- ------------
Total 163,033
-------------------------------------------------------------- ------------
NORWAY--0.2%
--------------------------------------------------------------
800,000 NGB 9% 1/31/99, Bond, 9.00%, 1/31/1999 133,448
--------------------------------------------------------------
630,000 Norwegian Government, Bond, 7.00%, 5/31/2001 100,397
--------------------------------------------------------------
473,000 Norwegian Govt., Foreign Gov't. Guarantee, 5.75%, 11/30/2004 67,634
-------------------------------------------------------------- ------------
Total 301,479
-------------------------------------------------------------- ------------
</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 BONDS--CONTINUED
--------------------------------------------------------------
SPAIN--0.2%
--------------------------------------------------------------
40,000,000 Spanish Government, 10.00%, 2/28/2005 $ 327,271
--------------------------------------------------------------
6,510,000 Spanish Govt, Bond, 9.40%, 4/30/1999 52,469
--------------------------------------------------------------
6,480,000 Spanish Govt., Deb., 10.10%, 2/28/2001 53,400
-------------------------------------------------------------- ------------
Total 433,140
-------------------------------------------------------------- ------------
SWEDEN--0.3%
--------------------------------------------------------------
1,000,000 Stadshypotekskas, Foreign Gov't. Guarantee, Series 1551,
7.50%, 3/17/1999 149,398
--------------------------------------------------------------
2,300,000 Sweden, 6.00%, 2/9/2005 291,996
-------------------------------------------------------------- ------------
Total 441,394
-------------------------------------------------------------- ------------
UNITED KINGDOM--0.6%
--------------------------------------------------------------
98,000 British Gas PLC, 8.875%, 7/8/2008 148,735
--------------------------------------------------------------
108,000 U.K. Treasury, Deb., 8.50%, 12/7/2005 171,653
--------------------------------------------------------------
365,000 UK Conversion, 9.00%, 3/3/2000 594,263
--------------------------------------------------------------
30,000 UK Treasury, Bond, 8.00%, 12/7/2015 44,848
-------------------------------------------------------------- ------------
Total 959,499
-------------------------------------------------------------- ------------
TOTAL FOREIGN BONDS 8,946,326
-------------------------------------------------------------- ------------
TOTAL BONDS (IDENTIFIED COST $110,061,769) 109,142,602
-------------------------------------------------------------- ------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
- ----------- ----------------------------------------------------------------
<C> <C> <S> <C>
CASH EQUIVALENTS--9.4%
- -----------------------------------------------------------------------------------
(E) REPURCHASE AGREEMENTS--9.4%
----------------------------------------------------------------
$11,655,000 BT Securities Corporation, 5.340%, dated 5/31/1996, due 6/3/1996 11,655,000
----------------------------------------------------------------
3,450,000 (f) UBS Securities, Inc., 5.310%, dated 5/16/1996, due 6/17/1996 3,450,000
----------------------------------------------------------------
900,000 (f) UBS Securities, Inc., 5.310%, dated 5/20/1996, due 6/19/1996 900,000
---------------------------------------------------------------- ------------
TOTAL CASH EQUIVALENTS (AT AMORTIZED COST) 16,005,000
---------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $168,552,738)(G) $173,008,969
---------------------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
(a) Non-Income producing security.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At May 31, 1996, these securities amounted to
$2,548,632 which represents 1.5% of net assets.
(c) The utility stocks are shown in the asset category in which they were
purchased. The Fund's total exposure to utility stocks is 10.7% of net
assets.
(d) Includes securities with a market value of $4,265,610 subject to dollar roll
transactions.
(e) The repurchase agreements are fully collateralized by U.S. Government and/or
agency obligations. The investments in the repurchase agreements are through
participation in joint accounts with other Federated Funds.
(f) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(g) The cost of investments for federal tax purposes amounts to $168,552,738.
The net unrealized appreciation of investments on a federal tax basis
amounts to $4,456,231 which is comprised of $7,317,051 appreciation and
$2,860,820 depreciation at May 31, 1996.
Note: The categories of investments are shown as a percentage of net assets
($170,326,852) at May 31, 1996.
The following acronyms are used throughout this portfolio:
<TABLE>
<S> <C>
ADR -- American Depository Receipt
GDR -- Global Depository Receipts
GTD -- Guaranty
LP -- Limited Partnership
PEPS -- Participating Equity Preferred Stock
PIK -- Payment in Kind
PLC -- Public Limited Company
STRYPES -- Structured Yield Product Exchangeable for Stock
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -----------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $168,552,738) $173,008,969
- -----------------------------------------------------------------------------------------
Cash denominated in foreign currencies (identified cost $4,294) 4,351
- -----------------------------------------------------------------------------------------
Income receivable 1,788,361
- -----------------------------------------------------------------------------------------
Receivable for investments sold 471,680
- -----------------------------------------------------------------------------------------
Receivable for shares sold 395,405
- -----------------------------------------------------------------------------------------
Deferred expenses 27,506
- ----------------------------------------------------------------------------------------- ------------
Total assets 175,696,272
- -----------------------------------------------------------------------------------------
LIABILITIES:
- -----------------------------------------------------------------------------------------
Payable for investments purchased $ 641,040
- ----------------------------------------------------------------------------
Payable for shares redeemed 15,500
- ----------------------------------------------------------------------------
Payable to Bank 388,520
- ----------------------------------------------------------------------------
Payable for dollar roll transactions 4,298,516
- ----------------------------------------------------------------------------
Payable for taxes withheld 8,435
- ----------------------------------------------------------------------------
Net payable for forward foreign currency exchange contacts 234
- ----------------------------------------------------------------------------
Accrued expenses 17,175
- ---------------------------------------------------------------------------- ----------
Total liabilities 5,369,420
- ----------------------------------------------------------------------------------------- ------------
NET ASSETS for 15,535,487 shares outstanding $170,326,852
- ----------------------------------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------
Paid in capital $163,541,881
- -----------------------------------------------------------------------------------------
Net unrealized appreciation of investments, translation of assets and liabilities in
foreign currency, and futures contracts 4,452,384
- -----------------------------------------------------------------------------------------
Accumulated net realized gain on investments, foreign currency transactions, and futures
contracts 1,015,663
- -----------------------------------------------------------------------------------------
Undistributed net investment income 1,316,924
- ----------------------------------------------------------------------------------------- ------------
Total Net Assets $170,326,852
- ----------------------------------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -----------------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
- -----------------------------------------------------------------------------------------
$134,552,351 / 12,267,320 shares outstanding $ 10.97
- ----------------------------------------------------------------------------------------- ------------
SELECT SHARES:
- -----------------------------------------------------------------------------------------
$35,774,501 / 3,268,167 shares outstanding $ 10.95
- ----------------------------------------------------------------------------------------- ------------
</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, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- --------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $11,935) $ 572,339
- --------------------------------------------------------------------------------------------
Interest (net of dollar roll expense of $9,225) (net of foreign taxes withheld of $6,475) 3,793,673
- -------------------------------------------------------------------------------------------- -----------
Total income 4,366,012
- --------------------------------------------------------------------------------------------
EXPENSES:
- --------------------------------------------------------------------------------------------
Investment advisory fee $ 562,589
- ------------------------------------------------------------------------------
Administrative personnel and services fee 77,501
- ------------------------------------------------------------------------------
Custodian fees 52,611
- ------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 38,359
- ------------------------------------------------------------------------------
Directors'/Trustees' fees 1,648
- ------------------------------------------------------------------------------
Auditing fees 7,048
- ------------------------------------------------------------------------------
Legal fees 1,921
- ------------------------------------------------------------------------------
Portfolio accounting fees 40,926
- ------------------------------------------------------------------------------
Distribution services fee--Select Shares 111,428
- ------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 150,387
- ------------------------------------------------------------------------------
Shareholder services fee--Select Shares 37,142
- ------------------------------------------------------------------------------
Share registration costs 35,805
- ------------------------------------------------------------------------------
Printing and postage 28,756
- ------------------------------------------------------------------------------
Insurance premiums 2,562
- ------------------------------------------------------------------------------
Miscellaneous 11,163
- ------------------------------------------------------------------------------ ----------
Total expenses 1,159,846
- ------------------------------------------------------------------------------
Waivers--
- ------------------------------------------------------------------------------
Waiver of investment advisory fee $(107,470)
- ------------------------------------------------------------------
Waiver of distribution services fee--Select Shares (37,142)
- ------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (120,310)
- ------------------------------------------------------------------ ---------
Total waivers (264,922)
- ------------------------------------------------------------------------------ ----------
Net expenses 894,924
- -------------------------------------------------------------------------------------------- -----------
Net investment income 3,471,088
- -------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN
CURRENCY, AND FUTURES CONTRACTS:
- --------------------------------------------------------------------------------------------
Net realized gain on investments, foreign currency transactions, and futures contracts 1,293,483
- --------------------------------------------------------------------------------------------
Net change in unrealized depreciation of investments, translation of assets and liabilities
in foreign currency, and futures contracts (1,677,789)
- -------------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments, foreign currency, and futures contracts (384,306)
- -------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 3,086,782
- -------------------------------------------------------------------------------------------- -----------
</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
(UNAUDITED) YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
------------- ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- --------------------------------------------------------------
OPERATIONS--
- --------------------------------------------------------------
Net investment income $ 3,471,088 $ 4,047,273
- --------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency
transactions, and futures contracts ($1,293,483 and $2,295,469
net gains, respectively, as computed for federal tax
purposes) 1,293,483 2,155,646
- --------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of
investments, translation of assets and liabilities in foreign
currency, and futures contracts (1,677,789) 6,986,534
- -------------------------------------------------------------- ------------ ----------------
Change in net assets resulting from operations 3,086,782 13,189,453
- -------------------------------------------------------------- ------------ ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- --------------------------------------------------------------
Distributions from net investment income
- --------------------------------------------------------------
Institutional Shares (2,838,533) (2,937,306)
- --------------------------------------------------------------
Select Shares (604,183) (373,022)
- --------------------------------------------------------------
Distributions from net realized gains on investments, foreign
currency transactions, and futures contracts
- --------------------------------------------------------------
Institutional Shares (1,517,396) --
- --------------------------------------------------------------
Select Shares (372,550) --
- -------------------------------------------------------------- ------------ ----------------
Change in net assets resulting from distributions to
shareholders (5,332,662) (3,310,328)
- -------------------------------------------------------------- ------------ ----------------
SHARE TRANSACTIONS--
- --------------------------------------------------------------
Proceeds from sale of shares 58,712,865 87,791,342
- --------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 2,943,062 1,555,355
- --------------------------------------------------------------
Cost of shares redeemed (17,585,113) (18,214,182)
- -------------------------------------------------------------- ------------ ----------------
Change in net assets resulting from share transactions 44,070,814 71,132,515
- -------------------------------------------------------------- ------------ ----------------
Change in net assets 41,824,934 81,011,640
- --------------------------------------------------------------
NET ASSETS:
- --------------------------------------------------------------
Beginning of period 128,501,918 47,490,278
- -------------------------------------------------------------- ------------ ----------------
End of period (including undistributed net investment income
of $1,316,924 and $1,288,552, respectively) $170,326,852 $128,501,918
- -------------------------------------------------------------- ------------ ----------------
</TABLE>
(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 YEAR ENDED
ENDED NOVEMBER 30,
(UNAUDITED) -----------------
MAY 31, 1996 1995 1994(A)
------------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.14 $ 9.85 $10.00
- ----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------
Net investment income 0.25 0.50 0.25
- ----------------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts 0.02 1.28 (0.25)
- ---------------------------------------------------------------- --------- ------ -------
Total from investment operations 0.27 1.78 0.00
- ---------------------------------------------------------------- --------- ------ -------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------
Distributions from net investment income (0.28) (0.49) (0.15)
- ----------------------------------------------------------------
Distributions from net realized gain on investments, foreign
currency transactions, and futures contracts (0.16) -- --
- ---------------------------------------------------------------- --------- ------ -------
Total distributions (0.44) (0.49) (0.15)
- ---------------------------------------------------------------- --------- ------ -------
NET ASSET VALUE, END OF PERIOD $10.97 $11.14 $ 9.85
- ---------------------------------------------------------------- --------- ------ -------
TOTAL RETURN (B) 2.44% 18.51% 0.02%
- ----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------
Expenses 1.05%* 1.00% 0.88%*
- ----------------------------------------------------------------
Net investment income 4.77%* 5.10% 5.07%*
- ----------------------------------------------------------------
Expense waiver/reimbursement (c) 0.34%* 0.55% 0.59%*
- ----------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------
Net assets, end of period (000 omitted) $134,552 $103,715 $43,793
- ----------------------------------------------------------------
Average commission rate paid $0.0026 -- --
- ----------------------------------------------------------------
Portfolio turnover 95% 157% 132%
- ----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) 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 YEAR ENDED
ENDED NOVEMBER 30,
(UNAUDITED) -----------------
MAY 31, 1996 1995 1994(A)
------------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.12 $ 9.83 $10.00
- ----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------
Net investment income 0.22 0.37 0.21
- ----------------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts 0.01 1.34 (0.25)
- ---------------------------------------------------------------- --------- ------ -------
Total from investment operations 0.23 1.71 (0.04)
- ---------------------------------------------------------------- --------- ------ -------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------
Distributions from net investment income (0.24) (0.42) (0.13)
- ----------------------------------------------------------------
Distributions from net realized gain on investments, foreign
currency transactions, and futures contracts (0.16) -- --
- ---------------------------------------------------------------- --------- ------ -------
Total distributions (0.40) (0.42) (0.13)
- ---------------------------------------------------------------- --------- ------ -------
NET ASSET VALUE, END OF PERIOD $10.95 $11.12 $ 9.83
- ---------------------------------------------------------------- --------- ------ -------
TOTAL RETURN (B) 2.10% 17.76% (0.40%)
- ----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------
Expenses 1.76%* 1.75% 1.64%*
- ----------------------------------------------------------------
Net investment income 4.07%* 4.37% 4.33%*
- ----------------------------------------------------------------
Expense waiver/reimbursement (c) 0.39%* 0.55% 0.84%*
- ----------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------
Net assets, end of period (000 omitted) $35,775 $24,787 $3,697
- ----------------------------------------------------------------
Average commission rate paid $0.0026 -- --
- ----------------------------------------------------------------
Portfolio turnover 95% 157% 132%
- ----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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 charge or
contingent deferred sales charge, if applicable.
(c) 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, 1996 (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 portfolios. The financial statements
included herein are only those of Federated Managed Growth And Income Fund (the
"Fund"), a diversified portfolio. 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.
The investment objective of the Fund is to seek current income and capital
appreciation.
(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 securities, listed corporate bonds,
other fixed income and asset-backed securities, and unlisted and private
placement securities are generally valued at the mean of the latest bid and
asked price as furnished by an independent pricing service. Foreign
government and corporate bonds are valued at the last sale price reported
on a national exchange. If the last sales price is not available the
securities are valued at the mean of the latest bid and ask price as
furnished by an independent pricing service. Listed foreign and domestic
equity securities are valued at the last sale price reported on a national
securities exchange. Short-term foreign and domestic securities are valued
at the prices provided by an independent pricing service. However,
short-term foreign and domestic 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.
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
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
"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.
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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Certain dividends from foreign securities may be recorded after the
ex-dividend date based upon when information becomes available to the Fund.
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 interest and dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax
rules and rates.
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.
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 over a period of five years from
the Fund's commencement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in 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 AND INCOME FUND
- --------------------------------------------------------------------------------
At May 31, 1996, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF % OF
INDUSTRY NET ASSETS INDUSTRY NET ASSETS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Agency 0.5
Automobile 0.1
Banking 0.7
Basic Industry 0.1
Beverage & Tobacco 0.1
Broadcasting & Publishing 0.2
Building Materials & Components 0.2
Business & Public Services 0.2
Chemicals 0.2
Construction & Housing 0.2
Corporate/Mortgage 0.2
Electrical & Electronics 0.3
Electronic Components 0.2
Energy Equipment & Services 0.1
Energy 0.2
Financial Services 0.2
Food & Household Products 0.2
Forest Products & Paper 0.1
Health & Personal Care 0.2
Industrial Components 0.1
Insurance 0.2
Leisure & Tourism 0.2
Machinery & Engineering 0.3
Merchandising 0.2
Metals 0.1
Mining 0.1
Materials & Commodities 0.1
Multi-Industry 0.2
Pharmaceuticals 0.1
Producer Manufacturing 0.1
Real Estate 0.3
Recreation 0.1
Soverign 3.0
State/Provincial 0.2
Supernational 0.2
Technology 0.1
Telecommunications 0.3
Textiles & Apparel 0.1
Transportation 0.1
Utilities 0.3
Wholesale & International Trade 0.1
</TABLE>
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock index futures contract with a broker, the
Fund is required to deposit in a segregated account a specified amount of
cash or U.S. government securities. Futures contracts are valued daily and
unrealized gains or losses are recorded in a "variation margin" account.
Daily, the Fund receives from or pays to the broker a specified amount of
cash based upon changes in the variation margin account. When a contract is
closed, the Fund recognizes a realized gain or loss. For the period ended
May 31, 1996, the Fund had realized gains of $376,628 on futures contracts.
At May 31, 1996, the Fund had no outstanding futures contracts.
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities.
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The
Fund may enter into these contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date as a hedge or cross
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
hedge against either specific transactions or portfolio positions. The
objective of the Fund's foreign currency hedging transactions is to reduce
the risk that the U.S. dollar value of the Fund's foreign currency
denominated securities will decline in value due to changes in foreign
currency exchange rates. All foreign currency exchange contracts are
"marked to market" daily at the applicable translation rates resulting in
unrealized gains or losses. Realized gains or losses are recorded at the
time the foreign currency exchange contract is offset by entering into a
closing transaction or by the delivery or receipt of the currency. Risks
may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts and from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar. At May 31, 1996, the Fund had outstanding foreign exchange
contracts as set forth below:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO CONTRACTS APPRECIATION
SETTLEMENT DATE DELIVER/RECEIVE IN EXCHANGE FOR AT VALUE (DEPRECIATION)
------------------------ ------------------------------ ------------------ --------- ---------------
<S> <C> <C> <C> <C>
CONTRACTS PURCHASED
6/4/96 32,157,837 Indonesian Rupiah $13,787 $13,808 $ (21)
6/3/96 509,195 Philippine Peso 19,450 19,487 (37)
CONTRACTS SOLD
6/3/96 3,449 Deutsche Mark 2,260 2,246 (14)
6/4/96 1,020 Deutsche Mark 668 665 (3)
6/4/96 12,772,427 Indonesian Rupiah 5,476 5,484 8
6/6/96 28,361,358 Indonesian Rupiah 12,159 12,156 (3)
6/5/96 34,848,161 Italian Lira 22,574 22,425 (149)
6/4/96 14,873,040 Italian Lira 9,634 9,625 (9)
6/4/96 1,812 Netherlands Guilder 1,061 1,055 (6)
6/4/96 1,170 Thailand Baht 46 46 0
------
Net Unrealized Depreciation on Foreign Exchange Contracts (234)
</TABLE>
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 of
portfolio securities, sales and maturities of short-term securities, sales
of FCs, currency gains or losses realized between the
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
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.
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 sells 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.
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 Board of 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, 1996 is
as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE(S) COST
---------------------------------------------------------- ---------------- -----------
<S> <C> <C>
Westinghouse Electric Corp., PEPS, Series C 9/27/95-3/14/96 $ 357,463
Solectron Corp., Conv. Bond 2/15/96-3/13/96 99,525
Commerzbank AG, Frankfurt 11/17/95 48,194
Shanghai Industrial Holdings Ltd. 5/23/96 21,867
Bombay Suburban Electric Supply, GDR 2/29/96 24,480
Hindalco Industries, GDR 1/22/96 21,175
Mahindra and Mahindra, GDR 1/22/96-2/2/96 19,450
Steel Authority of India, GDR 4/23/96 18,769
Sumitomo Trust & Banking 3/21/96 79,134
Grupo Financiero Bancomer, S.A. 11/6/95-1/17/96 16,066
Bayer Corp., Deb. 3/21/96-4/17/96 444,986
Loewen Group Int'l, Sr. Note 3/20/96 250,000
Freeport Terminal (Malta), Gtd. Global Note 6/16/94 284,100
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE(S) COST
---------------------------------------------------------- ---------------- -----------
<S> <C> <C>
First Nationwide Holdings, Sr. Note 1/4/95 $ 25,000
Granite Broadcasting Corp. Sr. Sub. Note 3/22/96 23,563
Park Communications, Inc., Sr. Note 5/6/96 25,000
SFX Broadcasting, Sr. Sub. Note 5/23/96 50,000
Knoll Inc., Sr. Sub. Note 2/27/96 51,250
CS Wireless Systems, Inc. 2/16/96 59,141
Charter Communications SE, Sr. Note 3/22/96 50,000
EchoStar Satellite Broadcasting Corp., Sr. Secd. Disc.
Note 3/19/96 15,457
UH Australia/Pacific, Sr. Disc. Note 5/8/96 25,583
RBX Corp., Sr. Sub. Note 2/9/96 24,875
Simmons Company, Sr. Sub. Note 4/15/96 25,000
Twin Laboratories Inc., Sr. Sub. Note 5/16/96 50,688
Packaging Resources Inc., Sr. Secd. Note 5/10/96 25,000
Dade International, Inc., Sr. Sub. Note 4/30/96-5/17/96 50,906
Courtyard by Marriott II, Sr. Secd. Note 1/12/96 50,000
Amf Group Inc., Sr. Sub. Disc. Note 3/7/96 56,629
Alvey Systems, Inc., Sr. Sub. Note 1/19/96 50,000
Adams Outdoor Advertising L.P., Sr. Note 3/5/96 25,000
K-III Communications Corp., Pfd. 2/12/96 51,000
American Communications, Sr. Disc. Note 3/21/96 27,534
Millicom International, Sr. Sub. Disc. Note 5/24/96 26,038
Nextlink Communications, L.L.C., Sr. Note 4/18/96 25,000
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
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.
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
------------------------- -------------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------ ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 4,085,782 $45,053,625 6,226,565 $65,821,031
- ------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 194,361 2,127,109 122,850 1,277,967
- ------------------------------------------------------
Shares redeemed (1,321,613) (14,557,122) (1,487,709) (15,675,825)
- ------------------------------------------------------ --------- ---------- --------- ----------
Net change resulting from Institutional share
transactions 2,958,530 $32,623,612 4,861,706 $51,423,173
- ------------------------------------------------------ --------- ---------- --------- ----------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
------------------------ ------------------------
SELECT SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------------------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,240,014 $13,659,240 2,065,372 $21,970,311
- --------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 74,614 815,953 26,322 277,388
- --------------------------------------------------------
Shares redeemed (275,210) (3,027,991) (238,977) (2,538,357)
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from Select share transactions 1,039,418 $11,447,202 1,852,717 $19,709,342
- -------------------------------------------------------- -------- ---------- -------- ----------
Net change resulting from share transactions 3,997,948 $44,070,814 6,714,423 $71,132,515
- -------------------------------------------------------- -------- ---------- -------- ----------
</TABLE>
(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 0.75% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a sub-advisory agreement between the Adviser and Federated
Global Research Corp., Federated Global Research Corp. receives an allocable
portion of the Fund's advisory fee. Such allocation is based on the amount of
foreign securities which Federated Global Research Corp. managers for the Fund.
This fee is paid by the Adviser out of its resources and is not an incremental
Fund expense.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ 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 AND INCOME FUND
- --------------------------------------------------------------------------------
DISTRIBUTION SERVICES 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 0.75% of average daily net assets of the Select
Shares annually, to compensate FSC. The distributor may voluntarily choose to
waive any 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 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FSS may voluntarily choose to waive any portion of its fee. FSS can
modify or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC") serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational and start-up administrative service
expenses of $86,568, were borne initially by the Adviser. The Fund has agreed to
reimburse the Adviser for the organizational and start-up administrative
expenses during the five year period following effective date. For the period
ended May 31, 1996, the Fund paid $12,568 pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1996, were as follows:
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------
PURCHASES $171,075,626
- ------------------------------------------------------------------------------ ------------
SALES $133,103,807
- ------------------------------------------------------------------------------ ------------
</TABLE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. John W. McGonigle
Glen R. Johnson Executive Vice President and Secretary
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Executive Vice President and Treasurer
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
J. Crilley Kelly
Assistant Secretary
</TABLE>
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 INCOME
FUND
[LOGO]
----------------------------------------------------------------
----------------------------------------------------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
Federated Managed Income Fund
is part of
Managed Series Trust,
a lifecycle investing program
from Federated Investors.
MAY 31, 1996
FEDERATED INVESTORS
(LOGO)Z
- ---------------------------------------------
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Federated Securities Corp. is the distributor of the fund
and is a subsidiary of Federated Investors.
CUSIP 56166K107
CUSIP 56166K206
G00517-01 (7/96)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Federated
Managed Income Fund for the six-month period from December 1, 1995 through May
31, 1996. Included in this report is the fund's investment review, followed by a
complete listing of the fund's holdings 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").
After a very strong 1995, the U.S. bond market was impacted by rising rates in
1996, which caused bond prices to fall. However, the fund's holdings of short-
to intermediate-maturity U.S. bonds, which accounted for 90% of the portfolio's
assets, were impacted less than bonds with longer maturities. After rapid 1995
gains, the U.S. stock market, where almost 10% of the fund's assets were
invested, progressed at a slower rate.
In this environment, Institutional Shares delivered a total return of 1.56%*
through dividends of $0.35 per share and capital gains of $0.07 per share.
Select Shares produced a total return of 1.11%* through dividends of $0.31 per
share and capital gains of $0.07 per share. Fund assets increased to reach $82.5
million at the end of the period.
Thank you for selecting Federated Managed Income Fund. As always, we invite your
comments and suggestions.
Sincerely,
LOGO
Glen R. Johnson
President
July 15, 1996
* 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.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1996
For the six-month period ended May 31, 1996, an investor in Federated Managed
Income Fund Institutional Shares experienced a total return of 1.56%,* while an
investor in Select Shares received a total return of 1.11%.* The driving force
behind last year's financial market performance was a belief that growth would
be slow in 1996. However, over the six-month reporting period, the economy
proved surprisingly resilient. After a weak holiday spending pattern, economic
activity began to accelerate noticeably in late winter, partially driven by a
rebound in interest sensitive activity such as housing and by renewed strength
in consumer spending. The stronger economic growth and the collapse of budget
negotiations on reducing the federal deficit shocked the financial markets.
Interest rates reversed course and rose rapidly through the spring. Stock
prices, which had been moving up quickly on lower interest rates, began to
falter and made much slower progress in late winter and spring.
ASSET ALLOCATION AS OF MAY 31, 1996
Federated Managed Income Fund operates on an investment philosophy that, over
time, an investor with a diversified portfolio has the potential to achieve
better returns with the same risk, or the same returns with lower risk, than an
investor in a single asset category. Therefore, to ensure proper diversification
of its portfolio, the fund's investment policies require management to allocate
the portfolio among as many as ten asset categories and limit the weight of each
asset category. In allocating the fund's portfolio among asset categories, fund
management analyzes the relative value offered by each category under prevailing
market conditions. Fund management seeks to improve the fund's performance by
weighting most heavily the asset categories that management believes will
provide the best relative value. The following table shows the allocation of the
portfolio among different asset categories at May 31, 1996.
* 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.
- --------------------------------------------------------------------------------
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1996
- ---------------------------------------- ------------------------ ------------------------
<S> <C> <C>
BONDS(1) 70-90 85
U.S. Treasury Securities 0-90 33
Mortgage-Backed Securities 0-45 32
Investment Grade Corporate Bonds 0-45 10
High Yield Corporate Bonds 0-10 5
Foreign Bonds 0-10 5
EQUITIES(1) 10-30 15
Large Company Stocks 0-30 5
Utility Stocks 0-15 5
Small Company Stocks 0-3 0
Foreign Stocks 0-3 0
Equity Reserves 0-12.5 5
</TABLE>
(1) Bonds convertible into equity securities at a price below the closing price
of the underlying equity securities on May 31, 1996 have been included under
the appropriate equity asset category.
In essence, investors have the choice of buying fairly valued bonds or
overvalued stocks. The cornerstone of a value investment philosophy is the
belief that investors should take risks only when offered the chance for higher
returns. Higher prices, without a change in the underlying fundamentals, reduce
potential returns from investments. Implementing this philosophy, bonds were
approximately 5% more of the fund's assets than normal throughout the reporting
period, as the level of stock prices made potential future returns less
attractive than normal. Throughout the reporting period, fund management
believed that stocks and bonds were richly priced relative to their fundamentals
and defensive positions were appropriate in both sectors.
STRUCTURE OF THE BOND PORTFOLIO
Fund management established a defensive bond position by reducing interest rate
risk, since bond prices fall when interest rates rise. The fund's investment
policies limit the duration of its bond portfolio to a range of two to four
years. A portfolio with its duration in this range has a sensitivity to interest
rate changes similar to that of short-to-intermediate maturity bonds. Bond
prices peaked for the period in early February 1996 and fell rapidly in the
spring as economic statistics began to indicate a stronger pulse to economic
activity. Anticipating upward cyclical pressure on interest rates, fund
management set a target duration for the fund's bond portfolio at 2.5, a below
average level. In this way, the fund was less sensitive to the negative impact
of rising interest rates on the value of the portfolio.
- --------------------------------------------------------------------------------
The bond portion emphasizes mortgage-backed securities and U.S. Treasurys, the
high quality portion of the bond market. A modest foreign bond position was held
for diversification purposes, since foreign bonds tend to be volatile at
different times than U.S. bonds. The mortgage-backed sector weight was above
normal throughout the period, which helped performance as the stable income flow
provided by these securities proved to be a defensive characteristic in the
rising rate environment. The allocation to high yield corporate bonds was
modestly increased at the beginning of 1996. This change proved rewarding as the
strengthening economy reduced concerns about credit risk in the corporate sector
and led to strong relative performance by high yield bonds.
STRUCTURE OF THE EQUITY PORTFOLIO
To enhance the defensive posture of the stock portfolio, the fund holds modestly
above normal levels of equity reserves. Since its inception, the fund held a
mid-point allocation to equity reserves invested in short-term debt. However, by
early June 1995, 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 5.0%, with the increased allocation coming from a reduction
in the allocation to U.S. large company stocks.
Within the equity market, the utility sector and large cap stocks have
approximately equal weights. Strong performance by utilities in late 1995 caused
fund management to reduce the utility sector weight at the beginning of 1996. As
utilities trailed significantly the rise in large cap stocks over the period,
the reduction in position aided performance by reducing the drag from this poor
performing sector. However, the relative value of utilities as indicated by
their above normal yield advantage over industrial stocks makes fund management
believe a slightly above normal weight in utilities is appropriate.
FEDERATED MANAGED INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--10.2%
- ------------------------------------------------------------------------------------
LARGE COMPANY--5.1%
----------------------------------------------------------------
BASIC INDUSTRY--0.3%
----------------------------------------------------------------
2,600 Allegheny Ludlum Corp. $ 52,000
----------------------------------------------------------------
600 Aluminum Co. of America 36,975
----------------------------------------------------------------
1,500 Barrick Gold Corp. 47,250
----------------------------------------------------------------
1,200 Du Pont (E.I.) de Nemours & Co. 95,700
----------------------------------------------------------------
300 Eastman Chemical Co. 20,100
----------------------------------------------------------------
900 International Paper Co. 35,888
---------------------------------------------------------------- -----------
Total 287,913
---------------------------------------------------------------- -----------
CONSUMER DURABLES--0.1%
----------------------------------------------------------------
1,100 Ford Motor Co. 40,150
----------------------------------------------------------------
2,525 Mattel, Inc. 68,806
---------------------------------------------------------------- -----------
Total 108,956
---------------------------------------------------------------- -----------
CONSUMER NON-DURABLES--0.5%
----------------------------------------------------------------
700 Avon Products, Inc. 64,750
----------------------------------------------------------------
500 CPC International, Inc. 34,563
----------------------------------------------------------------
3,000 IBP, Inc. 82,125
----------------------------------------------------------------
500 Kimberly-Clark Corp. 36,438
----------------------------------------------------------------
1,300 Philip Morris Cos., Inc. 129,188
----------------------------------------------------------------
600 Tambrands, Inc. 27,675
---------------------------------------------------------------- -----------
Total 374,739
---------------------------------------------------------------- -----------
ENERGY MINERALS--0.5%
----------------------------------------------------------------
1,400 Chevron Corp. 83,650
----------------------------------------------------------------
400 Exxon Corp. 33,900
----------------------------------------------------------------
1,500 Occidental Petroleum Corp. 38,813
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
----------------------------------------------------------------
ENERGY MINERALS--CONTINUED
----------------------------------------------------------------
300 Royal Dutch Petroleum Co. $ 45,000
----------------------------------------------------------------
900 Texaco, Inc. 75,375
----------------------------------------------------------------
2,600 USX-Marathon Group 56,875
----------------------------------------------------------------
1,600 Union Pacific Resources Group, Inc. 41,200
----------------------------------------------------------------
500 (a) Western Atlas, Inc. 30,625
---------------------------------------------------------------- -----------
Total 405,438
---------------------------------------------------------------- -----------
FINANCE--0.8%
----------------------------------------------------------------
1,448 Allstate Corp. 61,178
----------------------------------------------------------------
800 CIGNA Corp. 91,900
----------------------------------------------------------------
800 Chase Manhattan Corp. 56,000
----------------------------------------------------------------
600 Chubb Corp. 27,975
----------------------------------------------------------------
1,600 Citicorp 134,400
----------------------------------------------------------------
900 Dean Witter, Discover & Co. 53,325
----------------------------------------------------------------
902 Mellon Bank Corp. 51,527
----------------------------------------------------------------
700 Merrill Lynch & Co., Inc., STRYPES, $3.12 38,500
----------------------------------------------------------------
800 Providian Corp. 34,900
----------------------------------------------------------------
500 Sunamerica, Inc., Conv. Pfd., Series E, $3.10 36,500
----------------------------------------------------------------
700 Travelers/Aetna, Inc. 19,075
----------------------------------------------------------------
1,500 Travelers Group, Inc. 62,250
---------------------------------------------------------------- -----------
Total 667,530
---------------------------------------------------------------- -----------
HEALTH CARE--0.5%
----------------------------------------------------------------
700 Abbott Laboratories 30,188
----------------------------------------------------------------
1,500 American Home Products Corp. 80,250
----------------------------------------------------------------
1,100 Becton, Dickinson & Co. 93,500
----------------------------------------------------------------
1,200 Bristol-Myers Squibb Co. 102,450
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
----------------------------------------------------------------
HEALTH CARE--CONTINUED
----------------------------------------------------------------
500 Columbia/HCA Healthcare Corp. $ 26,938
----------------------------------------------------------------
900 Merck & Co., Inc. 58,163
----------------------------------------------------------------
1,000 Smithkline Beecham, ADR 51,000
---------------------------------------------------------------- -----------
Total 442,489
---------------------------------------------------------------- -----------
PRODUCER MANUFACTURING--0.5%
----------------------------------------------------------------
580 (a) FMC Corp. 39,005
----------------------------------------------------------------
700 General Electric Co. 57,925
----------------------------------------------------------------
900 Loews Corp. 71,775
----------------------------------------------------------------
1,000 Philips Electronics N.V. ADR 35,125
----------------------------------------------------------------
1,700 Textron, Inc. 144,075
----------------------------------------------------------------
5,700 (b) Westinghouse Electric Corp., PEPS, Series C, $1.3 97,613
---------------------------------------------------------------- -----------
Total 445,518
---------------------------------------------------------------- -----------
RETAIL TRADE--0.2%
----------------------------------------------------------------
900 Nordstrom, Inc. 45,900
----------------------------------------------------------------
1,800 Sears, Roebuck & Co. 91,575
----------------------------------------------------------------
1,500 Wal-Mart Stores, Inc. 38,813
---------------------------------------------------------------- -----------
Total 176,288
---------------------------------------------------------------- -----------
SERVICES--0.1%
----------------------------------------------------------------
1,400 Baker Hughes, Inc. 43,925
----------------------------------------------------------------
400 Gannett Co., Inc. 27,900
---------------------------------------------------------------- -----------
Total 71,825
---------------------------------------------------------------- -----------
TECHNOLOGY--0.9%
----------------------------------------------------------------
25,000 Analog Devices, Conv. Bond, 3.5%, 12/1/2000 29,615
----------------------------------------------------------------
800 (a) Applied Materials, Inc. 29,800
----------------------------------------------------------------
600 (a) DST Systems, Inc. 20,925
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
----------------------------------------------------------------
TECHNOLOGY--CONTINUED
----------------------------------------------------------------
900 (a) Digital Equipment Corp. $ 46,913
----------------------------------------------------------------
1,800 General Motors Corp., Class E 101,475
----------------------------------------------------------------
900 Hewlett-Packard Co. 96,075
----------------------------------------------------------------
900 Intel Corp. 67,950
----------------------------------------------------------------
600 International Business Machines Corp. 64,050
----------------------------------------------------------------
1,100 Lockheed Martin Corp. 92,263
----------------------------------------------------------------
700 Raytheon Co. 37,275
----------------------------------------------------------------
1,600 Rockwell International Corp. 93,400
----------------------------------------------------------------
800 (a) Seagate Technology, Inc. 47,000
---------------------------------------------------------------- -----------
Total 726,741
---------------------------------------------------------------- -----------
TRANSPORTATION--0.1%
----------------------------------------------------------------
600 (a) Southern Pacific Rail Corp. 14,625
----------------------------------------------------------------
500 Union Pacific Corp. 35,063
---------------------------------------------------------------- -----------
Total 49,688
---------------------------------------------------------------- -----------
(c) UTILITIES--0.6%
----------------------------------------------------------------
1,600 AT&T Corp. 99,800
----------------------------------------------------------------
1,200 CMS Energy Corp. 34,500
----------------------------------------------------------------
600 Columbia Gas System, Inc. 29,325
----------------------------------------------------------------
900 Enron Corp. 36,000
----------------------------------------------------------------
400 FPL Group, Inc. 17,100
----------------------------------------------------------------
900 GTE Corp. 38,475
----------------------------------------------------------------
1,800 MCI Communications Corp. 52,425
----------------------------------------------------------------
1,500 Pacific Gas & Electric Co. 34,875
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
LARGE COMPANY--CONTINUED
----------------------------------------------------------------
UTILITIES--CONTINUED
----------------------------------------------------------------
1,500 Southern Co. $ 34,688
----------------------------------------------------------------
1,600 TECO Energy, Inc. 37,800
---------------------------------------------------------------- -----------
Total 414,988
---------------------------------------------------------------- -----------
TOTAL LARGE COMPANY 4,172,113
---------------------------------------------------------------- -----------
(C) UTILITY STOCKS--5.1%
----------------------------------------------------------------
ELECTRIC UTILITIES: CENTRAL--1.9%
----------------------------------------------------------------
3,500 CMS Energy Corp. 100,625
----------------------------------------------------------------
3,564 Cinergy Corp. 105,584
----------------------------------------------------------------
4,400 DPL, Inc. 99,000
----------------------------------------------------------------
3,700 DQE, Inc. 99,438
----------------------------------------------------------------
2,100 Duke Power Co. 101,325
----------------------------------------------------------------
2,300 FPL Group, Inc. 98,325
----------------------------------------------------------------
3,200 General Public Utilities 107,200
----------------------------------------------------------------
3,800 Illinova Corp. 99,750
----------------------------------------------------------------
2,700 NIPSCO Industries, Inc. 100,575
----------------------------------------------------------------
5,000 Pacificorp 100,625
----------------------------------------------------------------
3,900 Peco Energy Co. 96,038
----------------------------------------------------------------
3,600 Pinnacle West Capital Corp. 95,400
----------------------------------------------------------------
4,300 Southern Co. 99,438
----------------------------------------------------------------
4,300 TECO Energy, Inc. 101,588
----------------------------------------------------------------
2,500 Texas Utilities Co. 102,188
----------------------------------------------------------------
3,600 Utilicorp United, Inc. 98,550
---------------------------------------------------------------- -----------
Total 1,605,649
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
STOCKS--CONTINUED
- ------------------------------------------------------------------------------------
(C) UTILITY STOCKS--CONTINUED
----------------------------------------------------------------
MAJOR U.S. TELECOMMUNICATIONS--2.7%
----------------------------------------------------------------
4,000 AT&T Corp. $ 249,500
----------------------------------------------------------------
4,500 Ameritech Corp. 254,250
----------------------------------------------------------------
4,000 Bell Atlantic Corp. 249,500
----------------------------------------------------------------
6,800 BellSouth Corp. 276,250
----------------------------------------------------------------
5,800 GTE Corp. 247,950
----------------------------------------------------------------
8,700 MCI Communications Corp. 253,388
----------------------------------------------------------------
4,800 NYNEX Corp. 221,400
----------------------------------------------------------------
5,100 SBC Communications, Inc. 251,813
----------------------------------------------------------------
7,600 U.S. West, Inc. 247,950
---------------------------------------------------------------- -----------
Total 2,252,001
---------------------------------------------------------------- -----------
NATURAL GAS DISTRIBUTION--0.2%
----------------------------------------------------------------
3,400 MCN Corp. 80,750
----------------------------------------------------------------
3,000 Pacific Enterprises 79,125
---------------------------------------------------------------- -----------
Total 159,875
---------------------------------------------------------------- -----------
OIL/GAS TRANSMISSION--0.3%
----------------------------------------------------------------
2,100 Enron Corp. 84,000
----------------------------------------------------------------
2,500 Panenergy Corp. 80,313
----------------------------------------------------------------
1,600 Williams Companies, Inc. 80,400
---------------------------------------------------------------- -----------
Total 244,713
---------------------------------------------------------------- -----------
TOTAL UTILITY STOCKS 4,262,238
---------------------------------------------------------------- -----------
TOTAL STOCKS (IDENTIFIED COST $7,527,430) 8,434,351
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--53.2%
- ------------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--31.9%
----------------------------------------------------------------
GOVERNMENT AGENCY--31.9%
----------------------------------------------------------------
$ 64,577 Federal Home Loan Mortgage Corp., 9.50%, 06/01/2021 $ 68,552
----------------------------------------------------------------
150,516 Federal Home Loan Mortgage Corp., 9.50%, 04/01/2021 159,780
----------------------------------------------------------------
463,145 Federal Home Loan Mortgage Corp., 7.50%, 05/01/2024 455,035
----------------------------------------------------------------
244,059 Federal Home Loan Mortgage Corp., 7.00%, 07/01/2024 232,921
----------------------------------------------------------------
1,022,694 Federal Home Loan Mortgage Corp., 6.50%, 09/1/2025 949,500
----------------------------------------------------------------
1,526,285 Federal Home Loan Mortgage Corp., 8.00%, 04/1/2024 1,531,322
----------------------------------------------------------------
999,037 Federal Home Loan Mortgage Corp., 6.50%, 04/1/2026 927,526
----------------------------------------------------------------
391,427 Federal Home Loan Mortgage Corp., 8.00%, 11/01/2009 398,653
----------------------------------------------------------------
980,188 Federal Home Loan Mortgage Corp., 8.00%, 09/1/2010 998,282
----------------------------------------------------------------
798,150 Federal Home Loan Mortgage Corp., 7.00%, 04/01/2009 783,672
----------------------------------------------------------------
1,039,403 Federal Home Loan Mortgage Corp., 7.00%, 02/1/2026 993,773
----------------------------------------------------------------
1,275,000 (d) Federal Home Loan Mortgage Corp., 6.50% 6/1/2011 1,224,778
----------------------------------------------------------------
950,000 (d) Federal Home Loan Mortgage Corp., 7.5%, 6/1/2026 932,045
----------------------------------------------------------------
522,875 Federal National Mortgage Association 7.00%, 5/1/2001 521,886
----------------------------------------------------------------
484,200 Federal National Mortgage Association, 7.00%, 07/01/2024 462,488
----------------------------------------------------------------
870,189 Federal National Mortgage Association, 8.50%, 07/01/2024 890,030
----------------------------------------------------------------
697,382 Federal National Mortgage Association, 9.50%, 10/01/2024 744,448
----------------------------------------------------------------
203,778 Federal National Mortgage Association, 7.50%, 06/01/2009 203,776
----------------------------------------------------------------
436,365 Federal National Mortgage Association, 8.00%, 11/01/2024 437,312
----------------------------------------------------------------
154,079 Federal National Mortgage Association, 8.50%, 02/01/2025 157,592
----------------------------------------------------------------
921,381 Federal National Mortgage Association, 7.50%, 07/1/2025 903,387
----------------------------------------------------------------
972,231 Federal National Mortgage Association, 7.00%, 07/1/2025 928,636
----------------------------------------------------------------
995,760 Federal National Mortgage Association, 6.50%, 10/1/2025 923,558
----------------------------------------------------------------
1,041,876 Federal National Mortgage Association, 6.00%, 03/1/2011 977,071
----------------------------------------------------------------
977,059 Federal National Mortgage Association, 6.50%, 02/1/2026 906,212
----------------------------------------------------------------
</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
----------------------------------------------------------------
$ 409,375 Federal National Mortgage Association, 10.50%, 01/01/2021 $ 451,332
----------------------------------------------------------------
500,000 (d) Federal National Mortgage Association, 6.50%, 6/1/2011 480,305
----------------------------------------------------------------
475,000 (d) Federal National Mortgage Association, 7.00%, 6/1/2011 467,277
----------------------------------------------------------------
873,530 Government National Mortgage Association, 9.00%, 02/15/2020 924,841
----------------------------------------------------------------
951,101 Government National Mortgage Association, 7.00%, 10/15/2023 905,629
----------------------------------------------------------------
225,898 Government National Mortgage Association, 7.50%, 05/15/2024 221,249
----------------------------------------------------------------
606,449 Government National Mortgage Association, 8.50%, 10/15/2024 621,410
----------------------------------------------------------------
788,444 Government National Mortgage Association, 7.00%, 07/15/2024 750,748
----------------------------------------------------------------
478,916 Government National Mortgage Association, 8.00%, 07/15/2025 480,645
----------------------------------------------------------------
832,559 Government National Mortgage Association, 9.50%, 08/15/2021 899,938
----------------------------------------------------------------
850,000 (d) Government National Mortgage Association, 9.00%, 6/1/2026 888,769
----------------------------------------------------------------
1,527,738 Government National Mortgage Association, 7.50%, 03/15/2026 1,496,297
---------------------------------------------------------------- -----------
TOTAL MORTGAGE-BACKED SECURITIES 26,300,675
---------------------------------------------------------------- -----------
HIGH YIELD BONDS--5.4%
----------------------------------------------------------------
AUTOMOTIVE--0.2%
----------------------------------------------------------------
50,000 Aftermarket Technology Co., Sr. Sub. Note, 12.00%, 8/1/2004 53,625
----------------------------------------------------------------
50,000 Exide Corp., Sr. Note, 10.00%, 4/15/2005 49,500
----------------------------------------------------------------
25,000 JPS Automotive Products Corp., Sr. Note, 11.125%, 6/15/2001 25,625
---------------------------------------------------------------- -----------
Total 128,750
---------------------------------------------------------------- -----------
BANKING--0.1%
----------------------------------------------------------------
50,000 First Nationwide Holdings, Sr. Note, 12.25%, 5/15/2001 54,625
----------------------------------------------------------------
25,000 (b) First Nationwide Holdings, Sr. Note, 12.50%, 4/15/2003 26,063
---------------------------------------------------------------- -----------
Total 80,688
---------------------------------------------------------------- -----------
BEVERAGE & TOBACCO--0.0%
----------------------------------------------------------------
25,000 Dr Pep Btlg Hldgs, Sr. Disc. Note, 11.625%, 2/15/2003 21,375
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
BROADCAST RADIO & TV--0.6%
----------------------------------------------------------------
$ 50,000 Argyle Television, Sr. Sub. Note, 9.75%, 11/1/2005 $ 47,750
----------------------------------------------------------------
500 (b) Chancellor Radio Broadcasting Co., 12.25% Sr. Cumulative Exch.
Pfd. Stock 50,250
----------------------------------------------------------------
50,000 (b) Granite Broadcasting Corp, Sr. Sub. Note, 9.375%, 12/1/2005 46,125
----------------------------------------------------------------
50,000 Heritage Media Corp., Sr. Sub. Note, 8.75%, 2/15/2006 47,750
----------------------------------------------------------------
25,000 (b) Park Communications, Inc., Sr. Note, 13.75%, 5/15/2004, PIK 26,375
----------------------------------------------------------------
25,000 Pegasus Media, Note, 12.50%, 7/1/2005 27,125
----------------------------------------------------------------
75,000 SCI Television, Sr. Secd. Note, 11.00%, 6/30/2005 79,313
----------------------------------------------------------------
50,000 (b) SFX Broadcasting, Sr. Sub. Note, 10.75%, 5/15/2006 50,000
----------------------------------------------------------------
50,000 Sinclair Broadcast Group, Sr. Sub. Note, 10.00%, 9/30/2005 48,625
----------------------------------------------------------------
50,000 Sullivan Broadcasting, Sr. Sub. Note, 10.25%, 12/15/2005 47,625
----------------------------------------------------------------
50,000 Young Broadcasting Corp., Sr. Sub. Note, 10.125%, 2/15/2005 48,875
---------------------------------------------------------------- -----------
Total 519,813
---------------------------------------------------------------- -----------
BUSINESS EQUIPMENT & SERVICES--0.1%
----------------------------------------------------------------
50,000 (b) Knoll Inc., Sr. Sub. Note, 10.875%, 3/15/2006 51,250
----------------------------------------------------------------
25,000 Monarch Acquisition Corp., Sr. Note, 12.50%, 7/1/2003 26,875
---------------------------------------------------------------- -----------
Total 78,125
---------------------------------------------------------------- -----------
CABLE TELEVISION--0.7%
----------------------------------------------------------------
100,000 (b) CS Wireless Systems, Inc., Unit, 11.375%, 3/1/2006 53,000
----------------------------------------------------------------
50,000 Cablevision Systems Corp., Sr. Sub. Note, 9.875%, 5/15/2006 49,875
----------------------------------------------------------------
25,000 Cai Wireless Systems, Sr. Note, 12.25%, 9/15/2002 26,438
----------------------------------------------------------------
50,000 (b) Charter Communications SE, Sr. Note, 11.25%, 3/15/2006 51,250
----------------------------------------------------------------
100,000 Comcast UK Cable, Deb., 11.20%, 11/15/2007 59,750
----------------------------------------------------------------
25,000 (b) EchoStar Satellite Broadcasting Corp., Sr. Secd. Disc. Note,
13.125%, 3/15/2004 16,688
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
CABLE TELEVISION--CONTINUED
----------------------------------------------------------------
$ 50,000 Insight Communication Co., Sr. Sub. Note, 11.25%, 3/1/2000 $ 51,000
----------------------------------------------------------------
100,000 International Cabletel, Sr. Note, 12.75%, 2/1/2006 59,250
----------------------------------------------------------------
50,000 People's Choice--TV, Unit, 13.125%, 6/1/2004 30,625
----------------------------------------------------------------
50,000 Rogers Cablesystems Inc., Sr. Secd. 2nd Priority Note, 10.00%,
12/1/2007 50,375
----------------------------------------------------------------
100,000 Telewest Plc, Sr. Disc. Deb., 11.00%, 10/1/2007 60,500
----------------------------------------------------------------
50,000 (b) UIH Australia/Pacific, Sr. Disc. Note, 14.00%, 5/15/2006 25,750
---------------------------------------------------------------- -----------
Total 534,501
---------------------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.3%
----------------------------------------------------------------
25,000 Arcadian Partners Lp, Sr. Note, Series B, 10.75%, 5/1/2005 27,125
----------------------------------------------------------------
25,000 Foamex Capital Corp., Sr. Sub. Deb., 11.875%, 10/1/2004 25,375
----------------------------------------------------------------
50,000 Harris Chemical, Sr. Secd. Disc. Note, 10.25%, 7/15/2001 50,750
----------------------------------------------------------------
50,000 Polymer Group, Sr. Note, 12.25%, 7/15/2002 54,500
----------------------------------------------------------------
25,000 (b) RBX Corp., Sr. Sub. Note, 11.25%, 10/15/2005 23,938
----------------------------------------------------------------
50,000 Viridian Inc., Note, 9.75%, 4/1/2003 51,750
---------------------------------------------------------------- -----------
Total 233,438
---------------------------------------------------------------- -----------
CLOTHING & TEXTILES--0.1%
----------------------------------------------------------------
25,000 Dan River Inc, Sr. Sub. Note, 10.125%, 12/15/2003 24,344
----------------------------------------------------------------
50,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%, 12/15/2005 48,750
---------------------------------------------------------------- -----------
Total 73,094
---------------------------------------------------------------- -----------
CONSUMER PRODUCTS--0.3%
----------------------------------------------------------------
50,000 Herff Jones, Inc., Sr. Sub. Note, 11.00%, 8/15/2005 53,000
----------------------------------------------------------------
50,000 Hosiery Corp. Of America, Sr. Sub. Note, 13.75%, 8/1/2002 53,750
----------------------------------------------------------------
50 Hosiery Corp. of America 250
----------------------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note, 9.00%, 12/15/2003 47,063
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
CONSUMER PRODUCTS--CONTINUED
----------------------------------------------------------------
$ 25,000 (b) Simmons Company, Sr. Sub. Note, 10.75%, 4/15/2006 $ 25,125
----------------------------------------------------------------
50,000 (b) Twin Laboratories Inc., Sr. Sub. Note, 10.25%, 5/15/2006 51,125
---------------------------------------------------------------- -----------
Total 230,313
---------------------------------------------------------------- -----------
CONTAINER & GLASS PRODUCTS--0.2%
----------------------------------------------------------------
75,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 76,500
----------------------------------------------------------------
25,000 (b) Packaging Resources Inc., Sr. Secd. Note, 11.625%, 5/1/2003 25,438
----------------------------------------------------------------
50,000 Plastic Containers, Inc., Sr. Secd. Note, 10.75%, 4/1/2001 49,938
---------------------------------------------------------------- -----------
Total 151,876
---------------------------------------------------------------- -----------
COSMETICS & TOILETRIES--0.1%
----------------------------------------------------------------
50,000 Revlon Consumer Products Corp., Sr. Sub. Note, 10.50%, 2/15/2003 50,875
---------------------------------------------------------------- -----------
ECOLOGICAL SERVICES & EQUIPMENT--0.0%
----------------------------------------------------------------
50,000 Mid-american Waste System, Sr. Sub. Note, 12.25%, 2/15/2003 29,750
---------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.1%
----------------------------------------------------------------
25,000 Carr Gottstein Foods Co., Sr. Sub. Note, 12%, 11/15/2005 26,000
----------------------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 47,938
----------------------------------------------------------------
25,000 Smith's Food & Drug, Sr. Sub. Note, 11.25%, 5/15/2007 25,438
---------------------------------------------------------------- -----------
Total 99,376
---------------------------------------------------------------- -----------
FOOD PRODUCTS--0.1%
----------------------------------------------------------------
25,000 Curtice-burns Foods, Inc., Sr. Sub. Note, 12.25%, 2/1/2005 24,750
----------------------------------------------------------------
50,000 Specialty Foods Corp., Sr. Note, 11.125%, 10/1/2002 46,500
----------------------------------------------------------------
25,000 Van de Kamp's, Inc., Sr. Sub. Note, 12.00%, 9/15/2005 26,813
---------------------------------------------------------------- -----------
Total 98,063
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
FOOD SERVICES--0.1%
----------------------------------------------------------------
$ 25,000 Americold Corporation, Sr. Sub. Note, 12.875%, 5/1/2008 $ 25,375
----------------------------------------------------------------
75,000 Flagstar Corp, Sr. Note, 10.875%, 12/1/2002 67,500
---------------------------------------------------------------- -----------
Total 92,875
---------------------------------------------------------------- -----------
FOREST PRODUCTS--0.2%
----------------------------------------------------------------
25,000 Repap New Brunswick, 2nd Priority Sr. Secd. Note, 10.625%,
4/15/2005 23,375
----------------------------------------------------------------
50,000 Riverwood International, Sr. Sub. Note, 10.875%, 4/1/2008 49,875
----------------------------------------------------------------
50,000 S. D. Warren Co., Sr. Sub. Note, 12%, 12/15/2004 53,000
----------------------------------------------------------------
50,000 Stone Container, Sr. Note, 11.5%, 10/1/2004 50,938
---------------------------------------------------------------- -----------
Total 177,188
---------------------------------------------------------------- -----------
HEALTHCARE--0.1%
----------------------------------------------------------------
50,000 (b) Dade International, Inc., Sr. Sub. Note, 11.125%, 5/1/2006 51,625
----------------------------------------------------------------
50,000 Tenet Healthcare, Sr. Sub. Note, 10.125%, 3/1/2005 53,375
---------------------------------------------------------------- -----------
Total 105,000
---------------------------------------------------------------- -----------
HOTELS, MOTELS, INNS & CASINOS--0.1%
----------------------------------------------------------------
50,000 (b) Courtyard by Marriott II, Sr. Secd. Note, 10.75%, 2/1/2008 49,563
---------------------------------------------------------------- -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.1%
----------------------------------------------------------------
25,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%, 7/15/2005 28,125
----------------------------------------------------------------
25,000 Fairfield Manufacturing Co., Inc., Sr. Sub. Note, 11.375%,
7/1/2001 25,500
---------------------------------------------------------------- -----------
Total 53,625
---------------------------------------------------------------- -----------
LEISURE & ENTERTAINMENT--0.3%
----------------------------------------------------------------
50,000 Affinity Group, Inc., Sr. Sub. Note, 11.50%, 10/15/2003 50,875
----------------------------------------------------------------
100,000 (b) Amf Group Inc., Sr. Sub. Disc. Note, 0/12.25%, 3/15/2006 54,500
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
LEISURE & ENTERTAINMENT--CONTINUED
----------------------------------------------------------------
$ 50,000 Premier Parks, Sr. Note, 12.00%, 8/15/2003 $ 53,625
----------------------------------------------------------------
75,000 Six Flags Theme Parks, Sr. Sub. Disc. Note, 12.25%, 6/15/2005 64,313
---------------------------------------------------------------- -----------
Total 223,313
---------------------------------------------------------------- -----------
MACHINERY & EQUIPMENT--0.1%
----------------------------------------------------------------
50,000 (b) Alvey Systems, Inc., Sr. Sub. Note, 11.375%, 1/31/2003 51,750
----------------------------------------------------------------
50,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 53,500
---------------------------------------------------------------- -----------
Total 105,250
---------------------------------------------------------------- -----------
OIL & GAS--0.1%
----------------------------------------------------------------
25,000 (b) Benton Oil & Gas Co., Sr. Note, 11.625%, 5/1/2003 25,875
----------------------------------------------------------------
50,000 Falcon Drilling Company, Sr. Note, 9.75%, 1/15/2001 51,750
---------------------------------------------------------------- -----------
Total 77,625
---------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.2%
----------------------------------------------------------------
25,000 (b) Adams Outdoor Advertising L.P., Sr. Note, 10.75%, 3/15/2006 25,500
----------------------------------------------------------------
50,000 Garden State Newspapers, Inc., Sr. Sub. Note, 12.00%, 7/1/2004 52,000
----------------------------------------------------------------
50,000 Hollinger Intl Publishing, Sr. Sub. Note, 9.25%, 2/1/2006 46,750
----------------------------------------------------------------
50,000 (b) K-III Communications Corp., Sr. Note, 8.5%, 2/1/2006 46,375
---------------------------------------------------------------- -----------
Total 170,625
---------------------------------------------------------------- -----------
REAL ESTATE--0.1%
----------------------------------------------------------------
50,000 Trizec Finance, Ltd., Sr. Note, 10.875%, 10/15/2005 50,625
---------------------------------------------------------------- -----------
RETAILERS--0.1%
----------------------------------------------------------------
50,000 Brylane Capital Corp., Sr. Sub. Note, 10.00%, 9/1/2003 47,625
---------------------------------------------------------------- -----------
SERVICES--0.1%
----------------------------------------------------------------
50,000 Coinmach Corp., Sr. Note, 11.75%, 11/15/2005 52,000
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
STEEL--0.2%
----------------------------------------------------------------
$ 25,000 Bayou Steel Corp., 1st Mtg. Note, 10.25%, 3/1/2001 $ 23,000
----------------------------------------------------------------
50,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 46,000
----------------------------------------------------------------
75,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 77,438
---------------------------------------------------------------- -----------
Total 146,438
---------------------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.3%
----------------------------------------------------------------
25,000 Ameritruck Distribution, Sr. Sub. Note, 12.25%, 11/15/2005 24,844
----------------------------------------------------------------
50,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 52,750
----------------------------------------------------------------
25,000 Great Dane Holdings, Sr. Sub. Deb., 12.75%, 8/1/2001 24,125
----------------------------------------------------------------
25,000 OMI Corporation, Sr. Note, 10.25%, 11/1/2003 24,625
----------------------------------------------------------------
50,000 Sea Containers, Sr. Note, 9.50%, 7/1/2003 49,500
----------------------------------------------------------------
50,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 49,750
---------------------------------------------------------------- -----------
Total 225,594
---------------------------------------------------------------- -----------
TECHNOLOGY--0.0%
----------------------------------------------------------------
25,000 (b) Solectron Corp., Conv. Bond, 6.00%, 3/1/2006 24,299
---------------------------------------------------------------- -----------
TELECOMMUNICATIONS & CELLULAR--0.4%
----------------------------------------------------------------
50,000 (b) American Communications, Sr. Disc. Note, 12.75%, 4/1/2006 26,375
----------------------------------------------------------------
50,000 Arch Communications, Sr. Disc. Note, 10.875%, 3/15/2008 28,250
----------------------------------------------------------------
50,000 Intermedia Communications, Sr. Disc. Note, 12.50%, 5/15/2006 28,125
----------------------------------------------------------------
50,000 (b) Millicom International, Sr. Sub. Disc. Note, 13.50%, 6/1/2006 26,375
----------------------------------------------------------------
50,000 Nextel Communications, Inc., Sr. Disc. Note, 11.50%, 9/1/2003 34,625
----------------------------------------------------------------
25,000 (b) Nextlink Communications, L.L.C., Sr. Note, 12.50%, 4/15/2006 25,313
----------------------------------------------------------------
25,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 25,563
----------------------------------------------------------------
75,000 Panamsat, L.p., Sr. Sub. Disc. Note, 11.375%, 8/1/2003 64,500
----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR SHARES DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
TELECOMMUNICATIONS & CELLULAR--CONTINUED
----------------------------------------------------------------
$ 50,000 ProNet Inc., Sr. Sub. Note, 10.875%, 9/15/2006 $ 50,000
----------------------------------------------------------------
50,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 49,500
---------------------------------------------------------------- -----------
Total 358,626
---------------------------------------------------------------- -----------
UTILITIES--0.2%
----------------------------------------------------------------
75,000 California Energy Co., Sr. Disc. Note, 10.25%, 1/15/2004 72,375
----------------------------------------------------------------
500 El Paso Electric Company, PIK Pfd., Series A, 11.40%, 2/1/2008 50,625
---------------------------------------------------------------- -----------
Total 123,000
---------------------------------------------------------------- -----------
TOTAL HIGH YIELD BONDS 4,413,308
---------------------------------------------------------------- -----------
INVESTMENT GRADE BONDS--9.5%
----------------------------------------------------------------
AEROSPACE & DEFENSE--0.3%
----------------------------------------------------------------
250,000 McDonnell Douglas Finance, Note, 9.40%, 10/15/2001 267,205
---------------------------------------------------------------- -----------
BANKING--1.7%
----------------------------------------------------------------
250,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 254,160
----------------------------------------------------------------
400,000 Bayerische Landesbank, Note, 6.20%, 2/9/2006 370,192
----------------------------------------------------------------
250,000 Chase Manhattan, Sub. Note, 8.00%, 5/1/2005 251,963
----------------------------------------------------------------
200,000 National Bank of Canada, Sub. Note, 8.125%, 8/15/2004 206,296
----------------------------------------------------------------
350,000 Santander Finance Issuances, Bank Guarantee, 7.875%, 4/15/2005 357,802
---------------------------------------------------------------- -----------
Total 1,440,413
---------------------------------------------------------------- -----------
BEVERAGE & TOBACCO--0.4%
----------------------------------------------------------------
100,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 94,797
----------------------------------------------------------------
250,000 RJR Nabisco, Inc., Note, 9.25%, 8/15/2013 252,633
---------------------------------------------------------------- -----------
Total 347,430
---------------------------------------------------------------- -----------
CABLE TELEVISION--0.5%
----------------------------------------------------------------
400,000 TKR Cable, Inc., Sr. Note, 10.50%, 10/30/2007 435,468
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
----------------------------------------------------------------
CHEMICALS & PLASTICS--0.4%
----------------------------------------------------------------
$ 350,000 (b) Bayer Corp., Deb., 6.5%, 10/1/2002 $ 340,190
---------------------------------------------------------------- -----------
CONGLOMERATES--0.3%
----------------------------------------------------------------
275,000 Leucadia National, Sr. Sub. Note, 8.25%, 6/15/2005 273,867
---------------------------------------------------------------- -----------
ELECTRONICS--0.3%
----------------------------------------------------------------
200,000 Harris Corp, Deb., 10.375%, 12/1/2018 222,656
---------------------------------------------------------------- -----------
FINANCE--RETAIL--0.3%
----------------------------------------------------------------
250,000 Household Finance, Deb., 6.45%, 2/1/2009 228,330
---------------------------------------------------------------- -----------
FINANCIAL INTERMEDIARIES--0.6%
----------------------------------------------------------------
200,000 Merrill Lynch, Medium Term Note, 7.25%, 6/14/2004 201,806
----------------------------------------------------------------
300,000 Salomon Inc., Sr. Note, 7.02%, 9/25/1998 300,111
---------------------------------------------------------------- -----------
Total 501,917
---------------------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.3%
----------------------------------------------------------------
225,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 241,097
---------------------------------------------------------------- -----------
GOVERNMENT AGENCY--0.3%
----------------------------------------------------------------
250,000 Federal National Mortgage Association 8.59%, 2/3/2005 255,703
---------------------------------------------------------------- -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.3%
----------------------------------------------------------------
250,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 275,400
---------------------------------------------------------------- -----------
INSURANCE--0.3%
----------------------------------------------------------------
250,000 Sunamerica Inc, Medium Term Note, 7.34%, 8/30/2005 245,705
---------------------------------------------------------------- -----------
OIL & GAS--0.3%
----------------------------------------------------------------
250,000 USX Corp., Note, 6.375%, 7/15/1998 247,860
---------------------------------------------------------------- -----------
PRINTING & PUBLISHING--0.5%
----------------------------------------------------------------
400,000 News America Holdings, Sr. Note, 7.50%, 3/1/2000 404,488
---------------------------------------------------------------- -----------
RETAILERS--0.3%
----------------------------------------------------------------
250,000 Penney J C Inc, S.F. Deb., 9.75%, 6/15/2021 278,438
---------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
----------------------------------------------------------------
SERVICES--0.3%
----------------------------------------------------------------
$ 250,000 (b) Loewen Group International, Sr. Note, 8.25%, 4/15/2003 $ 248,125
---------------------------------------------------------------- -----------
SOVEREIGN GOVERNMENT--1.2%
----------------------------------------------------------------
300,000 (b) Freeport Terminal (Malta), Gtd. Global Note, 7.50%, 3/29/2004 293,367
----------------------------------------------------------------
250,000 Quebec Province, Deb., 7.50%, 7/15/2023 235,835
----------------------------------------------------------------
100,000 Republic Of South Africa, Global Bond Deb., 9.625%, 12/15/1999 104,500
----------------------------------------------------------------
250,000 Republic of Colombia, Note, 7.25%, 2/15/2003 234,728
---------------------------------------------------------------- -----------
Total 868,430
---------------------------------------------------------------- -----------
UTILITIES--0.9%
----------------------------------------------------------------
300,000 Duke Power Co., 1st Mtg. Note, 7.00%, 9/1/2005 289,743
----------------------------------------------------------------
300,000 Gulf States Util, FMB, 6.75%, 10/1/1998 297,861
----------------------------------------------------------------
125,000 Pedernales Electric Coop, 10.875%, 09/01/2017 138,001
---------------------------------------------------------------- -----------
Total 725,605
---------------------------------------------------------------- -----------
TOTAL INVESTMENT GRADE BONDS 7,848,327
---------------------------------------------------------------- -----------
</TABLE>
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ -------------------------------------------------------------- -----------
<C> <C> <S> <C>
FOREIGN BONDS--5.4%
--------------------------------------------------------------
AUSTRALIAN DOLLAR--0.2%
--------------------------------------------------------------
78,000 Queensland Treas Global, Local Government Guarantee, 8.00%,
5/14/2003 $ 59,263
--------------------------------------------------------------
65,000 Queensland Treas Global, Local Government Guarantee, 8.00%,
8/14/2001 50,345
--------------------------------------------------------------
100,000 State Bank Of New South, 12.25%, 2/26/2001 89,343
-------------------------------------------------------------- -----------
Total 198,951
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ -------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
--------------------------------------------------------------
BELGIUM FRANC--0.1%
--------------------------------------------------------------
514,000 Belgian Government, Bond, 6.50%, 3/31/2005 $ 16,328
--------------------------------------------------------------
2,000,000 Belgium Kingdom, 7.75%, 10/15/2004 69,056
-------------------------------------------------------------- -----------
Total 85,384
-------------------------------------------------------------- -----------
CANADIAN DOLLAR--0.3%
--------------------------------------------------------------
167,000 Canada Government, Deb., 6.50%, 6/1/2004 113,817
--------------------------------------------------------------
200,000 Ontario Hydro, 9.00%, 6/24/2002 157,048
-------------------------------------------------------------- -----------
Total 270,865
-------------------------------------------------------------- -----------
DANISH KRONER--0.2%
--------------------------------------------------------------
489,000 Denmark-Bullet, Bond, 8.00%, 3/15/2006 85,925
--------------------------------------------------------------
600,000 Denmark, 8.00%, 5/15/2003 107,822
-------------------------------------------------------------- -----------
Total 193,747
-------------------------------------------------------------- -----------
FRENCH FRANC--0.3%
--------------------------------------------------------------
600,000 KFW International Finance, 7.00%, 5/12/2000 122,739
--------------------------------------------------------------
58,000 France O.A.T., Bond, 7.50%, 4/25/2005 74,257
--------------------------------------------------------------
270,000 France O.A.T., Bond, 7.25%, 4/25/2006 55,045
-------------------------------------------------------------- -----------
Total 252,041
-------------------------------------------------------------- -----------
GERMANY, FEDERAL REPUBLIC MARK OF--1.0%
--------------------------------------------------------------
100,000 Kfw Intl Finance, Bank Guarantee, 6.75%, 6/20/2005 66,060
--------------------------------------------------------------
700,000 Treuhandanstalt, 7.75%, 10/1/2002 503,532
--------------------------------------------------------------
408,000 Treuhandanstalt, Foreign Government Guarantee, 6.875%,
6/11/2003 279,531
-------------------------------------------------------------- -----------
Total 849,123
-------------------------------------------------------------- -----------
ITALIAN LIRA--0.5%
--------------------------------------------------------------
80,000,000 BTPS, Bond, 10.5%, 11/1/2000 54,802
--------------------------------------------------------------
480,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 313,570
-------------------------------------------------------------- -----------
Total 368,372
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ -------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
--------------------------------------------------------------
JAPANESE YEN--1.0%
--------------------------------------------------------------
38,000,000 KFW International Finance, 6.00%, 11/29/1999 $ 401,600
--------------------------------------------------------------
24,000,000 Export-Import Bank Japan, 4.375%, 10/1/2003 240,340
--------------------------------------------------------------
10,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 110,137
-------------------------------------------------------------- -----------
Total 752,077
-------------------------------------------------------------- -----------
NETHERLANDS GUILDER--0.3%
--------------------------------------------------------------
60,000 Lkb-global Bd, Bank Guarantee, 6%, 1/25/2006 37,588
--------------------------------------------------------------
350,000 Netherlands Government, 5.75%, 1/15/2004 200,366
--------------------------------------------------------------
60,000 Netherlands Government, 6%, 1/15/2006 34,173
-------------------------------------------------------------- -----------
Total 272,127
-------------------------------------------------------------- -----------
NEW ZEALAND DOLLAR--0.1%
--------------------------------------------------------------
41,000 New Zealand Government, 8.00%, 2/15/2001 26,690
--------------------------------------------------------------
70,000 New Zealand Government, Bond, 8%, 7/15/1998 46,629
-------------------------------------------------------------- -----------
Total 73,319
-------------------------------------------------------------- -----------
NORWEGIAN KRONE--0.2%
--------------------------------------------------------------
330,000 NGB 9% 1/31/99, Bond, 9%, 1/31/1999 55,047
--------------------------------------------------------------
420,000 Norwegian Government, Bond, 7%, 5/31/2001 66,931
--------------------------------------------------------------
315,000 Norwegian Government, Foreign Government Guarantee, 5.75%,
11/30/2004 45,041
-------------------------------------------------------------- -----------
Total 167,019
-------------------------------------------------------------- -----------
SPANISH PESETA--0.3%
--------------------------------------------------------------
20,000,000 Spanish Government, 10.00%, 2/28/2005 163,636
--------------------------------------------------------------
4,340,000 Spanish Government, Bond, 9.4%, 4/30/1999 34,979
--------------------------------------------------------------
4,950,000 Spanish Government, Deb., 10.10%, 2/28/2001 40,792
-------------------------------------------------------------- -----------
Total 239,407
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
- ------------ -------------------------------------------------------------- -----------
<C> <C> <S> <C>
BONDS--CONTINUED
- ----------------------------------------------------------------------------------
FOREIGN BONDS--CONTINUED
--------------------------------------------------------------
SWEDISH KRONA--0.3%
--------------------------------------------------------------
1,000,000 Stadshypotekskas, Foreign Government Guarantee, Series 1551,
7.5%, 3/17/1999 $ 149,398
--------------------------------------------------------------
900,000 Sweden, 6.00%, 2/9/2005 114,259
-------------------------------------------------------------- -----------
Total 263,657
-------------------------------------------------------------- -----------
UNITED KINGDOM POUND--0.6%
--------------------------------------------------------------
64,000 British Gas Plc, 8.875%, 7/8/2008 97,133
--------------------------------------------------------------
29,000 U.K. Treasury, Deb., 8.50%, 12/7/2005 46,092
--------------------------------------------------------------
175,000 UK Conversion, 9.00%, 3/3/2000 284,921
--------------------------------------------------------------
30,000 UK Treasury, Bond, 8.00%, 12/7/2015 44,848
-------------------------------------------------------------- -----------
Total 472,994
-------------------------------------------------------------- -----------
TOTAL FOREIGN BONDS 4,459,083
-------------------------------------------------------------- -----------
TOTAL BONDS (IDENTIFIED COST $43,540,083) 43,021,393
-------------------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ------------ ---------------------------------------------------------------- -----------
<C> <C> <S> <C>
CASH EQUIVALENTS--41.9%
- ------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--41.9%
----------------------------------------------------------------
$ 15,530,000 BT Securities Corporation, 5.340%, dated 5/31/96, due 6/3/1996 $15,530,000
----------------------------------------------------------------
15,000,000 Deutsche Bank Government Securities, Inc., 5.280%, dated
5/31/96, due 6/3/1996 15,000,000
----------------------------------------------------------------
950,000 (f) Swiss Bank Capital Markets, 5.300%, 6/13/1996 950,000
----------------------------------------------------------------
2,225,000 (f) UBS Securities, Inc., 5.310%, 6/17/1996 2,225,000
----------------------------------------------------------------
800,000 (f) UBS Securities, Inc., 5.310%, 6/19/1996 800,000
---------------------------------------------------------------- -----------
TOTAL CASH EQUIVALENTS (AT AMORTIZED COST) 34,505,000
---------------------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $85,572,513)(G) $85,960,744
---------------------------------------------------------------- -----------
</TABLE>
(a) Non-income producing security.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At May 31, 1996, these securities amounted to
$1,785,543 which represents 2% of net assets.
(c) The Fund's overall exposure to utility stocks is 5.7%.
(d) Indicates securities subject to dollar roll transactions with at total
market value of $3,993,174.
(e) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated Funds.
(f) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(g) The cost of investments for federal tax purposes amounts to $85,572,513. The
net unrealized appreciation of investments on a federal tax basis amounts to
$388,231 which is comprised of $1,235,445 appreciation and $847,214
depreciation at May 31, 1996.
Note: The categories of investments are shown as a percentage of net assets
($82,460,623) at May 31, 1996.
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
The following acronym(s) are used throughout this portfolio:
<TABLE>
<S> <C>
ADR -- American Depositary Receipt
LP -- Limited Partnership
PEPs -- Participating Equity Preferred Stock
PIK -- Payment in Kind
PLC -- Public Limited Company
STRYPES -- Structured Yield Product Exchangeable for Stock
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $85,572,513) $85,960,744
- ---------------------------------------------------------------------------------
Income receivable 617,021
- ---------------------------------------------------------------------------------
Receivable for investments sold 42,467
- ---------------------------------------------------------------------------------
Receivable for shares sold 58,676
- ---------------------------------------------------------------------------------
Deferred expenses 25,867
- --------------------------------------------------------------------------------- -----------
Total assets 86,704,775
- ---------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------
Payable for investments purchased $ 169,539
- --------------------------------------------------------------------
Payable to Bank 55,896
- --------------------------------------------------------------------
Payable for dollar roll transactions 4,009,600
- --------------------------------------------------------------------
Payable for taxes withheld 1,519
- --------------------------------------------------------------------
Accrued expenses 7,598
- -------------------------------------------------------------------- ----------
Total liabilities 4,244,152
- --------------------------------------------------------------------------------- -----------
NET ASSETS for 8,017,714 shares outstanding $82,460,623
- --------------------------------------------------------------------------------- -----------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------
Paid in capital $81,667,657
- ---------------------------------------------------------------------------------
Net unrealized appreciation of investments, translation of assets and liabilities
in foreign currency, and futures contracts 386,550
- ---------------------------------------------------------------------------------
Accumulated net realized gain on investments, foreign currency transactions, and
futures contracts 367,721
- ---------------------------------------------------------------------------------
Undistributed net investment income 38,695
- --------------------------------------------------------------------------------- -----------
Total Net Assets $82,460,623
- --------------------------------------------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------------------------------------------
INSTITUTIONAL SHARES:
$60,085,838 / 5,842,058 shares outstanding $ 10.29
- --------------------------------------------------------------------------------- -----------
SELECT SHARES:
$22,374,785 / 2,175,656 shares outstanding $ 10.28
- --------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $33) $ 112,052
- ---------------------------------------------------------------------------------------------
Interest (net of dollar roll expense of $9,016) (net of foreign taxes withheld of $3,170) 2,280,695
- --------------------------------------------------------------------------------------------- ------------
Total income 2,392,747
- ---------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------
Investment advisory fee $ 272,200
- -------------------------------------------------------------------------------
Administrative personnel and services fee 77,501
- -------------------------------------------------------------------------------
Custodian fees 23,796
- -------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 26,922
- -------------------------------------------------------------------------------
Directors'/Trustees' fees 1,648
- -------------------------------------------------------------------------------
Auditing fees 7,048
- -------------------------------------------------------------------------------
Legal fees 2,013
- -------------------------------------------------------------------------------
Portfolio accounting fees 37,616
- -------------------------------------------------------------------------------
Distribution services fee--Select Shares 66,281
- -------------------------------------------------------------------------------
Shareholder services fee--Institutional Shares 68,640
- -------------------------------------------------------------------------------
Shareholder services fee--Select Shares 22,094
- -------------------------------------------------------------------------------
Share registration costs 23,340
- -------------------------------------------------------------------------------
Printing and postage 21,286
- -------------------------------------------------------------------------------
Insurance premiums 2,562
- -------------------------------------------------------------------------------
Miscellaneous 11,712
- ------------------------------------------------------------------------------- ----------
Total expenses 664,659
- -------------------------------------------------------------------------------
Waivers--
- -------------------------------------------------------------------------------
Waiver of investment advisory fee $ (233,847)
- ------------------------------------------------------------------
Waiver of distribution services fee--Select Shares (22,094)
- ------------------------------------------------------------------
Waiver of shareholder services fee--Institutional Shares (54,912)
- ------------------------------------------------------------------ ----------
Total waivers (310,853)
- ------------------------------------------------------------------------------- ----------
Net expenses 353,806
- --------------------------------------------------------------------------------------------- ------------
Net investment income 2,038,941
- --------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY, AND FUTURES CONTRACTS:
- ---------------------------------------------------------------------------------------------
Net realized gain on investments, foreign currency transactions, and futures contracts 387,215
- ---------------------------------------------------------------------------------------------
Net change in unrealized depreciation of investments, translation of assets
and liabilities in foreign currency, and futures contracts (1,485,088)
- --------------------------------------------------------------------------------------------- ------------
Net realized and unrealized loss on investments and foreign currency (1,097,873)
- --------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 941,068
- --------------------------------------------------------------------------------------------- ------------
</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
(UNAUDITED) YEAR ENDED
MAY 31, 1996 MAY 31, 1995
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ------------------------------------------------------------------------
OPERATIONS--
- ------------------------------------------------------------------------
Net investment income $ 2,038,941 $ 2,908,367
- ------------------------------------------------------------------------
Net realized gain (loss) on investments, foreign currency transactions,
and futures contracts ($387,215) and $729,136 net gains, respectively,
as computed for federal tax purposes) 387,215 911,082
- ------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments,
translation of assets and liabilities in foreign currency, and futures
contracts (1,485,088) 2,481,101
- ------------------------------------------------------------------------ ----------- -----------
Change in net assets resulting from operations 941,068 6,300,550
- ------------------------------------------------------------------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS--
- ------------------------------------------------------------------------
Distributions from net investment income
- ------------------------------------------------------------------------
Institutional Shares (1,799,911) (2,431,427)
- ------------------------------------------------------------------------
Select Shares (505,695) (394,936)
- ------------------------------------------------------------------------
Distributions from net realized gains on investments, foreign currency
transactions, and futures contracts
- ------------------------------------------------------------------------
Institutional Shares (332,234) --
- ------------------------------------------------------------------------
Select Shares (91,563) --
- ------------------------------------------------------------------------ ----------- -----------
Change in net assets resulting from distributions to shareholders (2,729,403) (2,826,363)
- ------------------------------------------------------------------------ ----------- -----------
SHARE TRANSACTIONS--
- ------------------------------------------------------------------------
Proceeds from sale of shares 30,025,329 36,889,780
- ------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 1,136,280 900,372
- ------------------------------------------------------------------------
Cost of shares redeemed (11,692,223) (14,374,680)
- ------------------------------------------------------------------------ ----------- -----------
Change in net assets resulting from share transactions 19,469,386 23,415,472
- ------------------------------------------------------------------------ ----------- -----------
Change in net assets 17,681,051 26,889,659
- ------------------------------------------------------------------------ ----------- -----------
NET ASSETS:
- ------------------------------------------------------------------------
Beginning of period 64,779,572 37,889,913
- ------------------------------------------------------------------------ ----------- -----------
End of period (including undistributed net investment income of $38,695
and $305,359, respectively) $82,460,623 $64,779,572
- ------------------------------------------------------------------------ ----------- -----------
</TABLE>
(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 YEAR ENDED NOVEMBER
ENDED 30,
MAY 31, 1996 ---------------------
(UNAUDITED) 1995 1994(A)
------------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.54 $ 9.76 $10.00
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------
Net investment income 0.30 0.62 0.31
- -------------------------------------------------------------
Net realized and unrealized gain (loss) on investments,
foreign currency transactions, and futures contracts (0.13) 0.78 (0.25)
- ------------------------------------------------------------- --------- ------ -------
Total from investment operations 0.17 1.40 0.06
- ------------------------------------------------------------- --------- ------ -------
LESS DISTRIBUTIONS
- -------------------------------------------------------------
Distributions from net investment income (0.35) (0.62) (0.30)
- -------------------------------------------------------------
Distributions from net realized gain on investments,
foreign currency transactions, and futures contracts (0.07) 0.00 0.00
- ------------------------------------------------------------- --------- ------ -------
Total distributions (0.42) (0.62) (0.30)
- ------------------------------------------------------------- --------- ------ -------
NET ASSET VALUE, END OF PERIOD $10.29 $10.54 $ 9.76
- ------------------------------------------------------------- --------- ------ -------
TOTAL RETURN (B) 1.56% 14.74% 0.55%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 0.80%* 0.75% 0.67%*
- -------------------------------------------------------------
Net investment income 5.79%* 6.26% 6.02%*
- -------------------------------------------------------------
Expense waiver/reimbursement (c) 0.85%* 1.06% 1.01%*
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $60,086 $50,852 $34,692
- -------------------------------------------------------------
Average commission rate paid $.0479 -- --
- -------------------------------------------------------------
Portfolio turnover 161% 165% 153%
- -------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 25, 1994 (date of initial public
investment) to November 30, 1994. For the period from January 18, 1994 start
of business, 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 change or
contingent deferred sales charge, if applicable.
(c) 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 YEAR ENDED NOVEMBER
ENDED 30,
MAY 31, 1996 ---------------------
(UNAUDITED) 1995 1994(A)
------------ ------ -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.54 $ 9.77 $10.00
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------
Net investment income 0.27 0.48 0.28
- -------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency (0.15) 0.83 (0.25)
- ------------------------------------------------------------- --------- ------ ------
Total from investment operations 0.12 1.31 0.03
- ------------------------------------------------------------- --------- ------ ------
LESS DISTRIBUTIONS
- -------------------------------------------------------------
Distributions from net investment income (0.31) (0.54) (0.26)
- -------------------------------------------------------------
Distributions from net realized gain on investments and
foreign currency transactions (0.07) 0.00 0.00
- ------------------------------------------------------------- --------- ------ ------
Total distributions (0.38) (0.54) (0.26)
- ------------------------------------------------------------- --------- ------ ------
NET ASSET VALUE, END OF PERIOD $10.28 $10.54 $ 9.77
- ------------------------------------------------------------- --------- ------ ------
TOTAL RETURN (B) 1.11% 13.76% 0.26%
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 1.51%* 1.50% 1.42%*
- -------------------------------------------------------------
Net investment income 5.08%* 5.56% 5.24%*
- -------------------------------------------------------------
Expense waiver/reimbursement (c) 0.89%* 1.06% 1.26%*
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $22,375 $13,927 $3,198
- -------------------------------------------------------------
Average commission rate paid $.0479 -- --
- -------------------------------------------------------------
Portfolio turnover 161% 165% 153%
- -------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(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, the
start of business, 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 charge or
contingent deferred sales charge, if applicable.
(c) 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
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1996 (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 portfolios. The financial statements
included herein are only those of Federated Managed Income Fund (the "Fund"), a
diversified portfolio. 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 and Select Shares.
The investment objective of the Fund is to seek current income.
(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 securities, listed corporate bonds,
other fixed income and asset-backed securities, and unlisted and private
placement securities are generally valued at the mean of the latest bid and
asked price as furnished by an independent pricing service. Foreign
government and corporate bonds are valued at the last sales price reported
on a national exchange. If the last sales price is not available the
securities are valued at the mean of the latest bid and ask price as
furnished by an independent pricing service. Listed foreign and domestic
equity securities are valued at the last sale price reported on a national
securities exchange. Short-term foreign and domestic securities are valued
at the prices provided by an independent pricing service. However,
short-term foreign and domestic 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.
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
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
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"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Certain dividends from foreign securities may be recorded after the
ex-dividend date based upon when information becomes available to the Fund.
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 interest and dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax
rules and rates.
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.
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 over a period of five years from
the Fund's commencement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in 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 INCOME FUND
- --------------------------------------------------------------------------------
At May 31, 1996, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF % OF
INDUSTRY NET ASSETS INDUSTRY NET ASSETS
---------------------------- ---------- ---------------------------- ----------
<S> <C> <C> <C>
Agency 0.48% Producer Manufacturing 0.04%
Banking 0.25% Sovereign 3.92%
Basic Industry 0.06% State/Provincial 0.24%
Corporate 0.05% Supranational 0.13%
Corporate Mortgage 0.14% Utilities 0.12%
Energy Minerals 0.05%
</TABLE>
FUTURES CONTRACTS--The Fund purchases stock index futures contracts to
manage cashflows, enhance yield, and to potentially reduce transaction
costs. Upon entering into a stock index futures contract with a broker, the
Fund is required to deposit in a segregated account an amount of cash or
U.S. government securities. Futures contracts are valued daily and
unrealized gains or losses are recorded in a "variation margin" account.
Daily, the Fund receives from or pays to the broker a specified amount of
cash based upon changes in the variation margin account. When a contract is
closed, the Fund recognizes a realized gain or loss. For the period ended
May 31, 1996, the Fund had realized gains of $56,192 on future contracts.
At May 31, 1996, the fund had no outstanding futures contracts. Futures
contracts have market risks, including the risk that the change in the
value of the contract may not correlate with changes in the value of the
underlying securities.
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
exchange contracts as a way of managing foreign exchange rate risk. The
Fund may enter into these contracts for the purchase or sale of a specific
foreign currency at a fixed price on a future date as a hedge or cross-
hedge against either specific transactions or portfolio positions. The
objective of the Fund's foreign currency hedging transactions is to reduce
the risk that the U.S. dollar value of the Fund's foreign currency
denominated securities will decline in value due to changes in foreign
currency exchange rates. All foreign currency exchange contracts are
"marked-to-market" daily at the applicable translation rates resulting in
unrealized gains or losses. Realized gains or losses are recorded at the
time the foreign currency exchange contract is offset by entering into a
closing transaction or by delivery or receipt of the currency. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At May 31, 1996, the Fund had no outstanding foreign exchange contracts.
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
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
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 of
portfolio securities, 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.
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 sells 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.
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 Board of 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.
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
Additional information on each restricted security held at May 31, 1996 is
as follows:
<TABLE>
<CAPTION>
ACQUISITION ACQUISITION
SECURITY DATE(S) COST
---------------------------------------------------------- ---------------- -----------
<S> <C> <C>
Westinghouse Electric Corp., PEPS 3/16/96 $97,725
First Nationwide Holdings, Sr. Note 4/12/96 24,716
Chancellor Radio Broadcasting Co., 12.25% Sr. Cumulative
Exch. Pfd. Stock 2/21/96 50,000
Granite Broadcasting Corp. Sr. Sub. Note 3/22/96 47,125
Park Communications, Inc., Sr. Note 5/6/96 25,000
SFX Broadcasting, Sr. Sub. Note 5/23/96 50,000
Knoll Inc., Sr. Sub. Note 2/22/96-2/27/96 50,625
CS Wireless Systems, Inc., Unit 2/16/96 59,141
Charter Communications SE, Sr. Note 3/22/96 50,000
EchoStar Satellite Broadcasting Corp., Sr. Secd. Disc.
Note 3/19/96 15,457
UIH Australia/Pacific, Sr. Disc. Note 5/8/96 25,583
RBX Corp., Sr. Sub. Note 2/9/96 24,875
Simmons Company, Sr. Sub. Note 4/15/96 25,000
Twin Laboratories Inc., Sr. Sub. Note 5/16/96 50,688
Packaging Resources Inc., Sr. Secd. Note 5/10/96 25,000
Dade International, Inc., Sr. Sub. Note 4/30/96-5/17/96 50,906
Courtyard by Marriott II, Sr. Secd. Note 1/12/96 50,000
Amf Group Inc., Sr. Sub. Disc. Note 3/7/96 56,629
Alvey Systems, Inc., Sr. Sub. Note 1/19/96 50,000
Benton Oil & Gas Co., Sr. Note 4/29/96 25,000
Adams Outdoor Advertising L.P., Sr. Note 3/5/96 25,000
K-III Communications Corp., Sr. Note 1/29/96 50,156
Solectron Corp., Conv. Bond 2/15/96-3/13/96 24,644
American Communications, Sr. Disc. Note 3/21/96 27,537
Millicom International, Sr. Sub. Disc. Note 5/24/96 26,038
Nextlink Communications, L.L.C., Sr. Note 4/18/96 25,000
Bayer Corp., Deb. 3/21/96-4/17/96 345,301
Loewen Group Int'l, Sr. Note 3/20/96 250,000
Freeport Terminal (Malta), Gtd. Global Note 7/19/94 284,196
</TABLE>
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
FEDERATED MANAGED INCOME 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 shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
------------------------- -------------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------ ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,794,310 $18,707,095 2,449,773 $25,139,690
- ------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 72,873 758,953 68,764 702,502
- ------------------------------------------------------
Shares redeemed (851,916) (8,894,718) (1,244,562) (12,651,519)
- ------------------------------------------------------ -------- ---------- -------- ----------
Net change resulting from Institutional share
transactions 1,015,267 $10,571,330 1,273,975 $13,190,673
- ------------------------------------------------------ -------- ---------- -------- ----------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1996 NOVEMBER 30, 1995
------------------------- -------------------------
SELECT SHARES SHARES AMOUNT SHARES AMOUNT
- ------------------------------------------------------ ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,086,526 $11,318,234 1,144,376 $11,750,090
- ------------------------------------------------------
Shares issued to shareholders in payment of
distributions declared 36,245 377,327 19,145 197,870
- ------------------------------------------------------
Shares redeemed (269,101) (2,797,505) (168,971) (1,723,161)
- ------------------------------------------------------ -------- ---------- -------- ----------
Net change resulting from Select share transactions 853,670 $ 8,898,056 994,550 $10,224,799
- ------------------------------------------------------ -------- ---------- -------- ----------
Net change resulting from share transactions 1,868,937 $19,469,386 2,268,525 $23,415,472
- ------------------------------------------------------ -------- ---------- -------- ----------
</TABLE>
(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 0.75% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
Under the terms of a sub-advisory agreement between the Adviser and Federated
Global Research Corp., Federated Global Research Corp. receives an allocable
portion of the Fund's advisory fee. Such allocation is based on the amount of
foreign securities which the Sub-Adviser manages for the Fund. This fee is paid
by the Adviser out of its resources and is not an incremental Fund expense.
ADMINISTRATIVE FEE--Federated Services Company ("FServ"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The fee paid to FServ is based on the level of average
aggregate daily net assets of all funds advised by subsidiaries of
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
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 SERVICES 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 Fund's 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 0.75% of average daily net assets of the Select
Shares to compensate FSC.
The distributor may voluntarily choose to waive any 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 0.25%
of average daily net assets of the Fund for the period. The fee paid to FSS is
used to finance certain services for shareholders and to maintain shareholder
accounts. Federated Shareholder Services may voluntarily choose to waive any
portion of its fee. Federated Shareholder Services can modify or terminate this
voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--FServ, through its
subsidiary, Federated Shareholder Services Company ("FSSC") serves as transfer
and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the
size, type, and number of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational and start-up administrative service
expenses of $76,515 were borne initially by the Adviser. The Fund has agreed to
reimburse the Adviser for the organizational and start-up administrative
expenses during the five year period following the Fund's effective date. For
the period ended May 31, 1996, the Fund paid $13,406 pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities for the
period ended May 31, 1996, were as follows:
<TABLE>
<S> <C>
- -------------------------------------------------------------------------------
PURCHASES $68,550,444
- ------------------------------------------------------------------------------- -----------
SALES $50,718,934
- ------------------------------------------------------------------------------- -----------
</TABLE>
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[THIS PAGE INTENTIONALLY LEFT BLANK]
<TABLE>
<S> <C>
TRUSTEES OFFICERS
- ---------------------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Glen R. Johnson
William J. Copeland President
James E. Dowd J. Christopher Donahue
Lawrence D. Ellis, M.D. Executive Vice President
Edward L. Flaherty, Jr. John W. McGonigle
Glen R. Johnson Executive Vice President and Secretary
Peter E. Madden Edward C. Gonzales
Gregor F. Meyer Executive Vice President and Treasurer
John E. Murray, Jr. Richard B. Fisher
Wesley W. Posvar Vice President
Marjorie P. Smuts David M. Taylor
Assistant Treasurer
J. Crilley Kelly
Assistant Secretary
</TABLE>
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.
