FEDERATED
MANAGED INCOME
FUND
[LOGO OF MANAGED SERIES TRUST]
Semi-Annual Report
to Shareholders
Federated Managed
Income Fund is part of
Managed Series Trust,
a lifecycle investing program from
Federated Investors.
May 31, 1997
[LOGO OF FEDERATED INVESTORS]
Federated Securities Corp., Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 56166K107
Cusip 56166K206
G00517-01 (7/97)
PRESIDENT'S MESSAGE
- -------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Federated
Managed Income Fund for the six-month period from December 1, 1996 through May
31, 1997. Included in this report is an investment review, followed by a
complete listing of the fund's holdings and its financial statements. In
addition, separate Financial Highlights tables have been included for the
fund's Institutional Shares and Select Shares.
During the reporting period, the highly valued U.S. stock market, where
approximately 10% of the fund's $89 million portfolio was invested, continued
its climb while experiencing periodic volatility. The U.S. bond market--where
approximately 80% of the fund's portfolio was invested--paid good income
yields but was impacted by rising rates that caused bond prices to fall. A
strong U.S. dollar negatively impacted the returns of foreign bonds, which
accounted for 5% of portfolio assets.*
In this environment, the fund's Institutional Shares delivered a total return
of 2.12%** through dividends totaling $0.37 per share and capital gains
totaling $0.07 per share. The fund's Select Shares produced a total return of
1.78%** through dividends totaling $0.32 per share and capital gains totaling
$0.07 per share.
Thank you for pursuing your financial goals through the high level of
diversification and professional management of Federated Managed Income Fund.
As always, we invite your comments and suggestions.
Sincerely,
LOGO
Glen R. Johnson
President
July 15, 1997
* Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1997
The six-month period ended May 31, 1997 was a generally favorable one for
financial assets, and Federated Managed Income Fund participated in the
advance. For the six months ended May 31, 1997, an investor in the fund's
Institutional Shares had a total return of 2.12%,* while an investor in the
fund's Select Shares had a total return of 1.78%.* However, performance among
asset classes showed wide variation. Stocks of large U.S. companies had good
returns as investors favored companies with broad product lines and lower
perceived fundamental risk, while utility stocks declined in response to
gradually rising interest rates. While bond prices were also hurt by rising
interest rates, their higher income yield cushioned the impact and bonds
generally provided modest positive returns.
ASSET ALLOCATION AS OF MAY 31, 1997
Federated Managed Income Fund operates on an investment philosophy that, over
time, an investor with a diversified portfolio may 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, 1997.
- --------
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL NET ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1997
-------------------------------- --------- ----------------
<S> <C> <C>
BONDS(1) 70-90 85
U.S. Treasury Securities 0-90 40
Mortgage-Backed Securities 0-45 27
Investment Grade Corporate Bonds 0-45 10
High Yield Corporate Bonds 0-10 3
Foreign Bonds 0-10 5
EQUITIES(1) 10-30 13
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 3
</TABLE>
--------
(1) Bonds convertible into equity securities at a price below the
closing price of the underlying equity securities on May 31, 1997
have been included under the appropriate equity asset category.
Over the reporting period, as well as the past several years, investors have
been faced with 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 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 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
Management has kept a defensive bond position to help reduce 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 reporting period in December 1996 and fell in the
spring of 1997 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
years, 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. Treasuries,
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 reporting period, which helped performance as the
stable
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
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 reduced in the spring of 1997, as their yield advantage
over U.S. Treasuries narrowed substantially as investors in high yield bonds
became optimistic that credit problems would be minimal over the next few
years. That attitude may make high yield corporate bonds more vulnerable than
normal to any unexpected weakening in the U.S. economy.
STRUCTURE OF THE EQUITY PORTFOLIO
Since early June 1995, the severe overvaluation of the stock market caused
fund management to hold a defensive position on the equity market. This
defensive position involves holding equity reserves at 5.0%, with the above
normal 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 weightings. Utility stocks trailed industrial stocks as
the economy continued to grow strongly last winter. However, utility stocks
tend to offer substantially higher yields than industrial stocks, and
utilities historically proved to be defensive in sustained market declines.
Therefore, a normal position was held in utilities, despite the better growth
opportunities offered by other sectors of the equity market.
FEDERATED MANAGED INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
------------ ----------------------------- -----------
<C> <S> <C>
STOCKS--10.7%
------------------------------------------
LARGE-COMPANY--5.3%
-----------------------------
BASIC INDUSTRY--0.2%
-----------------------------
700 Betz Laboratories, Inc. $ 44,625
-----------------------------
500 Dow Chemical Co. 41,688
-----------------------------
4,000 LTV Corporation 56,000
-----------------------------
1,400 Morton International, Inc. 45,150
----------------------------- -----------
Total 187,463
----------------------------- -----------
CONSUMER DURABLES--0.3%
-----------------------------
1,200 General Motors Corp., Class H 66,150
-----------------------------
600 General Motors Corp. 34,350
-----------------------------
1,600 Martin Marietta Materials 46,000
-----------------------------
3,500 Rubbermaid, Inc. 97,563
----------------------------- -----------
Total 244,063
----------------------------- -----------
CONSUMER NON-DURABLES--0.6%
-----------------------------
500 CPC International, Inc. 43,000
-----------------------------
1,000 Kimberly-Clark Corp. 50,125
-----------------------------
3,400 PepsiCo, Inc. 124,950
-----------------------------
900 Philip Morris Cos., Inc. 39,600
-----------------------------
1,000 RJR Nabisco Holdings Corp. 32,375
-----------------------------
2,800 Russell Corp. 85,750
-----------------------------
900 Tambrands, Inc. 43,425
-----------------------------
500 Unilever N.V. 96,875
-----------------------------
600 V.F. Corp. 46,875
----------------------------- -----------
Total 562,975
----------------------------- -----------
ENERGY MINERALS--0.6%
-----------------------------
800 Amerada-Hess Corp. 42,800
-----------------------------
300 Atlantic Richfield Co. 43,650
-----------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
------------ ------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------
LARGE COMPANY--CONTINUED
-------------------------------------
ENERGY MINERALS--CONTINUED
-------------------------------------
1,000 Chevron Corp. $ 70,000
-------------------------------------
1,400 Exxon Corp. 82,950
-------------------------------------
1,900 Occidental Petroleum Corp. 44,175
-------------------------------------
200 Royal Dutch Petroleum Co. 39,050
-------------------------------------
2,400 Sun Co., Inc. 71,700
-------------------------------------
700 Texaco, Inc. 76,388
-------------------------------------
2,600 USX-Marathon Group 77,350
-------------------------------------
600 (a)Western Atlas, Inc. 40,650
------------------------------------- -----------
Total 588,713
------------------------------------- -----------
FINANCE--0.8%
-------------------------------------
2,300 Allmerica Financial Corp. 83,663
-------------------------------------
1,148 Allstate Corp. 84,522
-------------------------------------
1,485 Bear Stearns Cos., Inc. 48,263
-------------------------------------
700 CIGNA Corp. 121,625
-------------------------------------
1,200 Dean Witter, Discover & Co. 49,500
-------------------------------------
1,100 Federal National Mortgage Association 47,988
-------------------------------------
800 Marsh & McLennan Cos., Inc. 105,400
-------------------------------------
1,000 National City Corp. 51,500
-------------------------------------
800 Providian Corp. 47,900
-------------------------------------
1,000 Travelers Group, Inc. 54,875
------------------------------------- -----------
Total 695,236
------------------------------------- -----------
HEALTH CARE--0.7%
-------------------------------------
1,100 Abbott Laboratories 69,300
-------------------------------------
800 American Home Products Corp. 61,000
-------------------------------------
1,500 Bard (C.R.), Inc. 48,000
-------------------------------------
3,600 (a)Beverly Enterprises, Inc. 50,850
-------------------------------------
2,100 Biomet, Inc. 39,244
-------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
------------ --------------------------------- -----------
<C> <S> <C> <C> <C> <C> <C>
STOCKS--CONTINUED
----------------------------------------------
LARGE COMPANY--CONTINUED
---------------------------------
HEALTHCARE--CONTINUED
---------------------------------
1,400 Bristol-Myers Squibb Co. $ 102,725
---------------------------------
1,250 Columbia/HCA Healthcare Corp. 45,781
---------------------------------
2,600 (a)Healthsource, Inc. 55,900
---------------------------------
600 Merck & Co., Inc. 53,925
---------------------------------
600 Smithkline Beecham, ADR 52,500
---------------------------------
1,100 United Healthcare Corp. 62,150
--------------------------------- -----------
Total 641,375
--------------------------------- -----------
PRODUCER MANUFACTURING--0.4%
---------------------------------
3,800 ITT Industries, Inc. 94,050
---------------------------------
1,800 Ingersoll-Rand Co. 98,100
---------------------------------
1,900 (a)Lexmark Intl. Group, Class A 50,113
---------------------------------
400 Loews Corp. 38,900
---------------------------------
1,400 PACCAR, Inc. 63,350
--------------------------------- -----------
Total 344,513
--------------------------------- -----------
RETAIL TRADE--0.4%
---------------------------------
2,200 Dayton-Hudson Corp. 105,875
---------------------------------
6,100 (a)K Mart Corp. 85,400
---------------------------------
1,200 (a)Meyer (Fred), Inc. 55,050
---------------------------------
3,100 Wal-Mart Stores, Inc. 92,225
--------------------------------- -----------
Total 338,550
--------------------------------- -----------
SERVICES--0.3%
---------------------------------
1,600 Block (H&R), Inc. 52,800
---------------------------------
2,400 Browning-Ferris Industries, Inc. 78,600
---------------------------------
2,300 Readers Digest Association, Inc.,
Class A 56,925
---------------------------------
1,000 (a)Viacom, Inc., Class A 30,125
---------------------------------
600 (a)Viacom, Inc., Class B 17,813
--------------------------------- -----------
Total 236,263
--------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
------------ ------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------
LARGE COMPANY--CONTINUED
-------------------------------------
TECHNOLOGY--0.4%
-------------------------------------
1,600 AMP, Inc. $ 65,800
-------------------------------------
1,300 (a)Cabletron Systems, Inc. 57,200
-------------------------------------
600 International Business Machines Corp. 51,900
-------------------------------------
800 Lucent Technologies, Inc. 50,900
-------------------------------------
700 Raytheon Co. 33,425
-------------------------------------
1,800 (a)Storage Technology Corp. 73,350
------------------------------------- -----------
Total 332,575
------------------------------------- -----------
TRANSPORTATION--0.1%
-------------------------------------
1,900 CNF Transporation, Inc. 61,275
-------------------------------------
1,800 KLM Royal Dutch Airlines 52,875
------------------------------------- -----------
Total 114,150
------------------------------------- -----------
UTILITIES--0.5%
-------------------------------------
1,200 CMS Energy Corp. 40,350
-------------------------------------
900 Coastal Corp. 45,113
-------------------------------------
800 Columbia Gas System, Inc. 51,500
-------------------------------------
800 FPL Group, Inc. 37,200
-------------------------------------
1,500 GTE Corp. 66,188
-------------------------------------
2,000 Houston Industries, Inc. 41,500
-------------------------------------
2,400 MCI Communications Corp. 92,100
-------------------------------------
1,600 P G & E Corp. 37,000
-------------------------------------
6,500 (a)Tele-Communications, Inc., Class A 98,313
------------------------------------- -----------
Total 509,264
------------------------------------- -----------
TOTAL LARGE COMPANY 4,795,140
------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- -------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------
UTILITY STOCKS--5.4%
--------------------------------
ELECTRIC UTILITIES: CENTRAL--1.4%
--------------------------------
7,900 CMS Energy Corp. $ 265,638
--------------------------------
7,764 Cinergy Corp. 271,740
--------------------------------
10,400 DPL, Inc. 248,300
--------------------------------
9,100 Illinova Corp. 199,063
--------------------------------
6,700 NIPSCO Industries, Inc. 271,350
-------------------------------- -----------
Total 1,256,091
-------------------------------- -----------
ELECTRIC UTILITIES: EAST--0.8%
--------------------------------
8,500 DQE, Inc. 239,063
--------------------------------
7,800 GPU, Inc. 273,000
--------------------------------
9,900 Peco Energy Co. 188,100
-------------------------------- -----------
Total 700,163
-------------------------------- -----------
ELECTRIC UTILITIES: SOUTH--1.3%
--------------------------------
5,200 Duke Power Co. 234,000
--------------------------------
5,600 FPL Group, Inc. 260,400
--------------------------------
10,800 Southern Co. 229,500
--------------------------------
10,200 TECO Energy, Inc. 253,725
--------------------------------
6,000 Texas Utilities Co. 206,250
-------------------------------- -----------
Total 1,183,875
-------------------------------- -----------
ELECTRIC UTILITIES: WEST--0.5%
--------------------------------
11,800 Pacificorp 234,525
--------------------------------
8,100 Pinnacle West Capital Corp. 237,938
-------------------------------- -----------
Total 472,463
-------------------------------- -----------
NATURAL GAS DISTRIBUTION--0.5%
--------------------------------
8,200 MCN Corp. 242,925
--------------------------------
7,400 Pacific Enterprises 242,350
-------------------------------- -----------
Total 485,275
-------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
UNITS OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ ---------------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------------
UTILITY STOCKS--CONTINUED
----------------------------------------------
OIL/GAS TRANSMISSION--0.9%
----------------------------------------------
5,400 Enron Corp. $ 220,050
----------------------------------------------
6,400 Panenergy Corp. 299,200
----------------------------------------------
6,750 Williams Companies, Inc. 297,844
---------------------------------------------- -----------
Total 817,094
---------------------------------------------- -----------
SERVICES--0.0%
----------------------------------------------
400 Tele-Communications, Inc., Class A 6,050
---------------------------------------------- -----------
TOTAL UTILITY STOCKS 4,921,011
---------------------------------------------- -----------
TOTAL STOCKS (IDENTIFIED COST $8,671,189) 9,716,151
---------------------------------------------- -----------
BONDS--85.0%
-----------------------------------------------------------
TREASURY--40.0%
----------------------------------------------
$ 9,390,000 United States Treasury Note, 6.00%, 8/31/1997 9,406,245
----------------------------------------------
10,715,000 United States Treasury Note, 6.25%, 6/30/1998 10,757,753
----------------------------------------------
955,000 United States Treasury Note, 7.25%, 2/15/1998 964,550
----------------------------------------------
14,900,000 United States Treasury Note, 8.125%, 2/15/1998 15,138,847
---------------------------------------------- -----------
Total 36,267,395
---------------------------------------------- -----------
MORTGAGE-BACKED SECURITIES--26.7%
----------------------------------------------
GOVERNMENT AGENCY--26.7%
----------------------------------------------
52,986 Federal Home Loan Mortgage Corp., 9.50%, 30
Year, 6/1/2021 57,373
----------------------------------------------
116,695 Federal Home Loan Mortgage Corp., 9.50%, 30
Year, 4/1/2021 125,313
----------------------------------------------
431,994 Federal Home Loan Mortgage Corp., 7.50%, 30
Year, 5/1/2024 432,806
----------------------------------------------
227,803 Federal Home Loan Mortgage Corp., 7.00%, 30
Year, 7/1/2024 223,675
----------------------------------------------
935,457 Federal Home Loan Mortgage Corp., 6.50%, 30
Year, 9/1/2025 890,629
----------------------------------------------
1,263,338 Federal Home Loan Mortgage Corp., 8.00%, 30
Year, 4/1/2024 1,292,154
----------------------------------------------
986,507 Federal Home Loan Mortgage Corp., 7.00%, 30
Year, 2/1/2026 962,643
----------------------------------------------
880,749 Federal Home Loan Mortgage Corp., 6.50%, 30
Year, 4/1/2026 843,044
----------------------------------------------
886,595 Federal Home Loan Mortgage Corp., 7.50%, 30
Year, 7/1/2026 885,486
----------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ --------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
----------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--CONTINUED
---------------------------------------------------
GOVERNMENT AGENCY--CONTINUED
---------------------------------------------------
$ 1,168,932 Federal Home Loan Mortgage Corp., 6.50%, 15 Year,
3/1/2011 $ 1,143,321
---------------------------------------------------
318,933 Federal Home Loan Mortgage Corp., 8.00%, 15 Year,
9/1/2010 327,206
---------------------------------------------------
707,831 Federal Home Loan Mortgage Corp., 7.00%, 15 Year,
4/1/2009 707,393
---------------------------------------------------
230,469 Federal Home Loan Mortgage Corp., 6.50%, 15 Year,
5/1/2011 225,419
---------------------------------------------------
983,623 Federal Home Loan Mortgage Corp. 1, 7.50%, 15 Year,
7/1/2011 995,309
---------------------------------------------------
588,502 Federal Home Loan Mortgage Corp., 6.00%, 30 Year,
5/1/2003 572,683
---------------------------------------------------
455,539 Federal National Mortgage Association, 7.00%, 30
Year, 5/1/2001 458,814
---------------------------------------------------
454,183 Federal National Mortgage Association, 7.00%, 30
Year, 7/1/2024 444,531
---------------------------------------------------
752,006 Federal National Mortgage Association, 8.50%, 30
Year, 7/1/2024 779,740
---------------------------------------------------
564,571 Federal National Mortgage Association, 7.50%, 15
Year, 10/1/2011 570,042
---------------------------------------------------
392,527 Federal National Mortgage Association, 8.00%, 30
Year, 11/1/2024 399,789
---------------------------------------------------
378,533 Federal National Mortgage Association, 9.00%, 30
Year, 2/1/2025 398,406
---------------------------------------------------
123,168 Federal National Mortgage Association, 8.50%, 30
Year, 2/1/2025 127,595
---------------------------------------------------
844,647 Federal National Mortgage Association, 7.50%, 30
Year, 7/1/2025 843,059
---------------------------------------------------
905,926 Federal National Mortgage Association, 7.00%, 30
Year, 7/1/2025 883,840
---------------------------------------------------
985,208 Federal National Mortgage Association, 6.00%, 15
Year, 3/1/2011 944,026
---------------------------------------------------
938,026 Federal National Mortgage Association, 6.50%, 30
Year, 2/1/2026 891,322
---------------------------------------------------
995,536 Federal National Mortgage Association, 7.50%, 30
Year, 10/1/2026 991,494
---------------------------------------------------
442,710 Federal National Mortgage Association, 7.00%, 15
Year, 8/1/2011 440,634
---------------------------------------------------
321,196 Federal National Mortgage Association, 10.50%, 30
Year, 1/1/2021 354,821
---------------------------------------------------
969,832 Government National Mortgage Association, 8.00%, 30
Year, 6/15/2022 993,476
---------------------------------------------------
873,477 Government National Mortgage Association, 7.00%, 30
Year, 10/15/2023 855,466
---------------------------------------------------
505,983 Government National Mortgage Association, 8.50%, 30
Year, 10/15/2024 527,011
---------------------------------------------------
1,493,631 Government National Mortgage Association, 7.50%, 30
Year, 3/15/2026 1,490,180
---------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ --------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
----------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--CONTINUED
---------------------------------------------------
GOVERNMENT AGENCY--CONTINUED
---------------------------------------------------
$ 647,742 Government National Mortgage Association, 7.00%, 30
Year, 7/15/2024 $ 634,385
---------------------------------------------------
1,365,413 Government National Mortgage Association, 9.00%, 30
Year, 11/15/2017 1,459,709
--------------------------------------------------- -----------
TOTAL MORTGAGE-BACKED SECURITIES 24,172,794
--------------------------------------------------- -----------
INVESTMENT GRADE BONDS--10.2%
---------------------------------------------------
AEROSPACE & DEFENSE--0.3%
---------------------------------------------------
250,000 McDonnell Douglas Finance, Note, 9.40%, 10/15/2001 264,298
--------------------------------------------------- -----------
BANKING--1.2%
---------------------------------------------------
250,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 258,273
---------------------------------------------------
250,000 Chase Manhattan, Sub. Note, 8.00%, 5/1/2005 253,953
---------------------------------------------------
200,000 National Bank of Canada, Sub. Note, 8.125%,
8/15/2004 209,886
---------------------------------------------------
350,000 Santander Finance Issuances, Bank Guarantee,
7.875%, 4/15/2005 361,760
--------------------------------------------------- -----------
Total 1,083,872
--------------------------------------------------- -----------
BEVERAGE & TOBACCO--0.1%
---------------------------------------------------
100,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 95,980
--------------------------------------------------- -----------
CABLE TELEVISION--0.5%
---------------------------------------------------
400,000 TKR Cable Inc., 10.50%, 10/30/2007 438,892
--------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.4%
---------------------------------------------------
350,000 (b)Bayer Corp., Deb., 6.50%, 10/1/2002 344,435
--------------------------------------------------- -----------
ELECTRONICS--0.2%
---------------------------------------------------
200,000 Harris Corp, Deb., 10.375%, 12/1/2018 219,958
--------------------------------------------------- -----------
FINANCE--RETAIL--0.3%
---------------------------------------------------
250,000 Household Finance, Deb., 6.45%, 2/1/2009 230,498
--------------------------------------------------- -----------
FINANCIAL INTERMEDIARIES--1.0%
---------------------------------------------------
250,000 Green Tree Financial Corp, Sr. Sub. Note, 10.25%,
6/1/2002 282,908
---------------------------------------------------
325,000 Lehman Brothers, Inc., Sr. Sub. Note, 7.375%,
1/15/2007 321,380
---------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ --------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
----------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------
FINANCIAL INTERMEDIARIES--CONTINUED
---------------------------------------------------
$ 200,000 Merrill Lynch, Medium Term Note, 7.25%, 6/14/2004 $ 204,226
---------------------------------------------------
100,000 Salomon, Inc., Note, 7.20%, 2/1/2004 99,141
--------------------------------------------------- -----------
Total 907,655
--------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.3%
---------------------------------------------------
225,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 237,053
--------------------------------------------------- -----------
GOVERNMENT AGENCY--0.3%
---------------------------------------------------
250,000 Federal National Mortgage Association, 8.59%,
2/3/2005 254,135
--------------------------------------------------- -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.3%
---------------------------------------------------
250,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 272,965
--------------------------------------------------- -----------
INSURANCE--1.6%
---------------------------------------------------
250,000 (b)AFC Capital Trust I, Bond, 8.207%, 2/3/2027 250,983
---------------------------------------------------
85,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 90,589
---------------------------------------------------
350,000 Conseco, Inc., Sr. Note, 10.50%, 12/15/2004 408,961
---------------------------------------------------
265,000 Continental Corp, Note, 8.25%, 4/15/1999 272,841
---------------------------------------------------
250,000 Sunamerica Inc, Medium Term Note, 7.34%, 8/30/2005 249,421
---------------------------------------------------
250,000 USF&G Corp., Company Guarantee, 8.47%, 1/10/2027 247,556
--------------------------------------------------- -----------
Total 1,520,351
--------------------------------------------------- -----------
METALS & MINING--0.3%
---------------------------------------------------
225,000 (b)Southern Peru Ltd., Note, 7.90%, 5/30/2007 227,180
--------------------------------------------------- -----------
OIL & GAS--0.6%
---------------------------------------------------
275,000 Tosco Corp, Sr. Note, 7.625%, 5/15/2006 280,635
---------------------------------------------------
250,000 USX Corp., Note, 6.375%, 7/15/1998 250,638
--------------------------------------------------- -----------
Total 531,273
--------------------------------------------------- -----------
PRINTING & PUBLISHING--0.4%
---------------------------------------------------
400,000 News Amer Hldgs, Sr. Note, 7.50%, 3/1/2000 408,244
--------------------------------------------------- -----------
SERVICES--0.3%
---------------------------------------------------
250,000 Loewen Group Int'l, Sr. Note, 8.25%, 4/15/2003 255,835
--------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ --------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
----------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------
SOVEREIGN GOVERNMENT--0.7%
---------------------------------------------------
$ 300,000 (b)Freeport Terminal (Malta), Gtd. Global Note,
7.50%, 3/29/2009 $ 303,897
---------------------------------------------------
100,000 Republic Of South Africa, Global Bond Deb., 9.625%,
12/15/1999 105,716
---------------------------------------------------
250,000 Republic of Colombia, Note, 7.25%, 2/15/2003 241,875
--------------------------------------------------- -----------
Total 651,488
--------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.4%
---------------------------------------------------
300,000 Trans Ocean Container Corp., Sr. Sub. Note, 12.25%,
7/1/2004 349,830
--------------------------------------------------- -----------
UTILITIES--1.0%
---------------------------------------------------
300,000 Duke Power Co., 1st Mtg. Note, 7.00%, 9/1/2005 292,089
---------------------------------------------------
250,000 Enersis S.A., Note, 7.40%, 12/1/2016 238,460
---------------------------------------------------
300,000 Gulf States Util, FMB, 6.75%, 10/1/1998 300,717
---------------------------------------------------
125,000 Pedernales Electric Coop, 10.875%, 09/01/17 133,350
--------------------------------------------------- -----------
Total 964,616
--------------------------------------------------- -----------
TOTAL INVESTMENT GRADE BONDS 9,258,558
--------------------------------------------------- -----------
HIGH YIELD BONDS--2.7%
---------------------------------------------------
AUTOMOBILE--0.1%
---------------------------------------------------
38,000 Aftermarket Technology Co., Sr. Sub. Note, 12.00%,
8/1/2004 42,370
---------------------------------------------------
50,000 Collins & Aikman Products, Sr. Sub. Note, 11.5%,
4/15/2006 56,188
--------------------------------------------------- -----------
Total 98,558
--------------------------------------------------- -----------
BANKING--0.1%
---------------------------------------------------
50,000 First Nationwide Escrow , Sr. Sub. Note, 10.625%,
10/1/2003 54,500
--------------------------------------------------- -----------
BROADCAST RADIO & TV--0.2%
---------------------------------------------------
255 (b)American Radio Systems Corp., 255 Exchangeable
Pfd. Shares, $11.375 27,256
---------------------------------------------------
500 Chancellor Broadcasting Co., 500 PIK Pfd. Shares,
12.25% 59,500
---------------------------------------------------
50,000 Heritage Media Corp., Sr. Sub. Note, 8.75%,
2/15/2006 51,813
---------------------------------------------------
500 (b)Sinclair Broadcast Group, Inc., 500 Pfd. Shares,
Series A, $11.625 53,000
---------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ -------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
--------------------------------------------------
BROADCAST RADIO & TV--CONTINUED
--------------------------------------------------
$ 25,000 Sullivan Broadcasting, Sr. Sub. Note, 10.25%,
12/15/2005 $ 25,625
-------------------------------------------------- -----------
Total 217,194
-------------------------------------------------- -----------
BUSINESS EQUIPMENT & SERVICES--0.1%
--------------------------------------------------
50,000 Knoll, Inc., Sr. Sub. Note, 10.875%, 3/15/2006 55,125
--------------------------------------------------
25,000 United Stationers Supply, Sr. Sub. Note, 12.75%,
5/1/2005 27,969
-------------------------------------------------- -----------
Total 83,094
-------------------------------------------------- -----------
CABLE TELEVISION--0.3%
--------------------------------------------------
50,000 Cablevision Systems Corp., Sr. Sub. Note, 9.875%,
5/15/2006 52,125
--------------------------------------------------
50,000 Charter Communication Southeast, Sr. Note, 11.25%,
3/15/2006 53,500
--------------------------------------------------
50,000 (b)Diamond Cable, Sr. Disc. Note, 0/11.75%,
2/15/2007 29,313
--------------------------------------------------
25,000 Echostar Satellite Broadcasting Corp., Sr. Disc.
Note, 0/13.125%, 3/15/2004 17,000
--------------------------------------------------
50,000 International Cabletel, Sr. Defd. Cpn. Note,
0/11.50%, 2/1/2006 34,313
--------------------------------------------------
25,000 Pegasus Media , Note, 12.50%, 7/1/2005 27,125
--------------------------------------------------
25,000 Rogers Cablesystems Inc., Sr. Secd. 2nd Priority
Note, 10.00%, 12/1/2007 26,531
--------------------------------------------------
50,000 Telewest PLC, Sr. Disc. Deb., 0/11.00%, 10/1/2007 35,000
--------------------------------------------------
50,000 UIH Australia/Pacific, Sr. Disc. Note, 0/14.00%,
5/15/2006 28,250
-------------------------------------------------- -----------
Total 303,157
-------------------------------------------------- -----------
CHEMICALS & PLASTICS--0.1%
--------------------------------------------------
50,000 Harris Chemical, Sr. Note, 10.25%, 7/15/2001 52,750
--------------------------------------------------
33,000 Polymer Group, Sr. Note, 12.25%, 7/15/2002 36,135
-------------------------------------------------- -----------
Total 88,885
-------------------------------------------------- -----------
CLOTHING & TEXTILES--0.1%
--------------------------------------------------
50,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%,
12/15/2005 52,000
-------------------------------------------------- -----------
CONSUMER PRODUCTS--0.1%
--------------------------------------------------
25,000 Hosiery Corp. Of America, Sr. Sub. Note, 13.75%,
8/1/2002 27,500
--------------------------------------------------
Hosiery Corp. of America, 25 Common Shares 175
--------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ -------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
--------------------------------------------------
CONSUMER PRODUCTS--CONTINUED
--------------------------------------------------
$ 25,000 Playtex Family Products Corp., Sr. Sub. Note,
9.00%, 12/15/2003 $ 25,250
--------------------------------------------------
25,000 Revlon Consumer Products, Sr. Sub. Note, 10.50%,
2/15/2003 26,594
--------------------------------------------------
25,000 Simmons Co., Sr. Sub. Note, 10.75%, 4/15/2006 26,438
-------------------------------------------------- -----------
Total 105,957
-------------------------------------------------- -----------
CONTAINER & GLASS PRODUCTS--0.1%
--------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%,
8/15/2004 52,688
--------------------------------------------------
25,000 Packaging Resources Inc., Sr. Note, 11.625%,
5/1/2003 26,125
-------------------------------------------------- -----------
Total 78,813
-------------------------------------------------- -----------
ECOLOGICAL SERVICES & EQUIPMENT--0.1%
--------------------------------------------------
50,000 (b)Allied Waste, Sr. Sub. Note, 10.25%, 12/1/2006 53,375
--------------------------------------------------
50,000 (a)*Mid-American Waste System, Sr. Sub. Note,
12.25%, 2/15/2003 27,250
-------------------------------------------------- -----------
Total 80,625
-------------------------------------------------- -----------
FOOD & DRUG RETAILERS--0.1%
--------------------------------------------------
25,000 Carr Gottstein Foods Co., Sr. Sub. Note, 12.00%,
11/15/2005 27,781
--------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 55,000
-------------------------------------------------- -----------
Total 82,781
-------------------------------------------------- -----------
FOOD PRODUCTS--0.0%
--------------------------------------------------
25,000 Van De Kamp's, Inc., Sr. Sub. Note, 12.00%,
9/15/2005 27,750
-------------------------------------------------- -----------
FOREST PRODUCTS--0.1%
--------------------------------------------------
25,000 Four M Corp, Sr. Note, 12.00%, 6/1/2006 25,375
--------------------------------------------------
25,000 Stone Container, Sr. Note, 11.50%, 10/1/2004 26,375
-------------------------------------------------- -----------
Total 51,750
-------------------------------------------------- -----------
HEALTHCARE--0.1%
--------------------------------------------------
50,000 Dade International, Inc., Sr. Sub. Note, 11.125%,
5/1/2006 56,125
--------------------------------------------------
50,000 Tenet Healthcare, Sr. Sub. Note, 8.625%, 1/15/2007 50,688
-------------------------------------------------- -----------
Total 106,813
-------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ ------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-------------------------------------------------
HOTELS, MOTELS, INNS & CASINOS--0.0%
-------------------------------------------------
$ 25,000 Courtyard By Marriott, Sr. Note, 10.75%, 2/1/2008 $ 26,969
------------------------------------------------- -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.1%
-------------------------------------------------
25,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%,
7/15/2005 27,625
-------------------------------------------------
25,000 Fairfield Manufacturing Co., Inc., Sr. Sub. Note,
11.375%, 7/1/2001 26,500
-------------------------------------------------
50,000 Mettler-Toledo, Inc., Sr. Sub. Note, 9.75%,
10/1/2006 52,750
------------------------------------------------- -----------
Total 106,875
------------------------------------------------- -----------
LEISURE & ENTERTAINMENT--0.2%
-------------------------------------------------
50,000 AMF Group, Inc., Sr. Sub. Disc. Note, 0/12.25%,
3/15/2006 35,125
-------------------------------------------------
25,000 Cobblestone Golf, Sr. Note, 11.50%, 6/1/2003 26,281
-------------------------------------------------
50,000 Premier Parks, Sr. Note, 12.00%, 8/15/2003 55,625
-------------------------------------------------
75,000 Six Flags Theme Parks, Sr. Sub. Disc. Note,
0/12.25%, 6/15/2005 76,688
------------------------------------------------- -----------
Total 193,719
------------------------------------------------- -----------
MACHINERY & EQUIPMENT--0.1%
-------------------------------------------------
50,000 Alvey Systems, Sr. Sub. Note, 11.375%, 1/31/2003 51,625
-------------------------------------------------
33,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 37,785
------------------------------------------------- -----------
Total 89,410
------------------------------------------------- -----------
OIL & GAS--0.1%
-------------------------------------------------
50,000 Forcenergy, Inc., Sr. Sub. Note, 8.50%, 2/15/2007 48,750
------------------------------------------------- -----------
PRINTING & PUBLISHING--0.1%
-------------------------------------------------
50,000 Garden State Newspapers, Inc., Sr. Sub. Note,
12.00%, 7/1/2004 55,500
------------------------------------------------- -----------
REAL ESTATE--0.0%
-------------------------------------------------
25,000 Trizec Finance, Sr. Note, 10.875%, 10/15/2005 27,813
------------------------------------------------- -----------
STEEL--0.0%
-------------------------------------------------
GS Technologies Operating Co., Inc., Sr. Note,
25,000 12.00%, 9/1/2004 26,938
------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.1%
-------------------------------------------------
Ameritruck Distribution, Sr. Sub. Note, 12.25%,
25,000 11/15/2005 25,125
-------------------------------------------------
Gearbulk Holding Limited, Sr. Note, 11.25%,
25,000 12/1/2004 27,625
-------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ --------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
----------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------
SURFACE TRANSPORTATION--CONTINUED
---------------------------------------------------
$ 50,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 $ 54,250
--------------------------------------------------- -----------
Total 107,000
--------------------------------------------------- -----------
TELECOMMUNICATIONS & CELLULAR--0.3%
---------------------------------------------------
50,000 American Communications, Sr. Disc. Note, 0/12.75%,
4/1/2006 24,500
---------------------------------------------------
50,000 Arch Communications, Sr. Disc. Note, 0/10.875%,
3/15/2008 26,500
---------------------------------------------------
50,000 Intermedia Communications, Sr. Disc. Note,
0/12.50%, 5/15/2006 34,500
---------------------------------------------------
50,000 Millicom International, Sr. Disc. Note, 0/13.50%,
6/1/2006 36,750
---------------------------------------------------
25,000 Nextel Communications, Inc., Sr. Disc. Note,
0/11.50%, 9/1/2003 21,531
---------------------------------------------------
25,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 23,875
---------------------------------------------------
50,000 Teleport Communications, Sr. Disc. Note, 0/11.125%,
7/1/2007 35,813
---------------------------------------------------
50,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 50,500
--------------------------------------------------- -----------
Total 253,969
--------------------------------------------------- -----------
UTILITIES--0.1%
---------------------------------------------------
50,000 California Energy Co., Sr. Note, 10.25%, 1/15/2004 54,188
---------------------------------------------------
El Paso Electric Co., 572 PIK Pfd. Shares, Series
A, 11.40% 62,863
--------------------------------------------------- -----------
Total 117,051
--------------------------------------------------- -----------
TOTAL HIGH YIELD BONDS 2,485,871
--------------------------------------------------- -----------
FOREIGN BONDS--5.4%
---------------------------------------------------
AUSTRALIAN DOLLAR--0.2%
---------------------------------------------------
78,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 5/14/2003 61,453
---------------------------------------------------
65,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 8/14/2001 51,675
---------------------------------------------------
100,000 State Bank Of New South Wales, 12.25%, 2/26/2001 88,973
---------------------------------------------------
25,000 West Aust T Corp, Local Government Guarantee,
8.00%, 7/15/2003 19,788
--------------------------------------------------- -----------
Total 221,889
--------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ ------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
FOREIGN BONDS--CONTINUED
-------------------------------------------------
BELGIUM FRANC--0.1%
-------------------------------------------------
$ 514,000 Belgian Government, Bond, 6.50%, 3/31/2005 $ 15,280
-------------------------------------------------
2,000,000 Belgium Kingdom, 7.75%, 10/15/2004 63,916
------------------------------------------------- -----------
Total 79,196
------------------------------------------------- -----------
CANADIAN DOLLAR--0.3%
-------------------------------------------------
167,000 Canada Government, Deb., 6.50%, 6/1/2004 122,746
-------------------------------------------------
200,000 Ontario Hydro, 9.00%, 6/24/2002 162,662
-------------------------------------------------
34,000 Ontario Hydro, Bond, 7.75%, 11/3/2005 26,542
------------------------------------------------- -----------
Total 311,950
------------------------------------------------- -----------
DANISH KRONE--0.3%
898,000 Denmark--Bullet, Bond, 8.00%, 3/15/2006 152,373
-------------------------------------------------
600,000 Denmark, 8.00%, 5/15/2003 102,675
------------------------------------------------- -----------
Total 255,048
------------------------------------------------- -----------
FRENCH FRANC--0.2%
-------------------------------------------------
28,000 France O.A.T., Deb., 8.25%, 4/25/2022 36,327
-------------------------------------------------
270,000 France O.A.T., Bond, 7.25%, 4/25/2006 51,764
-------------------------------------------------
73,000 France O.A.T., Bond, 7.5%, 4/25/2005 91,617
------------------------------------------------- -----------
Total 179,708
------------------------------------------------- -----------
DEUTSCHE MARK--1.5%
-------------------------------------------------
45,000 DG-HYPBK 5.75%, 1/22/2007 25,782
-------------------------------------------------
79,000 Deutschland Republic, Deb., 6.25%, 1/4/2024 43,454
-------------------------------------------------
38,000,000 KFW International Finance, 6.00%, 11/29/1999 362,623
-------------------------------------------------
100,000 KFW International Finance, Bank Guarantee, 6.75%,
6/20/2005 62,094
-------------------------------------------------
600,000 KFW International Finance, 7.00%, 5/12/2000 111,566
-------------------------------------------------
700,000 Treuhandanstalt, 7.75%, 10/1/2002 460,236
-------------------------------------------------
408,000 Treuhandanstalt, Foreign Government. Guarantee,
6.875%, 6/11/2003 258,202
------------------------------------------------- -----------
Total 1,323,957
------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ ------------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
FOREIGN BONDS--CONTINUED
-------------------------------------------------
GREEK DRACHMA--0.0%
-------------------------------------------------
$ 11,400,000 Hellenic Republic, FRN 14.00%, 10/23/2003 $ 43,544
------------------------------------------------- -----------
IRISH POUND--0.1%
-------------------------------------------------
20,000 Irish Government, Bond, 6.50%, 10/18/2001 30,704
-------------------------------------------------
20,000 Treasury, Deb., 6.25%, 4/1/1999 30,297
------------------------------------------------- -----------
Total 61,001
------------------------------------------------- -----------
ITALIAN LIRA--0.4%
-------------------------------------------------
80,000,000 BTPS, Bond, 10.50%, 11/1/2000 52,311
-------------------------------------------------
480,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 315,854
------------------------------------------------- -----------
Total 368,165
------------------------------------------------- -----------
JAPANESE YEN--0.4%
-------------------------------------------------
24,000,000 Export-Import Bank Japan, 4.375%, 10/1/2003 230,313
-------------------------------------------------
10,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 99,828
------------------------------------------------- -----------
Total 330,141
------------------------------------------------- -----------
NETHERLANDS GUILDER--0.3%
-------------------------------------------------
40,000 Bank Ned Gemeenten, Bond, 6.375%, 1/4/2006 21,602
-------------------------------------------------
30,000 Bank Ned Gemeenten, Bond, 7.75%, 12/20/2004 17,571
-------------------------------------------------
60,000 LKB-global Bd, Bank Guarantee, 6.00%, 1/25/2006 35,334
-------------------------------------------------
350,000 Netherlands Government, 5.75%, 1/15/2004 185,878
-------------------------------------------------
60,000 Netherlands Government, 6.00%, 1/15/2006 31,802
------------------------------------------------- -----------
Total 292,187
------------------------------------------------- -----------
NEW ZEALAND DOLLAR--0.1%
-------------------------------------------------
41,000 New Zealand Government, 8.00%, 2/15/2001 28,971
-------------------------------------------------
70,000 New Zealand Government, Bond, 8.00%, 7/15/1998 48,827
------------------------------------------------- -----------
Total 77,798
------------------------------------------------- -----------
NORWEGIAN KRONE--0.2%
-------------------------------------------------
330,000 NGB, Bond, 9.00%, 1/31/1999 49,931
-------------------------------------------------
420,000 Norwegian Government, Bond, 7.00%, 5/31/2001 63,531
-------------------------------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ ----------------------------------------------- -----------
<C> <S> <C>
BONDS--CONTINUED
------------------------------------------------------------
FOREIGN BONDS--CONTINUED
-----------------------------------------------
NORWEIGIAN KRONE--CONTINUED
-----------------------------------------------
$ 315,000 Norwegian Government, Foreign Gov't. Guarantee,
5.75%, 11/30/2004 $ 44,150
----------------------------------------------- -----------
Total 157,612
----------------------------------------------- -----------
PORTUGESE ESCUDO--0.0%
-----------------------------------------------
6,500,000 Portuguese Ot's, Bond, 11.875%, 2/23/2000 43,486
----------------------------------------------- -----------
SPAINISH PESETA--0.4%
-----------------------------------------------
20,000,000 Spanish Government, 10.00%, 2/28/2005 167,398
-----------------------------------------------
12,000,000 Spanish Government, Bond, 8.80%, 4/30/2006 94,989
-----------------------------------------------
4,340,000 Spanish Government, Bond, 9.40%, 4/30/1999 32,245
-----------------------------------------------
4,950,000 Spanish Government., Deb., 10.10%, 2/28/2001 39,436
----------------------------------------------- -----------
Total 334,068
----------------------------------------------- -----------
SWEDEN--0.3%
-----------------------------------------------
1,000,000 Stadshypotekskas, Foreign Government Guarantee,
Series 1551, 7.50%, 3/17/1999 133,800
-----------------------------------------------
900,000 Sweden, 6.00%, 2/9/2005 110,247
----------------------------------------------- -----------
Total 244,047
----------------------------------------------- -----------
UNITED KINGDOM POUND--0.6%
-----------------------------------------------
80,000 British Gas PLC, 8.875%, 7/8/2008 138,803
-----------------------------------------------
29,000 UK Treasury, Deb., 8.50%, 12/7/2005 51,272
-----------------------------------------------
175,000 UK Conversion, 9.00%, 3/3/2000 300,141
-----------------------------------------------
20,000 U K Treasury, Bond, 7.50%, 12/7/2006 33,320
-----------------------------------------------
30,000 U K Treasury, Bond, 8.00%, 12/7/2015 52,631
----------------------------------------------- -----------
Total 576,177
----------------------------------------------- -----------
TOTAL FOREIGN BONDS 4,899,964
----------------------------------------------- -----------
TOTAL BONDS (IDENTIFIED COST $77,232,604) 77,084,582
----------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED INCOME FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
---------- ---------------------------------------------------- -----------
<C> <S> <C>
(C) REPURCHASE AGREEMENT--2.5%
---------------------------------------------------------------
$2,245,000 BT Securities Corporation, 5.56%, dated 5/30/1997,
due 6/2/1997 (AT AMORTIZED COST) $ 2,245,000
---------------------------------------------------- -----------
TOTAL INVESTMENTS (IDENTIFIED COST $88,148,793) (D) $89,045,733
---------------------------------------------------- -----------
</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, 1997, these securities amounted
to $1,289,439 which represents 1.4% of total net assets.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
The investment in the repurchase agreement is through participation in a
joint account with other Federated Funds.
(d) The cost of investments for federal tax purposes amounts to $88,148,793.
The net unrealized appreciation of investments on a federal tax basis
amounts to $896,943 which is comprised of $2,011,906 appreciation and
$1,114,963 depreciation at May 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($90,731,853) at May 31, 1997.
The following acronyms are used throughout this portfolio:
ADR--American Depositary Receipt
FRN--Floating Rate Note
PIK--Payment in Kind
PLC--Public Limited Company
PP--Principal Payment
* MID-AMERICAN WASTE SYSTEMS, INC.
On January 22, 1997, Mid-American Waste filed for protection under Chapter
11 of the Bankruptcy Code. The company has agreed to be acquired by USA
Waste Services, Inc. The timing and outcome of this potential transaction
are uncertain. Mid-American Waste has been deemed illiquid as a result of
contractual agreements relating to litigation.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------
Total investments in securities, at value
(identified and tax cost $88,148,793) $89,045,733
- ---------------------------------------------
Cash 9,865
- ---------------------------------------------
Income receivable 1,416,924
- ---------------------------------------------
Receivable for investments sold 18,876
- ---------------------------------------------
Receivable for shares sold 289,368
- ---------------------------------------------
Deferred expenses 13,489
- --------------------------------------------- -----------
Total assets 90,794,255
- ---------------------------------------------
LIABILITIES:
- -------------------------------------
Payable for dollar roll transactions $ 2,390
- -------------------------------------
Payable for taxes withheld 1,608
- -------------------------------------
Accrued expenses 58,404
- ------------------------------------- -------
Total liabilities 62,402
- --------------------------------------------- -----------
NET ASSETS for 8,733,902 shares outstanding $90,731,853
- --------------------------------------------- -----------
NET ASSETS CONSIST OF:
- ---------------------------------------------
Paid in capital $89,067,794
- ---------------------------------------------
Net unrealized appreciation of investments
and translation of assets and liabilities in
foreign currency 893,243
- ---------------------------------------------
Accumulated net realized gain on investments
and foreign currency transactions 593,655
- ---------------------------------------------
Undistributed net investment income 177,161
- --------------------------------------------- -----------
Total Net Assets $90,731,853
- --------------------------------------------- -----------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------
INSTITUTIONAL SHARES:
- ---------------------------------------------
$64,999,989 / 6,256,766 shares outstanding $10.39
- --------------------------------------------- -----------
SELECT SHARES:
- ---------------------------------------------
$25,731,864 / 2,477,136 shares outstanding $10.39
- --------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------
Dividends (net of foreign taxes withheld of $144) $ 163,825
- ----------------------------------------------------
Interest (net of dollar roll expense of $2,380 and 2,914,854
foreign taxes withheld of $2,461) -----------
- ----------------------------------------------------
Total income 3,078,679
- ----------------------------------------------------
EXPENSES:
- -----------------------------------------
Investment advisory fee $341,967
- -----------------------------------------
Administrative personnel and services fee 77,177
- -----------------------------------------
Custodian fees 10,725
- -----------------------------------------
Transfer and dividend disbursing agent
fees and expenses 51,000
- -----------------------------------------
Directors'/Trustees' fees 2,078
- -----------------------------------------
Auditing fees 7,978
- -----------------------------------------
Legal fees 2,482
- -----------------------------------------
Portfolio accounting fees 36,070
- -----------------------------------------
Distribution services fee--Select Shares 96,073
- -----------------------------------------
Shareholder services fee--Institutional
Shares 81,965
- -----------------------------------------
Shareholder services fee--Select Shares 32,024
- -----------------------------------------
Share registration costs 18,399
- -----------------------------------------
Printing and postage 14,898
- -----------------------------------------
Insurance premiums 2,244
- -----------------------------------------
Taxes 990
- -----------------------------------------
Miscellaneous 11,597
- ----------------------------------------- ---------
Total expenses 787,667
- -----------------------------------------
Waivers--
- -----------------------------
Waiver of investment
advisory fee $ (233,632)
- -----------------------------
Waiver of distribution
services fee--Select Shares (32,024)
- -----------------------------
Waiver of shareholder
services fee--Institutional (65,572)
Shares -----------
- -----------------------------
Total waivers (331,228)
- ----------------------------------------- ---------
Net expenses 456,439
- ---------------------------------------------------- -----------
Net investment income 2,622,240
- ---------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY:
- ----------------------------------------------------
Net realized gain on investments and foreign
currency transactions 605,083
- ----------------------------------------------------
Net change in unrealized appreciation of
investments and translation of assets and (1,389,256)
liabilities in foreign currency -----------
- ----------------------------------------------------
Net realized and unrealized loss on investments (784,173)
and foreign currency -----------
- ----------------------------------------------------
Change in net assets resulting from operations $ 1,838,067
- ---------------------------------------------------- -----------
</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, 1997 NOVEMBER 30, 1996
---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------
OPERATIONS--
- -------------------------------------------
Net investment income $ 2,622,240 $ 4,425,589
- -------------------------------------------
Net realized gain (loss) on investments,
foreign currency transactions and futures
contracts ($605,083 and $629,064 net gains,
respectively,
as computed for federal tax purposes) 605,083 649,318
- -------------------------------------------
Net change in unrealized
appreciation/depreciation of
investments, translation of assets and
liabilities in foreign
currency, and futures contracts (1,389,256) 410,861
- ------------------------------------------- ------------ ------------
Change in net assets resulting from
operations 1,838,067 5,485,768
- ------------------------------------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------
Distributions from net investment income
- -------------------------------------------
Institutional Shares (1,998,199) (3,457,532)
- -------------------------------------------
Select Shares (693,841) (1,037,906)
- -------------------------------------------
Distributions from net realized gains on
investments, foreign
currency transactions
- -------------------------------------------
Institutional Shares (457,124) (332,234)
- -------------------------------------------
Select Shares (172,678) (91,563)
- ------------------------------------------- ------------ ------------
Change in net assets resulting from
distributions to shareholders (3,321,842) (4,919,235)
- ------------------------------------------- ------------ ------------
SHARE TRANSACTIONS--
- -------------------------------------------
Proceeds from sale of shares 15,386,326 48,463,331
- -------------------------------------------
Net asset value of shares issued to
shareholders in payment of
distributions declared 1,661,143 2,121,547
- -------------------------------------------
Cost of shares redeemed (17,413,409) (23,349,415)
- ------------------------------------------- ------------ ------------
Change in net assets resulting from share
transactions (365,940) 27,235,463
- ------------------------------------------- ------------ ------------
Change in net assets (1,849,715) 27,801,996
- -------------------------------------------
NET ASSETS:
- -------------------------------------------
Beginning of period 92,581,568 64,779,572
- ------------------------------------------- ------------ ------------
End of period (including undistributed net
investment income of
$177,161 and $246,961, respectively) $ 90,731,853 $ 92,581,568
- ------------------------------------------- ------------ ------------
</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
ENDED YEAR ENDED NOVEMBER 30,
(UNAUDITED) -------------------------
MAY 31,
1997 1996 1995 1994(A)
---------------------------------- ----------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $10.56 $10.54 $ 9.76 $10.00
----------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------
Net investment income 0.36 0.59 0.62 0.31
----------------------------------
Net realized and unrealized gain
(loss) on investments, foreign
currency, and futures contracts (0.09) 0.12 0.78 (0.25)
----------------------------------
------- ------- ------- -------
Total from investment operations 0.27 0.71 1.40 0.06
----------------------------------
------- ------- ------- -------
LESS DISTRIBUTIONS
----------------------------------
Distributions from net investment
income (0.37) (0.62) (0.62) (0.30)
----------------------------------
Distributions from net realized
gain on investments, foreign
currency transactions, and
futures contracts (0.07) (0.07) -- --
----------------------------------
------- ------- ------- -------
Total distributions (0.44) (0.69) (0.62) (0.30)
----------------------------------
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $10.39 $10.56 $10.54 $ 9.76
----------------------------------
------- ------- ------- -------
TOTAL RETURN (B) 2.12% 6.98% 14.74% 0.55%
----------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------
Expenses 0.79%* 0.80% 0.75% 0.67%*
----------------------------------
Net investment income 5.86%* 5.72% 6.26% 6.02%*
----------------------------------
Expense waiver/reimbursement (c) 0.70%* 0.80% 1.06% 1.01%*
----------------------------------
SUPPLEMENTAL DATA
----------------------------------
Net assets, end of period (000
omitted) $65,000 $67,122 $50,852 $34,692
----------------------------------
Average commission rate paid (d) $0.0002 $0.0003
----------------------------------
Portfolio turnover 22% 164% 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 the start of
business, January 27, 1994 to May 24, 1994, the net investment income was
distributed to the fund'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.
(d)Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
FINANCIAL HIGHLIGHTS--SELECT SHARES
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
(UNAUDITED) -------------------------------
MAY 31,
1997 1996 1995 1994(A)
---------------------------------- ----------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD $10.56 $10.54 $ 9.77 $10.00
----------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------
Net investment income 0.31 0.53 0.48 0.28
----------------------------------
Net realized and unrealized gain
(loss) on investments, foreign
currency, and futures contracts (0.09) 0.10 0.83 (0.25)
----------------------------------
------- ------- ------- ------
Total from investment operations 0.22 0.63 1.31 0.03
----------------------------------
------- ------- ------- ------
LESS DISTRIBUTIONS
----------------------------------
Distributions from net investment
income (0.32) (0.54) (0.54) (0.26)
----------------------------------
Distributions from net realized
gain on investments, foreign
currency transactions, and
futures contracts (0.07) (0.07) -- --
----------------------------------
------- ------- ------- ------
Total distributions (0.39) (0.61) (0.54) (0.26)
----------------------------------
------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $10.39 $10.56 $10.54 $ 9.77
----------------------------------
------- ------- ------- ------
TOTAL RETURN (B) 1.78% 6.23% 13.76% 0.26%
----------------------------------
RATIOS TO AVERAGE NET ASSETS
----------------------------------
Expenses 1.50%* 1.50% 1.50% 1.42%*
----------------------------------
Net investment income 5.25%* 5.02% 5.56% 5.24%*
----------------------------------
Expense waiver/reimbursement (c) 0.76%* 0.85% 1.06% 1.26%*
----------------------------------
SUPPLEMENTAL DATA
----------------------------------
Net assets, end of period (000
omitted) $25,732 $25,459 $13,927 $3,198
----------------------------------
Average commission rate paid (d) $0.0002 $0.0003
----------------------------------
Portfolio turnover 22% 164% 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 the start of
business, January 27, 1994 to May 24, 1994, the net investment income was
distributed to the fund'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.
(d)Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (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 investment objective of the Fund is to seek current income.
The Fund offers two classes of shares: Institutional Shares and Select Shares.
(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--Listed equity securities are valued at the last sale
price reported on a national securities exchange. U.S. government
securities, listed corporate bonds, other fixed income and asset-backed
securities, and unlisted securities and private placement securities are
valued at prices furnished by an independent pricing service. Short-term
securities are valued at the prices provided by an independent pricing
service. However, short-term securities with remaining maturities of sixty
days or less at the time of purchase may be valued at amortized cost, which
approximates fair market value.
With respect to valuation of foreign securities, trading in foreign
countries may be completed at times which vary from the closing of the New
York Stock Exchange. Therefore, foreign securities are valued at the latest
closing price on the exchange on which they are traded prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign
currencies are translated into U.S. dollars at the foreign exchange rate in
effect at noon, eastern time, on the day the value of the foreign security
is determined.
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
FEDERATED MANAGED INCOME FUND
- -------------------------------------------------------------------------------
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 the Fund is reasonably able to obtain
information.
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 over a period not to exceed five years from the Fund's
commencement date.
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. Future contracts have
market risks, including the risk that the change in value of the contract
may not correlate with the changes in value of the underlying securities.
As of May 31, 1997, the Fund had no outstanding futures contracts.
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
commitments for the delayed delivery of securities or foreign currency
exchange transactions. Purchased contracts are used to acquire exposure to
foreign currencies; whereas, contracts to sell are used to hedge the Fund's
securities against currency fluctuations. Risks may arise upon entering
these transactions from the potential inability of counter-parts to meet
the terms of their commitments and from unanticipated movements in security
prices or foreign exchange rates. The foreign currency transactions are
adjusted by the daily exchange rate of the underlying currency and any
gains or
FEDERATED MANAGED INCOME FUND
- -------------------------------------------------------------------------------
losses are recorded for financial statement purpose as unrealized until the
settlement date. At May 31, 1997, the Fund had no outstanding foreign
currency commitments.
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 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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Trustees. The Fund will not incur any
registration costs upon such reseals. 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, 1997 is
as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
-------- ------------------- ----------------
<S> <C> <C>
Bayer Corp. 3/21/1996-4/17/1996 $345,302
AFC Capital Trust 1/29/1997 250,000
Southern Peru Ltd. 5/23/1997 225,000
Freeport Terminal (Malta) 7/19/1994 284,196
American Radio Systems, Inc. 2/4/1997-3/4/1997 25,741
Sinclair Broadcast Group, Inc. 3/5/1997 50,000
Diamond Cable 2/21/1997 30,547
Allied Waste 11/25/1996 50,000
</TABLE>
FEDERATED MANAGED INCOME FUND
- -------------------------------------------------------------------------------
DOLLAR ROLL TRANSACTIONS--The Fund enters into dollar roll transactions,
with respect to mortgage securities issued by Government National Mortgage
Association, Federal National Mortage Association and Federal Home Loan
Mortgage Corporation, 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.
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, 1997 NOVEMBER 30, 1996
------------------------ ------------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- -------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 989,140 $ 10,259,113 2,995,976 $ 31,129,010
- --------------------------
Shares issued to
shareholders in payment of
distributions declared 102,036 1,058,276 135,176 1,403,094
- --------------------------
Shares redeemed (1,192,123) (12,369,809) (1,600,230) (16,630,503)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting
from Institutional (100,947) $ (1,052,420) 1,530,922 $ 15,901,601
Shares transactions ---------- ------------ ---------- ------------
- --------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SELECT SHARES MAY 31, 1997 NOVEMBER 30, 1996
- -------------------------- ------------------------ ------------------------
<S> <C> <C> <C> <C>
Shares sold 493,745 $ 5,127,213 1,668,304 $ 17,334,321
- --------------------------
Shares issued to
shareholders in payment of
distributions declared 58,122 602,867 69,234 718,453
- --------------------------
Shares redeemed (486,199) (5,043,600) (648,056) (6,718,912)
- -------------------------- ---------- ------------ ---------- ------------
Net change resulting
from Select Shares 65,668 $ 686,480 1,089,482 $ 11,333,862
transactions ---------- ------------ ---------- ------------
- --------------------------
Net change resulting (35,279) $ (365,940) 2,620,404 $ 27,235,463
from share transactions ---------- ------------ ---------- ------------
- --------------------------
</TABLE>
FEDERATED MANAGED INCOME FUND
- -------------------------------------------------------------------------------
(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. (the "Sub-Adviser"), the Sub-Adviser,
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 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 of up to 0.75% of average net
assets, 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 shares 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 Trust's accounting records
for which it receives a fee. The fee is based on the level of the Trust's
average daily net assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $91,334 were borne
initially by Adviser. The Fund has agreed to reimburse Adviser for the
organizational expenses during the five year period following effective
date. For the period ended May 31, 1997, the Fund paid $9,254 pursuant to
this agreement.
FEDERATED MANAGED INCOME FUND
- -------------------------------------------------------------------------------
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, 1997, were as follows:
<TABLE>
<S> <C>
- ---------
PURCHASES $19,072,176
- --------- -----------
SALES $19,340,817
- --------- -----------
</TABLE>
(6) 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.
At May 31, 1997, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF NET % OF NET
INDUSTRY ASSETS INDUSTRY ASSETS
------------------------------- -------- ------------------------------- --------
<S> <C> <C> <C>
Aerospace & Military Technology 0.3 Government Agency 26.9
Agency 1.1 Healthcare 0.8
Automotive 0.1 Industrial Products & Equipment 0.4
Banking 1.3 Insurance 1.7
Basic Industry 0.2 Leisure & Entertainment 0.2
Beverage & Tobacco 0.1 Machinery & Equipment 0.1
Broadcast Radio & T.V. 0.3 Metals & Mining 0.3
Business Equipment & Services 0.1 Natural Gas Distribution 0.5
Cable Television 0.8 Oil & Gas 1.5
Chemicals & Plastics 0.5 Printing & Publishing 0.5
Clothing & Textiles 0.1 Producer Manufacturing 0.4
Consumer Durables 0.3 Retail Trade 0.4
Consumer Non-Durables 0.6 Services 0.6
Container & Glass Products 0.1 Sovereign 3.0
Ecological Services & Equipment 0.1 Sovereign Government 1.4
Electrical Utilities 4.0 State & Provincial 0.2
Electrical & Electronics 0.7 Supranational 0.1
Electronics 0.2 Surface Transportation 0.5
Energy Minerals 0.7 Technology 0.4
Finance 1.0 Telecommunications & Cellular 0.3
Financial Intermediaries 1.2 Transportation 0.1
Financial Services 0.2 Treasury Securities 40.0
Forest Products & Paper 0.1 Utilities 1.9
</TABLE>
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. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President, Treasurer,
John E. Murray, Jr. and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
Karen M. Brownlee
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the fund's prospectuses which
contain facts concerning its objective and policies, management fees,
expenses and other information.
[LOGO OF MANAGED SERIES TRUST]
FEDERATED
MANAGED GROWTH AND
INCOME FUND
[LOGO OF MANAGED SERIES TRUST]
- -----------------------
- -----------------------
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
Federated Managed
Growth and Income Fund is part of
Managed Series Trust,
a lifecycle investing program from
Federated Investors.
May 31, 1997
[LOGO OF FEDERATED INVESTORS]
Federated Securities Corp., Distributor
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 56166K305
Cusip 56166K404
G00516-01 (7/97)
PRESIDENT'S MESSAGE
- -------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Federated
Managed Growth and Income Fund for the six-month period from December 1, 1996
through May 31, 1997. Included in this report is an investment review,
followed by a complete listing of the fund's holdings and its financial
statements. In addition, separate Financial Highlights tables have been
included for the fund's Institutional Shares and Select Shares.
During the reporting period, the highly valued U.S. stock market, where
approximately 24% of the fund's $202 million portfolio was invested, continued
its climb while experiencing periodic volatility. The international stock
market, where approximately 5% of the fund's portfolio was invested, recorded
positive gains that were less than those of U.S. stocks. The U.S. bond
market--where approximately 60% of the fund's portfolio was invested--paid
good income yields but was impacted by rising rates that caused bond prices to
fall. A strong U.S. dollar negatively impacted the returns of foreign bonds,
which accounted for 5% of portfolio assets.*
In this environment, the fund's Institutional Shares delivered a total return
of 2.81%** through dividends totaling $0.26 per share and capital gains
totaling $0.12 per share. The fund's Select Shares produced a total return of
2.44%** through dividends totaling $0.22 per share and capital gains totaling
$0.12 per share.
Thank you for pursuing your financial goals through the high level of
diversification and professional management of Federated Managed Growth and
Income Fund. As always, we invite your comments and suggestions.
Sincerely,
/s/ Glen R. Johnson
Glen R. Johnson
President
July 15, 1997
* Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards.
** Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1997
The six month period ended May 31, 1997 was a generally favorable one for
financial assets, and Federated Managed Growth and Income Fund participated in
the advance. For the six months ended May 31, 1997, an investor in the fund's
Institutional Shares had a total return of 2.81%,* while an investor in the
fund's Select Shares had a total return of 2.44%.* However, performance among
asset classes showed wide variation. Stocks of large U.S. companies did
especially well as investors continued to favor companies with broad product
lines and lower perceived fundamental risk. Small company stocks had good
returns for the reporting period but still lagged large company stocks.
Foreign stocks generally had good returns in local currency terms, but dollar
strength in the foreign exchange market caused returns in dollar terms to be
more moderate. Utilities declined in response to gradually rising interest
rates. While bond prices were also hurt by rising interest rates, their higher
income yield cushioned the impact and bonds generally provided modest positive
returns.
ASSET ALLOCATION AS OF MAY 31, 1997
Federated Managed Growth and Income Fund operates on an investment philosophy
that, over time, an investor with a diversified portfolio may 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, 1997.
- --------
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1997
-------------------------------- --------- ----------------
<S> <C> <C>
BONDS (1) 50-70 64
U.S. Treasury Securities 0-70 30
Mortgage-Backed Securities 0-35 19
Investment Grade Corporate Bonds 0-35 8
High Yield Corporate Bonds 0-7.5 2
Foreign Bonds 0-7.5 5
EQUITIES (1) 30-50 34
Large Company Stocks 0-50 13
Utility Stocks 0-20 7
Small Company Stocks 0-7.5 3
Foreign Stocks 0-7.5 5
Equity Reserves 0-15 6
</TABLE>
--------
(1) Bonds convertible into equity securities at a price below the
closing price of the underlying equity securities on May 31, 1997
have been included under the appropriate equity asset category.
Over the reporting period, as well as the past several years, investors have
been faced with 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 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 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
Management has kept a defensive bond position to help reduce 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 reporting period in December 1996 and fell rapidly in
the spring of 1997 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
years, 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. Treasuries,
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
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
weight was above normal throughout the reporting 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
Since early June 1995, the severe overvaluation of the market caused fund
management to hold a defensive position on the equity market. This defensive
position involves holding equity reserves at 7.5%, with the above normal
allocation coming from a reduction in the allocation to U.S. large company
stocks.
Equity portfolio returns were adversely affected by negative returns to
utilities. Utility stocks trailed industrial stocks as the economy continued
to grow strongly last winter. However, utility stocks tend to offer
substantially higher yields than industrial stocks, and utilities historically
proved to be defensive in sustained market declines. Therefore, a normal
position was held in utilities, despite the better growth opportunities
offered by other sectors of the equity market.
Normal positions were also held in foreign equities and domestic small company
stocks.
FEDERATED MANAGED GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ----------------------------- ------------
<C> <S> <C>
STOCKS--28.8%
-----------------------------------------
LARGE-COMPANY--13.1%
-----------------------------
BASIC INDUSTRY--0.5%
-----------------------------
4,900 Betz Laboratories, Inc. $ 312,375
-----------------------------
3,000 Dow Chemical Co. 250,125
-----------------------------
21,800 LTV Corporation 305,200
-----------------------------
7,700 Morton International, Inc. 248,325
----------------------------- ------------
Total 1,116,025
----------------------------- ------------
CONSUMER DURABLES--0.7%
-----------------------------
6,400 General Motors Corp., Class H 352,800
-----------------------------
3,400 General Motors Corp. 194,650
-----------------------------
9,400 Martin Marietta Materials 270,250
-----------------------------
19,800 Rubbermaid, Inc. 551,925
----------------------------- ------------
Total 1,369,625
----------------------------- ------------
CONSUMER NON-DURABLES--1.5%
-----------------------------
2,800 CPC International, Inc. 240,800
-----------------------------
5,800 Kimberly-Clark Corp. 290,725
-----------------------------
18,300 PepsiCo, Inc. 672,525
-----------------------------
5,400 Philip Morris Cos., Inc. 237,600
-----------------------------
6,100 RJR Nabisco Holdings Corp. 197,488
-----------------------------
14,700 Russell Corp. 450,188
-----------------------------
5,000 Tambrands, Inc. 241,250
-----------------------------
2,700 Unilever N.V. 523,125
-----------------------------
3,500 V.F. Corp. 273,438
----------------------------- ------------
Total 3,127,139
----------------------------- ------------
ENERGY MINERALS--1.7%
-----------------------------
4,600 Amerada-Hess Corp. 246,100
-----------------------------
1,800 Atlantic Richfield Co. 261,900
-----------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------
LARGE-COMPANY--CONTINUED
-------------------------------------
ENERGY MINERALS--CONTINUED
-------------------------------------
5,700 Chevron Corp. $ 399,000
-------------------------------------
7,200 Exxon Corp. 426,600
-------------------------------------
10,300 Occidental Petroleum Corp. 239,475
-------------------------------------
1,300 Royal Dutch Petroleum Co. 253,825
-------------------------------------
13,600 Sun Co., Inc. 406,300
-------------------------------------
3,800 Texaco, Inc. 414,675
-------------------------------------
14,300 USX-Marathon Group 425,425
-------------------------------------
3,600 (b)Western Atlas, Inc. 243,900
------------------------------------- ------------
Total 3,317,200
------------------------------------- ------------
FINANCE--2.0%
-------------------------------------
12,400 Allmerica Financial Corp. 451,050
-------------------------------------
6,430 Allstate Corp. 473,409
-------------------------------------
8,540 Bear Stearns Cos., Inc. 277,550
-------------------------------------
3,800 CIGNA Corp. 660,250
-------------------------------------
6,600 Dean Witter, Discover & Co. 272,250
-------------------------------------
6,000 Federal National Mortgage Association 261,750
-------------------------------------
4,400 Marsh & McLennan Cos., Inc. 579,700
-------------------------------------
5,300 National City Corp. 272,950
-------------------------------------
4,700 Providian Corp. 281,413
-------------------------------------
5,666 Travelers Group, Inc. 310,922
------------------------------------- ------------
Total 3,841,244
------------------------------------- ------------
HEALTH CARE--1.7%
-------------------------------------
6,200 Abbott Laboratories 390,600
-------------------------------------
3,800 (b)American Home Products Corp. 289,750
-------------------------------------
8,300 Bard (C.R.), Inc. 265,600
-------------------------------------
19,400 (b)Beverly Enterprises, Inc. 274,025
-------------------------------------
11,400 (b)Biomet, Inc. 213,038
-------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ----------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------
LARGE-COMPANY--CONTINUED
-----------------------------------------
HEALTH CARE--CONTINUED
-----------------------------------------
7,600 Bristol-Myers Squibb Co. $ 557,650
-----------------------------------------
7,300 Columbia/HCA Healthcare Corp. 267,363
-----------------------------------------
13,800 (b)Healthsource, Inc. 296,700
-----------------------------------------
3,200 Merck & Co., Inc. 287,600
-----------------------------------------
3,300 Smithkline Beecham, ADR 288,750
-----------------------------------------
6,100 United Healthcare Corp. 344,650
----------------------------------------- ------------
Total 3,475,726
----------------------------------------- ------------
PRODUCER MANUFACTURING--0.9%
-----------------------------------------
21,100 ITT Industries, Inc. 522,225
-----------------------------------------
10,700 Ingersoll-Rand Co. 583,150
-----------------------------------------
10,700 (b)Lexmark Intl. Group, Class A 282,213
-----------------------------------------
2,500 Loews Corp. 243,125
-----------------------------------------
6,400 PACCAR, Inc. 289,600
----------------------------------------- ------------
Total 1,920,313
----------------------------------------- ------------
RETAIL TRADE--0.9%
-----------------------------------------
12,100 Dayton-Hudson Corp. 582,313
-----------------------------------------
34,700 (b)K Mart Corp. 485,800
-----------------------------------------
6,400 (b)Meyer (Fred), Inc. 293,600
-----------------------------------------
18,100 Wal-Mart Stores, Inc. 538,475
----------------------------------------- ------------
Total 1,900,188
----------------------------------------- ------------
SERVICES--0.6%
-----------------------------------------
8,700 Block (H&R), Inc. 287,100
-----------------------------------------
12,900 Browning-Ferris Industries, Inc. 422,475
-----------------------------------------
12,500 Readers Digest Association, Inc., Class A 309,375
-----------------------------------------
6,000 (b)Viacom, Inc., Class A 180,750
-----------------------------------------
3,000 (b)Viacom, Inc., Class B 89,063
----------------------------------------- ------------
Total 1,288,763
----------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------
LARGE-COMPANY--CONTINUED
-------------------------------------
TECHNOLOGY--0.9%
-------------------------------------
8,900 AMP, Inc. $ 366,013
-------------------------------------
7,900 (b)Cabletron Systems, Inc. 347,600
-------------------------------------
3,400 International Business Machines Corp. 294,100
-------------------------------------
4,366 Lucent Technologies, Inc. 277,787
-------------------------------------
3,800 Raytheon Co. 181,450
-------------------------------------
11,200 (b)Storage Technology Corp. 456,400
------------------------------------- ------------
Total 1,923,350
------------------------------------- ------------
TRANSPORTATION--0.3%
-------------------------------------
10,300 CNF Transporation, Inc. 332,175
-------------------------------------
9,700 (b)KLM Royal Dutch Airlines 284,938
------------------------------------- ------------
Total 617,113
------------------------------------- ------------
UTILITIES--1.4%
-------------------------------------
6,700 CMS Energy Corp. 225,288
-------------------------------------
4,800 Coastal Corp. 240,600
-------------------------------------
4,500 (b)Columbia Gas System, Inc. 289,688
-------------------------------------
4,500 FPL Group, Inc. 209,250
-------------------------------------
7,800 GTE Corp. 344,175
-------------------------------------
11,200 Houston Industries, Inc. 232,400
-------------------------------------
13,800 MCI Communications Corp. 529,575
-------------------------------------
8,900 P G & E Corp. 205,813
-------------------------------------
37,600 (b)Tele-Communications, Inc., Class A 568,700
------------------------------------- ------------
Total 2,845,489
------------------------------------- ------------
TOTAL LARGE-COMPANY 26,742,175
------------------------------------- ------------
SMALL-COMPANY--3.1%
-------------------------------------
BASIC INDUSTRY--0.2%
-------------------------------------
5,900 (b)Chirex, Inc. 67,850
-------------------------------------
1,700 Donaldson Company, Inc. 62,263
-------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ---------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
----------------------------------------------------
SMALL-COMPANY--CONTINUED
----------------------------------------
BASIC INDUSTRY--CONTINUED
----------------------------------------
1,800 (b)Fibreboard Corp. $ 97,875
----------------------------------------
3,300 (b)Royal Group Technologies Ltd. 80,850
----------------------------------------
4,900 Spartech Corp. 61,863
---------------------------------------- ------------
Total 370,701
---------------------------------------- ------------
CONSUMER DURABLES--0.1%
----------------------------------------
2,200 Carlisle Cos., Inc. 67,100
----------------------------------------
3,100 (b)Equity Marketing, Inc. 58,125
----------------------------------------
2,600 Wynns International, Inc. 64,350
---------------------------------------- ------------
Total 189,575
---------------------------------------- ------------
CONSUMER NON-DURABLES--0.1%
----------------------------------------
1,700 (b)Blyth Industries, Inc. 75,650
----------------------------------------
4,000 (b)North Face, Inc. 73,000
----------------------------------------
3,400 (b)Sport-Haley Inc. 64,600
----------------------------------------
3,300 (b)USA Detergents, Inc. 42,900
---------------------------------------- ------------
Total 256,150
---------------------------------------- ------------
ENERGY MINERALS--0.1%
----------------------------------------
1,600 Devon Energy Corp. 59,600
----------------------------------------
1,800 (b)EVI, Inc. 67,725
----------------------------------------
3,900 (b)Tuboscope Vetco International Corp. 63,375
----------------------------------------
1,700 Vintage Petroleum, Inc. 57,800
---------------------------------------- ------------
Total 248,500
---------------------------------------- ------------
FINANCE--0.6%
----------------------------------------
3,400 Aames Financial Corp 43,775
----------------------------------------
1,800 CMAC Investment Corp. 74,925
----------------------------------------
3,600 (b)D & N Financial Corp. 63,900
----------------------------------------
1,938 (b)Delphi Financial Group, Inc., Class A 73,644
----------------------------------------
4,000 (b)Delta Financial Corp. 64,000
----------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------------
SMALL-COMPANY--CONTINUED
-------------------------------------------
FINANCE--CONTINUED
-------------------------------------------
1,700 Executive Risk, Inc. $ 88,613
-------------------------------------------
2,400 (b)FIRSTPLUS Financial Group, Inc. 61,200
-------------------------------------------
1,500 Frontier Insurance Group, Inc. 82,313
-------------------------------------------
3,000 (b)Leasing Solutions, Inc. 45,375
-------------------------------------------
2,100 Peoples Heritage Financial Group 69,563
-------------------------------------------
3,300 (b)Prime Service, Inc. 80,850
-------------------------------------------
1,500 Redwood Trust, Inc. 85,688
-------------------------------------------
1,900 Sirrom Capital Corp. 73,863
-------------------------------------------
4,800 (b)Southern Pacific Funding 67,200
-------------------------------------------
1,400 TCF Financial Corp. 59,500
-------------------------------------------
1,800 Vesta Insurance Group, Inc. 82,575
------------------------------------------- ------------
Total 1,116,984
------------------------------------------- ------------
HEALTH CARE--0.4%
-------------------------------------------
3,400 (b)American HomePatient, Inc. 66,300
-------------------------------------------
3,100 (b)Cambridge Neuroscience, Inc. 30,225
-------------------------------------------
2,300 (b)Curative Technologies, Inc. 63,969
-------------------------------------------
6,200 (b)Cyanotech Corp. 41,075
-------------------------------------------
3,900 (b)FPA Medical Management, Inc. 78,000
-------------------------------------------
2,200 (b)Genesis Health Ventures, Inc. 72,325
-------------------------------------------
2,400 (b)Medicis Pharmaceutical Corp., Class A 82,200
-------------------------------------------
6,600 (b)Prime Medical Services 73,425
-------------------------------------------
3,100 (b)Respironics, Inc. 62,775
-------------------------------------------
3,900 (b)Rotech Medical Corp. 65,813
-------------------------------------------
1,300 Shared Medical Systems Corp. 68,900
-------------------------------------------
1,900 (b)Universal Health Services, Inc., Class B 76,950
-------------------------------------------
4,400 (b)VIDAMED, Inc. 31,900
------------------------------------------- ------------
Total 813,857
------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------
SMALL-COMPANY--CONTINUED
-------------------------------------
PRODUCER MANUFACTURING--0.2%
-------------------------------------
3,100 (b)AFC Cable Systems, Inc. $ 84,863
-------------------------------------
6,600 (b)Ballantyne of Omaha, Inc. 106,425
-------------------------------------
2,800 (b)Cable Design Technologies, Class A 77,000
-------------------------------------
9,300 (b)Raster Graphics Inc. 68,588
-------------------------------------
1,900 (b)Sinter Metals, Inc. 70,063
-------------------------------------
2,900 (b)US Office Products Co. 71,775
------------------------------------- ------------
Total 478,714
------------------------------------- ------------
RETAIL TRADE--0.3%
-------------------------------------
3,300 (b)Amrion, Inc. 76,725
-------------------------------------
1,300 (b)CDW Computer Centers, Inc. 63,700
-------------------------------------
3,200 (b)Central Garden & Pet Co. 77,200
-------------------------------------
1,700 (b)Express Scripts, Inc., Class A 77,563
-------------------------------------
3,700 (b)Just For Feet, Inc. 72,613
-------------------------------------
2,800 (b)Microage, Inc. 50,750
-------------------------------------
4,200 (b)Paul Harris Stores, Inc. 72,975
-------------------------------------
1,800 (b)Pomeroy Computer Resources 41,400
-------------------------------------
1,600 (b)Proffitts, Inc. 63,800
-------------------------------------
2,000 Riser Foods, Inc. 83,375
------------------------------------- ------------
Total 680,101
------------------------------------- ------------
SERVICES--0.3%
-------------------------------------
2,200 (b)American Radio Systems Corp. 81,950
-------------------------------------
2,300 (b)BARRA, Inc. 67,850
-------------------------------------
1,400 (b)Caribiner International, Inc. 90,650
-------------------------------------
3,200 (b)FactSet Research Systems 62,400
-------------------------------------
1,400 (b)Newpark Resources, Inc. 73,500
-------------------------------------
2,800 (b)Personnel Group of America, Inc. 85,050
-------------------------------------
4,100 (b)Prime Hospitality Corp. 76,363
-------------------------------------
2,500 (b)SFX Broadcasting, Inc. 80,625
------------------------------------- ------------
Total 618,388
------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- -------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------
SMALL-COMPANY--CONTINUED
--------------------------------------
TECHNOLOGY--0.7%
--------------------------------------
5,400 (b)ACT Networks, Inc. $ 95,175
--------------------------------------
2,000 (b)Adtran, Inc. 53,500
--------------------------------------
3,700 (b)Alphanet Solutions, Inc. 69,838
--------------------------------------
2,300 (b)Anadigics, Inc. 76,188
--------------------------------------
5,100 (b)Award Software International, Inc. 68,850
--------------------------------------
4,300 (b)BA Merchant Services, Inc., Class A 70,413
--------------------------------------
3,900 (b)Benchmarq Microelectronics, Inc. 78,488
--------------------------------------
2,300 (b)Claremont Technology Group 52,613
--------------------------------------
3,100 (b)Cybex Computer Products Corp. 56,381
--------------------------------------
2,000 (b)Ducommun, Inc. 52,500
--------------------------------------
1,600 (b)Dynatech Corp. 60,000
--------------------------------------
3,000 (b)ESS Technology, Inc. 46,500
--------------------------------------
2,700 (b)Elexsys International, Inc. 40,500
--------------------------------------
4,200 (b)Exar Corp. 77,175
--------------------------------------
2,500 (b)II-VI, Inc. 48,750
--------------------------------------
2,300 (b)Integrated Measurement Systems, Inc 38,525
--------------------------------------
4,000 (b)Mastech Corp. 72,000
--------------------------------------
1,700 National Processing, Inc. 14,238
--------------------------------------
3,500 (b)Network General Corp. 64,313
--------------------------------------
1,400 (b)Perceptron, Inc. 39,550
--------------------------------------
2,300 (b)Stratasys, Inc. 54,769
--------------------------------------
3,200 (b)Tollgrade Communications, Inc. 74,400
-------------------------------------- ------------
Total 1,304,666
-------------------------------------- ------------
TRANSPORTATION--0.0%
--------------------------------------
2,400 (b)Atlas Air, Inc. 69,000
-------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- --------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
---------------------------------------------
SMALL-COMPANY--CONTINUED
---------------------------------
UTILITIES--0.1%
---------------------------------
1,400 CMS Energy Corp. $ 47,075
---------------------------------
1,300 (b)Calenergy, Inc. 53,625
---------------------------------
800 Cincinnati Bell, Inc. 49,200
--------------------------------- ------------
Total 149,900
--------------------------------- ------------
TOTAL SMALL-COMPANY 6,296,536
--------------------------------- ------------
UTILITY STOCKS--7.4%
---------------------------------
ELECTRIC UTILITIES: CENTRAL--1.9%
---------------------------------
24,300 CMS Energy Corp. 817,088
---------------------------------
23,821 Cinergy Corp. 833,735
---------------------------------
31,900 DPL, Inc. 761,613
---------------------------------
28,000 Illinova Corp. 612,500
---------------------------------
20,600 NIPSCO Industries, Inc. 834,300
--------------------------------- ------------
Total 3,859,236
--------------------------------- ------------
ELECTRIC UTILITIES: EAST--1.1%
---------------------------------
26,100 DQE, Inc. 734,063
---------------------------------
23,900 GPU, Inc. 836,500
---------------------------------
30,400 Peco Energy Co. 577,600
--------------------------------- ------------
Total 2,148,163
--------------------------------- ------------
ELECTRIC UTILITIES: SOUTH--1.8%
---------------------------------
15,900 Duke Power Co. 715,500
---------------------------------
17,200 FPL Group, Inc. 799,800
---------------------------------
33,300 Southern Co. 707,625
---------------------------------
31,200 TECO Energy, Inc. 776,100
---------------------------------
18,500 Texas Utilities Co. 635,938
--------------------------------- ------------
Total 3,634,963
--------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------------------ ------------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------------------------
UTILITY STOCKS--CONTINUED
------------------------------------------------
ELECTRIC UTILITIES: WEST--0.8%
------------------------------------------------
36,200 Pacificorp $ 719,475
------------------------------------------------
24,900 Pinnacle West Capital Corp. 731,438
------------------------------------------------ ------------
Total 1,450,913
------------------------------------------------ ------------
NATURAL GAS DISTRIBUTION--0.7%
------------------------------------------------
25,300 MCN Corp. 749,513
------------------------------------------------
22,600 Pacific Enterprises 740,150
------------------------------------------------ ------------
Total 1,489,663
------------------------------------------------ ------------
OIL/GAS TRANSMISSION--1.1%
------------------------------------------------
16,600 Enron Corp. 676,450
------------------------------------------------
19,600 Panenergy Corp. 916,300
------------------------------------------------
20,550 Williams Companies, Inc. 906,769
------------------------------------------------ ------------
Total 2,499,519
------------------------------------------------ ------------
TOTAL UTILITY STOCKS 15,082,457
------------------------------------------------ ------------
FOREIGN EQUITY--5.2%
------------------------------------------------
ARGENTINA--0.1%
------------------------------------------------
885 Banco Frances del Rio de la Plata S.A., ADR 29,094
------------------------------------------------
4,221 Compania Naviera Perez Companc S.A., Class B 32,307
------------------------------------------------
702 (b)IRSA Inversiones y Representaciones S.A., GDR 27,466
------------------------------------------------
1,000 Telecom Argentina S.A., ADR 53,375
------------------------------------------------
1,800 Telefonica De Argentina ADR 65,250
------------------------------------------------ ------------
Total 207,492
------------------------------------------------ ------------
AUSTRALIA--0.2%
------------------------------------------------
15,000 (b)Coles Myer 69,990
------------------------------------------------
14,000 (b)News Corp., Ltd. 62,168
------------------------------------------------
23,000 Oil Search Ltd. 57,688
------------------------------------------------
55,000 (b)Queensland Metals Corp. NL 61,162
------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------------------ ------------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------
AUSTRALIA--CONTINUED
------------------------------------------------
8,000 Westpac Banking Corp. Ltd. $ 43,446
------------------------------------------------
8,000 Woodside Petroleum Ltd. 67,545
------------------------------------------------ ------------
Total 361,999
------------------------------------------------ ------------
BELGIUM--0.0%
------------------------------------------------
1,400 Delhaize-Le Lion 69,623
------------------------------------------------ ------------
BRAZIL--0.2%
------------------------------------------------
60,000 Banco Itau SA, Preference 30,827
------------------------------------------------
Centrais Eletricas Brasileiras SA, Preference,
100,000 Series B 49,229
------------------------------------------------
817,000 Companhia Energetica de Minas Gerais, Preference 37,397
------------------------------------------------
260,000 Petroleo Brasileiro SA, Preference 62,176
------------------------------------------------
660,000 Telecomunicacoes Brasileiras SA 86,000
------------------------------------------------
7,233 (b)Telecomunicacoes de Sao Paulo SA Rights 243
------------------------------------------------
166,000 (b)Telecomunicacoes de Sao Paulo SA, Preference 56,910
------------------------------------------------ ------------
Total 322,782
------------------------------------------------ ------------
CHILE--0.0%
------------------------------------------------
400 (b)Banco BHIF, ADR 8,350
------------------------------------------------
250 (a)Chilectra S.A., ADR 6,760
------------------------------------------------
425 Compania Telecomunicacion Chile, ADR 14,556
------------------------------------------------
100 Sociedad Quimica Y Minera De Chile, ADR 6,500
------------------------------------------------ ------------
Total 36,166
------------------------------------------------ ------------
COLOMBIA--0.0%
------------------------------------------------
700 Banco Ganadero SA, ADR 26,775
------------------------------------------------
800 Banco Industrial Colombiano, ADR 14,100
------------------------------------------------ ------------
Total 40,875
------------------------------------------------ ------------
DENMARK--0.0%
------------------------------------------------
1,080 (b)Sydbank AS 51,434
------------------------------------------------
770 Unidanmark A 40,219
------------------------------------------------ ------------
Total 91,653
------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ---------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
----------------------------------------------------
FOREIGN EQUITY--CONTINUED
----------------------------------------
FRANCE--0.3%
----------------------------------------
821 AXA $ 49,121
----------------------------------------
470 (b)CLF-Dexia France 43,870
----------------------------------------
680 Casino Ord 30,629
----------------------------------------
800 Compagnie Financiere de Paribas, Class A 51,494
----------------------------------------
320 Compagnie de Saint Gobain 44,166
----------------------------------------
300 Financiere Sogeparc SA 40,522
----------------------------------------
560 Groupe Danon BSN SA 84,273
----------------------------------------
240 LVMH (Moet-Hennessy) 58,103
----------------------------------------
450 Rhone-Poulenc Rorer, Inc. 33,863
----------------------------------------
1,617 Schneider SA 77,649
----------------------------------------
1,280 Scor SA 51,647
----------------------------------------
560 Total SA-B 51,204
---------------------------------------- ------------
Total 616,541
---------------------------------------- ------------
GERMANY--0.3%
----------------------------------------
2,155 Bayer AG 83,534
----------------------------------------
1,680 (b)Commerzbank AG, Frankfurt 49,345
----------------------------------------
1,030 (b)Daimler Benz AG 79,249
----------------------------------------
825 Deutsche Bank, AG 45,713
----------------------------------------
2,225 Dresdner Bank AG, Frankfurt 77,851
----------------------------------------
125 Gea AG, Vorzugsaktien 50,465
----------------------------------------
160 Mannesmann AG 64,970
----------------------------------------
625 Schwarz Pharma 46,443
----------------------------------------
800 Siemens AG 45,090
----------------------------------------
1,680 Skw Trostberg 55,538
----------------------------------------
255 Thyssen AG 57,890
----------------------------------------
925 Veba AG 52,282
---------------------------------------- ------------
Total 708,370
---------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------------ ------------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------
HONG KONG--0.4%
------------------------------------------
6,000 Beijing Enterprises $ 35,000
------------------------------------------
7,000 (b)Cheung Kong 71,595
------------------------------------------
84,000 China EB-IHD Holdings Ltd. 129,006
------------------------------------------
17,000 China Resources Enterprises Ltd. 59,676
------------------------------------------
11,000 Citic Pacific Ltd. 62,890
------------------------------------------
19,000 Great Eagle Holdings 67,187
------------------------------------------
1,839 HSBC Holdings PLC 55,774
------------------------------------------
3,000 Hong Kong Telecommunications, Ltd., ADR 66,654
------------------------------------------
8,000 Hutchison Whampoa 66,594
------------------------------------------
10,000 (b)New World Development Co. Ltd. 63,496
------------------------------------------
40,000 Sino Land Co. 46,719
------------------------------------------ ------------
Total 724,591
------------------------------------------ ------------
INDONESIA--0.0%
------------------------------------------
30,000 Lippo Bank 30,216
------------------------------------------
13,000 Indosat 38,746
------------------------------------------
16,500 (b)Putra Surya Multidana 19,671
------------------------------------------
2,933 Steady Safe 3,225
------------------------------------------ ------------
Total 91,858
------------------------------------------ ------------
IRELAND--0.0%
------------------------------------------
2,200 (b)Elan Corp. PLC, ADR 89,650
------------------------------------------ ------------
ITALY--0.1%
------------------------------------------
6,400 Eni 31,916
------------------------------------------
9,600 STET Societa Finanziaria Telefonica S.P.A. 48,440
------------------------------------------
28,000 Telecom Italia Mobile 82,127
------------------------------------------ ------------
Total 162,483
------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- --------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
---------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------
JAPAN--1.6%
---------------------------------------
4,000 Canare Electric Co. Ltd. $ 133,963
---------------------------------------
7,200 Circle K Japan Co. Ltd. 383,959
---------------------------------------
16,000 Hitachi Ltd. 170,374
---------------------------------------
4,000 Hitachi Maxell 92,744
---------------------------------------
3,000 Honda Motor Co. Ltd. 88,106
---------------------------------------
2,000 Ito-Yokado Co., Ltd. 114,040
---------------------------------------
1,300 Mabuchi Motor Co. 73,903
---------------------------------------
5,000 Matsushita Kotobuki Electric 179,476
---------------------------------------
16,000 (b)Minolta Co. 105,934
---------------------------------------
11,000 (b)Mitsubishi Estate Co. Ltd. 150,193
---------------------------------------
6,000 Mitsubishi Trust & Banking Corp., Tokyo 86,046
---------------------------------------
75,000 (b)Mitsui Osk Lines 167,454
---------------------------------------
1,500 Nintendo Corp. Ltd. 117,218
---------------------------------------
25 Nippon Telegraph & Telephone Corp. 238,300
---------------------------------------
10,000 Nissei ASB Machine Co. 124,517
---------------------------------------
4,000 Sankyo Co. Ltd. 126,750
---------------------------------------
3,000 Sony Corp. 252,726
---------------------------------------
6,000 Sumitomo Bank Ltd., Osaka 82,954
---------------------------------------
8,000 (b)Sumitomo Trust & Banking 70,760
---------------------------------------
11,000 Taiyo Yuden Co. 175,698
---------------------------------------
17,000 Tokyu Land Corp. 70,949
--------------------------------------- ------------
Total 3,006,064
--------------------------------------- ------------
KOREA--0.1%
---------------------------------------
1,211 Kookmin Bank 21,904
---------------------------------------
1,440 Korea Electric Power Corp. 44,420
---------------------------------------
2,163 SK Telecom Co. Ltd., ADR 20,008
---------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ----------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------------
FOREIGN EQUITY--CONTINUED
-----------------------------------------------
KOREA--CONTINUED
-----------------------------------------------
1,250 Shinhan Bank $ 16,186
-----------------------------------------------
860 (b)Sindo Ricoh Co. 49,584
----------------------------------------------- ------------
Total 152,102
----------------------------------------------- ------------
MALAYSIA--0.1%
-----------------------------------------------
43,000 Berjaya Group 56,815
-----------------------------------------------
3,000 Malayan Banking 31,639
-----------------------------------------------
7,000 UMW Holdings 35,937
----------------------------------------------- ------------
Total 124,391
----------------------------------------------- ------------
MEXICO--0.1%
-----------------------------------------------
1,900 Empresas ICA Sociedad Controladora S.A., ADR 27,550
-----------------------------------------------
5,000 Fomento Economico Mexicano, SA de C.V., Class B 26,552
-----------------------------------------------
113,000 (a)(b)Grupo Financiero Bancomer, S.A. de C.V.,
Class B 42,434
-----------------------------------------------
1,200 Telefonos de Mexico, Class L, ADR 53,250
-----------------------------------------------
1,400 (b)Tubos de Acero de Mexico SA, ADR 24,500
----------------------------------------------- ------------
Total 174,286
----------------------------------------------- ------------
NETHERLANDS--0.2%
-----------------------------------------------
5,203 ABN Amro Holding 96,076
-----------------------------------------------
800 ABN-Amro Holdings NV, ADR 14,900
-----------------------------------------------
2,666 Bols Wessanen (kon.) 50,755
-----------------------------------------------
2,227 Boskalis Westminster N.V. 46,799
-----------------------------------------------
589 (b)Hunter Douglas N.V. 51,930
-----------------------------------------------
1,233 ING Groep, N.V. 54,451
-----------------------------------------------
2,400 VNU--Verenigde Nederlandse Uitgeversbedrijven
Verenigd Bezit 54,179
-----------------------------------------------
343 Wolters Kluwer NV 41,231
----------------------------------------------- ------------
Total 410,321
----------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
---------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------
NEW ZEALAND--0.0%
---------------------------------------------------
16,000 Air New Zealand Ltd., Class B $ 47,338
---------------------------------------------------
66,000 (b)Guiness Peat Group PLC 37,779
--------------------------------------------------- ------------
Total 85,117
--------------------------------------------------- ------------
PAKISTAN--0.0%
---------------------------------------------------
1,650 (a)(b)Hub Power Co., GDR 38,528
--------------------------------------------------- ------------
PHILIPPINES--0.0%
---------------------------------------------------
84,000 (b)Belle Corp. 22,294
---------------------------------------------------
1,400 Philippine Commercial International Bank 13,668
---------------------------------------------------
237,000 Universal Rightfield Property 25,160
--------------------------------------------------- ------------
Total 61,122
--------------------------------------------------- ------------
SINGAPORE--0.1%
---------------------------------------------------
3,000 City Developments Ltd. 27,896
---------------------------------------------------
2,000 Singapore Press Holdings Ltd. 39,852
---------------------------------------------------
9,000 (b)Straits Steamship Land Ltd. 26,806
---------------------------------------------------
2,250 (b)Straits Steamship Land Ltd. Warrants, 12/12/2000 2,108
---------------------------------------------------
12,000 (a)(b)Want Want Holdings 43,440
---------------------------------------------------
12,000 Wing Tai Holdings, Ltd. 35,741
--------------------------------------------------- ------------
Total 175,843
--------------------------------------------------- ------------
SPAIN--0.1%
---------------------------------------------------
690 Empresa Nac De Electridad 52,695
---------------------------------------------------
1,200 Repsol SA 50,221
---------------------------------------------------
2,180 Telefonica de Espana 62,885
---------------------------------------------------
1,600 Vidrala SA 67,294
---------------------------------------------------
508 Zardoya-Otis SA 63,605
--------------------------------------------------- ------------
Total 296,700
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ---------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
----------------------------------------------------
FOREIGN EQUITY--CONTINUED
----------------------------------------
SWEDEN--0.1%
----------------------------------------
5,120 Munksjo AB $ 49,541
----------------------------------------
13,000 Skand Enskilda BKN, Class A 134,173
---------------------------------------- ------------
Total 183,714
---------------------------------------- ------------
SWITZERLAND--0.3%
----------------------------------------
25 ABB AG 34,277
----------------------------------------
480 Credit Suisse Group-Registered 60,237
----------------------------------------
118 Holderbank Financiere Glaris AG, Class B 103,471
----------------------------------------
65 Nestle SA 80,768
----------------------------------------
118 Novartis AG (Reg) 159,955
----------------------------------------
5 (b)Roche Holding AG 44,408
----------------------------------------
38 (b)Swissair AG 38,687
----------------------------------------
77 UBS--Union Bank of Switzerland 84,372
----------------------------------------
237 Zurich Versicherungsgesellschaft 87,009
---------------------------------------- ------------
Total 693,184
---------------------------------------- ------------
UNITED KINGDOM--0.9%
----------------------------------------
2,667 Barclays PLC 51,874
----------------------------------------
3,600 Bass PLC 46,907
----------------------------------------
1,816 Boc Group PLC 30,509
----------------------------------------
4,690 Boots Co. PLC 54,319
----------------------------------------
2,716 British Aerospace PLC 55,226
----------------------------------------
5,566 British Petroleum Co. PLC 66,468
----------------------------------------
5,040 British Telecommunication PLC 36,524
----------------------------------------
3,200 Burmah Castrol 55,488
----------------------------------------
7,357 Cadbury Schweppes PLC 65,952
----------------------------------------
6,290 Compass Group 70,175
----------------------------------------
10,025 Cookson Group 38,539
----------------------------------------
6,800 Cowie Group PLC 39,601
----------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ----------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------
FOREIGN EQUITY--CONTINUED
-----------------------------------
UNITED KINGDOM--CONTINUED
-----------------------------------
6,050 David S. Smith (Holdings) PLC $ 21,971
-----------------------------------
6,760 Delta PLC 35,608
-----------------------------------
2,155 EMI Group PLC 41,316
-----------------------------------
12,080 FKI PLC 35,175
-----------------------------------
3,431 GKN PLC 59,382
-----------------------------------
3,880 General Accident 57,188
-----------------------------------
6,560 General Electric Co. PLC 37,452
-----------------------------------
2,820 Glaxo Wellcome PLC 56,372
-----------------------------------
3,360 Granada Group PLC 47,709
-----------------------------------
4,257 (b)Grand Metropolitan PLC 39,555
-----------------------------------
10,556 Guardian Royal Exchange 48,351
-----------------------------------
5,000 (b)Imperial Chemical Industries PLC 66,661
-----------------------------------
154 Inchcape PLC 726
-----------------------------------
9,060 Ladbroke Group PLC 34,088
-----------------------------------
3,200 Marks & Spencer PLC 26,606
-----------------------------------
12,000 Mirror Group PLC 42,990
-----------------------------------
3,960 Pearson 46,642
-----------------------------------
2,765 RTZ Corp. PLC 47,493
-----------------------------------
3,360 Rank Group PLC 23,635
-----------------------------------
3,268 Reckitt & Colman PLC 46,082
-----------------------------------
7,360 Reed International PLC 72,360
-----------------------------------
21,840 Rugby Group PLC 42,158
-----------------------------------
8,536 Salvesen Christian 33,373
-----------------------------------
12,988 Sedgwick Group PLC 26,558
-----------------------------------
3,326 Siebe PLC 52,341
-----------------------------------
5,543 Smithkline Beecham PLC 95,300
-----------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
UNITS OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
---------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------
UNITED KINGDOM--CONTINUED
---------------------------------------------------
8,577 Tomkins PLC $ 37,252
---------------------------------------------------
1,640 Zeneca Group 49,820
--------------------------------------------------- ------------
Total 1,835,746
--------------------------------------------------- ------------
TOTAL FOREIGN EQUITY 10,761,201
--------------------------------------------------- ------------
TOTAL STOCKS (IDENTIFIED COST $50,302,360) 58,882,369
--------------------------------------------------- ------------
BONDS--64.5%
---------------------------------------------------------------
TREASURY--29.9%
---------------------------------------------------
TREASURY--29.9%
---------------------------------------------------
$ 1,000,000 United States Treasury Note, 5.500%, 11/15/1998 992,530
---------------------------------------------------
24,000,000 United States Treasury Note, 5.500%, 12/31/2000 23,301,120
---------------------------------------------------
975,000 United States Treasury Note, 6.375%, 3/31/2001 972,407
---------------------------------------------------
10,905,000 United States Treasury Note, 6.375%, 5/15/1999 10,942,077
---------------------------------------------------
21,360,000 United States Treasury Note, 6.875%, 3/31/2000 21,653,192
---------------------------------------------------
2,850,000 United States Treasury Note, 7.750%, 1/31/2000 2,948,382
--------------------------------------------------- ------------
TOTAL TREASURY 60,809,708
--------------------------------------------------- ------------
MORTGAGE-BACKED SECURITIES--19.3%
---------------------------------------------------
GOVERNMENT AGENCY--19.3%
---------------------------------------------------
359,156 Federal Home Loan Mortgage Corp., 9.500%, 6/1/2021 388,898
---------------------------------------------------
110,410 Federal Home Loan Mortgage Corp., 8.000%, 11/1/2021 113,032
---------------------------------------------------
343,054 Federal Home Loan Mortgage Corp., 7.50%, 5/1/2024 343,699
---------------------------------------------------
913,332 Federal Home Loan Mortgage Corp., 7.00%, 8/1/2025 891,238
---------------------------------------------------
997,403 Federal Home Loan Mortgage Corp., 7.50%, 12/1/2022 1,001,452
---------------------------------------------------
755,989 Federal Home Loan Mortgage Corp., 8.00%, 11/1/2022 776,310
---------------------------------------------------
227,803 Federal Home Loan Mortgage Corp., 7.00%, 7/1/2024 223,675
---------------------------------------------------
422,128 Federal Home Loan Mortgage Corp., 8.00%, 4/1/2025 430,123
---------------------------------------------------
962,113 Federal Home Loan Mortgage Corp., 6.50%, 9/1/2025 916,008
---------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- -------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--CONTINUED
--------------------------------------------------
GOVERNMENT AGENCY--CONTINUED
--------------------------------------------------
$ 999,738 Federal Home Loan Mortgage Corp., 7.00%, 1/1/2026 $ 975,555
--------------------------------------------------
935,323 Federal Home Loan Mortgage Corp., 7.000%, 2/1/2026 917,197
--------------------------------------------------
1,782,609 Federal Home Loan Mortgage Corp., 7.500%, 6/1/2026 1,780,380
--------------------------------------------------
920,419 Federal Home Loan Mortgage Corp., 9.00%, 11/1/2006 958,101
--------------------------------------------------
327,756 Federal Home Loan Mortgage Corp., 8.00%, 11/1/2009 336,566
--------------------------------------------------
1,787,778 Federal Home Loan Mortgage Corp., 6.50%, 3/1/2011 1,748,608
--------------------------------------------------
285,183 Federal Home Loan Mortgage Corp., 7.00%, 4/1/2009 285,006
--------------------------------------------------
563,405 Federal Home Loan Mortgage Corp., 7.00%, 4/1/2009 563,056
--------------------------------------------------
502,422 Federal Home Loan Mortgage Corp., 6.50%, 5/1/2011 491,414
--------------------------------------------------
959,621 Federal Home Loan Mortgage Corp., 6.00%, 6/1/2011 920,411
--------------------------------------------------
1,905,073 Federal Home Loan Mortgage Corp., 8.00%, 9/1/2026 1,941,155
--------------------------------------------------
939,084 Federal Home Loan Mortgage Corp., 7.50%, 8/1/2003 951,404
--------------------------------------------------
Federal National Mortgage Association, 7.50%,
720,489 9/1/2009 730,396
--------------------------------------------------
Federal National Mortgage Association, 7.00%,
453,339 7/1/2024 443,705
--------------------------------------------------
Federal National Mortgage Association, 7.50%,
949,516 5/1/2026 946,848
--------------------------------------------------
Federal National Mortgage Association, 7.50%,
176,928 6/1/2009 179,361
--------------------------------------------------
Federal National Mortgage Association, 8.00%,
1,017,338 11/1/2024 1,036,159
--------------------------------------------------
Federal National Mortgage Association, 8.50%,
123,168 2/1/2025 127,595
--------------------------------------------------
Federal National Mortgage Association, 8.00%,
708,607 7/1/2025 721,716
--------------------------------------------------
Federal National Mortgage Association, 7.50%,
499,299 7/1/2025 498,360
--------------------------------------------------
Federal National Mortgage Association, 7.00%,
461,845 7/1/2025 450,585
--------------------------------------------------
Federal National Mortgage Association, 6.50%,
955,264 9/1/2025 907,701
--------------------------------------------------
Federal National Mortgage Association, 6.50%,
921,887 1/1/2003 912,668
--------------------------------------------------
Federal National Mortgage Association, 6.00%,
959,080 3/1/2011 918,991
--------------------------------------------------
Federal National Mortgage Association, 6.00%,
945,128 4/1/2011 905,621
--------------------------------------------------
Federal National Mortgage Association, 7.00%,
1,017,826 7/1/2026 991,301
--------------------------------------------------
Federal National Mortgage Association, 10.50%,
482,399 1/1/2021 532,902
--------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- -------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--CONTINUED
--------------------------------------------------
GOVERNMENT AGENCY--CONTINUED
--------------------------------------------------
Government National Mortgage Association, 10.00%,
$ 702,558 10/15/2018 $ 772,154
--------------------------------------------------
Government National Mortgage Association, 8.50%,
856,814 10/15/2022 895,105
--------------------------------------------------
Government National Mortgage Association, 6.50%,
895,096 1/15/2024 854,817
--------------------------------------------------
Government National Mortgage Association, 8.00%,
921,332 11/15/2024 941,777
--------------------------------------------------
Government National Mortgage Association, 9.50%,
108,029 12/15/2025 116,300
--------------------------------------------------
Government National Mortgage Association, 7.00%,
227,703 8/15/2024 222,721
--------------------------------------------------
Government National Mortgage Association, 7.50%,
1,846,786 4/15/2024 1,850,831
--------------------------------------------------
Government National Mortgage Association 7.00%,
1,704,992 3/15/2026 1,659,486
--------------------------------------------------
Government National Mortgage Association, 7.00%,
999,017 4/15/2026 972,353
--------------------------------------------------
Government National Mortgage Association, 9.00%,
1,813,282 11/15/2017 1,938,508
--------------------------------------------------
Government National Mortgage Association, 8.00%,
1,878,980 9/15/2017 1,941,813
-------------------------------------------------- ------------
TOTAL MORTGAGE-BACKED SECURITIES 39,423,062
-------------------------------------------------- ------------
INVESTMENT GRADE BONDS--7.9%
--------------------------------------------------
AEROSPACE & DEFENSE--0.1%
--------------------------------------------------
250,000 McDonnell Douglas Finance, Note, 9.40%, 10/15/2001 264,298
-------------------------------------------------- ------------
AUTOMOBILE--0.1%
--------------------------------------------------
200,000 Chrysler Corp., Deb., 10.95%, 8/1/2017 213,020
-------------------------------------------------- ------------
BANKING--1.2%
--------------------------------------------------
525,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 542,372
--------------------------------------------------
330,000 Chase Manhattan, Sub. Note, 8.00%, 5/1/2005 335,217
--------------------------------------------------
Crestar Financial Corp, Sub. Note, 8.75%,
250,000 11/15/2004 271,958
--------------------------------------------------
400,000 Exp-Imp BK Korea, Note, 6.50%, 5/15/2000 396,822
--------------------------------------------------
National Bank of Canada, Sub. Note, 8.125%,
300,000 8/15/2004 314,829
--------------------------------------------------
Santander Finance Issuances, Bank Guarantee,
400,000 7.875%, 4/15/2005 413,440
-------------------------------------------------- ------------
Total 2,274,638
-------------------------------------------------- ------------
BEVERAGE & TOBACCO--0.1%
--------------------------------------------------
150,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 143,970
-------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------
BROADCAST RADIO & TV--0.1%
---------------------------------------------------
$ 250,000 SCI Television, Sr. Secd. Note, 11.00%, 6/30/2005 $ 265,000
--------------------------------------------------- ------------
CABLE TELEVISION--0.4%
---------------------------------------------------
350,000 Continental Cablevision, Sr. Note, 8.50%, 9/15/2001 370,549
---------------------------------------------------
400,000 TKR Cable Inc., 10.50%, 10/30/2007 438,892
--------------------------------------------------- ------------
Total 809,441
--------------------------------------------------- ------------
CHEMICALS & PLASTICS--0.2%
---------------------------------------------------
450,000 (a)Bayer Corp., Deb., 6.50%, 10/1/2002 442,845
--------------------------------------------------- ------------
ECOLOGICAL SERVICES & EQUIPMENT--0.1%
---------------------------------------------------
275,000 Waste Management, Deb., 8.75%, 5/1/2018 293,150
--------------------------------------------------- ------------
ELECTRONICS--0.2%
---------------------------------------------------
300,000 Harris Corp, Deb., 10.375%, 12/1/2018 329,937
--------------------------------------------------- ------------
FINANCE--RETAIL--0.1%
---------------------------------------------------
150,000 Household Finance, Deb., 6.45%, 2/1/2009 138,299
--------------------------------------------------- ------------
FINANCIAL INTERMEDIARIES--1.0%
---------------------------------------------------
400,000 DLJ, Note, 6.875%, 11/1/2005 386,640
---------------------------------------------------
Green Tree Financial Corp, Sr. Sub. Note, 10.25%,
400,000 6/1/2002 452,652
---------------------------------------------------
Lehman Brothers, Inc., Sr. Sub. Note, 7.375%,
500,000 1/15/2007 494,430
---------------------------------------------------
300,000 Merrill Lynch, Medium Term Note, 7.25%, 6/14/2004 306,339
---------------------------------------------------
225,000 Salomon, Inc., Note, 7.20%, 2/1/2004 223,067
---------------------------------------------------
(a)World Financial, Pass Thru Cert., Series 96 WFP-
248,853 B, 6.91%, 9/1/2013 242,437
--------------------------------------------------- ------------
Total 2,105,565
--------------------------------------------------- ------------
FOOD & DRUG RETAILERS--0.2%
---------------------------------------------------
300,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 316,071
--------------------------------------------------- ------------
GOVERNMENT AGENCY--0.2%
---------------------------------------------------
Federal National Mortgage Association, 7.430%,
250,000 8/4/2005 248,893
---------------------------------------------------
Federal National Mortgage Association, 8.590%,
250,000 2/3/2005 254,135
--------------------------------------------------- ------------
Total 503,028
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.2%
---------------------------------------------------
$ 350,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 $ 382,151
--------------------------------------------------- ------------
INSURANCE--1.0%
---------------------------------------------------
250,000 (a)AFC Capital Trust I, Bond, 8.207%, 2/3/2027 250,983
---------------------------------------------------
450,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 479,588
---------------------------------------------------
350,000 Conseco, Inc., Sr. Note, 10.50%, 12/15/2004 408,961
---------------------------------------------------
515,000 Continental Corp, Note, 8.25%, 4/15/1999 530,239
---------------------------------------------------
250,000 Sunamerica Inc, Medium Term Note, 7.34%, 8/30/2005 249,421
---------------------------------------------------
250,000 USF&G Corp., Company Guarantee, 8.47%, 1/10/2027 247,556
--------------------------------------------------- ------------
Total 2,166,748
--------------------------------------------------- ------------
LEISURE & ENTERTAINMENT--0.2%
---------------------------------------------------
350,000 Viacom, Inc., Sr. Note, 7.75%, 6/1/2005 348,338
--------------------------------------------------- ------------
METALS & MINING--0.4%
---------------------------------------------------
450,000 Santa Fe Pacific Gold Co., Note, 8.375%, 7/1/2005 476,604
---------------------------------------------------
275,000 (a)Southern Peru Ltd., Note, 7.90%, 5/30/2007 277,665
--------------------------------------------------- ------------
Total 754,269
--------------------------------------------------- ------------
OIL & GAS--0.3%
---------------------------------------------------
275,000 Tosco Corp, Sr. Note, 7.625%, 5/15/2006 280,635
---------------------------------------------------
350,000 USX Corp., Note, 6.375%, 7/15/1998 350,893
--------------------------------------------------- ------------
Total 631,528
--------------------------------------------------- ------------
PRINTING & PUBLISHING--0.2%
---------------------------------------------------
400,000 News Amer Hldgs, Sr. Note, 7.50%, 3/1/2000 408,244
--------------------------------------------------- ------------
RETAILERS--0.2%
---------------------------------------------------
400,000 May Department Stores, Deb., 8.125%, 8/15/2035 406,900
--------------------------------------------------- ------------
SERVICES--0.1%
---------------------------------------------------
Loewen Group International, Sr. Note, 8.25%,
250,000 4/15/2003 255,835
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------
SOVEREIGN GOVERNMENT--0.8%
---------------------------------------------------
(a)Freeport Terminal (Malta), Gtd. Global Note,
$ 300,000 7.50%, 3/29/2009 $ 303,897
---------------------------------------------------
150,000 Quebec, Province of, Deb., 7.00%, 1/30/2007 147,525
---------------------------------------------------
Republic Of South Africa, Global Bond Deb., 9.625%,
450,000 12/15/1999 475,722
---------------------------------------------------
400,000 Republic of Colombia, Note, 7.25%, 2/15/2003 387,000
---------------------------------------------------
375,000 Swedish Export Credit, 9.875%, 3/15/2038 402,679
--------------------------------------------------- ------------
Total 1,716,823
--------------------------------------------------- ------------
SURFACE TRANSPORTATION--0.1%
---------------------------------------------------
Trans Ocean Container Corp., Sr. Sub. Note, 12.25%,
225,000 7/1/2004 262,373
--------------------------------------------------- ------------
UTILITIES--0.4%
---------------------------------------------------
200,000 Duke Power Co., 1st Mtg. Note, 7.00%, 9/1/2005 194,726
---------------------------------------------------
250,000 Enersis S.A., Note, 7.4%, 12/1/2016 238,460
---------------------------------------------------
200,000 Gulf States Util, FMB, 6.75%, 10/1/1998 200,478
---------------------------------------------------
125,000 Pedernales Electric Coop, 10.875%, 09/01/17 133,350
--------------------------------------------------- ------------
Total 767,014
--------------------------------------------------- ------------
TOTAL INVESTMENT GRADE BONDS 16,199,485
--------------------------------------------------- ------------
HIGH YIELD BONDS--2.4%
---------------------------------------------------
AEROSPACE & DEFENSE--0.0%
---------------------------------------------------
50,000 Tracor, Inc., Sr. Sub. Note, 8.50%, 3/1/2007 51,000
--------------------------------------------------- ------------
AUTOMOBILE--0.1%
---------------------------------------------------
Aftermarket Technology Co., Sr. Sub. Note, 12.00%,
38,000 8/1/2004 42,370
---------------------------------------------------
Blue Bird Body Co., Sr. Sub. Note, 10.75%,
50,000 11/15/2006 53,625
---------------------------------------------------
Collins & Aikman Products, Sr. Sub. Note, 11.50%,
50,000 4/15/2006 56,188
--------------------------------------------------- ------------
Total 152,183
--------------------------------------------------- ------------
BANKING--0.0%
---------------------------------------------------
First Nationwide Escrow, Sr. Sub. Note, 10.625%,
75,000 10/1/2003 81,750
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- -------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
--------------------------------------------------
BROADCAST RADIO & TV--0.3%
--------------------------------------------------
(a)American Radio Systems Corp., 511 Exchangeable
Pfd. Shares Stock, $11.375 $ 54,512
--------------------------------------------------
(a)Chancellor Broadcasting Co., 500 Exchangeable
Pfd. Shares Stock, 12.00% 54,125
--------------------------------------------------
Chancellor Radio Broad., Sr. Sub. Note, 12.50%,
$ 38,000 10/1/2004 44,650
--------------------------------------------------
Heritage Media Corp., Sr. Sub. Note, 8.75%,
50,000 2/15/2006 51,813
--------------------------------------------------
Jacor Communications, Inc, Sr. Sub. Note, 9.75%,
50,000 12/15/2006 52,563
--------------------------------------------------
(a)Sinclair Broadcast Group, Inc., Pfd., 500
Shares, Series A, $11.625 53,000
--------------------------------------------------
Young Broadcasting Corp., Sr. Sub. Note, 10.125%,
50,000 2/15/2005 52,500
-------------------------------------------------- ------------
Total 363,163
-------------------------------------------------- ------------
BUSINESS EQUIPMENT & SERVICES--0.1%
--------------------------------------------------
50,000 Knoll, Inc., Sr. Sub. Note, 10.875%, 3/15/2006 55,125
--------------------------------------------------
(a)Outsourcing Solutions, Sr. Sub. Note, 11.00%,
50,000 11/1/2006 53,563
--------------------------------------------------
United Stationers Supply, Sr. Sub. Note, 12.75%,
25,000 5/1/2005 27,969
-------------------------------------------------- ------------
Total 136,657
-------------------------------------------------- ------------
CABLE TELEVISION--0.3%
--------------------------------------------------
13 (a)CS Wireless Systems, Inc. 0
--------------------------------------------------
Cablevision Systems Corp., Sr. Sub. Note, 9.875%,
50,000 5/15/2006 52,125
--------------------------------------------------
Charter Communication Southeast, Sr. Note, 11.25%,
50,000 3/15/2006 53,500
--------------------------------------------------
(a)Diamond Cable, Sr. Disc. Note, 0/10.75%,
125,000 2/15/2007 73,281
--------------------------------------------------
50,000 Echostar Satellite Broadcasting Corp. Sr. Disc.
Note, 0/13.125%, 3/15/2004 34,000
--------------------------------------------------
25,000 International Cabletel, Sr. Defd. Cpn. Note,
0/11.50%,
2/1/2006 17,156
--------------------------------------------------
International Cabletel, Sr. Disc. Note, 0/12.75%,
100,000 4/15/2005 75,250
--------------------------------------------------
50,000 Lenfest Communication, Sr. Note, 8.375%, 11/1/2005 48,875
--------------------------------------------------
25,000 Pegasus Media, Note, 12.50%, 7/1/2005 27,125
--------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------
CABLE TELEVISION--CONTINUED
---------------------------------------------------
$ 50,000 Rogers Cablesystems Ltd., Sr. Secd. 2nd Priority
Note, 10.00%,
3/15/2005 $ 53,563
---------------------------------------------------
100,000 Telewest PLC, Sr. Disc. Deb., 0/11.00%, 10/1/2007 70,000
---------------------------------------------------
UIH Australia/Pacific, Sr. Disc. Note, 0/14.00%,
50,000 5/15/2006 28,250
--------------------------------------------------- ------------
Total 533,125
--------------------------------------------------- ------------
CHEMICALS & PLASTICS--0.1%
---------------------------------------------------
50,000 Harris Chemical, Sr. Note, 10.25%, 7/15/2001 52,750
---------------------------------------------------
33,000 Polymer Group, Sr. Note, 12.25%, 7/15/2002 36,135
---------------------------------------------------
RBX Corp., Sr. Sub. Note, Series B, 11.25%,
25,000 10/15/2005 21,406
--------------------------------------------------- ------------
Total 110,291
--------------------------------------------------- ------------
CLOTHING & TEXTILES--0.1%
---------------------------------------------------
(a)Glenoit Corporation, Sr. Sub. Note, 11.00%,
50,000 4/15/2007 51,375
---------------------------------------------------
Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%,
75,000 12/15/2005 78,000
--------------------------------------------------- ------------
Total 129,375
--------------------------------------------------- ------------
Consumer Products--0.1%
---------------------------------------------------
50,000 Herff Jones, Inc., Sr. Sub. Note, 11.00%, 8/15/2005 53,813
---------------------------------------------------
ICON Fitness Corp., Sr. Disc. Note, 0/14.00%,
50,000 11/15/2006 26,750
---------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note,
9.00%,
12/15/2003 50,500
---------------------------------------------------
(a)Renaissance Cosmetics, Sr. Note, 11.75%,
50,000 2/15/2004 52,125
---------------------------------------------------
Revlon Consumer Products, Sr. Sub. Note, 10.50%,
50,000 2/15/2003 53,188
---------------------------------------------------
50,000 Simmons Co., Sr. Sub. Note, 10.75%, 4/15/2006 52,875
--------------------------------------------------- ------------
Total 289,251
--------------------------------------------------- ------------
CONTAINER & GLASS PRODUCTS--0.1%
---------------------------------------------------
Owens Illinois, Inc., Sr. Sub. Note, 9.75%,
50,000 8/15/2004 52,688
---------------------------------------------------
Packaging Resources Inc., Sr. Note, 11.625%,
50,000 5/1/2003 52,250
--------------------------------------------------- ------------
Total 104,938
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------
ECOLOGICAL SERVICES & EQUIPMENT--0.0%
---------------------------------------------------
$ 50,000 (a)Allied Waste, Sr. Sub. Note, 10.25%, 12/1/2006 $ 53,375
---------------------------------------------------
*(b)Mid-American Waste System, Sr. Sub. Note,
50,000 12.25%, 2/15/2003 27,250
--------------------------------------------------- ------------
Total 80,625
--------------------------------------------------- ------------
ELECTRONICS--0.0%
---------------------------------------------------
Advanced Micro Devices, Sr. Secd. Note, 11.00%,
50,000 8/1/2003 55,813
---------------------------------------------------
50,000 (a)Fairchild Semiconductor, Sr. Sub. Note, 10.125%, 51,750
3/15/2007
--------------------------------------------------- ------------
Total 107,563
--------------------------------------------------- ------------
FOOD & DRUG RETAILERS--0.0%
---------------------------------------------------
25,000 Carr Gottstein Foods Co., Sr. Sub. Note, 12.00%, 27,781
11/15/2005
---------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 55,000
--------------------------------------------------- ------------
Total 82,781
--------------------------------------------------- ------------
FOOD PRODUCTS--0.1%
---------------------------------------------------
50,000 International Home Foods, Sr. Sub. Note, 10.375%, 51,875
11/1/2006
---------------------------------------------------
50,000 Specialty Foods Corp., Sr. Note, 11.125%, 10/1/2002 50,000
---------------------------------------------------
25,000 Van De Kamp's, Inc., Sr. Sub. Note, 12.00%, 27,750
9/15/2005
--------------------------------------------------- ------------
Total 129,625
--------------------------------------------------- ------------
FOREST PRODUCTS--0.0%
---------------------------------------------------
25,000 Four M Corp, Sr. Note, 12.00%, 6/1/2006 25,375
---------------------------------------------------
50,000 Stone Container, Sr. Note, 11.50%, 10/1/2004 52,750
--------------------------------------------------- ------------
Total 78,125
--------------------------------------------------- ------------
HEALTHCARE--0.0%
---------------------------------------------------
50,000 Dade International, Inc., Sr. Sub. Note, 11.125%, 56,125
5/1/2006
---------------------------------------------------
50,000 Tenet Healthcare, Sr. Sub. Note, 10.125%, 3/1/2005 54,625
---------------------------------------------------
50,000 Tenet Healthcare, Sr. Sub. Note, 8.625%, 1/15/2007 50,688
--------------------------------------------------- ------------
Total 161,438
--------------------------------------------------- ------------
HOTELS, MOTELS, INNS & CASINOS--0.0%
---------------------------------------------------
50,000 Courtyard By Marriott, Sr. Note, 10.75%, 2/1/2008 53,938
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.1%
---------------------------------------------------
$ 25,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%, $ 27,625
7/15/2005
---------------------------------------------------
50,000 (a)Continental Global, Sr. Note, 11.00%, 4/1/2007 52,313
---------------------------------------------------
50,000 Euramax International PLC, Sr. Sub. Note, 11.25%, 53,000
10/1/2006
---------------------------------------------------
50,000 Mettler-Toledo, Inc., Sr. Sub. Note, 9.75%, 52,750
10/1/2006
---------------------------------------------------
50,000 Unifrax Investment Corp., Sr. Note, 10.50%, 52,000
11/1/2003
--------------------------------------------------- ------------
Total 237,688
--------------------------------------------------- ------------
LEISURE & ENTERTAINMENT--0.1%
---------------------------------------------------
100,000 AMF Group, Inc., Sr. Sub. Disc. Note, 0/12.25%, 70,250
3/15/2006
---------------------------------------------------
25,000 Cobblestone Golf, Sr. Note, 11.50%, 6/1/2003 26,281
---------------------------------------------------
50,000 Premier Parks, Sr. Note, 9.75%, 1/15/2007 52,125
---------------------------------------------------
100,000 Six Flags Theme Parks, Sr. Sub. Disc. Note, 102,250
0/12.25%, 6/15/2005
---------------------------------------------------
50,000 Viacom Inc, Sub. Deb., 8.00%, 7/7/2006 49,000
--------------------------------------------------- ------------
Total 299,906
--------------------------------------------------- ------------
MACHINERY & EQUIPMENT--0.1%
---------------------------------------------------
50,000 Alvey Systems, Sr. Sub. Note, 11.375%, 1/31/2003 51,625
---------------------------------------------------
50,000 Clark Material Handling, Sr. Note, 10.75%, 52,750
11/15/2006
---------------------------------------------------
33,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 37,785
---------------------------------------------------
50,000 Tokheim Corp., Sr. Sub. Note, 11.50%, 8/1/2006 54,250
--------------------------------------------------- ------------
Total 196,410
--------------------------------------------------- ------------
OIL & GAS--0.1%
---------------------------------------------------
50,000 Abraxas Petroleum Corp., Sr. Note, 11.50%, 54,250
11/1/2004
---------------------------------------------------
50,000 Falcon Drilling Company, Sr. Note, 9.75%, 1/15/2001 52,063
---------------------------------------------------
50,000 Forcenergy Inc., Sr. Sub. Note, 9.50%, 11/1/2006 51,875
---------------------------------------------------
United Meridian Corp., Sr. Sub. Note, 10.375%,
50,000 10/15/2005 54,125
--------------------------------------------------- ------------
Total 212,313
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
- ----------- ----------------------------------------------------------------- ------------
<S> <C> <C>
BONDS--CONTINUED
- ------------------------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------------------
PRINTING & PUBLISHING--0.1%
-----------------------------------------------------------------
$ 50,000 Garden State Newspapers, Inc., Sr. Sub. Note, 12.00%, 7/1/2004 $ 55,500
-----------------------------------------------------------------
50,000 Hollinger International, Sr. Sub. Note, 9.25%, 3/15/2007 50,750
-----------------------------------------------------------------
K-III Communications Corp., 500 Pfd. Shares, Series D, $10.00 50,250
----------------------------------------------------------------- ------------
Total 156,500
----------------------------------------------------------------- ------------
SERVICES--0.0%
-----------------------------------------------------------------
25,000 Coinmach Corp., Sr. Note, 11.75%, 11/15/2005 27,750
-----------------------------------------------------------------
50,000 KinderCare Learning, Sr. Sub. Note, 9.50%, 2/15/2009 48,375
----------------------------------------------------------------- ------------
Total 76,125
----------------------------------------------------------------- ------------
STEEL--0.0%
-----------------------------------------------------------------
25,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 24,375
-----------------------------------------------------------------
50,000 GS Technologies Operating Co., Inc., Sr. Note, 12.00%, 9/1/2004 53,875
----------------------------------------------------------------- ------------
Total 78,250
----------------------------------------------------------------- ------------
SURFACE TRANSPORTATION--0.1%
-----------------------------------------------------------------
25,000 Ameritruck Distribution, Sr. Sub. Note, 12.25%, 11/15/2005 25,125
-----------------------------------------------------------------
50,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 55,250
-----------------------------------------------------------------
50,000 Statia Terminals, 1st Mtg. Note, 11.75%, 11/15/2003 53,500
-----------------------------------------------------------------
50,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 54,250
----------------------------------------------------------------- ------------
Total 188,125
----------------------------------------------------------------- ------------
TELECOMMUNICATIONS & CELLULAR--0.4%
-----------------------------------------------------------------
50,000 American Communications, Sr. Disc. Note, 0/12.75%, 4/1/2006 24,500
-----------------------------------------------------------------
100,000 Brooks Fiber Properties, Inc. Sr. Disc. Note, 0/10.875%, 3/1/2006 68,250
-----------------------------------------------------------------
50,000 (a)Comcast Cellular Holdings, Sr. Note, 9.50%, 5/1/2007 50,438
-----------------------------------------------------------------
100,000 Intermedia Communications, Sr. Disc. Note, 0/12.50%, 5/15/2006 69,000
-----------------------------------------------------------------
50,000 Millicom International, Sr. Disc. Note, 0/13.50%, 6/1/2006 36,750
-----------------------------------------------------------------
75,000 Nextel Communications, Inc., Sr. Disc. Note, 0/11.50%, 9/1/2003 64,594
-----------------------------------------------------------------
50,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 47,750
-----------------------------------------------------------------
50,000 Phonetel Technologies, Sr. Note, 12.00%, 12/15/2006 50,250
-----------------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ -------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH YIELD BONDS--CONTINUED
--------------------------------------------------
TELECOMMUNICATIONS & CELLULAR--0.4%
--------------------------------------------------
(a)Qwest Communications, Sr. Note, 10.875%,
$ 50,000 4/1/2007 $ 53,750
--------------------------------------------------
50,000 Sygnet Wireless, Inc., Sr. Note, 11.50%, 10/1/2006 50,063
--------------------------------------------------
Teleport Communications, Sr. Disc. Note,
100,000 0/11.125%, 7/1/2007 71,625
--------------------------------------------------
50,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 50,500
-------------------------------------------------- ------------
Total 637,470
-------------------------------------------------- ------------
UTILITIES--0.1%
--------------------------------------------------
75,000 California Energy Co., Sr. Note, 10.25%, 1/15/2004 81,281
--------------------------------------------------
El Paso Electric Co., 572 PIK Pfd. Shares, Series
A, 11.40% 62,777
-------------------------------------------------- ------------
Total 144,058
-------------------------------------------------- ------------
TOTAL HIGH YIELD BONDS 4,872,673
-------------------------------------------------- ------------
FOREIGN BONDS--5.0%
--------------------------------------------------
AUSTRAILIAN DOLLAR--0.2%
--------------------------------------------------
134,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 5/14/2003 105,573
--------------------------------------------------
175,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 8/14/2001 139,124
--------------------------------------------------
150,000 State Bank Of New South Wales, 12.25%, 2/26/2001 133,459
--------------------------------------------------
25,000 West Aust T Corp, Local Government Guarantee,
8.00%, 7/15/2003 19,788
-------------------------------------------------- ------------
Total 397,944
-------------------------------------------------- ------------
BELGIAN FRANC--0.1%
--------------------------------------------------
2,112,000 Belgian Government, Bond, 6.50%, 3/31/2005 62,785
--------------------------------------------------
6,000,000 Belgium Kingdom, 7.75%, 10/15/2004 191,748
-------------------------------------------------- ------------
Total 254,533
-------------------------------------------------- ------------
CANADIAN DOLLAR--0.3%
--------------------------------------------------
290,000 Canada Government, Deb., 6.50%, 6/1/2004 213,152
--------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ ------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
FOREIGN BONDS--CONTINUED
-------------------------------------------------
CANADIAN DOLLAR--CONTINUED
-------------------------------------------------
375,000 Ontario Hydro, 9.00%, 6/24/2002 $ 304,991
-------------------------------------------------
102,000 Ontario Hydro, Bond, 7.75%, 11/3/2005 79,625
------------------------------------------------- ------------
Total 597,768
------------------------------------------------- ------------
DENMARK KRONE--0.3%
-------------------------------------------------
1,844,000 Denmark--Bullet, Bond, 8.00%, 3/15/2006 312,890
-------------------------------------------------
1,200,000 Denmark, 8.00%, 5/15/2003 205,349
------------------------------------------------- ------------
Total 518,239
------------------------------------------------- ------------
FRENCH FRANC--0.2%
-------------------------------------------------
28,000 France O.A.T., Deb., 8.25%, 4/25/2022 36,327
-------------------------------------------------
1,044,000 France O.A.T., Bond, 7.25%, 4/25/2006 200,155
-------------------------------------------------
150,500 France O.A.T., Bond, 7.50%, 4/25/2005 188,881
------------------------------------------------- ------------
Total 425,363
------------------------------------------------- ------------
DEUTSCHE MARC--1.1%
-------------------------------------------------
300,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 178,164
-------------------------------------------------
137,000 DG-HYPBK 5.75%, 1/22/2007 78,492
-------------------------------------------------
188,000 Deutschland Republic, Deb., 6.25%, 1/4/2024 103,410
-------------------------------------------------
33,000,000 KFW International Finance, 6.00%, 11/29/1999 314,910
-------------------------------------------------
KFW International Finance, Bank Guarantee, 6.75%,
350,000 6/20/2005 217,329
-------------------------------------------------
1,400,000 KFW International Finance, 7.00%, 5/12/2000 260,321
-------------------------------------------------
1,100,000 Treuhandanstalt, 7.75%, 10/1/2002 723,229
-------------------------------------------------
744,000 Treuhandanstalt, Foreign Government Guarantee,
6.875%, 6/11/2003 470,839
------------------------------------------------- ------------
Total 2,346,694
------------------------------------------------- ------------
GREEK DRACHMA--0.1%
-------------------------------------------------
34,000,000 Hellenic Republic, FRN, 14.00%, 10/23/2003 129,869
------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------- ------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
FOREIGN BONDS--CONTINUED
-------------------------------------------------
IRISH POUND--0.2%
-------------------------------------------------
108,000 Irish Government, Bond, 6.50%, 10/18/2001 $ 165,803
-------------------------------------------------
108,000 Treasury, Deb., 6.25%, 4/1/1999 163,604
------------------------------------------------- ------------
Total 329,407
------------------------------------------------- ------------
ITALIAN LIRA--0.4%
-------------------------------------------------
110,000,000 Btps, Bond, 10.50%, 11/1/2000 71,928
-------------------------------------------------
1,040,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 684,351
------------------------------------------------- ------------
Total 756,279
------------------------------------------------- ------------
JAPANESE YEN--0.5%
-------------------------------------------------
65,000,000 Export-Import Bank Japan, 4.375%, 10/1/2003 623,765
-------------------------------------------------
42,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 419,278
------------------------------------------------- ------------
Total 1,043,043
------------------------------------------------- ------------
NETHERLAND GUILDER--0.3%
-------------------------------------------------
70,000 Bank Ned Gemeenten, Bond, 6.375%, 1/4/2006 37,804
-------------------------------------------------
30,000 Bk Ned Gemeenten, Bond, 7.75%, 12/20/2004 17,571
-------------------------------------------------
90,000 Lkb-global Bd, Bank Guarantee, 6.00%, 1/25/2006 53,002
-------------------------------------------------
700,000 Netherlands Government, 5.75%, 1/15/2004 371,756
-------------------------------------------------
210,000 Netherlands Government, 6.00%, 1/15/2006 111,308
------------------------------------------------- ------------
Total 591,441
------------------------------------------------- ------------
NEW ZEALAND DOLLAR--0.1%
-------------------------------------------------
143,000 New Zealand Government, 8.00%, 2/15/2001 101,046
-------------------------------------------------
105,000 New Zealand Government, Bond, 8.00%, 7/15/1998 73,241
------------------------------------------------- ------------
Total 174,287
------------------------------------------------- ------------
NORWEGIAN KRONE--0.1%
-------------------------------------------------
800,000 NGB, Bond, 9.00%, 1/31/1999 121,044
-------------------------------------------------
630,000 Norwegian Government, Bond, 7.00%, 5/31/2001 95,296
-------------------------------------------------
473,000 Norwegian Government, Foreign Government
Guarantee, 5.75%,
11/30/2004 66,296
------------------------------------------------- ------------
Total 282,636
------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN
CURRENCY PAR
AMOUNT OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
------------ ------------------------------------------------ ------------
<C> <S> <C>
BONDS--CONTINUED
-------------------------------------------------------------
FOREIGN BONDS--CONTINUED
------------------------------------------------
PORTUGUESE ESCUDO--0.0%
------------------------------------------------
10,250,000 Portuguese Ot's, Bond, 11.875%, 2/23/2000 $ 68,574
------------------------------------------------ ------------
SPANISH PESETA--0.3%
------------------------------------------------
40,000,000 Spanish Government, 10.00%, 2/28/2005 334,795
------------------------------------------------
29,000,000 Spanish Government, Bond, 8.80%, 4/30/2006 229,556
------------------------------------------------
6,510,000 Spanish Government, Bond, 9.40%, 4/30/1999 48,368
------------------------------------------------
6,480,000 Spanish Government, Deb., 10.10%, 2/28/2001 51,626
------------------------------------------------ ------------
Total 664,345
------------------------------------------------ ------------
SWEDISH KRONA--0.2%
------------------------------------------------
1,000,000 Stadshypotekskas, Foreign Government Guarantee,
Series 1551,
7.50%, 3/17/1999 133,800
------------------------------------------------
2,300,000 Sweden, 6.00%, 2/9/2005 281,743
------------------------------------------------ ------------
Total 415,543
------------------------------------------------ ------------
UNITED KINGDOM POUND--0.6%
------------------------------------------------
127,000 British Gas PLC, 8.875%, 7/8/2008 220,349
------------------------------------------------
108,000 U.K. Treasury, Deb., 8.50%, 12/7/2005 190,944
------------------------------------------------
365,000 UK Conversion, 9.00%, 3/3/2000 626,009
------------------------------------------------
108,000 United Kingdom Treasury, Bond, 7.50%, 12/7/2006 179,930
------------------------------------------------
30,000 United Kingdom Treasury, Bond, 8.00%, 12/7/2015 51,634
------------------------------------------------ ------------
Total 1,268,866
------------------------------------------------ ------------
TOTAL FOREIGN BONDS 10,264,831
------------------------------------------------ ------------
TOTAL BONDS (IDENTIFIED COST $131,644,239) 131,569,759
------------------------------------------------ ------------
CASH EQUIVALENTS--5.5%
-------------------------------------------------------------
(C) REPURCHASE AGREEMENT--5.5%
-------------------------------------------------------------
11,145,000 BT Securities Corporation, 5.560%, dated
5/30/1997,
due 6/2/1997 (AT AMORTIZED COST) 11,145,000
------------------------------------------------ ------------
TOTAL INVESTMENTS (IDENTIFIED COST
$193,091,599) (D) $201,597,128
------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- -------------------------------------------------------------------------------
(a) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At May 31, 1997, these securities amounted
to $2,302,596 which represents 1.1% of total net assets.
(b) Non-income producing security.
(c) The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations. The investment in the repurchase agreement is
through participation in a joint account with other Federated funds.
(d) The cost of investments for federal tax purposes amounts to $193,091,599.
The net unrealized appreciation of investments on a federal tax basis
amounts to $8,505,529 which is comprised of $11,097,044 appreciation and
$2,591,515 depreciation at May 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($204,103,181) at May 31, 1997.
The following acronyms are used throughout this portfolio:
ADR--American Depositary Receipt
FRN--Floating Rate Note
GDR--Global Depository Receipt
GTD--Guaranty
PIK--Payment in Kind
PLC--Public Limited Company
PP--Principal Payment
* MID-AMERICAN WASTE SYSTEMS, INC.
On January 22, 1997, Mid-American Waste filed for protection under Chapter 11
of the Bankruptcy Code. The company has agreed to be acquired by USA Waste
Services, Inc. The timing and outcome of this potential transaction are
uncertain. Mid-American Waste has been deemed illiquid as a result of
contractual agreements relating to litigation.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ------------------------------------------------
Total investments in securities, at value
(identified and tax cost $193,091,599) $201,597,128
- ------------------------------------------------
Cash 3,144
- ------------------------------------------------
Cash denominated in foreign currencies
(identified cost $3,308) 3,290
- ------------------------------------------------
Income receivable 2,126,620
- ------------------------------------------------
Receivable for investments sold 721,884
- ------------------------------------------------
Receivable for shares sold 199,189
- ------------------------------------------------
Deferred expenses 14,303
- ------------------------------------------------ ------------
Total assets 204,665,558
- ------------------------------------------------
LIABILITIES:
- ------------------------------------
Payable for investments purchased $ 433,003
- ------------------------------------
Payable for shares redeemed 32,862
- ------------------------------------
Payable for taxes withheld 8,217
- ------------------------------------
Accrued expenses 88,295
- ------------------------------------ -----------
Total liabilities 562,377
- ------------------------------------------------ ------------
NET ASSETS for 18,063,343 shares outstanding $204,103,181
- ------------------------------------------------ ------------
NET ASSETS CONSIST OF:
- ------------------------------------------------
Paid-in capital $191,155,885
- ------------------------------------------------
Net unrealized appreciation of investments and
translation of assets and liabilities in
foreign currency 8,495,666
- ------------------------------------------------
Accumulated net realized gain on investments,
foreign currency transactions, and futures
contracts 2,928,426
- ------------------------------------------------
Undistributed net investment income 1,523,204
- ------------------------------------------------ ------------
Total Net Assets $204,103,181
- ------------------------------------------------ ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION
PROCEEDS PER SHARE:
- ------------------------------------------------
INSTITUTIONAL SHARES:
- ------------------------------------------------
$158,790,239 / 14,050,411 shares outstanding $ 11.30
- ------------------------------------------------ ------------
SELECT SHARES:
- ------------------------------------------------
$45,312,942 / 4,012,932 shares outstanding $ 11.29
- ------------------------------------------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------
Dividends (net of foreign taxes withheld of $17,085) $ 738,740
- ---------------------------------------------------------------
Interest (net of dollar roll expense of $2,259 and foreign
taxes withheld of $4,213) 4,897,655
- --------------------------------------------------------------- -----------
Total income 5,636,395
- ---------------------------------------------------------------
EXPENSES:
- --------------------------------------------------
Investment advisory fee $ 757,185
- --------------------------------------------------
Administrative personnel and services fee 76,689
- --------------------------------------------------
Custodian fees 56,839
- --------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 62,313
- --------------------------------------------------
Directors'/Trustees' fees 2,458
- --------------------------------------------------
Auditing fees 8,459
- --------------------------------------------------
Legal fees 2,004
- --------------------------------------------------
Portfolio accounting fees 45,162
- --------------------------------------------------
Distribution services fee--Select Shares 166,687
- --------------------------------------------------
Shareholder services fee--Institutional Shares 196,833
- --------------------------------------------------
Shareholder services fee--Select Shares 55,562
- --------------------------------------------------
Share registration costs 19,124
- --------------------------------------------------
Printing and postage 25,057
- --------------------------------------------------
Insurance premiums 2,270
- --------------------------------------------------
Taxes 1,502
- --------------------------------------------------
Miscellaneous 13,951
- -------------------------------------------------- -----------
Total expenses 1,492,095
- --------------------------------------------------
Waivers--
- ---------------------------------------
Waiver of investment advisory fee $ (58,992)
- ---------------------------------------
Waiver of distribution services fee--
Select Shares (55,562)
- ---------------------------------------
Waiver of shareholder services fee--
Institutional Shares (157,466)
- --------------------------------------- ----------
Total waivers (272,020)
- -------------------------------------------------- -----------
Net expenses 1,220,075
- --------------------------------------------------------------- -----------
Net investment income 4,416,320
- --------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN
CURRENCY, AND FUTURES CONTRACTS:
- ---------------------------------------------------------------
Net realized gain on investments, foreign currency transac-
tions, and futures contracts 3,011,755
- ---------------------------------------------------------------
Net change in unrealized appreciation of investments and
translation of assets and liabilities in foreign currency (1,926,467)
- --------------------------------------------------------------- -----------
Net realized and unrealized gain on investments, foreign
currency, and futures contracts 1,085,288
- --------------------------------------------------------------- -----------
Change in net assets resulting from operations $ 5,501,608
- --------------------------------------------------------------- -----------
</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, NOVEMBER 30,
1997 1996
- --------------------------------------------------- ------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- ---------------------------------------------------
OPERATIONS--
- ---------------------------------------------------
Net investment income $ 4,416,320 $ 7,708,963
- ---------------------------------------------------
Net realized gain (loss) on investments, foreign
currency transactions, and futures contracts
($3,011,755 and $2,127,966, respectively, as
computed for federal tax purposes) 3,011,755 2,283,641
- ---------------------------------------------------
Net change in unrealized appreciation/depreciation
of investments, translation of assets and
liabilities in foreign currency, and futures
contracts (1,926,467) 4,291,960
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from operations 5,501,608 14,284,564
- --------------------------------------------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ---------------------------------------------------
Distributions from net investment income
- ---------------------------------------------------
Institutional Shares (3,671,620) (5,990,819)
- ---------------------------------------------------
Select Shares (867,929) (1,327,197)
- ---------------------------------------------------
Distributions from net realized gains on invest-
ments, foreign currency transactions, and futures
contracts
- ---------------------------------------------------
Institutional Shares (1,660,283) (1,517,396)
- ---------------------------------------------------
Select Shares (461,933) (372,550)
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from distributions
to shareholders (6,661,765) (9,207,962)
- --------------------------------------------------- ------------ ------------
SHARE TRANSACTIONS--
- ---------------------------------------------------
Proceeds from sale of shares 38,133,887 103,412,568
- ---------------------------------------------------
Net asset value of shares issued to shareholders in
payment of distributions declared 3,993,151 5,072,213
- ---------------------------------------------------
Cost of shares redeemed (37,746,998) (41,180,003)
- --------------------------------------------------- ------------ ------------
Change in net assets resulting from share trans-
actions 4,380,040 67,304,778
- --------------------------------------------------- ------------ ------------
Change in net assets 3,219,883 72,381,380
- ---------------------------------------------------
NET ASSETS:
- ---------------------------------------------------
Beginning of period 200,883,298 128,501,918
- --------------------------------------------------- ------------ ------------
End of period (including undistributed net invest-
ment income of $1,523,204 and $1,646,433, respec-
tively) $204,103,181 $200,883,298
- --------------------------------------------------- ------------ ------------
</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
ENDED YEAR ENDED NOVEMBER 30,
(UNAUDITED) ---------------------------
MAY 31,
1997 1996 1995 1994(A)
- ------------------------------------ ----------- -------- -------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.37 $ 11.14 $ 9.85 $ 10.00
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------
Net investment income 0.25 0.50 0.50 0.25
-----------------------------------
Net realized and unrealized gain
(loss) on investments, foreign cur-
rency, and futures contracts 0.06 0.41 1.28 (0.25)
----------------------------------- -------- -------- -------- -------
Total from investment operations 0.31 0.91 1.78 0.00
- ------------------------------------ -------- -------- -------- -------
LESS DISTRIBUTIONS
- ------------------------------------
Distributions from net investment
income (0.26) (0.52) (0.49) (0.15)
-----------------------------------
Distributions from net realized
gain on investments, foreign cur-
rency transactions, and future con-
tracts (0.12) (0.16) -- --
----------------------------------- -------- -------- -------- -------
Total distributions (0.38) (0.68) (0.49) (0.15)
- ------------------------------------ -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 11.30 $ 11.37 $ 11.14 $ 9.85
- ------------------------------------ -------- -------- -------- -------
TOTAL RETURN (B) 2.81% 8.54% 18.51% 0.02%
- ------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------
Expenses 1.05%* 1.05% 1.00% 0.88%*
-----------------------------------
Net investment income 4.53%* 4.72% 5.10% 5.07%*
-----------------------------------
Expense waiver/reimbursement (c) 0.26%* 0.31% 0.55% 0.59%*
-----------------------------------
SUPPLEMENTAL DATA
- ------------------------------------
Net assets, end of period (000
omitted) $158,790 $156,635 $103,715 $43,793
-----------------------------------
Average commission rate paid (d) $ 0.0037 $ 0.0043 -- --
-----------------------------------
Portfolio turnover 35% 154% 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.
(d) Represents total commissions paid on portfolio securities divided by
total portfolio shares purchased or sold on which commissions were
charged.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS--SELECT SHARES
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
(UNAUDITED) -------------------------
MAY 31,
1997 1996 1995 1994(A)
- -------------------------------------- ----------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.36 $ 11.12 $ 9.83 $10.00
- --------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------
Net investment income 0.21 0.43 0.37 0.21
- --------------------------------------
Net realized and unrealized gain
(loss) on investments, foreign
currency, and futures contracts 0.06 0.41 1.34 (0.25)
- -------------------------------------- ------- ------- ------- ------
Total from investment operations 0.27 0.84 1.71 (0.04)
- -------------------------------------- ------- ------- ------- ------
LESS DISTRIBUTIONS
- --------------------------------------
Distributions from net investment in-
come (0.22) (0.44) (0.42) (0.13)
- --------------------------------------
Distributions from net realized gain
on investments and foreign currency
transactions (0.12) (0.16) -- --
- -------------------------------------- ------- ------- ------- ------
Total distributions (0.34) (0.60) (0.42) (0.13)
- -------------------------------------- ------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 11.29 $ 11.36 $ 11.12 $ 9.83
- -------------------------------------- ------- ------- ------- ------
TOTAL RETURN (B) 2.44% 7.92% 17.76% (0.40)%
- --------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------
Expenses 1.75%* 1.75% 1.75% 1.64%*
- --------------------------------------
Net investment income 3.83%* 4.02% 4.37% 4.33%*
- --------------------------------------
Expense waiver/reimbursement (c) 0.31%* 0.36% 0.55% 0.84%*
- --------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------
Net assets, end of period (000 omit-
ted) $45,313 $44,248 $24,787 $3,697
- --------------------------------------
Average commission rate paid (d) $0.0037 $0.0043
- --------------------------------------
Portfolio turnover 35% 154% 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.
(d) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH AND INCOME FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (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 investment objective of the Fund is to seek current
income and capital appreciation.
The Fund offers two classes of shares: Institutional Shares and Select Shares.
(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--Listed equity securities are valued at the last sale
price reported on a national securities exchange. U.S. government
securities, listed corporate bonds, (other fixed income and asset-backed
securities), and unlisted securities and private placement securities are
valued at the prices furnished by an independent pricing service. Short-
term securities are valued at the prices provided by an independent pricing
service. However, short-term securities with remaining maturities of sixty
days or less at the time of purchase may be valued at amortized cost, which
approximates fair market value.
With respect to valuation of foreign securities, trading in foreign
countries may be completed at times which vary from the closing of the New
York Stock Exchange. Therefore, foreign securities are valued at the latest
closing price on the exchange on which they are traded prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign
currencies are translated into U.S. dollars at the foreign exchange rate in
effect at noon, eastern time on the day the value of the foreign security
is determined.
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 the Fund is reasonably able to obtain
information.
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 over a period not to exceed five years from the Fund's
commencement date.
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, 1997, the Fund had realized gains
of $3,039 on future contracts. As of May 31, 1997, the Fund had no
outstanding futures contracts.
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
commitments for the delayed delivery of securities or foreign currency
exchange transactions. Purchased contracts are used to acquire exposure to
foreign currencies; whereas, contracts to sell are used to hedge the Fund's
securities against currency fluctuations. Risks may arise upon entering
these transactions from the potential inability of counter-parties to meet
the terms of their commitments and from unanticipated movements in security
prices or foreign exchange rates. The foreign currency
FEDERATED MANAGED GROWTH AND INCOME FUND
- -------------------------------------------------------------------------------
transactions are adjusted by the daily exchange rate of the underlying
currency and any gains or losses are recorded for financial statement
purpose as unrealized until the settlement date. At May 31, 1997, the Fund
had outstanding foreign currency commitments as set forth below:
<TABLE>
<CAPTION>
UNREALIZED
SETTLEMENT CONTRACTS TO IN EXCHANGE CONTRACTS AT APPRECIATION
DATE(S) DELIVER/RECEIVE FOR VALUE (DEPRECIATION)
------------- --------------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C>
CONTRACTS PURCHASED:
Deutsche Mark 6/2/97 90,780 $ 53,558 $ 53,116 $(442)
Pound Sterling 6/2/97-6/4/97 121,123 197,623 198,140 177
CONTRACTS SOLD:
Austrian Schilling 6/2/97 191,638 16,074 16,005 69
Belgian Franc 6/2/97 37,800 1,075 1,071 4
French Franc 6/30/97 457,021 79,344 79,143 201
Pound Sterling 6/2/97 19,334 31,570 31,628 (58)
Netherlands Guilder 6/2/97 1,222 585 583 2
New Zealand Dollar 6/3/97 280 193 193 0
-----
Net unrealized
depreciation on foreign
exchange contracts $ (47)
=====
</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 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.
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
FEDERATED MANAGED GROWTH AND INCOME FUND
- -------------------------------------------------------------------------------
offering of the securities. Many restricted securities may be resold in the
secondary market in transactions exempt from registration. Such restricted
securities may be determined to be liquid under criteria established by the
Trustees. The Fund will not incur any registration costs upon such resales.
The Fund's restricted securities are valued at the price provided by
dealers in the secondary market or, if no market prices are available, at
the fair value as determined by the Fund's pricing committee.
Additional information on each restricted security held at May 31, 1997 is
as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
------------------------------------------------- --------------------- ----------------
<S> <C> <C>
AFC Capital Trust I, Bond 01/29/1997 250,000
Allied Waste, Sr. Sub. Note 11/25/1996 50,000
American Radio Systems Corp., Pfd. 02/04/1997-03/04/1997 51,482
Bayer Corp., Deb. 03/21/1996-04/17/1996 444,986
Chancellor Broadcasting Co., Pfd. 1/17/1997 50,000
Chilectra S.A. 02/28/1996 5,428
Comcast Cellular Holdings, Sr. Note 05/05/1997 49,919
CS Wireless Systems, Inc. 02/16/1996 0
Continental Global, Sr. Note 03/26/1997 50,000
Diamond Cable, Sr. Disc. Note 02/21/1997 76,151
Glenoit Corp., Sr. Sub. Note 03/26/1997 49,905
Fairchild Semiconductor, Sr. Sub. Note 03/06/1997 50,000
Freeport Terminal (Malta), Gtd. Global Note 06/16/1994 284,100
Grupo Financiero Bancomer, S.A. de C.V., Class B 05/22/1997-05/23/1997 44,820
Hub Power Co., GDR 02/13/1997 40,506
Outsourcing Solutions, Sr. Sub. Note 10/31/1996 50,000
Qwest Communications, Sr. Disc. Note 03/25/1997 50,000
Renaissance Cosmetics, Sr. Note 02/03/1997 50,000
Sinclair Broadcast Group, Pfd. 03/05/1997 50,000
Southern Peru Ltd., Note 05/23/1997 275,000
Want Want Holdings 04/11/1997 40,840
World Financial, Pass Thru Cert., Series 96 WFP-B 11/18/1996 250,000
</TABLE>
DOLLAR ROLL TRANSACTIONS--The Fund enters into dollar roll transactions,
with respect to mortgage securities issued by GNMA, FNMA and FHLMC, in
which the Fund 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.
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.
FEDERATED MANAGED GROWTH AND INCOME FUND
- -------------------------------------------------------------------------------
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, 1997 NOVEMBER 30, 1996
----------------------- -----------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- --------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 2,429,706 $27,053,369 7,128,986 $78,333,565
Shares issued to
shareholders in payment
of distributions declared 255,587 2,833,315 334,449 3,648,682
- ---------------------------
Shares redeemed (2,414,416) (26,811,269) (2,992,691) (32,944,715)
- --------------------------- ---------- ----------- ---------- -----------
Net change resulting from
Institutional
Share transactions 270,877 $ 3,075,415 4,470,744 $49,037,532
- --------------------------- ---------- ----------- ---------- -----------
SELECT SHARES
- ---------------------------
Shares sold 996,023 $11,080,518 2,283,902 $25,079,003
- ---------------------------
Shares issued to
shareholders in payment of
distributions declared 104,595 1,159,836 130,571 1,423,531
- ---------------------------
Shares redeemed (983,076) (10,935,729) (747,832) (8,235,288)
- --------------------------- ---------- ----------- ---------- -----------
Net change resulting from
Select
Share transactions 117,542 $ 1,304,625 1,666,641 $18,267,246
- --------------------------- ---------- ----------- ---------- -----------
Net change resulting from
share transactions 388,419 $ 4,380,040 6,137,385 $67,304,778
- --------------------------- ---------- ----------- ---------- -----------
</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
FEDERATED MANAGED GROWTH AND INCOME FUND
- -------------------------------------------------------------------------------
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 expenses of $86,568 were
borne initially by the Adviser. The Fund has agreed to reimburse the Adviser
for the organizational expenses during the five year period following
effective date. For the period ended May 31, 1997, the Fund paid $17,482
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, 1997, were as follows:
<TABLE>
<S> <C>
- ---------
Purchases $66,534,782
- --------- -----------
Sales $65,360,275
- --------- -----------
</TABLE>
FEDERATED MANAGED GROWTH AND INCOME FUND
- -------------------------------------------------------------------------------
(6) 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.
At May 31, 1997, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF NET % OF NET
INDUSTRY ASSETS INDUSTRY ASSETS
------------------------------- -------- ------------------------------------- --------
<S> <C> <C> <C>
Aerospace & Military Technology 0.2 Industrial Products & Equipment 0.4
Agency 0.9 Insurance 0.1
Automotive 0.3 Leisure & Entertainment 0.4
Banking 1.8 Machinery & Engineering 0.3
Basic Industry 0.7 Machinery & Equipment 0.1
Beverage & Tobacco 0.1 Manufacturing 0.1
Broadcast Radio & T.V. 0.3 Merchandising 0.2
Building Materials & Components 0.1 Metals & Mining 0.4
Business Equipment & Services 0.1 Metals & Steel 0.2
Cable Television 0.7 Miscellaneous Materials & Commodities 0.3
Chemicals & Plastics 0.4 Multi-Industry 0.2
Clothing & Textiles 0.1 Natural Gas Distribution 0.7
Consumer Durables 0.8 Oil & Gas 0.5
Consumer Non-Durables 1.7 Printing & Publishing 0.5
Consumer Products 0.1 Producer Manufacturing 1.2
Container & Glass Products 0.1 Real Estate 0.3
Ecological Services & Equipment 0.2 Recreation 0.1
Electrical & Electronics 0.9 Retail Trade 1.5
Energy Minerals 1.8 Services 1.1
Energy Sources 0.2 Sovereign Government 4.3
Finance 2.5 State & Provincial 0.2
Financial Intermediaries 1.2 Supranational 0.2
Financial Services 0.1 Surface Transportation 0.2
Food & Drug Retailers 0.2 Technology 1.6
Food & Household Products 0.3 Telecommunications & Cellular 0.8
Forest Products & Paper 0.1 Transportation 0.5
Government Agency 19.6 Treasury Securities 29.9
Health & Personal Care 0.3 Utilities 7.6
Healthcare 2.2
</TABLE>
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. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President, Treasurer,
John E. Murray, Jr. and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
Karen M. Brownlee
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other government agency. Investment in mutual funds involves
investment risk, including possible loss of principal.
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the fund's prospectuses which
contain facts concerning its objective and policies, management fees,
expenses and other information.
FEDERATED
MANAGED GROWTH
FUND
[LOGO OF MANAGED SERIES TRUST]
Semi-Annual Report
to Shareholders
Federated Managed
Growth Fund is part of
Managed Series Trust,
a lifecycle investing program from
Federated Investors.
May 31, 1997
[LOGO OF FEDERATED INVESTORS]
Federated Securities Corp., Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 56166K503
Cusip 56166K602
G00515-01 (7/97)
PRESIDENT'S MESSAGE
- -------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders of Federated
Managed Growth Fund for the six-month period from December 1, 1996 through May
31, 1997. Included in this report is an investment review, followed by a
complete listing of the fund's holdings and its financial statements. In
addition, separate Financial Highlights tables have been included for the
fund's Institutional Shares and Select Shares.
During the reporting period, the highly valued U.S. stock market, where
approximately 50% of the fund's $222 million portfolio was invested, continued
its climb while experiencing periodic volatility. The international stock
market, where approximately 13% of the fund's portfolio was invested, recorded
positive gains that were less than those of U.S. stocks. The U.S. bond
market--where approximately 38% of the fund's portfolio was invested--was
impacted by rising rates that caused bond prices to fall, while a strong U.S.
dollar negatively impacted the returns of foreign bonds, which accounted for
5% of portfolio assets.*
In this environment, the fund's Institutional Shares delivered a total return
of 5.08%** through a share price increase of $0.08, dividends totaling $0.22
per share, and capital gains totaling $0.30 per share. The fund's Select
Shares produced a total return of 4.73%** through a share price increase of
$0.08, dividends totaling $0.18 per share, and capital gains totaling $0.30
per share.
Thank you for pursuing your long-term goals through the high level of
diversification and professional management of Federated Managed Growth Fund.
As always, we invite your comments and suggestions.
Sincerely,
LOGO
Glen R. Johnson
President
July 15, 1997
*Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards.
**Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1997
The six-month period ended May 31, 1997 was a generally favorable one for
financial assets, and Federated Managed Growth Fund participated in the
advance. For the six months ended May 31, 1997, an investor in the fund's
Institutional Shares had a total return of 5.08%,* while an investor in the
fund's Select Shares had a total return of 4.73%.* However, performance among
asset classes showed wide variation. Stocks of large U.S. companies did
especially well as investors continued to favor companies with broad product
lines and lower perceived fundamental risk. Small company stocks had good
returns for the reporting period but still lagged large company stocks.
Foreign stocks generally had good returns in local currency terms, but dollar
strength in the foreign exchange market caused returns in dollar terms to be
more moderate. Utilities declined in response to gradually rising interest
rates. While bond prices were also hurt by rising interest rates, their higher
income yield cushioned the impact and bonds generally provided modest positive
returns.
ASSET ALLOCATION AS OF MAY 31, 1997
Federated Managed Growth Fund operates on an investment philosophy that, over
time, an investor with a diversified portfolio may 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, 1997.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL NET ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1997
-------------------------------- --------- ----------------
<S> <C> <C>
BONDS(1) 30-50 43
U.S. Treasury Securities 0-45 24
Mortgage-Backed Securities 0-15 7
Investment Grade Corporate Bonds 0-15 3
High Yield Corporate Bonds 0-15 4
Foreign Bonds 0-15 5
EQUITIES(1) 50-70 55
Large Company Stocks 0-70 26
Utility Stocks 0-7.5 2
Small Company Stocks 0-21 8
Foreign Stocks 0-21 13
Equity Reserves 0-15 6
</TABLE>
--------
(1) Bonds convertible into equity securities at a price below the
closing price of the underlying equity securities on May 31, 1997
have been included under the appropriate equity asset category.
Over the reporting period, as well as the past several years, investors have
been faced with 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 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 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
Management has kept a defensive bond position to help reduce 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 reporting period in December 1996 and fell
rapidly in the spring of 1997 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 years, 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
reduced in the spring of 1997, as their yield advantage over U.S. Treasuries
narrowed substantially as investors in high yield bonds became optimistic that
credit problems would be minimal over the next few years. That attitude may
make high yield corporate bonds more vulnerable than normal to any unexpected
weakening in the U.S. economy.
STRUCTURE OF THE EQUITY PORTFOLIO
Since early June 1995, the severe overvaluation of the market caused fund
management to hold a defensive position on the equity market. This defensive
position involves holding equity reserves at 7.5%, with the above normal
allocation coming from a reduction in the allocation to U.S. large company
stocks.
Historically, small company stocks are awarded premium valuations versus large
company stocks because smaller companies often have superior growth prospects.
However, in the recent market environment, investors focused on earnings
stability, and small company stocks were relatively cheap as their premium for
growth was below normal. Recognizing that such trends can last for extended
periods, fund management only held a normal position in small company stocks
despite their attractive valuations during the reporting period.
Foreign stocks are somewhat cheaper than U.S. stocks and foreign economies are
at earlier stages of the business cycle. This implies that return prospects
for foreign stocks are better than normal relative to U.S. stocks, and fund
management believes an above-normal foreign stock position is appropriate.
FEDERATED MANAGED GROWTH FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ----------------------------- -----------
<C> <S> <C>
STOCKS--48.9%
---------------------------------------
LARGE COMPANY--25.6%
-----------------------------
BASIC INDUSTRY--1.1%
-----------------------------
10,600 Betz Laboratories, Inc. $ 675,750
-----------------------------
6,500 Dow Chemical Co. 541,938
-----------------------------
46,700 LTV Corporation 653,800
-----------------------------
16,500 Morton International, Inc. 532,125
----------------------------- -----------
Total 2,403,613
----------------------------- -----------
CONSUMER DURABLES--1.3%
-----------------------------
13,900 General Motors Corp., Class H 766,238
-----------------------------
7,300 General Motors Corp. 417,925
-----------------------------
19,600 Martin Marietta Materials 563,500
-----------------------------
42,400 Rubbermaid, Inc. 1,181,900
----------------------------- -----------
Total 2,929,563
----------------------------- -----------
CONSUMER NON-DURABLES--2.9%
-----------------------------
6,000 CPC International, Inc. 516,000
-----------------------------
12,600 Kimberly-Clark Corp. 631,575
-----------------------------
39,100 PepsiCo, Inc. 1,436,925
-----------------------------
10,950 Philip Morris Cos., Inc. 481,800
-----------------------------
13,200 RJR Nabisco Holdings Corp. 427,350
-----------------------------
32,200 Russell Corp. 986,125
-----------------------------
10,800 Tambrands, Inc. 521,100
-----------------------------
5,700 Unilever N.V. 1,104,375
-----------------------------
7,500 V.F. Corp. 585,938
----------------------------- -----------
Total 6,691,188
----------------------------- -----------
ENERGY MINERALS--3.2%
-----------------------------
9,900 Amerada-Hess Corp. 529,650
-----------------------------
3,800 Atlantic Richfield Co. 552,900
-----------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------
LARGE COMPANY--CONTINUED
-------------------------------------
ENERGY MINERALS--CONTINUED
-------------------------------------
12,300 Chevron Corp. $ 861,000
-------------------------------------
15,400 Exxon Corp. 912,450
-------------------------------------
22,100 Occidental Petroleum Corp. 513,825
-------------------------------------
2,800 Royal Dutch Petroleum Co. 546,700
-------------------------------------
29,400 Sun Co., Inc. 878,325
-------------------------------------
8,500 Texaco, Inc. 927,563
-------------------------------------
30,600 USX-Marathon Group 910,350
-------------------------------------
7,800 (a)Western Atlas, Inc. 528,450
------------------------------------- -----------
Total 7,161,213
------------------------------------- -----------
FINANCE--3.7%
-------------------------------------
26,500 Allmerica Financial Corp. 963,938
-------------------------------------
13,700 Allstate Corp. 1,008,663
-------------------------------------
18,500 Bear Stearns Cos., Inc. 601,250
-------------------------------------
8,200 CIGNA Corp. 1,424,750
-------------------------------------
14,300 Dean Witter, Discover & Co. 589,875
-------------------------------------
12,900 Federal National Mortgage Association 562,763
-------------------------------------
9,400 Marsh & McLennan Cos., Inc. 1,238,450
-------------------------------------
11,300 National City Corp. 581,950
-------------------------------------
10,100 Providian Corp. 604,738
-------------------------------------
12,133 Travelers Group, Inc. 665,798
------------------------------------- -----------
Total 8,242,175
------------------------------------- -----------
HEALTH CARE--3.3%
-------------------------------------
13,400 Abbott Laboratories 844,200
-------------------------------------
8,100 American Home Products Corp. 617,625
-------------------------------------
17,900 Bard (C.R.), Inc. 572,800
-------------------------------------
41,600 (a)Beverly Enterprises, Inc. 587,600
-------------------------------------
24,400 Biomet, Inc. 455,975
-------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ----------------------------------------- -------------
<C> <S> <C>
STOCKS--CONTINUED
---------------------------------------------------
LARGE COMPANY--CONTINUED
-----------------------------------------
HEALTH CARE--CONTINUED
-----------------------------------------
16,200 Bristol-Myers Squibb Co. $ 1,188,675
-----------------------------------------
16,100 Columbia/HCA Healthcare Corp. 589,663
-----------------------------------------
29,700 (a)Healthsource, Inc. 638,550
-----------------------------------------
6,900 Merck & Co., Inc. 620,138
-----------------------------------------
7,100 Smithkline Beecham, ADR 621,250
-----------------------------------------
13,000 United Healthcare Corp. 734,500
----------------------------------------- -------------
Total 7,470,976
----------------------------------------- -------------
PRODUCER MANUFACTURING--1.8%
-----------------------------------------
45,600 ITT Industries, Inc. 1,128,600
-----------------------------------------
23,000 Ingersoll-Rand Co. 1,253,500
-----------------------------------------
23,000 (a)Lexmark Intl. Group, Class A 606,625
-----------------------------------------
5,300 Loews Corp. 515,425
-----------------------------------------
14,400 PACCAR, Inc. 651,600
----------------------------------------- -------------
Total 4,155,750
----------------------------------------- -------------
RETAIL TRADE--1.8%
-----------------------------------------
26,000 Dayton-Hudson Corp. 1,251,250
-----------------------------------------
74,300 (a)K Mart Corp. 1,040,200
-----------------------------------------
13,800 (a)Meyer (Fred), Inc. 633,075
-----------------------------------------
38,900 Wal-Mart Stores, Inc. 1,157,275
----------------------------------------- -------------
Total 4,081,800
----------------------------------------- -------------
SERVICES--1.3%
-----------------------------------------
18,700 Block (H&R), Inc. 617,100
-----------------------------------------
27,600 Browning-Ferris Industries, Inc. 903,900
-----------------------------------------
27,200 Readers Digest Association, Inc., Class A 673,200
-----------------------------------------
12,600 (a)Viacom, Inc., Class A 379,575
-----------------------------------------
6,700 (a)Viacom, Inc., Class B 198,906
----------------------------------------- -------------
Total 2,772,681
----------------------------------------- -------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------
LARGE COMPANY--CONTINUED
-------------------------------------
TECHNOLOGY--1.9%
-------------------------------------
19,100 AMP, Inc. $ 785,488
-------------------------------------
17,300 (a)Cabletron Systems, Inc. 761,200
-------------------------------------
7,800 International Business Machines Corp. 674,700
-------------------------------------
10,034 Lucent Technologies, Inc. 638,413
-------------------------------------
8,300 Raytheon Co. 396,325
-------------------------------------
23,800 (a)Storage Technology Corp. 969,850
------------------------------------- -----------
Total 4,225,976
------------------------------------- -----------
TRANSPORTATION--0.6%
-------------------------------------
22,000 CNF Transportation, Inc. 709,500
-------------------------------------
20,600 KLM Royal Dutch Airlines 605,125
------------------------------------- -----------
Total 1,314,625
------------------------------------- -----------
UTILITIES--2.7%
-------------------------------------
14,300 CMS Energy Corp. 480,838
-------------------------------------
10,300 Coastal Corp. 516,288
-------------------------------------
9,700 Columbia Gas System, Inc. 624,438
-------------------------------------
9,800 FPL Group, Inc. 455,700
-------------------------------------
17,900 GTE Corp. 789,838
-------------------------------------
24,600 Houston Industries, Inc. 510,450
-------------------------------------
29,500 MCI Communications Corp. 1,132,063
-------------------------------------
19,200 P G & E Corp. 444,000
-------------------------------------
80,800 (a)Tele-Communications, Inc., Class A 1,222,100
------------------------------------- -----------
Total 6,175,715
------------------------------------- -----------
TOTAL LARGE COMPANY 57,625,275
------------------------------------- -----------
SMALL COMPANY--7.9%
-------------------------------------
BASIC INDUSTRY--0.5%
-------------------------------------
18,100 (a)Chirex, Inc. 208,150
-------------------------------------
4,500 Donaldson Company, Inc. 164,813
-------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ---------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------
SMALL COMPANY--CONTINUED
----------------------------------------
BASIC INDUSTRY--CONTINUED
----------------------------------------
5,200 (a)Fibreboard Corp. $ 282,750
----------------------------------------
8,000 (a)Royal Group Technologies Ltd. 196,000
----------------------------------------
13,000 Spartech Corp. 164,125
---------------------------------------- -----------
Total 1,015,838
---------------------------------------- -----------
CONSUMER DURABLES--0.2%
----------------------------------------
6,600 Carlisle Cos., Inc. 201,300
----------------------------------------
7,500 (a)Equity Marketing, Inc. 140,625
----------------------------------------
6,600 Wynns International, Inc. 163,350
---------------------------------------- -----------
Total 505,275
---------------------------------------- -----------
CONSUMER NON-DURABLES--0.3%
----------------------------------------
4,400 (a)Blyth Industries, Inc. 195,800
----------------------------------------
12,400 (a)North Face, Inc. 226,300
----------------------------------------
10,100 (a)Sport-Haley Inc. 191,900
----------------------------------------
10,300 (a)USA Detergents, Inc. 133,900
---------------------------------------- -----------
Total 747,900
---------------------------------------- -----------
ENERGY MINERALS--0.3%
----------------------------------------
4,400 Devon Energy Corp. 163,900
----------------------------------------
4,800 (a)EVI, Inc. 180,600
----------------------------------------
10,300 (a)Tuboscope Vetco International Corp. 167,375
----------------------------------------
4,500 Vintage Petroleum, Inc. 153,000
---------------------------------------- -----------
Total 664,875
---------------------------------------- -----------
FINANCE--1.4%
----------------------------------------
10,600 Aames Financial Corp 136,475
----------------------------------------
4,800 CMAC Investment Corp. 199,800
----------------------------------------
10,000 (a)D & N Financial Corp. 177,500
----------------------------------------
5,202 (a)Delphi Financial Group, Inc., Class A 197,676
----------------------------------------
12,400 (a)Delta Financial Corp. 198,400
----------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ------------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------
SMALL COMPANY--CONTINUED
-------------------------------------------
FINANCE--CONTINUED
-------------------------------------------
4,200 Executive Risk, Inc. $ 218,925
-------------------------------------------
7,300 (a)FIRSTPLUS Financial Group, Inc. 186,150
-------------------------------------------
4,000 Frontier Insurance Group, Inc. 219,500
-------------------------------------------
8,600 (a)Leasing Solutions, Inc. 130,075
-------------------------------------------
5,200 Peoples Heritage Financial Group 172,250
-------------------------------------------
9,300 (a)Prime Service, Inc. 227,850
-------------------------------------------
4,600 Redwood Trust, Inc. 262,775
-------------------------------------------
5,700 Sirrom Capital Corp. 221,588
-------------------------------------------
12,800 (a)Southern Pacific Funding 179,200
-------------------------------------------
3,900 TCF Financial Corp. 165,750
-------------------------------------------
4,500 Vesta Insurance Group, Inc. 206,438
------------------------------------------- -----------
Total 3,100,352
------------------------------------------- -----------
HEALTH CARE--1.0%
-------------------------------------------
10,600 (a)American HomePatient, Inc. 206,700
-------------------------------------------
8,800 (a)Cambridge Neuroscience, Inc. 85,800
-------------------------------------------
5,900 (a)Curative Technologies, Inc. 164,094
-------------------------------------------
15,300 (a)Cyanotech Corp. 101,363
-------------------------------------------
10,900 (a)FPA Medical Management, Inc. 218,000
-------------------------------------------
6,700 (a)Genesis Health Ventures, Inc. 220,263
-------------------------------------------
7,400 (a)Medicis Pharmaceutical Corp., Class A 253,450
-------------------------------------------
20,300 (a)Prime Medical Services 225,838
-------------------------------------------
8,400 (a)Respironics, Inc. 170,100
-------------------------------------------
12,100 (a)Rotech Medical Corp. 204,188
-------------------------------------------
3,600 Shared Medical Systems Corp. 190,800
-------------------------------------------
5,100 (a)Universal Health Services, Inc., Class B 206,550
-------------------------------------------
10,900 (a)VIDAMED, Inc. 79,025
------------------------------------------- -----------
Total 2,326,171
------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------
SMALL COMPANY--CONTINUED
-------------------------------------
PRODUCER MANUFACTURING--0.5%
-------------------------------------
9,000 (a)AFC Cable Systems, Inc. $ 246,375
-------------------------------------
10,500 (a)Ballantyne of Omaha, Inc. 169,313
-------------------------------------
7,600 (a)Cable Design Technologies, Class A 209,000
-------------------------------------
28,600 (a)Raster Graphics Inc. 210,925
-------------------------------------
4,900 Sinter Metals, Inc. 180,688
-------------------------------------
8,800 (a)US Office Products Co. 217,800
------------------------------------- -----------
Total 1,234,101
------------------------------------- -----------
RETAIL TRADE--0.9%
-------------------------------------
8,900 (a)Amrion, Inc. 206,925
-------------------------------------
4,100 (a)CDW Computer Centers, Inc. 200,900
-------------------------------------
9,300 (a)Central Garden & Pet Co. 224,363
-------------------------------------
5,400 (a)Express Scripts, Inc., Class A 246,375
-------------------------------------
11,500 (a)Just For Feet, Inc. 225,688
-------------------------------------
6,900 (a)Microage, Inc. 125,063
-------------------------------------
13,100 (a)Paul Harris Stores, Inc. 227,613
-------------------------------------
5,700 (a)Pomeroy Computer Resources 131,100
-------------------------------------
4,600 (a)Proffitts, Inc. 183,425
-------------------------------------
4,900 Riser Foods, Inc. 204,269
------------------------------------- -----------
Total 1,975,721
------------------------------------- -----------
SERVICES--0.7%
-------------------------------------
6,700 (a)American Radio Systems Corp. 249,575
-------------------------------------
6,200 (a)BARRA, Inc. 182,900
-------------------------------------
3,800 (a)Caribiner International, Inc. 246,050
-------------------------------------
8,600 (a)FactSet Research Systems 167,700
-------------------------------------
3,600 (a)Newpark Resources, Inc. 189,000
-------------------------------------
7,300 (a)Personnel Group of America, Inc. 221,738
-------------------------------------
11,000 (a)Prime Hospitality Corp. 204,875
-------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- -------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------------
SMALL COMPANY--CONTINUED
--------------------------------------
SERVICES--CONTINUED
--------------------------------------
6,400 (a)SFX Broadcasting, Inc. $ 206,400
-------------------------------------- -----------
Total 1,668,238
-------------------------------------- -----------
TECHNOLOGY--1.8%
--------------------------------------
16,600 (a)ACT Networks, Inc. 292,575
--------------------------------------
6,200 (a)Adtran, Inc. 165,850
--------------------------------------
9,900 (a)Alphanet Solutions, Inc. 186,863
--------------------------------------
7,000 (a)Anadigics, Inc. 231,875
--------------------------------------
14,300 (a)Award Software International, Inc. 193,050
--------------------------------------
9,800 (a)BA Merchant Services, Inc., Class A 160,475
--------------------------------------
12,000 (a)Benchmarq Microelectronics, Inc. 241,500
--------------------------------------
7,100 (a)Claremont Technology Group 162,413
--------------------------------------
8,100 (a)Cybex Computer Products Corp. 147,319
--------------------------------------
5,000 (a)Ducommun, Inc. 131,250
--------------------------------------
4,600 (a)Dynatech Corp. 172,500
--------------------------------------
7,700 (a)ESS Technology, Inc. 119,350
--------------------------------------
6,700 (a)Elexsys International, Inc. 100,500
--------------------------------------
11,900 (a)Exar Corp. 218,663
--------------------------------------
7,100 (a)II-VI, Inc. 138,450
--------------------------------------
5,700 (a)Integrated Measurement Systems, Inc 95,475
--------------------------------------
12,400 (a)Mastech Corp. 223,200
--------------------------------------
12,200 (a)Micro Linear Corp. 244,000
--------------------------------------
4,300 National Processing, Inc. 36,013
--------------------------------------
10,900 (a)Network General Corp. 200,288
--------------------------------------
3,400 (a)Perceptron, Inc. 96,050
--------------------------------------
7,100 (a)Stratasys, Inc. 169,069
--------------------------------------
9,900 (a)Tollgrade Communications, Inc. 230,175
-------------------------------------- -----------
Total 3,956,903
-------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- -------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------
SMALL COMPANY--CONTINUED
--------------------------------
TRANSPORTATION--0.1%
--------------------------------
7,400 (a)Atlas Air, Inc. $ 212,750
-------------------------------- -----------
UTILITIES--0.2%
--------------------------------
3,900 CMS Energy Corp. 131,138
--------------------------------
3,800 (a)Calenergy, Inc. 156,750
--------------------------------
2,200 Cincinnati Bell, Inc. 135,300
-------------------------------- -----------
Total 423,188
-------------------------------- -----------
TOTAL SMALL COMPANY 17,831,312
-------------------------------- -----------
UTILITY STOCKS--2.3%
--------------------------------
ELECTRIC UTILITIES: CENTRAL--0.6%
--------------------------------
8,300 CMS Energy Corp. 279,088
--------------------------------
8,239 Cinergy Corp. 288,365
--------------------------------
11,000 DPL, Inc. 262,625
--------------------------------
9,600 Illinova Corp. 210,000
--------------------------------
7,100 NIPSCO Industries, Inc. 287,550
-------------------------------- -----------
Total 1,327,628
-------------------------------- -----------
ELECTRIC UTILITIES: EAST--0.3%
--------------------------------
8,950 DQE, Inc. 251,719
--------------------------------
8,200 GPU, Inc. 287,000
--------------------------------
10,500 Peco Energy Co. 199,500
-------------------------------- -----------
Total 738,219
-------------------------------- -----------
ELECTRIC UTILITIES: SOUTH--0.6%
--------------------------------
5,500 Duke Power Co. 247,500
--------------------------------
5,900 FPL Group, Inc. 274,350
--------------------------------
11,500 Southern Co. 244,375
--------------------------------
10,700 TECO Energy, Inc. 266,163
--------------------------------
6,400 Texas Utilities Co. 220,000
-------------------------------- -----------
Total 1,252,388
-------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- --------------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------------
UTILITY STOCKS--CONTINUED
---------------------------------------------
ELECTRIC UTILITIES: WEST--0.2%
---------------------------------------------
12,400 Pacificorp $ 246,450
---------------------------------------------
8,600 Pinnacle West Capital Corp. 252,625
--------------------------------------------- -----------
Total 499,075
--------------------------------------------- -----------
NATURAL GAS DISTRIBUTION--0.2%
---------------------------------------------
8,700 MCN Corp. 257,738
---------------------------------------------
7,800 Pacific Enterprises 255,450
--------------------------------------------- -----------
Total 513,188
--------------------------------------------- -----------
OIL/GAS TRANSMISSION--0.4%
---------------------------------------------
5,700 Enron Corp. 232,275
---------------------------------------------
6,800 Panenergy Corp. 317,900
---------------------------------------------
7,050 Williams Companies, Inc. 311,081
--------------------------------------------- -----------
Total 861,256
--------------------------------------------- -----------
TOTAL UTILITY STOCKS 5,191,754
--------------------------------------------- -----------
FOREIGN STOCKS--13.1%
---------------------------------------------
ARGENTINA--0.2%
---------------------------------------------
30,000 (a)Acindar Industria Argentina de Aceros SA 70,985
---------------------------------------------
1,960 Banco Frances del Rio de la Plata S.A., ADR 64,435
---------------------------------------------
8,070 Compania Naviera Perez Companc SA, Class B 61,766
---------------------------------------------
1,405 IRSA Inversiones y Representaciones S.A., GDR 54,971
---------------------------------------------
2,200 Telecom Argentina S.A., ADR 117,425
---------------------------------------------
3,500 Telefonica De Argentina ADR 126,875
--------------------------------------------- -----------
Total 496,457
--------------------------------------------- -----------
AUSTRALIA--0.4%
---------------------------------------------
40,000 (a)Coles Myer 186,640
---------------------------------------------
31,000 (a)News Corp., Ltd. 137,657
---------------------------------------------
50,000 Oil Search Ltd. 125,409
---------------------------------------------
145,000 (a)Queensland Metals Corp. NL 161,246
---------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ------------------------------------------------------- ----------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------------------
FOREIGN STOCKS--CONTINUED
-------------------------------------------------------
AUSTRALIA--CONTINUED
-------------------------------------------------------
17,000 Westpac Banking Corp. Ltd. $ 92,322
-------------------------------------------------------
32,000 Woodside Petroleum Ltd. 270,181
------------------------------------------------------- ----------
Total 973,455
------------------------------------------------------- ----------
BELGIUM--0.0%
-------------------------------------------------------
2,000 Delhaize-Le Lion 99,462
------------------------------------------------------- ----------
BRAZIL--0.4%
-------------------------------------------------------
113,000 Banco Itau SA, Preference 58,057
-------------------------------------------------------
6,200 (a)COFAP-Cia Fabricadora de Pecas, Preference 63,709
-------------------------------------------------------
324,000 Centrais Eletricas Brasileiras SA, Preference, Series B 159,503
-------------------------------------------------------
1,523,000 Companhia Energetica de Minas Gerais, Preference 69,712
-------------------------------------------------------
156,000 Light Participacoes SA 51,293
-------------------------------------------------------
750,000 Petroleo Brasileiro SA, Preference 179,355
-------------------------------------------------------
1,766,000 Telecomunicacoes Brasileiras SA 230,115
-------------------------------------------------------
22,137 Telecomunicacoes de Sao Paulo SA Rights 744
-------------------------------------------------------
508,000 Telecomunicacoes de Sao Paulo SA, Preference 174,158
------------------------------------------------------- ----------
Total 986,646
------------------------------------------------------- ----------
CHILE--0.0%
-------------------------------------------------------
900 Banco BHIF, ADR 18,788
-------------------------------------------------------
600 Banco de A. Edwards, ADR 12,525
-------------------------------------------------------
750 (b)Chilectra S.A., ADR, 144A 20,279
-------------------------------------------------------
850 Compania Telecomunicacion Chile, ADR 29,113
-------------------------------------------------------
300 Sociedad Quimica Y Minera De Chile, ADR 19,500
------------------------------------------------------- ----------
Total 100,205
------------------------------------------------------- ----------
COLOMBIA--0.0%
-------------------------------------------------------
1,400 Banco Ganadero SA, ADR 53,550
-------------------------------------------------------
1,500 Banco Industrial Colombiano, ADR 26,438
------------------------------------------------------- ----------
Total 79,988
------------------------------------------------------- ----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ---------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------
FOREIGN STOCKS--CONTINUED
----------------------------------------
DENMARK--0.1%
----------------------------------------
2,900 (a)Sydbank AS $ 138,110
----------------------------------------
2,100 Unidanmark A 109,689
---------------------------------------- -----------
Total 247,799
---------------------------------------- -----------
FRANCE--0.8%
----------------------------------------
2,100 AXA 125,645
----------------------------------------
1,240 (a)CLF-Dexia France 115,741
----------------------------------------
2,700 Casino Ord 121,614
----------------------------------------
1,800 Compagnie Financiere de Paribas, Class A 115,863
----------------------------------------
710 Compagnie de Saint Gobain 97,993
----------------------------------------
800 Financiere Sogeparc SA 108,059
----------------------------------------
1,600 Groupe Danon BSN SA 240,779
----------------------------------------
720 LVMH (Moet-Hennessy) 174,308
----------------------------------------
1,100 Rhone-Poulenc Rorer, Inc. 82,775
----------------------------------------
5,248 Schneider SA 252,012
----------------------------------------
3,400 Scor SA 137,187
----------------------------------------
1,600 Total SA-B 146,296
---------------------------------------- -----------
Total 1,718,272
---------------------------------------- -----------
GERMANY, FEDERAL REPUBLIC OF--0.9%
----------------------------------------
5,875 Bayer AG 227,733
----------------------------------------
5,050 Commerzbank AG, Frankfurt 148,330
----------------------------------------
4,000 (a)Daimler Benz AG 307,764
----------------------------------------
2,230 Deutsche Bank, AG 123,563
----------------------------------------
6,065 Dresdner Bank Ag, Frankfurt 212,209
----------------------------------------
385 Gea AG, Vorzugsaktien 155,433
----------------------------------------
535 Mannesmann AG 217,243
----------------------------------------
1,550 Schwarz Pharma 115,178
----------------------------------------
2,000 Siemens AG 112,726
----------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ------------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------
FOREIGN STOCKS--CONTINUED
-------------------------------------------
GERMANY, FEDERAL REPUBLIC OF--CONTINUED
-------------------------------------------
4,500 Skw Trostberg $ 148,763
-------------------------------------------
700 Thyssen AG 158,914
-------------------------------------------
2,540 Veba AG 143,563
------------------------------------------- -----------
Total 2,071,419
------------------------------------------- -----------
HONG KONG--1.0%
-------------------------------------------
6,000 (a)Beijing Enterprises 35,000
-------------------------------------------
26,000 (a)Cheung Kong 265,922
-------------------------------------------
232,000 China EB-IHD Holdings Ltd. 356,301
-------------------------------------------
35,000 China Resources Enterprises Ltd. 122,862
-------------------------------------------
31,000 Citic Pacific Ltd. 177,234
-------------------------------------------
51,000 Great Eagle Holdings 180,345
-------------------------------------------
3,751 HSBC Holdings PLC 113,762
-------------------------------------------
7,000 Hong Kong Telecommunications, Ltd., ADR 155,760
-------------------------------------------
17,000 Hutchison Whampoa 141,511
-------------------------------------------
24,000 (a)New World Development Co. Ltd. 152,391
-------------------------------------------
108,000 Sino Land Co. 126,140
------------------------------------------- -----------
Total 1,827,228
------------------------------------------- -----------
INDONESIA--0.1%
-------------------------------------------
69,000 Lippo Bank, Foreign Shares 69,496
-------------------------------------------
28,000 PT Indosat 83,453
-------------------------------------------
33,000 (a)PT Putra Surya Multidana, Foreign Shares 39,342
-------------------------------------------
45,733 PT Steady Safe, Foreign Shares 50,292
------------------------------------------- -----------
Total 242,583
------------------------------------------- -----------
IRELAND--0.1%
-------------------------------------------
6,000 (a)Elan Corp. PLC, ADR 244,500
------------------------------------------- -----------
ITALY--0.2%
-------------------------------------------
17,150 Eni 85,525
-------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- -------------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------------------
FOREIGN STOCKS--CONTINUED
--------------------------------------------
ITALY--CONTINUED
--------------------------------------------
890 (a)La Rinascente S.P.A. Warrants, 12/31/1999 $ 336
--------------------------------------------
25,000 STET Societa Finanziaria Telefonica S.P.A. 126,147
--------------------------------------------
63,000 Telecom Italia Mobile 184,786
-------------------------------------------- -----------
Total 396,794
-------------------------------------------- -----------
JAPAN--3.7%
--------------------------------------------
11,000 Canare Electric Co. Ltd. 368,398
--------------------------------------------
13,200 Circle K Japan Co. Ltd. 703,924
--------------------------------------------
43,000 Hitachi Ltd. 457,879
--------------------------------------------
10,000 Hitachi Maxell 231,859
--------------------------------------------
8,000 Honda Motor Co. Ltd. 234,951
--------------------------------------------
7,000 Ito-Yokado Co., Ltd. 399,141
--------------------------------------------
2,900 Mabuchi Motor Co. 164,860
--------------------------------------------
10,000 Matsushita Kotobuki Electric 358,952
--------------------------------------------
36,000 (a)Minolta Co 238,351
--------------------------------------------
40,000 (a)Mitsubishi Estate Co. Ltd. 546,157
--------------------------------------------
19,000 Mitsubishi Trust & Banking Corp., Tokyo 272,477
--------------------------------------------
205,000 (a)Mitsui Osk Lines 457,707
--------------------------------------------
4,000 Nintendo Corp. Ltd. 312,581
--------------------------------------------
68 Nippon Telegraph & Telephone Corp. 648,175
--------------------------------------------
20,000 Nissei ASB Machine Co. 249,034
--------------------------------------------
17,000 Sankyo Co. Ltd. 538,686
--------------------------------------------
6,000 Sony Corp. 505,453
--------------------------------------------
17,000 Sumitomo Bank Ltd., Osaka 235,036
--------------------------------------------
60,000 Sumitomo Realty & Dev 471,447
--------------------------------------------
24,000 (a)Sumitomo Trust & Banking 212,280
--------------------------------------------
31,000 Taiyo Yuden Co 495,148
--------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- --------------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------------------
FOREIGN STOCKS--CONTINUED
---------------------------------------------------
JAPAN--CONTINUED
---------------------------------------------------
48,000 Tokyu Land Corp $ 200,326
--------------------------------------------------- ------------
Total 8,302,822
--------------------------------------------------- ------------
KOREA, REPUBLIC OF--0.2%
---------------------------------------------------
3,381 Kookmin Bank 61,154
---------------------------------------------------
3,120 Korea Electric Power Corp. 96,242
---------------------------------------------------
4,326 SK Telecom Co. Ltd., ADR 40,016
---------------------------------------------------
509 (a)Samsung Electronics Co. 50,112
---------------------------------------------------
509 Samsung Electronics Co. Rights expire 7/1/97 390
---------------------------------------------------
4,640 Shinhan Bank 60,083
---------------------------------------------------
1,860 (a)Sindo Ricoh Co. 107,239
--------------------------------------------------- ------------
Total 415,236
--------------------------------------------------- ------------
MALAYSIA--0.1%
---------------------------------------------------
93,000 Berjaya Group Berhad 122,880
---------------------------------------------------
8,000 Malayan Banking Berhad 84,371
---------------------------------------------------
23,000 UMW Holdings Bhd 118,080
--------------------------------------------------- ------------
Total 325,331
--------------------------------------------------- ------------
MEXICO--0.2%
---------------------------------------------------
3,600 Empresas ICA Sociedad Controladora S.A., ADR 52,200
---------------------------------------------------
9,000 Fomento Economico Mexicano, SA de C.V., Class B 47,794
---------------------------------------------------
310,000 (a)Grupo Financiero Bancomer, S.A. de C.V., Class B 116,412
---------------------------------------------------
2,600 Pan American Beverage, Class A 75,400
---------------------------------------------------
3,400 Telefonos de Mexico, Class L, ADR 150,875
---------------------------------------------------
3,000 (a)Tubos de Acero de Mexico SA, ADR 52,500
--------------------------------------------------- ------------
Total 495,181
--------------------------------------------------- ------------
NETHERLANDS--0.6%
---------------------------------------------------
13,416 ABN Amro Holding 247,734
---------------------------------------------------
2,400 ABN-Amro Holdings Nv, ADR 44,700
---------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ------------------------------------------------------ -----------
<C> <S> <C>
STOCKS--CONTINUED
----------------------------------------------------------------
FOREIGN STOCKS--CONTINUED
------------------------------------------------------
NETHERLANDS--CONTINUED
------------------------------------------------------
960 Akzo Nobel NV $ 127,684
------------------------------------------------------
7,676 Bols Wessanen (kon.) 146,133
------------------------------------------------------
7,563 Boskalis Westminster N.V. 158,931
------------------------------------------------------
1,625 (a)Hunter Douglas N.V. 143,270
------------------------------------------------------
3,228 ING Groep, N.V. 142,553
------------------------------------------------------
6,600 VNU--Verenigde Nederlandse Uitgeversbedrijven Verenigd
Bezit 148,993
------------------------------------------------------
959 Wolters Kluwer NV 115,280
------------------------------------------------------ -----------
Total 1,275,278
------------------------------------------------------ -----------
NEW ZEALAND--0.1%
------------------------------------------------------
32,000 Air New Zealand Ltd., Class B 94,676
------------------------------------------------------
220,000 (a)Guiness Peat Group PLC 125,931
------------------------------------------------------ -----------
Total 220,607
------------------------------------------------------ -----------
PAKISTAN--0.0%
------------------------------------------------------
700 (a)Hub Power Co., GDR 16,345
------------------------------------------------------
3,000 (b)Hub Power Co., GDR, 144A 70,050
------------------------------------------------------ -----------
Total 86,395
------------------------------------------------------ -----------
PHILIPPINES--0.1%
------------------------------------------------------
179,000 (a)Belle Corp. 47,507
------------------------------------------------------
108,150 (a)Filinvest Land, Inc. 24,603
------------------------------------------------------
2,700 Philippine Commercial International Bank 26,360
------------------------------------------------------
528,000 (a)Universal Rightfield Property 56,053
------------------------------------------------------ -----------
Total 154,523
------------------------------------------------------ -----------
SINGAPORE--0.2%
------------------------------------------------------
11,000 City Developments Ltd. 102,286
------------------------------------------------------
3,000 Singapore Press Holdings Ltd., Foreign Shares 59,778
------------------------------------------------------
16,000 (a)Straits Steamship Land Ltd. 47,654
------------------------------------------------------
4,000 (a)Straits Steamship Land Ltd. Warrants, 12/12/2000 3,747
------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- ---------------------------------------- -----------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------
FOREIGN STOCKS--CONTINUED
----------------------------------------
SINGAPORE--CONTINUED
----------------------------------------
34,000 (a)(b)Want Want Holdings, 144A $ 123,080
----------------------------------------
27,000 Wing Tai Holdings, Ltd. 80,417
---------------------------------------- -----------
Total 416,962
---------------------------------------- -----------
SPAIN--0.3%
----------------------------------------
1,900 Empresa Nac De Electridad 145,102
----------------------------------------
3,425 Repsol SA 143,340
----------------------------------------
5,950 Telefonica de Espana 171,635
----------------------------------------
4,200 Vidrala SA 176,646
----------------------------------------
1,100 Zardoya-Otis SA 137,728
---------------------------------------- -----------
Total 774,451
---------------------------------------- -----------
SWEDEN--0.2%
----------------------------------------
11,300 Munksjo AB 109,338
----------------------------------------
27,000 Skand Enskilda BKN, Class A 278,667
----------------------------------------
2,350 Skandia Forsakrings AB 82,919
---------------------------------------- -----------
Total 470,924
---------------------------------------- -----------
SWITZERLAND--1.0%
----------------------------------------
100 (a)ABB AG 137,108
----------------------------------------
1,500 Credit Suisse Group-Registered 188,241
----------------------------------------
260 Holderbank Financiere Glaris AG, Class B 227,986
----------------------------------------
170 Nestle SA 211,240
----------------------------------------
306 Novartis AG (Reg) 414,798
----------------------------------------
800 Oerlikon-Buhrle Holding AG 92,629
----------------------------------------
20 (a)Roche Holding AG 177,633
----------------------------------------
166 (a)Swissair AG 169,000
----------------------------------------
205 UBS--Union Bank of Switzerland 224,626
----------------------------------------
653 Zurich Versicherungsgesellschaft 239,735
---------------------------------------- -----------
Total 2,082,996
---------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
--------- --------------------------------------------- ----------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------------
FOREIGN STOCKS--CONTINUED
---------------------------------------------
THAILAND--0.0%
---------------------------------------------
1,800 Bangkok Bank Public Co., Ltd., Foreign Shares $ 16,130
--------------------------------------------- ----------
UNITED KINGDOM--2.2%
---------------------------------------------
7,171 Barclays PLC 139,478
---------------------------------------------
10,000 Bass PLC 130,296
---------------------------------------------
8,526 Boc Group Plc 143,239
---------------------------------------------
6,200 Boots Co. PLC 71,808
---------------------------------------------
7,449 British Aerospace PLC 151,466
---------------------------------------------
14,558 British Petroleum Co. PLC 173,848
---------------------------------------------
12,100 British Telecommunication PLC 87,687
---------------------------------------------
8,900 Burmah Castrol 154,327
---------------------------------------------
20,065 Cadbury Schweppes PLC 179,873
---------------------------------------------
18,100 Compass Group 201,934
---------------------------------------------
37,687 Cookson Group 144,879
---------------------------------------------
18,700 Cowie Group PLC 108,902
---------------------------------------------
16,600 David S. Smith (Holdings) PLC 60,285
---------------------------------------------
18,400 Delta Plc 96,921
---------------------------------------------
5,950 EMI Group PLC 114,075
---------------------------------------------
34,200 FKI PLC 99,584
---------------------------------------------
9,355 GKN PLC 161,911
---------------------------------------------
10,030 General Accident 147,833
---------------------------------------------
17,450 General Electric Co. PLC 99,625
---------------------------------------------
7,386 Glaxo Wellcome PLC 147,647
---------------------------------------------
8,800 Granada Group PLC 124,953
---------------------------------------------
13,004 (a)Grand Metropolitan PLC 120,829
---------------------------------------------
28,841 Guardian Royal Exchange 132,103
---------------------------------------------
11,000 (a)Imperial Chemical Industries PLC 146,655
---------------------------------------------
360 Inchcape Plc 1,696
---------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES,
UNITS OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- ----------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------------
FOREIGN STOCKS--CONTINUED
-----------------------------------------------
UNITED KINGDOM--CONTINUED
-----------------------------------------------
21,649 Ladbroke Group Plc $ 81,454
-----------------------------------------------
13,500 Marks & Spencer PLC 112,242
-----------------------------------------------
32,300 Mirror Group PLC 115,716
-----------------------------------------------
15,560 Morgan Crucible Co 116,325
-----------------------------------------------
9,980 Pearson 117,546
-----------------------------------------------
4,284 RTZ Corp. PLC 73,584
-----------------------------------------------
8,800 Rank Group PLC 61,901
-----------------------------------------------
7,282 Reckitt & Colman PLC 102,684
-----------------------------------------------
16,400 Reed International Plc 161,237
-----------------------------------------------
48,600 Rugby Group PLC 93,813
-----------------------------------------------
24,000 Salvesen Christian 93,833
-----------------------------------------------
43,352 Sedgwick Group PLC 88,647
-----------------------------------------------
9,568 Siebe PLC 150,571
-----------------------------------------------
9,432 Smithkline Beecham PLC 162,163
-----------------------------------------------
19,514 Tomkins PLC 84,753
-----------------------------------------------
4,350 Zeneca Group 132,144
----------------------------------------------- ------------
Total 4,890,467
----------------------------------------------- ------------
TOTAL FOREIGN STOCKS 29,412,111
----------------------------------------------- ------------
TOTAL STOCKS (IDENTIFIED COST $92,558,570) 110,060,452
----------------------------------------------- ------------
BONDS--43.6%
-----------------------------------------------------------
TREASURY--24.4%
-----------------------------------------------------------
TREASURY SECURITIES--24.4%
-----------------------------------------------
$15,340,000 United States Treasury Note, 5.500%, 12/31/2000 14,893,299
-----------------------------------------------
8,385,000 United States Treasury Note, 5.625%, 11/30/2000 8,181,664
-----------------------------------------------
6,500,000 United States Treasury Note, 5.875%, 11/30/2001 6,345,495
-----------------------------------------------
3,400,000 United States Treasury Note, 6.250%, 8/31/2000 3,387,012
-----------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
---------- --------------------------------------------------- -----------
<C> <S> <C>
TREASURY--CONTINUED
--------------------------------------------------------------
TREASURY SECURITIES--CONTINUED
---------------------------------------------------
$5,850,000 United States Treasury Note, 6.375%, 3/31/2001 $ 5,834,439
---------------------------------------------------
7,090,000 United States Treasury Note, 6.375%, 9/30/2001 7,059,371
---------------------------------------------------
9,140,000 United States Treasury Note, 6.625%, 3/31/2002 9,182,592
--------------------------------------------------- -----------
TOTAL TREASURY 54,883,872
--------------------------------------------------- -----------
MORTGAGE-BACKED SECURITIES--7.4%
--------------------------------------------------------------
GOVERNMENT AGENCY--7.4%
---------------------------------------------------
714,231 Federal Home Loan Mortgage Corp., 9.50%, 30 Year,
6/1/2021 773,377
---------------------------------------------------
371,389 Federal Home Loan Mortgage Corp., 8.00%, 15 Year,
5/1/2006 379,281
---------------------------------------------------
496,780 Federal Home Loan Mortgage Corp., 7.00%, 30 Year,
1/1/2027 484,361
---------------------------------------------------
991,227 Federal Home Loan Mortgage Corp., 7.00%, 30 Year,
2/1/2026 967,249
---------------------------------------------------
949,051 Federal Home Loan Mortgage Corp., 7.50%, 30 Year,
7/1/2026 947,864
---------------------------------------------------
475,961 Federal Home Loan Mortgage Corp., 7.50%, 30 Year,
7/1/2026 475,366
---------------------------------------------------
624,986 Federal Home Loan Mortgage Corp., 8.00%, 15 Year,
10/1/2010 641,198
---------------------------------------------------
863,501 Federal Home Loan Mortgage Corp., 7.00%, 15 Year,
1/1/2011 859,995
---------------------------------------------------
649,922 Federal Home Loan Mortgage Corp., 6.50%, 15 Year,
5/1/2011 635,682
---------------------------------------------------
988,591 Federal Home Loan Mortgage Corp., 6.00%, 15 Year,
7/1/2011 948,197
---------------------------------------------------
952,536 Federal Home Loan Mortgage Corp., 8.00%, 30 Year,
9/1/2026 970,577
---------------------------------------------------
267,040 Federal National Mortgage Association, 7.00%, 30
Year, 5/1/2001 268,960
---------------------------------------------------
Federal National Mortgage Association, 8.50%, 30
540,224 Year, 3/1/2025 559,639
---------------------------------------------------
Federal National Mortgage Association, 6.00%, 30
459,236 Year, 2/1/2003 446,891
---------------------------------------------------
Federal National Mortgage Association, 8.50%, 30
123,168 Year, 2/1/2025 127,595
---------------------------------------------------
Federal National Mortgage Association, 7.50%, 30
832,165 Year, 7/1/2025 830,600
---------------------------------------------------
Federal National Mortgage Association, 7.00%, 30
458,307 Year, 8/1/2025 446,364
---------------------------------------------------
Federal National Mortgage Association, 6.50%, 30
504,384 Year, 10/1/2025 479,270
---------------------------------------------------
Federal National Mortgage Association, 6.50%, 30
1,179,801 Year, 10/1/2025 1,121,059
---------------------------------------------------
Government National Mortgage Association, 6.50%, 30
509,763 Year, 1/15/2024 486,824
---------------------------------------------------
Government National Mortgage Association, 7.00%, 30
238,323 Year, 5/15/2024 233,108
---------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ------------------------------------------ -----------
<C> <S> <C>
MORTGAGE-BACKED SECURITIES--CONTINUED
----------------------------------------------------
$261,808 Government National Mortgage Association,
8.00%, 30 Year, 11/15/2024 $ 267,618
------------------------------------------
497,877 Government National Mortgage Association,
7.50%, 30 Year, 3/15/2026 496,727
------------------------------------------
456,409 Government National Mortgage Association,
8.00%, 30 Year, 5/15/2025 465,679
------------------------------------------
987,473 Government National Mortgage Association,
7.50%, 30 Year, 2/15/2026 988,401
------------------------------------------
498,388 Government National Mortgage Association,
7.00%, 30 Year, 10/15/2026 484,683
------------------------------------------
709,956 Government National Mortgage Association,
9.00%, 30 Year, 11/15/2017 758,985
------------------------------------------ -----------
TOTAL MORTGAGE-BACKED SECURITIES 16,545,550
------------------------------------------ -----------
HIGH YIELD BONDS--4.0%
----------------------------------------------------
AEROSPACE & DEFENSE--0.0%
------------------------------------------
50,000 Tracor, Inc., Sr. Sub. Note, 8.50%,
3/1/2007 51,000
------------------------------------------ -----------
AUTOMOBILE--0.1%
------------------------------------------
75,000 Aftermarket Technology Co., Sr. Sub. Note,
12.00%, 8/1/2004 83,625
------------------------------------------
100,000 Collins & Aikman Products, Sr. Sub. Note,
11.50%, 4/15/2006 112,375
------------------------------------------ -----------
Total 196,000
------------------------------------------ -----------
BANKING--0.1%
------------------------------------------
175,000 First Nationwide Escrow, Sr. Sub. Note,
10.625%, 10/1/2003 190,750
------------------------------------------ -----------
BEVERAGE & TOBACCO--0.0%
------------------------------------------
100,000 Dimon Inc., Sr. Note, 8.875%, 6/1/2006 102,750
------------------------------------------ -----------
BROADCAST RADIO & TV--0.3%
------------------------------------------
(b)American Radio Systems Corp., 1,023
Exchangeable Pfd. Shares, $11.375 108,950
------------------------------------------
Chancellor Broadcasting Co., 1,000 PIK
Pfd. Shares, 12.25% 119,000
------------------------------------------
38,000 Chancellor Radio Broad., Sr. Sub. Note,
12.50%, 10/1/2004 44,650
------------------------------------------
100,000 Heritage Media Corp., Sr. Sub. Note,
8.75%, 2/15/2006 103,625
------------------------------------------
(b)Sinclair Broadcast Group, Inc., 500
Pfd. Shares, Series A, $11.625 53,000
------------------------------------------
100,000 Sinclair Broadcast Group, Sr. Sub. Note,
10.00%, 9/30/2005 104,500
------------------------------------------
100,000 Sullivan Broadcasting, Sr. Sub. Note,
10.25%, 12/15/2005 102,500
------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ------------------------------------------- ----------
<C> <S> <C>
HIGH YIELD BONDS--CONTINUED
-----------------------------------------------------
BROADCAST RADIO & TV--CONTINUED
-------------------------------------------
Young Broadcasting Corp., Sr. Sub. Note,
$ 50,000 10.125%, 2/15/2005 $ 52,500
------------------------------------------- ----------
Total 688,725
------------------------------------------- ----------
BUSINESS EQUIPMENT & SERVICES--0.1%
-------------------------------------------
Knoll, Inc., Sr. Sub. Note, 10.875%,
150,000 3/15/2006 165,375
-------------------------------------------
(b)Outsourcing Solutions, Sr. Sub. Note,
50,000 11.00%, 11/1/2006 53,563
-------------------------------------------
United Stationers Supply, Sr. Sub. Note,
100,000 12.75%, 5/1/2005 111,875
------------------------------------------- ----------
Total 330,813
------------------------------------------- ----------
CABLE TELEVISION--1.0%
-------------------------------------------
100,000 Australis Holding Pty Ltd, Unit, 11/1/2002 60,500
-------------------------------------------
Australis Holdings Pty Limited--100 Warrant 0
-------------------------------------------
Bell Cablemedia PLC, Sr. Disc. Note,
100,000 0/11.95%, 7/15/2004 89,500
-------------------------------------------
Cablevision Systems Corp., Sr. Sub. Note,
100,000 9.875%, 5/15/2006 104,250
-------------------------------------------
Cablevision Systems, Sr. Sub. Note, 9.25%,
50,000 11/1/2005 50,500
-------------------------------------------
Charter Communication Southeast, Sr. Note,
50,000 11.25%, 3/15/2006 53,500
-------------------------------------------
Comcast Corp., Sr. Sub. Deb., 9.375%,
100,000 5/15/2005 104,250
-------------------------------------------
(b)Diamond Cable, Sr. Disc. Note, 0/11.75%,
150,000 2/15/2007 87,938
-------------------------------------------
Echostar Satellite Broadcasting Corp. Sr.
100,000 Disc. Note, 0/13.125%, 3/15/2004 68,000
-------------------------------------------
International Cabletel, Sr. Defd. Cpn.
100,000 Note, 0/11.50%, 2/1/2006 68,625
-------------------------------------------
International Cabletel, Sr. Disc. Note,
100,000 0/12.75%, 4/15/2005 75,250
-------------------------------------------
100,000 Pegasus Media, Note, 12.50%, 7/1/2005 108,500
-------------------------------------------
Rogers Cablesystems Inc., Sr. Secd. 2nd
50,000 Priority Note, 10.00%, 12/1/2007 53,063
-------------------------------------------
Rogers Cablesystems Ltd., Sr. Secd. 2nd
50,000 Priority Note, 10.00%, 3/15/2005 53,563
-------------------------------------------
Telewest PLC, Sr. Disc. Deb., 0/11.00%,
200,000 10/1/2007 140,000
-------------------------------------------
UIH Australia/Pacific, Sr. Disc. Note,
100,000 0/14.00%, 5/15/2006 56,500
------------------------------------------- ----------
Total 1,173,939
------------------------------------------- ----------
CHEMICALS & PLASTICS--0.1%
-------------------------------------------
83,000 Polymer Group, Sr. Note, 12.25%, 7/15/2002 90,885
-------------------------------------------
RBX Corp., Sr. Sub. Note, Series B, 11.25%,
75,000 10/15/2005 64,219
-------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ----------------------------------------------------- -----------
<C> <S> <C>
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
CHEMICALS & PLASTICS--CONTINUED
-----------------------------------------------------
Sterling Chemical Holding, Sr. Disc. Note, 0/13.50%,
$ 75,000 8/15/2008 $ 49,313
-----------------------------------------------------
Sterling Chemicals Holdings, Inc. 75 Warrants,
8/15/2008 2,625
-----------------------------------------------------
Uniroyal Technology Corporation, Sr. Secd. Note,
50,000 11.75%, 6/1/2003 50,000
----------------------------------------------------- -----------
Total 257,042
----------------------------------------------------- -----------
CLOTHING & TEXTILES--0.1%
-----------------------------------------------------
(b)Collins & Aikman Floors, Sr. Sub. Note, 10.00%,
50,000 1/15/2007 50,250
-----------------------------------------------------
(b)Glenoit Corporation, Sr. Sub. Note, 11.00%,
50,000 4/15/2007 51,375
-----------------------------------------------------
Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%,
100,000 12/15/2005 104,000
----------------------------------------------------- -----------
Total 205,625
----------------------------------------------------- -----------
CONSUMER PRODUCTS--0.3%
-----------------------------------------------------
50,000 American Safety Razor Co., Sr. Note, 9.875%, 8/1/2005 52,313
-----------------------------------------------------
Hosiery Corp. Of America, Sr. Sub. Note, 13.75%,
100,000 8/1/2002 110,000
-----------------------------------------------------
Hosiery Corp. of America, 50 Common Shares 350
-----------------------------------------------------
ICON Fitness Corp., Sr. Disc. Note, 0/14.00%,
100,000 11/15/2006 53,500
-----------------------------------------------------
Playtex Family Products Corp., Sr. Sub. Note, 9.00%,
100,000 12/15/2003 101,000
-----------------------------------------------------
50,000 (b)Renaissance Cosmetics, Sr. Note, 11.75%, 2/15/2004 52,125
-----------------------------------------------------
Revlon Consumer Products, Sr. Sub. Note, 10.50%,
100,000 2/15/2003 106,375
-----------------------------------------------------
75,000 Simmons Co., Sr. Sub. Note, 10.75%, 4/15/2006 79,313
----------------------------------------------------- -----------
Total 554,976
----------------------------------------------------- -----------
CONTAINER & GLASS PRODUCTS--0.1%
-----------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%, 8/15/2004 52,688
-----------------------------------------------------
100,000 Packaging Resources Inc., Sr. Note, 11.625%, 5/1/2003 104,500
-----------------------------------------------------
(b)Plastic Containers, Inc., Sr. Secd. Note, 10.00%,
50,000 12/15/2006 52,313
----------------------------------------------------- -----------
Total 209,501
----------------------------------------------------- -----------
ECOLOGICAL SERVICES & EQUIPMENT--0.1%
-----------------------------------------------------
100,000 (b)Allied Waste, Sr. Sub. Note, 10.25%, 12/1/2006 106,750
-----------------------------------------------------
ICF Kaiser International, 120 Warrants 30
-----------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ------------------------------------------ -----------
<C> <S> <C>
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------
ECOLOGICAL SERVICES & EQUIPMENT--CONTINUED
------------------------------------------
(a)*Mid-American Waste System, Sr. Sub.
$100,000 Note, 12.25%, 2/15/2003 $ 54,500
------------------------------------------ -----------
Total 161,280
------------------------------------------ -----------
ELECTRONICS--0.0%
------------------------------------------
Advanced Micro Devices, Sr. Secd. Note,
50,000 11.00%, 8/1/2003 55,813
------------------------------------------
(b)Fairchild Semiconductor, Sr. Sub. Note,
50,000 10.125%, 3/15/2007 51,750
------------------------------------------ -----------
Total 107,563
------------------------------------------ -----------
FINANCIAL INTERMEDIARIES--0.0%
------------------------------------------
Olympic Financial Ltd., Unit, 11.50%,
50,000 3/15/2007 49,938
------------------------------------------ -----------
FOOD & DRUG RETAILERS--0.1%
------------------------------------------
Carr Gottstein Foods Co., Sr. Sub. Note,
100,000 12.00%, 11/15/2005 111,125
------------------------------------------
Ralph's Grocery Co., Sr. Note, 10.45%,
75,000 6/15/2004 82,500
------------------------------------------ -----------
Total 193,625
------------------------------------------ -----------
FOOD PRODUCTS--0.1%
------------------------------------------
International Home Foods, Sr. Sub. Note,
75,000 10.375%, 11/1/2006 77,813
------------------------------------------
(b)MBW Foods Inc., Sr. Sub. Note, 9.875%,
50,000 2/15/2007 50,375
------------------------------------------
Specialty Foods, Sr. Sub. Note, 11.25%,
50,000 8/15/2003 45,750
------------------------------------------
Van De Kamp's, Inc., Sr. Sub. Note,
100,000 12.00%, 9/15/2005 111,000
------------------------------------------ -----------
Total 284,938
------------------------------------------ -----------
FOREST PRODUCTS--0.1%
------------------------------------------
75,000 Four M Corp, Sr. Note, 12.00%, 6/1/2006 76,125
------------------------------------------
Stone Container, Sr. Note, 11.50%,
75,000 10/1/2004 79,125
------------------------------------------ -----------
Total 155,250
------------------------------------------ -----------
HEALTHCARE--0.1%
------------------------------------------
Dade International, Inc., Sr. Sub. Note,
125,000 11.125%, 5/1/2006 140,313
------------------------------------------
Tenet Healthcare, Sr. Sub. Note, 10.125%,
100,000 3/1/2005 109,250
------------------------------------------ -----------
Total 249,563
------------------------------------------ -----------
HOTELS, MOTELS, INNS & CASINOS--0.0%
------------------------------------------
Courtyard By Marriott, Sr. Note, 10.75%,
50,000 2/1/2008 53,938
------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ----------------------------------------------------- -----------
<C> <S> <C>
HIGH YIELD BONDS--CONTINUED
---------------------------------------------------------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.2%
-----------------------------------------------------
$100,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%, 7/15/2005 $ 110,500
-----------------------------------------------------
50,000 (b)Continental Global, Sr. Note, 11.00%, 4/1/2007 52,313
-----------------------------------------------------
Euramax International Plc, Sr. Sub. Note, 11.25%,
75,000 10/1/2006 79,500
-----------------------------------------------------
Fairfield Manufacturing Co., Inc., Sr. Sub. Note,
50,000 11.375%, 7/1/2001 53,000
-----------------------------------------------------
International Knife & Saw, Sr. Sub. Note, 11.375%,
50,000 11/15/2006 53,125
-----------------------------------------------------
50,000 Mettler-Toledo, Inc., Sr. Sub. Note, 9.75%, 10/1/2006 52,750
----------------------------------------------------- -----------
Total 401,188
----------------------------------------------------- -----------
LEISURE & ENTERTAINMENT--0.3%
-----------------------------------------------------
AMF Group, Inc., Sr. Sub. Disc. Note, 0/12.25%,
100,000 3/15/2006 70,250
-----------------------------------------------------
50,000 AMF Group, Inc., Sr. Sub. Note, 10.875%, 3/15/2006 53,750
-----------------------------------------------------
50,000 Cobblestone Golf, Sr. Note, 11.50%, 6/1/2003 52,563
-----------------------------------------------------
100,000 Premier Parks, Sr. Note, 12.00%, 8/15/2003 111,250
-----------------------------------------------------
Six Flags Theme Parks, Sr. Sub. Disc. Note, 0/12.25%,
150,000 6/15/2005 153,375
-----------------------------------------------------
100,000 Viacom Inc, Sub. Deb., 8.00%, 7/7/2006 98,000
----------------------------------------------------- -----------
Total 539,188
----------------------------------------------------- -----------
MACHINERY & EQUIPMENT--0.1%
-----------------------------------------------------
100,000 Alvey Systems, Sr. Sub. Note, 11.375%, 1/31/2003 103,250
-----------------------------------------------------
50,000 Clark Material Handling, Sr. Note, 10.75%, 11/15/2006 52,750
-----------------------------------------------------
67,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 76,715
-----------------------------------------------------
75,000 Tokheim Corp., Sr. Sub. Note, 11.50%, 8/1/2006 81,375
----------------------------------------------------- -----------
Total 314,090
----------------------------------------------------- -----------
OIL & GAS--0.1%
-----------------------------------------------------
75,000 Forcenergy Inc., Sr. Sub. Note, 9.50%, 11/1/2006 77,813
-----------------------------------------------------
United Meridian Corp., Sr. Sub. Note, 10.375%,
100,000 10/15/2005 108,250
----------------------------------------------------- -----------
Total 186,063
----------------------------------------------------- -----------
PRINTING & PUBLISHING--0.1%
-----------------------------------------------------
Garden State Newspapers, Inc., Sr. Sub. Note, 12.00%,
100,000 7/1/2004 111,000
-----------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ------------------------------------------------------ -----------
<C> <S> <C>
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
PRINTING & PUBLISHING--CONTINUED
------------------------------------------------------
Hollinger International, Sr. Sub. Note, 9.25%,
$ 50,000 3/15/2007 $ 50,750
------------------------------------------------------
K-III Communications Corp., 1,074 PIK Pfd. Shares,
Series B, 11.625% 117,200
------------------------------------------------------ -----------
Total 278,950
------------------------------------------------------ -----------
REAL ESTATE--0.0%
------------------------------------------------------
100,000 Trizec Finance, Sr. Note, 10.875%, 10/15/2005 111,250
------------------------------------------------------ -----------
STEEL--0.1%
------------------------------------------------------
(b)Bar Technologies, Inc. 50 Warrants, 4/01/2001 2,250
------------------------------------------------------
50,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 48,750
------------------------------------------------------
GS Technologies Operating Co., Inc., Sr. Note, 12.00%,
100,000 9/1/2004 107,750
------------------------------------------------------ -----------
Total 158,750
------------------------------------------------------ -----------
SURFACE TRANSPORTATION--0.2%
------------------------------------------------------
Ameritruck Distribution, Sr. Sub. Note, 12.25%,
50,000 11/15/2005 50,250
------------------------------------------------------
100,000 Gearbulk Holding Limited, Sr. Note, 11.25%, 12/1/2004 110,500
------------------------------------------------------
75,000 Statia Terminals, 1st Mtg. Note, 11.75%, 11/15/2003 80,250
------------------------------------------------------
100,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 108,500
------------------------------------------------------
100,000 Trism, Inc., Sr. Sub. Note, 10.75%, 12/15/2000 87,500
------------------------------------------------------ -----------
Total 437,000
------------------------------------------------------ -----------
TELECOMMUNICATIONS & CELLULAR--0.4%
------------------------------------------------------
American Communications, Sr. Disc. Note, 0/12.75%,
100,000 4/1/2006 49,000
------------------------------------------------------
Arch Communications, Sr. Disc. Note, 0/10.875%,
100,000 3/15/2008 53,000
------------------------------------------------------
Brooks Fiber Properties, Inc. Sr. Disc. Note,
100,000 0/10.875%, 3/1/2006 68,250
------------------------------------------------------
Cellular Communication, Sr. Disc. Note, 13.25%
150,000 accrual, 8/15/2000 110,438
------------------------------------------------------
Cellular Communications International, Inc. 150
Warrants, 8/15/2003 1,500
------------------------------------------------------
100,000 (b)McLeod, Sr. Disc. Note, 0/11.00%, 3/1/2007 60,000
------------------------------------------------------
Millicom International, Sr. Disc. Note, 0/13.50%,
200,000 6/1/2006 147,000
------------------------------------------------------
Nextel Communications, Inc., Sr. Disc. Note, 0/11.50%,
75,000 9/1/2003 64,594
------------------------------------------------------
Paging Network, Inc., Sr. Sub. Note, 10.00%,
50,000 10/15/2008 47,250
------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ------------------------------------------------------ -----------
<C> <S> <C>
HIGH YIELD BONDS--CONTINUED
----------------------------------------------------------------
TELECOMMUNICATIONS & CELLULAR--CONTINUED
------------------------------------------------------
$ 50,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 $ 47,750
------------------------------------------------------
PanAmSat Corp., 56 PIK Pfd. Shares, 12.75% 70,280
------------------------------------------------------
50,000 Phonetel Technologies, Sr. Note, 12.00%, 12/15/2006 50,250
------------------------------------------------------
50,000 (b)Qwest Communications, Sr. Note, 10.875%, 4/1/2007 53,750
------------------------------------------------------
50,000 Sygnet Wireless, Inc., Sr. Note, 11.50%, 10/1/2006 50,063
------------------------------------------------------
Teleport Communications, Sr. Disc. Note, 0/11.125%,
150,000 7/1/2007 107,438
------------------------------------------------------
125,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 126,250
------------------------------------------------------ -----------
Total 1,106,813
------------------------------------------------------ -----------
UTILITIES--0.1%
------------------------------------------------------
125,000 California Energy Co., Sr. Note, 10.25%, 1/15/2004 135,469
------------------------------------------------------
El Paso Electric Co., 1,146 PIK Pfd. Shares, Series A,
11.40% 125,774
------------------------------------------------------ -----------
Total 261,243
------------------------------------------------------ -----------
TOTAL HIGH YIELD BONDS 9,011,751
------------------------------------------------------ -----------
INVESTMENT GRADE BONDS--2.8%
----------------------------------------------------------------
BANKING--0.5%
------------------------------------------------------
250,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 258,273
------------------------------------------------------
250,000 Exp-Imp BK Korea, Note, 6.50%, 5/15/2000 248,014
------------------------------------------------------
250,000 National Bank of Canada, Sub. Note, 8.125%, 8/15/2004 262,358
------------------------------------------------------
Santander Finance Issuances, Bank Guarantee, 7.875%,
250,000 4/15/2005 258,400
------------------------------------------------------ -----------
Total 1,027,045
------------------------------------------------------ -----------
BEVERAGE & TOBACCO--0.0%
------------------------------------------------------
50,000 Philip Morris Cos., Inc., Deb., 6.00%, 7/15/2001 47,990
------------------------------------------------------ -----------
CABLE TELEVISION--0.2%
------------------------------------------------------
230,000 Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 260,107
------------------------------------------------------
250,000 TKR Cable Inc., 10.50%, 10/30/2007 274,308
------------------------------------------------------ -----------
Total 534,415
------------------------------------------------------ -----------
CHEMICALS & PLASTICS--0.1%
------------------------------------------------------
250,000 (b)Bayer Corp., Deb., 6.50%, 10/1/2002 246,025
------------------------------------------------------ -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
--------- ------------------------------------------------------ -----------
<C> <S> <C>
INVESTMENT GRADE BONDS--CONTINUED
----------------------------------------------------------------
FINANCIAL INTERMEDIARIES--0.4%
------------------------------------------------------
$300,000 DLJ, Note, 6.875%, 11/1/2005 $ 289,980
------------------------------------------------------
Green Tree Financial Corp, Sr. Sub. Note, 10.25%,
250,000 6/1/2002 282,908
------------------------------------------------------
Lehman Brothers, Inc., Sr. Sub. Note, 7.375%,
100,000 1/15/2007 98,886
------------------------------------------------------
150,000 Salomon, Inc., Note, 7.20%, 2/1/2004 148,712
------------------------------------------------------ -----------
Total 820,486
------------------------------------------------------ -----------
FOOD & DRUG RETAILERS--0.1%
------------------------------------------------------
250,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 263,393
------------------------------------------------------ -----------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.1%
------------------------------------------------------
250,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 272,965
------------------------------------------------------ -----------
INSURANCE--0.3%
------------------------------------------------------
200,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 213,150
------------------------------------------------------
225,000 Conseco, Inc., Sr. Note, 10.50%, 12/15/2004 262,904
------------------------------------------------------
250,000 Sunamerica Inc, Medium Term Note, 7.34%, 8/30/2005 249,421
------------------------------------------------------ -----------
Total 725,475
------------------------------------------------------ -----------
LEISURE & ENTERTAINMENT--0.1%
------------------------------------------------------
250,000 Viacom, Inc., Sr. Note, 7.75%, 6/1/2005 248,813
------------------------------------------------------ -----------
METALS & MINING--0.2%
------------------------------------------------------
250,000 Santa Fe Pacific Gold Co, Note, 8.375%, 7/1/2005 264,780
------------------------------------------------------
250,000 (b)Southern Peru Ltd., Note, 7.90%, 5/30/2007 252,423
------------------------------------------------------ -----------
Total 517,203
------------------------------------------------------ -----------
PRINTING & PUBLISHING--0.1%
------------------------------------------------------
250,000 News Amer Hldgs, Sr. Note, 7.50%, 3/1/2000 255,153
------------------------------------------------------ -----------
SERVICES--0.1%
------------------------------------------------------
200,000 Loewen Group Int'l, Sr. Note, 8.25%, 4/15/2003 204,668
------------------------------------------------------ -----------
SOVEREIGN GOVERNMENT--0.4%
------------------------------------------------------
(b)Freeport Terminal (Malta), Gtd. Global Note, 7.50%,
250,000 3/29/2009 253,248
------------------------------------------------------
Republic Of South Africa, Global Bond Deb., 9.625%,
250,000 12/15/1999 264,290
------------------------------------------------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ --------------------------------------------------- -----------
<C> <S> <C>
INVESTMENT GRADE BONDS--CONTINUED
----------------------------------------------------------------
SOVEREIGN GOVERNMENT--CONTINUED
---------------------------------------------------
$ 285,000 Republic of Colombia, Note, 7.25%, 2/15/2003 $ 275,738
--------------------------------------------------- -----------
Total 793,276
--------------------------------------------------- -----------
SURFACE TRANSPORTATION--0.2%
---------------------------------------------------
350,000 Trans Ocean Container Corp., Sr. Sub. Note, 12.25%,
7/1/2004 408,135
--------------------------------------------------- -----------
TOTAL INVESTMENT GRADE BONDS 6,365,042
--------------------------------------------------- -----------
FOREIGN BONDS--5.0%
----------------------------------------------------------------
AUSTRALIAN DOLLAR--0.3%
---------------------------------------------------
224,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 5/14/2003 176,480
---------------------------------------------------
283,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 8/14/2001 224,984
---------------------------------------------------
150,000 State Bank Of New South Wales, 12.25%, 2/26/2001 133,459
---------------------------------------------------
310,000 West Aust T Corp, Local Government Guarantee,
8.00%, 7/15/2003 245,374
--------------------------------------------------- -----------
Total 780,297
--------------------------------------------------- -----------
BELGIAN FRANC--0.0%
---------------------------------------------------
2,570,000 Belgian Government, Bond, 6.50%, 3/31/2005 76,401
--------------------------------------------------- -----------
CANADIAN DOLLAR--0.5%
---------------------------------------------------
569,000 Canada Government, Deb., 6.50%, 6/1/2004 419,249
---------------------------------------------------
400,000 Ontario Hydro, 9.00%, 6/24/2002 325,324
---------------------------------------------------
546,000 Ontario Hydro, Bond, 7.75%, 11/3/2005 426,225
--------------------------------------------------- -----------
Total 1,170,798
--------------------------------------------------- -----------
DANISH KRONE--0.1%
---------------------------------------------------
1,200,000 Denmark, 8.00%, 5/15/2003 205,349
--------------------------------------------------- -----------
FRENCH FRANC--0.3%
---------------------------------------------------
1,352,000 France O.A.T., Bond, 7.25%, 4/25/2006 259,204
---------------------------------------------------
319,000 France O.A.T., Bond, 7.50%, 4/25/2005 400,352
--------------------------------------------------- -----------
Total 659,556
--------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY PAR IN U.S.
AMOUNT DOLLARS
------------ ------------------------------------------------- -----------
<C> <S> <C>
FOREIGN BONDS--CONTINUED
---------------------------------------------------------------
DEUTSCHE MARK--1.0%
-------------------------------------------------
$ 400,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 $ 237,552
-------------------------------------------------
727,000 DG-HYPBK 5.75%, 1/22/2007 416,522
-------------------------------------------------
42,000,000 KFW International Finance, 6.00%, 11/29/1999 400,794
-------------------------------------------------
KFW International Finance, Bank Guarantee, 6.75%,
500,000 6/20/2005 310,470
-------------------------------------------------
800,000 KFW International Finance, 7.00%, 5/12/2000 148,755
-------------------------------------------------
1,050,000 Treuhandanstalt, 7.75%, 10/1/2002 690,355
------------------------------------------------- -----------
Total 2,204,448
------------------------------------------------- -----------
GREEK DRACHMA--0.3%
-------------------------------------------------
181,800,000 Hellenic Republic, FRN 14.00%, 10/23/2003 694,416
------------------------------------------------- -----------
IRISH POUND--0.1%
-------------------------------------------------
180,000 Treasury, Deb., 6.25%, 4/1/1999 272,674
------------------------------------------------- -----------
ITALIAN LIRA--0.5%
-------------------------------------------------
265,000,000 BTPS, Bond, 10.5%, 11/1/2000 173,281
-------------------------------------------------
1,225,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 806,087
------------------------------------------------- -----------
Total 979,368
------------------------------------------------- -----------
JAPANESE YEN--0.0%
-------------------------------------------------
10,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 99,828
------------------------------------------------- -----------
NETHERLANDS GUILDER--0.3%
-------------------------------------------------
285,000 Bank Ned Gemeenten, Bond, 6.375%, 1/4/2006 153,916
-------------------------------------------------
400,000 Bank Ned Gemeenten, Bond, 7.75%, 12/20/2004 234,278
-------------------------------------------------
220,000 Lkb-global Bd, Bank Guarantee, 6.00%, 1/25/2006 129,559
-------------------------------------------------
300,000 Netherlands Government, 6.00%, 1/15/2006 159,012
------------------------------------------------- -----------
Total 676,765
------------------------------------------------- -----------
NEW ZEALAND DOLLAR--0.1%
-------------------------------------------------
205,000 New Zealand Government, 8.00%, 2/15/2001 144,856
-------------------------------------------------
270,000 New Zealand Government, Bond, 8.00%, 7/15/1998 188,333
------------------------------------------------- -----------
Total 333,189
------------------------------------------------- -----------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
---------- -------------------------------------------------- ------------
<C> <S> <C>
FOREIGN BONDS--CONTINUED
--------------------------------------------------------------
NORWEGIAN KRONE--0.3%
--------------------------------------------------
$ 1,429,000 NGB, Bond, 9.00%, 1/31/1999 $ 216,215
--------------------------------------------------
1,620,000 Norwegian Government, Bond, 7.00%, 5/31/2001 245,047
--------------------------------------------------
Norwegian Government, Foreign Gov't. Guarantee,
1,215,000 5.75%, 11/30/2004 170,294
-------------------------------------------------- ------------
Total 631,556
-------------------------------------------------- ------------
PORTUGESE ESCUDO--0.2%
--------------------------------------------------
58,000,000 Portuguese Ot's, Bond, 11.875%, 2/23/2000 388,030
-------------------------------------------------- ------------
SPANISH PESETA--0.4%
--------------------------------------------------
40,000,000 Spanish Government, 10.00%, 2/28/2005 334,795
--------------------------------------------------
30,000,000 Spanish Government, Bond, 8.80%, 4/30/2006 237,472
--------------------------------------------------
16,740,000 Spanish Government, Bond, 9.40%, 4/30/1999 124,375
--------------------------------------------------
15,030,000 Spanish Government, Deb., 10.10%, 2/28/2001 119,743
-------------------------------------------------- ------------
Total 816,385
-------------------------------------------------- ------------
SWEDISH KRONA--0.1%
--------------------------------------------------
Stadshypotekskas, Foreign Gov't. Guarantee, Series
1,000,000 1551, 7.5%, 3/17/1999 133,800
-------------------------------------------------- ------------
UNITED KINGDOM POUND--0.5%
--------------------------------------------------
366,000 British Gas PLC, 8.875%, 7/8/2008 635,022
--------------------------------------------------
145,000 U.K. Treasury, Deb., 8.50%, 12/7/2005 256,361
--------------------------------------------------
180,000 U.K. Treasury, Bond, 7.50%, 12/7/2006 299,883
-------------------------------------------------- ------------
Total 1,191,266
-------------------------------------------------- ------------
TOTAL FOREIGN BONDS 11,314,126
-------------------------------------------------- ------------
TOTAL BONDS (IDENTIFIED COST $97,553,511) 98,120,341
-------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED GROWTH FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
---------- -------------------------------------------------- ------------
<C> <S> <C>
CASH EQUIVALENTS--6.2%
--------------------------------------------------------------
(C)REPURCHASE AGREEMENTS--6.2%
--------------------------------------------------------------
$13,865,000 BT Securities Corporation, 5.56%, dated 5/30/1997,
due 6/2/1997 (AT AMORTIZED COST) $ 13,865,000
-------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $203,977,081) (D) $222,045,793
-------------------------------------------------- ------------
</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, 1997, these securities amounted
to $1,851,807 which represents 0.8% of net assets.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
The investment in the repurchase agreement is through participation in a
joint account with other Federated funds.
(d) The cost of investments for federal tax purposes amounts to $203,977,081.
The net unrealized appreciation of investments on a federal tax basis
amounts to $18,068,712 which is comprised of $20,494,060 appreciation and
$2,425,348 depreciation at May 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($225,083,442) at May 31, 1997.
The following acronyms are used throughout this portfolio:
ADR--American Depositary Receipt
FRN--Floating Rate Note
GDR--Global Depository Receipt
PIK--Payment in Kind
PLC--Public Limited Company
*MID-AMERICAN WASTE SYSTEMS, INC.
On January 22, 1997, Mid-American Waste filed for protection under Chapter 11
of the Bankruptcy Code. The company has agreed to be acquired by USA Waste
Services, Inc. The timing and outcome of this potential transaction are
uncertain. Mid-American Waste has been deemed illiquid as a result of
contractual agreements relating to litigation.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ----------------------------------------------------------------
Total investments in securities, at value (identified and tax
cost $203,977,081) $222,045,793
- ----------------------------------------------------------------
Income receivable 2,175,599
- ----------------------------------------------------------------
Receivable for investments sold 2,354,583
- ----------------------------------------------------------------
Receivable for shares sold 263,690
- ----------------------------------------------------------------
Deferred expenses 12,867
- ---------------------------------------------------------------- ------------
Total assets 226,852,532
- ----------------------------------------------------------------
LIABILITIES:
- ----------------------------------------------------
Payable for investments purchased $ 1,162,480
- ----------------------------------------------------
Net payable for foreign currency exchange contracts
purchased 750
- ----------------------------------------------------
Payable to bank 397,653
- ----------------------------------------------------
Payable for taxes withheld 16,444
- ----------------------------------------------------
Accrued expenses 191,763
- ---------------------------------------------------- -----------
Total liabilities 1,769,090
- ---------------------------------------------------------------- ------------
NET ASSETS for 18,296,197 shares outstanding $225,083,442
- ---------------------------------------------------------------- ------------
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------
Paid in capital $203,070,741
- ----------------------------------------------------------------
Net unrealized appreciation of investments, translation of
assets and liabilities in foreign currency, and futures
contracts 18,054,754
- ----------------------------------------------------------------
Accumulated net realized gain on investments, foreign currency
transactions and futures contracts 3,009,795
- ----------------------------------------------------------------
Undistributed net investment income 948,152
- ---------------------------------------------------------------- ------------
Total Net Assets $225,083,442
- ---------------------------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER
SHARE:
- ----------------------------------------------------------------
INSTITUTIONAL SHARES:
- ----------------------------------------------------------------
$150,058,428 / 12,188,231 shares outstanding $12.31
- ---------------------------------------------------------------- ------------
SELECT SHARES:
- ----------------------------------------------------------------
$75,025,014 / 6,107,966 shares outstanding $12.28
- ---------------------------------------------------------------- ------------
</TABLE>
(See notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -------------------------------------------------------------
Dividends (net of foreign taxes withheld of $42,189) $ 986,202
- -------------------------------------------------------------
Interest (net of foreign taxes withheld of $11,610) 3,667,261
- ------------------------------------------------------------- -----------
Total income 4,653,463
- -------------------------------------------------------------
EXPENSES:
- -------------------------------------------------
Investment advisory fee $ 785,201
- -------------------------------------------------
Administrative personnel and services fee 79,367
- -------------------------------------------------
Custodian fees 55,042
- -------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 74,041
- -------------------------------------------------
Directors'/Trustees' fees 2,455
- -------------------------------------------------
Auditing fees 11,944
- -------------------------------------------------
Legal fees 2,621
- -------------------------------------------------
Portfolio accounting fees 46,725
- -------------------------------------------------
Distribution services fee--Select Shares 252,398
- -------------------------------------------------
Shareholder services fee--Institutional Shares 177,601
- -------------------------------------------------
Shareholder services fee--Select Shares 84,133
- -------------------------------------------------
Share registration costs 24,710
- -------------------------------------------------
Printing and postage 22,702
- -------------------------------------------------
Insurance premiums 2,900
- -------------------------------------------------
Taxes 2,762
- -------------------------------------------------
Miscellaneous 11,899
- ------------------------------------------------- ----------
Total expenses 1,636,501
- -------------------------------------------------
Waivers--
- --------------------------------------
Waiver of investment advisory fee $ (70,828)
- --------------------------------------
Waiver of distribution services fee--
Select Shares (84,133)
- --------------------------------------
Waiver of shareholder services fee-- (142,081)
Institutional Shares ----------
- --------------------------------------
Total waivers (297,042)
- ------------------------------------------------- ----------
Net expenses 1,339,459
- ------------------------------------------------------------- -----------
Net investment income 3,314,004
- ------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN
CURRENCY, AND FUTURES CONTRACTS:
- -------------------------------------------------------------
Net realized gain on investments, foreign currency
transactions, and futures contracts (net of foreign taxes
withheld of $373) 3,060,515
- -------------------------------------------------------------
Net change in unrealized appreciation of investments,
translation of assets and liabilities in foreign currency, 4,312,401
and futures contracts -----------
- -------------------------------------------------------------
Net realized and unrealized gain on investments, foreign 7,372,916
currency, and futures contracts -----------
- -------------------------------------------------------------
Change in net assets resulting from operations $10,686,920
- ------------------------------------------------------------- -----------
</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, 1997 NOVEMBER 30, 1996
- ------------------------------------------- ---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------
OPERATIONS--
- -------------------------------------------
Net investment income $ 3,314,004 $ 5,251,886
- -------------------------------------------
Net realized gain (loss) on investments,
foreign currency transactions, and futures
contracts ($3,060,515 and $4,840,279 net
gains, respectively, as computed for
federal tax purposes) 3,060,515 5,108,532
- -------------------------------------------
Net change in unrealized
appreciation/depreciation of investments,
translation of assets and liabilities in
foreign currency, and futures contracts 4,312,401 7,820,439
- ------------------------------------------- ------------ ------------
Change in net assets resulting from 10,686,920 18,180,857
operations ------------ ------------
- -------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------
Distributions from net investment income
- -------------------------------------------
Institutional Shares (2,568,090) (3,611,245)
- -------------------------------------------
Select Shares (975,398) (1,261,400)
- -------------------------------------------
Distributions from net realized gains on
investments, foreign currency transactions,
and futures contracts
- -------------------------------------------
Institutional Shares (3,327,990) (1,417,081)
- -------------------------------------------
Select Shares (1,494,754) (583,800)
- ------------------------------------------- ------------ ------------
Change in net assets resulting from
distributions to shareholders (8,366,232) (6,873,526)
- ------------------------------------------- ------------ ------------
SHARE TRANSACTIONS--
- -------------------------------------------
Proceeds from sale of shares 59,685,214 111,287,688
- -------------------------------------------
Net asset value of shares issued to
shareholders in payment of distributions
declared 6,025,203 4,340,056
- -------------------------------------------
Cost of shares redeemed (39,411,010) (26,142,343)
- ------------------------------------------- ------------ ------------
Change in net assets resulting from share 26,299,407 89,485,401
transactions ------------ ------------
- -------------------------------------------
Change in net assets 28,620,095 100,792,732
- -------------------------------------------
NET ASSETS:
- -------------------------------------------
Beginning of period 196,463,347 95,670,615
- ------------------------------------------- ------------ ------------
End of period (including undistributed net
investment income of $948,152 and
$1,177,636, respectively) $225,083,442 $196,463,347
- ------------------------------------------- ------------ ------------
</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
ENDED
(UNAUDITED) YEAR ENDED NOVEMBER 30,
MAY 31, --------------------------
1997 1996 1995 1994(A)
- ------------------------------------ ----------- -------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.23 $ 11.52 $ 9.82 $ 10.00
- ------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------
Net investment income 0.20 0.41 0.40 0.20
- ------------------------------------
Net realized and unrealized gain
(loss) on investments, foreign 0.40 0.97 1.70 (0.26)
currency, and futures contracts -------- -------- ------- -------
- ------------------------------------
Total from investment operations 0.60 1.38 2.10 (0.06)
- ------------------------------------ -------- -------- ------- -------
LESS DISTRIBUTIONS
- ------------------------------------
Distributions from net investment
income (0.22) (0.44) (0.40) (0.12)
- ------------------------------------
Distributions from net realized
gain on investments, foreign
currency transactions, and futures (0.30) (0.23) -- --
contracts -------- -------- ------- -------
- ------------------------------------
Total distributions (0.52) (0.67) (0.40) (0.12)
- ------------------------------------ -------- -------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 12.31 $ 12.23 $ 11.52 $ 9.82
- ------------------------------------ -------- -------- ------- -------
TOTAL RETURN (B) 5.08% 12.54% 21.79% (0.59%)
- ------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------
Expenses 1.05%* 1.05% 1.00% 0.89%*
- ------------------------------------
Net investment income 3.39%* 3.77% 4.29% 4.28%*
- ------------------------------------
Expense waiver/reimbursement (c) 0.27%* 0.40% 0.76% 0.90%*
- ------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------
Net assets, end of period (000
omitted) $150,058 $136,255 $68,313 $28,973
- ------------------------------------
Average commission rate paid (d) $ 0.0039 $ 0.0020
- ------------------------------------
Portfolio turnover 44% 95% 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.
(d) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
FINANCIAL HIGHLIGHTS--SELECT SHARES
- -------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED NOVEMBER 30,
MAY 31, -------------------------
1997 1996 1995 1994(A)
- ------------------------------------- ----------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.20 $ 11.50 $ 9.81 $10.00
- -------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------
Net investment income 0.16 0.36 0.23 0.15
- -------------------------------------
Net realized and unrealized gain
(loss) on investments, foreign
currency, 0.40 0.94 1.79 (0.24)
and futures contracts ------- ------- ------- ------
- -------------------------------------
Total from investment operations 0.56 1.30 2.02 (0.09)
- ------------------------------------- ------- ------- ------- ------
LESS DISTRIBUTIONS
- -------------------------------------
Distributions from net investment
income (0.18) (0.37) (0.33) (0.10)
- -------------------------------------
Distributions from net realized gain
on investments, foreign currency (0.30) (0.23) -- --
transactions, and futures contracts ------- ------- ------- ------
- -------------------------------------
Total distributions (0.48) (0.60) (0.33) (0.10)
- ------------------------------------- ------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 12.28 $ 12.20 $ 11.50 $ 9.81
- ------------------------------------- ------- ------- ------- ------
TOTAL RETURN (B) 4.73% 11.75% 20.95% (0.90%)
- -------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------
Expenses 1.75%* 1.75% 1.75% 1.70%*
- -------------------------------------
Net investment income 2.70%* 3.07% 3.48% 3.53%*
- -------------------------------------
Expense waiver/reimbursement (c) 0.30%* 0.45% 0.76% 1.15%*
- -------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------
Net assets, end of period (000
omitted) $75,025 $60,208 $27,358 $2,952
- -------------------------------------
Average commission rate paid (d) $0.0039 $0.0020
- -------------------------------------
Portfolio turnover 44% 95% 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.
(d) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997
- -------------------------------------------------------------------------------
(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 investment objective of the Fund is to seek capital appreciation.
The Fund offers two classes of shares: Institutional Shares and Select Shares.
(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--Listed equity securities are valued at the last sale
price reported on a national securities exchange. U.S. government
securities, listed corporate bonds, other fixed income and asset-backed
securities, and unlisted securities and private placement securities are
valued at prices furnished by an independent pricing service. Short-term
securities are valued at the prices provided by an independent pricing
service. However, short-term securities with remaining maturities of sixty
days or less at the time of purchase may be valued at amortized cost, which
approximates fair market value.
With respect to valuation of foreign securities, trading in foreign
countries may be completed at times which vary from the closing of the New
York Stock Exchange. Therefore, foreign securities are valued at the latest
closing price on the exchange on which they are traded prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign
currencies are translated into U.S. dollars at the foreign exchange rate in
effect at noon, eastern time, on the day the value of the foreign security
is determined.
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 the Fund is reasonably able to obtain
information.
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 over a period not to exceed five years from the Fund's
commencement date.
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, 1997, the Fund had realized gains of $44,449 on futures contracts.
As of May 31, 1997, the Fund had no outstanding futures contracts.
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
commitments for the delayed delivery of securities or foreign currency
exchange transactions. Purchased contracts are used to acquire exposure to
foreign currencies; whereas, contracts to sell are used to hedge the Fund's
securities against currency fluctuations. Risks may arise upon entering
these transactions from the potential inability of counter-parts to meet
the terms of their commitments and from unanticipated movements in security
prices or foreign exchange rates. The foreign currency transactions are
adjusted by the daily exchange rate of the underlying currency and any
gains or losses are recorded for financial statement purpose as unrealized
until the settlement date.
FEDERATED MANAGED GROWTH FUND
- -------------------------------------------------------------------------------
At May 31, 1997, the Fund had outstanding foreign currency commitments as
set forth below:
<TABLE>
<CAPTION>
IN CONTRACTS UNREALIZED
SETTLEMENT CONTRACTS TO EXCHANGE AT APPRECIATION
CONTRACTS DATE DELIVER/RECEIVE FOR VALUE (DEPRECIATION)
SOLD: ------------ --------------- -------- --------- --------------
<S> <C> <C> <C> <C> <C>
Austrian
Schilling June 2, 1997 443,164 $36,869 $37,012 $(143)
Pound Ster-
ling June 2, 1997 43,644 71,248 71,395 (147)
<CAPTION>
CONTRACTS
PURCHASED:
<S> <C> <C> <C> <C> <C>
Deutsche
Mark June 2, 1997 195,168 115,143 114,193 (950)
Pound Ster- 490
ling June 2, 1997 207,717 339,307 339,797 -----
Net
unrealized
depreciation
on foreign
exchange $(750)
contracts -----
</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 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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Trustees. The Fund will not incur any
registration costs upon such resales. The Fund's restricted securities are
valued at the price provided by dealers in the secondary market or, if no
market prices are available, at the fair value as determined by the Fund's
pricing committee.
FEDERATED MANAGED GROWTH FUND
- -------------------------------------------------------------------------------
Additional information on each restricted security held at May 31, 1997 is
as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
------------------------------ ------------------- ----------------
<S> <C> <C>
Chilectra S.A., ADR 2/28/1996 $ 16,284
Hub Power Co. 5/3/1996 18,288
Want Want Holdings 11/15/1996 73,074
American Radio Systems Corp. 1/27/1997-3/4/1997 102,715
Sinclair Broadcast Group, Inc. 4/2/1996 99,500
Outsourcing Solutions 10/31/1996 50,000
Diamond Cable 2/21/1997-3/1/1997 91,538
Collins & Aikman Floors 1/29/1997 50,000
Glenoit Corporation 3/26/1997 49,905
Renaissance Cosmetics 3/27/1997 50,000
Plastic Containers, Inc. 12/11/1996 50,000
Allied Waste 11/25/1996-3/5/1997 103,313
Fairchild Semiconductor 3/6/1997 50,000
MBW Foods Inc. 3/5/1997 50,000
Continental Global 3/26/1997 50,000
Bar Technologies, Inc. 8/28/1996 2,794
McLeod 2/27/1997 62,027
Qwest Communications 3/25/1997 50,000
Bayer Corp. 5/21/1996 245,903
Southern Peru Ltd. 4/23/1997 250,000
Freeport Terminal (Malta) 5/12/1995 247,740
</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. Transactions in shares were as follows:
FEDERATED MANAGED GROWTH FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, 1996
----------------------- -----------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- ---------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 3,342,037 $39,587,052 6,436,864 $74,361,820
- ----------------------------
Shares issued to
shareholders in payment of
distributions declared 315,747 3,735,285 233,538 2,669,402
- ----------------------------
Shares redeemed (2,609,231) (30,957,164) (1,460,401) (16,943,185)
- ---------------------------- ---------- ----------- ---------- -----------
Net change resulting from
Institutional Share 1,048,553 $12,365,173 5,210,001 $60,088,037
transactions ---------- ----------- ---------- -----------
- ----------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, 1996
----------------------- -----------------------
SELECT SHARES SHARES AMOUNT SHARES AMOUNT
- ---------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,692,742 $20,098,162 3,200,775 $36,925,868
- ----------------------------
Shares issued to
shareholders in payment of
distributions declared 193,862 2,289,918 146,513 1,670,654
- ----------------------------
Shares redeemed (712,898) (8,453,846) (792,466) (9,199,158)
- ---------------------------- ---------- ----------- ---------- -----------
Net change resulting from
Select Share transactions 1,173,706 $19,934,234 2,554,822 $29,397,364
- ---------------------------- ---------- ----------- ---------- -----------
Net change resulting from 2,222,259 $26,299,407 7,764,823 $89,485,401
share transactions ---------- ----------- ---------- -----------
- ----------------------------
</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. (the "Sub-Adviser"), the Sub-Adviser,
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 Investors for the period. The administrative fee received during
the period of the Administrative Services Agreement shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
FEDERATED MANAGED GROWTH FUND
- -------------------------------------------------------------------------------
DISTRIBUTION 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 net
assets, 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 expenses of $88,474 were borne
initially by Adviser. The Fund has agreed to reimburse Adviser for the
organizational expenses during the five year period following effective
date. For the period ended May 31, 1997, the Fund paid $8,949 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, 1997, were as follows:
<TABLE>
<S> <C>
- ---------
PURCHASES $103,128,033
- --------- ------------
SALES $ 85,161,442
- --------- ------------
</TABLE>
(6) 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,
FEDERATED MANAGED GROWTH FUND
- -------------------------------------------------------------------------------
political or economic developments may have an effect on the liquidity and
volatility of portfolio securities and currency holdings.
At May 31, 1997, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF NET % OF NET
INDUSTRY ASSETS INDUSTRY ASSETS
------------------------------- -------- ------------------------------------- --------
<S> <C> <C> <C>
Aerospace & Military Technology 0.1 Government Agency 7.4
Agency 0.2 Healthcare 5.2
Automotive 0.4 Industrial Components 0.1
Banking 2.0 Industrial Products & Equipment 0.3
Basic Industry 0.3 Insurance 0.8
Beverage & Tobacco 0.3 Leisure & Entertainment 0.6
Broadcast Radio & T.V. 0.7 Machinery & Engineering 0.6
Building Materials & Components 0.1 Machinery & Equipment 0.1
Business & Public Services 0.1 Manufacturing 0.6
Business Equipment & Services 0.2 Metals & Mining 0.3
Cable Television 0.8 Metals--Steel 0.1
Chemicals 0.4 Miscellaneous Materials & Commodities 0.5
Chemicals & Plastics 0.2 Multi-Industry 0.4
Clothing & Textiles 0.1 Natural Gas Distribution 0.2
Construction & Housing 0.1 Oil & Gas 0.6
Consumer Durables 1.7 Pharmaceuticals 0.1
Consumer Non-Durables 3.3 Printing & Publishing 0.2
Container & Glass Products 0.1 Producer Manufacturing 2.4
Ecological Services & Equipment 0.1 Real Estate 1.1
Electrical Utilities 1.7 Recreation, Other Consumer Goods 0.2
Electrical & Electronics 0.7 Retail Trade 2.7
Electronics 0.8 Services 2.1
Energy Minerals 3.5 Sovereign 2.7
Energy Sources 0.5 Sovereign Government 9.9
Finance 5.2 State & Provincial 0.2
Financial Intermediaries 0.7 Surface Transportation 0.4
Financial Services 0.2 Technology 3.6
Food & Drug Retailers 0.2 Telecommunications & Cellular 1.5
Food & Household Products 0.8 Transportation 0.4
Forest Products & Paper 0.1 Treasury Securities 24.4
Utilities 3.6
</TABLE>
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. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President, Treasurer,
John E. Murray, Jr. and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
Karen M. Brownlee
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors
only when preceded or accompanied by the fund's prospectuses which
contain facts concerning its objective and policies, management fees,
expenses and other information.
[LOGO OF MANAGED SERIES TRUST]
FEDERATED
MANAGED AGGRESSIVE
GROWTH FUND
[LOGO OF MANAGED SERIES TRUST]
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, 1997
[LOGO OF FEDERATED INVESTORS]
Federated Securities Corp., Distributor
Federated Investors Tower
Pittsburgh, PA 15222-3779
Cusip 56166K701
Cusip 56166K800
G00514-01 (7/97)
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, 1996
through May 31, 1997. Included in this report is an investment review,
followed by a complete listing of the fund's holdings and its financial
statements. In addition, separate Financial Highlights tables have been
included for the fund's Institutional Shares and Select Shares.
During the reporting period, the highly valued U.S. stock market, where the
majority of the fund's $102 million portfolio was invested, continued its
climb while experiencing periodic volatility. The international stock market,
where approximately 20% of the fund's portfolio was invested, recorded
positive gains that did not match those of U.S. stocks.* The U.S. bond
market--where approximately 25% of the fund's portfolio was invested--was
impacted by rising rates that caused bond prices to fall, while a strong U.S.
dollar negatively impacted the returns of foreign bonds, which accounted for
5% of portfolio assets.
In this environment, the fund's Institutional Shares delivered a total return
of 5.52%** through a share price increase of $0.15, dividends totaling $0.15
per share, and capital gains totaling $0.36 per share. The fund's Select
Shares produced a total return of 5.17%** through a share price increase of
$0.15, dividends totaling $0.11 per share, and capital gains totaling $0.36
per share.
Thank you for pursuing your long-term goals through the high level of
diversification and professional management of Federated Managed Aggressive
Growth Fund. As always, we welcome your comments and suggestions.
Sincerely,
Glen R. Johnson
LOGO
President
July 15, 1997
*Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards.
**Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
PERFORMANCE FOR SIX-MONTH PERIOD ENDED MAY 31, 1997
The six-month period ended May 31, 1997 was a generally favorable one for
financial assets and Federated Managed Aggressive Growth Fund participated in
the advance. For the six months ended May 31, 1997, an investor in the fund's
Institutional Shares had a total return of 5.52%*, while an investor in the
fund's Select Shares had a total return of 5.17%*. However, performance among
asset classes showed wide variation. Stocks of large U.S. companies did
especially well as investors continued to favor companies with broad product
lines and lower perceived fundamental risk. Small company stocks had good
returns for the reporting period but still lagged large company stocks.
Foreign stocks generally had good returns in local currency terms, but dollar
strength in the foreign exchange market caused returns in dollar terms to be
more moderate. While bond prices were hurt by rising interest rates, their
higher income yield cushioned the impact and bonds generally provided modest
positive returns.
ASSET ALLOCATION AS OF MAY 31, 1997
Federated Managed Aggressive Growth Fund operates on an investment philosophy
that, over time, an investor with a diversified portfolio may 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, 1997.
* Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
ASSET CATEGORIES AS A PERCENTAGE OF TOTAL ASSETS
<TABLE>
<CAPTION>
PERMITTED PERCENTAGE AS OF
ASSET CATEGORY RANGE MAY 31, 1997
-------------------------------- --------- ----------------
<S> <C> <C>
BONDS(1) 0-40 31
U.S. Treasury Securities 0-32.5 14
Mortgage-Backed Securities 0-12.5 5
Investment Grade Corporate Bonds 0-12.5 3
High Yield Corporate Bonds 0-16 4
Foreign Bonds 0-16 5
EQUITIES(1) 60-100 70
Large Company Stocks 0-100 25
Small Company Stocks 0-40 15
Foreign Stocks 0-40 20
Equity Reserves 0-20 10
</TABLE>
--------
(1) Bonds convertible into equity securities at a price below the
closing price of the underlying equity securities on May 31, 1997
have been included under the appropriate equity asset category.
Over the reporting period, as well as the past several years, investors have
been faced with 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 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 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
Management has kept a defensive bond position to help reduce 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 reporting period in December 1996 and
fell rapidly in the spring of 1997 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 years, 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 allocation to high yield
corporate bonds was reduced in the spring of 1997 as their yield advantage
over U.S. Treasuries narrowed substantially as investors in high yield bonds
became optimistic that
credit problems would be minimal over the next few years. That attitude may
make high yield corporate bonds more vulnerable than normal to any unexpected
weakening in the U.S. economy.
STRUCTURE OF THE EQUITY PORTFOLIO
Since early June 1995, the severe overvaluation of the market caused fund
management to hold a defensive position on the equity market. This defensive
position involves holding equity reserves at 10%, with the above average
allocation coming from a reduction in the allocation to U.S. large company
stocks.
Historically, small company stocks are awarded premium valuations versus large
company stocks because smaller companies often have superior growth prospects.
However, in the recent market environment, investors focused on earnings
stability, and small company stocks were relatively cheap as their premium for
growth was below normal. Recognizing that such trends can last for extended
periods, fund management only held a normal position in small company stocks
despite their attractive valuations during the reporting period.
Foreign stocks are somewhat cheaper than U.S. stocks and foreign economies are
at earlier stages of the business cycle. This implies that return prospects
for foreign stocks are better than normal relative to U.S. stocks, and fund
management believes an above-normal foreign stock position is appropriate.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
PORTFOLIO OF INVESTMENTS
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ----------------------------- ------------
<C> <S> <C>
STOCKS--59.3%
-----------------------------------------
LARGE-CAP STOCKS--25.1%
-----------------------------
BASIC INDUSTRY--1.0%
-----------------------------
4,500 Betz Laboratories, Inc. $ 286,875
-----------------------------
2,900 Dow Chemical Co. 241,788
-----------------------------
20,900 LTV Corporation 292,600
-----------------------------
7,400 (a)Morton International, Inc. 238,650
----------------------------- ------------
Total 1,059,913
----------------------------- ------------
CONSUMER DURABLES--1.3%
-----------------------------
6,100 General Motors Corp., Class H 336,263
-----------------------------
3,300 General Motors Corp. 188,925
-----------------------------
9,000 Martin Marietta Materials 258,750
-----------------------------
19,000 Rubbermaid, Inc. 529,625
----------------------------- ------------
Total 1,313,563
----------------------------- ------------
CONSUMER NON-DURABLES--2.9%
-----------------------------
2,700 CPC International, Inc. 232,200
-----------------------------
5,400 Kimberly-Clark Corp. 270,675
-----------------------------
17,500 PepsiCo, Inc. 643,125
-----------------------------
4,950 Philip Morris Cos., Inc. 217,800
-----------------------------
5,900 RJR Nabisco Holdings Corp. 191,013
-----------------------------
14,100 Russell Corp. 431,813
-----------------------------
4,800 Tambrands, Inc. 231,600
-----------------------------
2,500 Unilever N.V. 484,375
-----------------------------
3,300 V.F. Corp. 257,813
----------------------------- ------------
Total 2,960,414
----------------------------- ------------
ENERGY MINERALS--3.1%
-----------------------------
4,400 Amerada-Hess Corp. 235,400
-----------------------------
1,700 Atlantic Richfield Co. 247,350
-----------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------
LARGE-CAP STOCKS--CONTINUED
-------------------------------------
ENERGY MINERALS--CONTINUED
-------------------------------------
5,500 Chevron Corp. $ 385,000
-------------------------------------
6,900 Exxon Corp. 408,825
-------------------------------------
9,900 Occidental Petroleum Corp. 230,175
-------------------------------------
1,200 Royal Dutch Petroleum Co. 234,300
-------------------------------------
13,000 Sun Co., Inc. 388,375
-------------------------------------
3,800 Texaco, Inc. 414,675
-------------------------------------
13,700 USX-Marathon Group 407,575
-------------------------------------
3,300 (a)Western Atlas, Inc. 223,575
------------------------------------- ------------
Total 3,175,250
------------------------------------- ------------
FINANCE--3.6%
-------------------------------------
11,900 Allmerica Financial Corp. 432,863
-------------------------------------
6,146 Allstate Corp. 452,499
-------------------------------------
7,980 Bear Stearns Cos., Inc. 259,350
-------------------------------------
3,600 CIGNA Corp. 625,500
-------------------------------------
6,300 Dean Witter, Discover & Co. 259,875
-------------------------------------
5,700 Federal National Mortgage Association 248,663
-------------------------------------
4,200 Marsh & McLennan Cos., Inc. 553,350
-------------------------------------
5,000 National City Corp. 257,500
-------------------------------------
4,500 Providian Corp. 269,438
-------------------------------------
5,400 Travelers Group, Inc. 296,325
------------------------------------- ------------
Total 3,655,363
------------------------------------- ------------
HEALTH CARE--3.3%
-------------------------------------
6,000 Abbott Laboratories 378,000
-------------------------------------
3,600 (a)American Home Products Corp. 274,500
-------------------------------------
8,000 Bard (C.R.), Inc. 256,000
-------------------------------------
18,600 (a)Beverly Enterprises, Inc. 262,725
-------------------------------------
10,900 (a)Biomet, Inc. 203,694
-------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ----------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------
LARGE-CAP STOCKS--CONTINUED
-----------------------------------------
HEALTH CARE--CONTINUED
-----------------------------------------
7,200 Bristol-Myers Squibb Co. $ 528,300
-----------------------------------------
7,000 Columbia/HCA Healthcare Corp. 256,375
-----------------------------------------
13,500 (a)Healthsource, Inc. 290,250
-----------------------------------------
3,000 Merck & Co., Inc. 269,625
-----------------------------------------
3,200 Smithkline Beecham, ADR 280,000
-----------------------------------------
5,800 United Healthcare Corp. 327,700
----------------------------------------- ------------
Total 3,327,169
----------------------------------------- ------------
PRODUCER MANUFACTURING--1.8%
-----------------------------------------
20,300 ITT Industries, Inc. 502,425
-----------------------------------------
10,300 Ingersoll-Rand Co. 561,350
-----------------------------------------
10,200 (a)Lexmark International Group, Class A 269,025
-----------------------------------------
2,400 Loews Corp. 233,400
-----------------------------------------
6,400 PACCAR, Inc. 289,600
----------------------------------------- ------------
Total 1,855,800
----------------------------------------- ------------
RETAIL TRADE--1.8%
-----------------------------------------
11,600 Dayton-Hudson Corp. 558,250
-----------------------------------------
33,300 (a)K Mart Corp. 466,200
-----------------------------------------
6,200 (a)Meyer (Fred), Inc. 284,425
-----------------------------------------
17,300 Wal-Mart Stores, Inc. 514,675
----------------------------------------- ------------
Total 1,823,550
----------------------------------------- ------------
SERVICES--1.2%
-----------------------------------------
8,300 Block (H&R), Inc. 273,900
-----------------------------------------
12,300 Browning-Ferris Industries, Inc. 402,825
-----------------------------------------
12,000 Readers Digest Association, Inc., Class A 297,000
-----------------------------------------
5,500 (a)Viacom, Inc., Class A 165,688
-----------------------------------------
3,100 (a)Viacom, Inc., Class B 92,031
----------------------------------------- ------------
Total 1,231,444
----------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------
LARGE-CAP STOCKS--CONTINUED
-------------------------------------
TECHNOLOGY--1.8%
-------------------------------------
8,500 AMP, Inc. $ 349,563
-------------------------------------
7,600 (a)Cabletron Systems, Inc. 334,400
-------------------------------------
3,400 International Business Machines Corp. 294,100
-------------------------------------
4,400 Lucent Technologies, Inc. 279,950
-------------------------------------
3,700 Raytheon Co. 176,675
-------------------------------------
10,800 (a)Storage Technology Corp. 440,100
------------------------------------- ------------
Total 1,874,788
------------------------------------- ------------
TRANSPORTATION--0.6%
-------------------------------------
9,800 CNF Transportation, Inc. 316,050
-------------------------------------
9,200 (a)KLM Royal Dutch Airlines 270,250
------------------------------------- ------------
Total 586,300
------------------------------------- ------------
UTILITIES--2.7%
-------------------------------------
6,400 CMS Energy Corp. 215,200
-------------------------------------
4,700 Coastal Corp. 235,588
-------------------------------------
4,300 (a)Columbia Gas System, Inc. 276,813
-------------------------------------
4,400 FPL Group, Inc. 204,600
-------------------------------------
8,000 GTE Corp. 353,000
-------------------------------------
10,900 Houston Industries, Inc. 226,175
-------------------------------------
13,200 MCI Communications Corp. 506,550
-------------------------------------
8,500 P G & E Corp. 196,563
-------------------------------------
36,000 (a)Tele-Communications, Inc., Class A 544,500
------------------------------------- ------------
Total 2,758,989
------------------------------------- ------------
TOTAL LARGE-CAP STOCKS 25,622,543
------------------------------------- ------------
SMALL-CAP STOCKS--15.0%
-------------------------------------
BASIC INDUSTRY--0.9%
-------------------------------------
15,000 (a)Chirex, Inc. 172,500
-------------------------------------
4,000 Donaldson Company, Inc. 146,500
-------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ---------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
----------------------------------------------------
SMALL-CAP STOCKS--CONTINUED
----------------------------------------
BASIC INDUSTRY--CONTINUED
----------------------------------------
5,300 (a)Fibreboard Corp. $ 288,188
----------------------------------------
7,000 (a)Royal Group Technologies Ltd. 171,500
----------------------------------------
11,300 Spartech Corp. 142,663
---------------------------------------- ------------
Total 921,351
---------------------------------------- ------------
CONSUMER DURABLES--0.4%
----------------------------------------
5,500 Carlisle Cos., Inc. 167,750
----------------------------------------
6,200 (a)Equity Marketing, Inc. 116,250
----------------------------------------
5,400 Wynns International, Inc. 133,650
---------------------------------------- ------------
Total 417,650
---------------------------------------- ------------
CONSUMER NON-DURABLES--0.6%
----------------------------------------
3,900 (a)Blyth Industries, Inc. 173,550
----------------------------------------
10,400 (a)North Face, Inc. 189,800
----------------------------------------
8,700 (a)Sport-Haley Inc. 165,300
----------------------------------------
8,600 (a)USA Detergents, Inc. 111,800
---------------------------------------- ------------
Total 640,450
---------------------------------------- ------------
ENERGY MINERALS--0.6%
----------------------------------------
3,800 Devon Energy Corp. 141,550
----------------------------------------
4,200 (a)EVI, Inc. 158,025
----------------------------------------
9,000 (a)Tuboscope Vetco International Corp. 146,250
----------------------------------------
3,900 Vintage Petroleum, Inc. 132,600
---------------------------------------- ------------
Total 578,425
---------------------------------------- ------------
FINANCE--2.6%
----------------------------------------
8,800 Aames Financial Corp 113,300
----------------------------------------
4,200 CMAC Investment Corp. 174,825
----------------------------------------
9,200 (a)D & N Financial Corp. 163,300
----------------------------------------
4,590 (a)Delphi Financial Group, Inc., Class A 174,420
----------------------------------------
10,300 (a)Delta Financial Corp. 164,800
----------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------------
SMALL-CAP STOCKS--CONTINUED
-------------------------------------------
FINANCE--CONTINUED
-------------------------------------------
3,500 Executive Risk, Inc. $ 182,438
-------------------------------------------
6,100 (a)FIRSTPLUS Financial Group, Inc. 155,550
-------------------------------------------
3,500 Frontier Insurance Group, Inc. 192,063
-------------------------------------------
7,500 (a)Leasing Solutions, Inc. 113,438
-------------------------------------------
4,500 Peoples Heritage Financial Group 149,063
-------------------------------------------
8,100 (a)Prime Service, Inc. 198,450
-------------------------------------------
3,800 Redwood Trust, Inc. 217,075
-------------------------------------------
4,800 Sirrom Capital Corp. 186,600
-------------------------------------------
10,600 (a)Southern Pacific Funding 148,400
-------------------------------------------
3,400 TCF Financial Corp. 144,500
-------------------------------------------
4,100 Vesta Insurance Group, Inc. 188,088
------------------------------------------- ------------
Total 2,666,310
------------------------------------------- ------------
HEALTH CARE--1.9%
-------------------------------------------
8,800 (a)American HomePatient, Inc. 171,600
-------------------------------------------
7,700 (a)Cambridge Neuroscience, Inc. 75,075
-------------------------------------------
5,100 (a)Curative Technologies, Inc. 141,844
-------------------------------------------
12,600 (a)Cyanotech Corp. 83,475
-------------------------------------------
9,800 (a)FPA Medical Management, Inc. 196,000
-------------------------------------------
5,600 (a)Genesis Health Ventures, Inc. 184,100
-------------------------------------------
5,650 (a)Medicis Pharmaceutical Corp., Class A 193,513
-------------------------------------------
16,900 (a)Prime Medical Services 188,013
-------------------------------------------
7,300 (a)Respironics, Inc. 147,825
-------------------------------------------
10,100 (a)Rotech Medical Corp. 170,438
-------------------------------------------
3,200 Shared Medical Systems Corp. 169,600
-------------------------------------------
4,400 (a)Universal Health Services, Inc., Class B 178,200
-------------------------------------------
9,000 (a)VIDAMED, Inc. 65,250
------------------------------------------- ------------
Total 1,964,933
------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-------------------------------------------------
SMALL-CAP STOCKS--CONTINUED
-------------------------------------
PRODUCER MANUFACTURING--1.0%
-------------------------------------
7,700 (a)AFC Cable Systems, Inc. $ 210,788
-------------------------------------
9,200 (a)Ballantyne of Omaha, Inc. 148,350
-------------------------------------
6,600 (a)Cable Design Technologies, Class A 181,500
-------------------------------------
23,800 (a)Raster Graphics Inc. 175,525
-------------------------------------
4,300 (a)Sinter Metals, Inc. 158,563
-------------------------------------
7,300 (a)US Office Products Co. 180,675
------------------------------------- ------------
Total 1,055,401
------------------------------------- ------------
RETAIL TRADE--1.6%
-------------------------------------
7,700 (a)Amrion, Inc. 179,025
-------------------------------------
3,400 (a)CDW Computer Centers, Inc. 166,600
-------------------------------------
7,700 (a)Central Garden & Pet Co. 185,763
-------------------------------------
4,500 (a)Express Scripts, Inc., Class A 205,313
-------------------------------------
9,600 (a)Just For Feet, Inc. 188,400
-------------------------------------
5,700 (a)Microage, Inc. 103,313
-------------------------------------
10,900 (a)Paul Harris Stores, Inc. 189,388
-------------------------------------
4,700 (a)Pomeroy Computer Resources 108,100
-------------------------------------
4,100 (a)Proffitts, Inc. 163,488
-------------------------------------
4,000 Riser Foods, Inc. 166,750
------------------------------------- ------------
Total 1,656,140
------------------------------------- ------------
SERVICES--1.4%
-------------------------------------
5,600 (a)American Radio Systems Corp. 208,600
-------------------------------------
5,400 (a)BARRA, Inc. 159,300
-------------------------------------
3,300 (a)Caribiner International, Inc. 213,675
-------------------------------------
7,500 (a)FactSet Research Systems 146,250
-------------------------------------
3,200 (a)Newpark Resources, Inc. 168,000
-------------------------------------
6,400 (a)Personnel Group of America, Inc. 194,400
-------------------------------------
9,600 (a)Prime Hospitality Corp. 178,800
-------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- -------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------
SMALL-CAP STOCKS--CONTINUED
--------------------------------------
SERVICES--CONTINUED
--------------------------------------
5,400 (a)SFX Broadcasting, Inc. $ 174,150
-------------------------------------- ------------
Total 1,443,175
-------------------------------------- ------------
TECHNOLOGY--3.4%
--------------------------------------
13,800 (a)ACT Networks, Inc. 243,225
--------------------------------------
5,200 (a)Adtran, Inc. 139,100
--------------------------------------
8,200 (a)Alphanet Solutions, Inc. 154,775
--------------------------------------
5,900 (a)Anadigics, Inc. 195,438
--------------------------------------
24,100 (a)Award Software International, Inc. 325,350
--------------------------------------
8,300 (a)BA Merchant Services, Inc., Class A 135,913
--------------------------------------
10,000 (a)Benchmarq Microelectronics, Inc. 201,250
--------------------------------------
5,900 (a)Claremont Technology Group 134,963
--------------------------------------
6,700 (a)Cybex Computer Products Corp. 121,856
--------------------------------------
4,100 (a)Ducommun, Inc. 107,625
--------------------------------------
4,000 (a)Dynatech Corp. 150,000
--------------------------------------
6,800 (a)ESS Technology, Inc. 105,400
--------------------------------------
5,500 (a)Elexsys International, Inc. 82,500
--------------------------------------
10,400 (a)Exar Corp. 191,100
--------------------------------------
6,300 (a)II-VI, Inc. 122,850
--------------------------------------
5,100 (a)Integrated Measurement Systems, Inc 85,425
--------------------------------------
10,300 (a)Mastech Corp. 185,400
--------------------------------------
10,200 (a)Micro Linear Corp. 204,000
--------------------------------------
3,200 (a)National Processing, Inc. 26,800
--------------------------------------
9,100 (a)Network General Corp. 167,213
--------------------------------------
2,800 (a)Perceptron, Inc. 79,100
--------------------------------------
5,900 (a)Stratasys, Inc. 140,494
--------------------------------------
8,200 (a)Tollgrade Communications, Inc. 190,650
-------------------------------------- ------------
Total 3,490,427
-------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------------------ ------------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------------------------
SMALL-CAP STOCKS--CONTINUED
------------------------------------------------
TRANSPORTATION--0.2%
------------------------------------------------
6,100 (a)Atlas Air, Inc. $ 175,375
------------------------------------------------ ------------
UTILITIES--0.4%
------------------------------------------------
3,400 CMS Energy Corp. 114,325
------------------------------------------------
3,300 (a)Calenergy, Inc. 136,125
------------------------------------------------
1,900 Cincinnati Bell, Inc. 116,850
------------------------------------------------ ------------
Total 367,300
------------------------------------------------ ------------
TOTAL SMALL-CAP STOCKS 15,376,937
------------------------------------------------ ------------
FOREIGN EQUITY--19.2%
------------------------------------------------
ARGENTINA--0.3%
------------------------------------------------
20,000 (a)Acindar Industria Argentina de Aceros SA 47,324
------------------------------------------------
1,178 Banco Frances del Rio de la Plata S.A., ADR 38,727
------------------------------------------------
4,523 (a)Compania Naviera Perez Companc SA, Class B 34,618
------------------------------------------------
802 (a)IRSA Inversiones y Representaciones S.A., GDR 31,378
------------------------------------------------
1,500 (a)Telecom Argentina S.A., ADR 80,063
------------------------------------------------
2,400 Telefonica De Argentina ADR 87,000
------------------------------------------------ ------------
Total 319,110
------------------------------------------------ ------------
AUSTRALIA--0.6%
------------------------------------------------
20,000 (a)Coles Myer 93,320
------------------------------------------------
20,000 (a)News Corp., Ltd. 88,811
------------------------------------------------
33,000 Oil Search Ltd. 82,770
------------------------------------------------
75,000 (a)Queensland Metals Corp. NL 83,403
------------------------------------------------
15,000 Westpac Banking Corp. Ltd. 81,461
------------------------------------------------
25,000 Woodside Petroleum Ltd. 211,079
------------------------------------------------ ------------
Total 640,844
------------------------------------------------ ------------
BELGIUM--0.1%
------------------------------------------------
1,800 Delhaize-Le Lion 89,515
------------------------------------------------ ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ------------------------------------------------ ------------
<C> <S> <C>
STOCKS--CONTINUED
------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
------------------------------------------------
BRAZIL--0.6%
------------------------------------------------
66,000 Banco Itau SA, Preference $ 33,909
------------------------------------------------
2,700 (a)COFAP-Cia Fabricadora de Pecas, Preference 27,744
------------------------------------------------
218,000 Centrais Eletricas Brasileiras SA, Preference,
Series B 107,320
------------------------------------------------
937,000 Companhia Energetica de Minas Gerais, Preference 42,889
------------------------------------------------
100,000 Light Participacoes SA 32,880
------------------------------------------------
512,000 (a)Petroleo Brasileiro SA, Preference 122,440
------------------------------------------------
1,211,000 Telecomunicacoes Brasileiras SA 157,797
------------------------------------------------
14,249 (a)Telecomunicacoes de Sao Paulo SA Rights 479
------------------------------------------------
327,000 Telecomunicacoes de Sao Paulo SA, Preference 112,105
------------------------------------------------ ------------
Total 637,563
------------------------------------------------ ------------
CHILE--0.1%
------------------------------------------------
500 (a)Banco BHIF, ADR 10,438
------------------------------------------------
400 (a)Banco de A. Edwards, ADR 8,350
------------------------------------------------
500 (a)(b)Chilectra S.A., ADR 13,520
------------------------------------------------
425 Compania Telecomunicacion Chile, ADR 14,556
------------------------------------------------
200 Sociedad Quimica Y Minera De Chile, ADR 13,000
------------------------------------------------ ------------
Total 59,864
------------------------------------------------ ------------
COLOMBIA--0.0%
------------------------------------------------
800 Banco Ganadero SA, ADR 30,600
------------------------------------------------
900 Banco Industrial Colombiano, ADR 15,863
------------------------------------------------ ------------
Total 46,463
------------------------------------------------ ------------
DENMARK--0.2%
------------------------------------------------
2,050 (a)Sydbank AS 97,630
------------------------------------------------
1,450 Unidanmark A 75,738
------------------------------------------------ ------------
Total 173,368
------------------------------------------------ ------------
FRANCE--1.2%
------------------------------------------------
1,528 AXA 91,422
------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ---------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
----------------------------------------------------
FOREIGN EQUITY--CONTINUED
----------------------------------------
FRANCE--CONTINUED
----------------------------------------
1,410 (a)CLF-Dexia France $ 131,609
----------------------------------------
1,100 Casino Ord 49,546
----------------------------------------
1,200 Compagnie Financiere de Paribas, Class A 77,242
----------------------------------------
450 Compagnie de Saint Gobain 62,108
----------------------------------------
560 Financiere Sogeparc SA 75,642
----------------------------------------
1,000 Groupe Danon BSN SA 150,487
----------------------------------------
480 LVMH (Moet-Hennessy) 116,205
----------------------------------------
660 Rhone-Poulenc Rorer, Inc. 49,665
----------------------------------------
3,300 Schneider SA 158,468
----------------------------------------
2,370 Scor SA 95,627
----------------------------------------
1,061 Total SA-B 97,012
---------------------------------------- ------------
Total 1,155,033
---------------------------------------- ------------
GERMANY, FEDERAL REPUBLIC OF--1.3%
----------------------------------------
4,025 Bayer AG 156,021
----------------------------------------
3,300 (a)Commerzbank AG, Frankfurt 96,928
----------------------------------------
2,260 (a)Daimler Benz AG 173,887
----------------------------------------
1,380 Deutsche Bank, AG 76,465
----------------------------------------
4,150 Dresdner Bank AG, Frankfurt 145,205
----------------------------------------
256 Gea AG, Vorzugsaktien 103,353
----------------------------------------
359 Mannesmann AG 145,776
----------------------------------------
945 Schwarz Pharma 70,221
----------------------------------------
1,250 Siemens AG 70,454
----------------------------------------
3,150 Skw Trostberg 104,134
----------------------------------------
500 Thyssen AG 113,510
----------------------------------------
1,735 Veba AG 98,064
---------------------------------------- ------------
Total 1,354,018
---------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- -------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
--------------------------------------------------------
FOREIGN EQUITY--CONTINUED
--------------------------------------------
HONG KONG--1.2%
--------------------------------------------
6,000 (a)Beijing Enterprises $ 35,000
--------------------------------------------
18,000 (a)Cheung Kong 184,100
--------------------------------------------
160,000 China EB-IHD Holdings Ltd. 245,725
--------------------------------------------
23,000 China Resources Enterprises Ltd. 80,738
--------------------------------------------
22,000 Citic Pacific Ltd. 125,779
--------------------------------------------
35,000 Great Eagle Holdings 123,766
--------------------------------------------
2,429 HSBC Holdings PLC 73,668
--------------------------------------------
5,000 (a)Hong Kong Telecommunications, Ltd., ADR 111,090
--------------------------------------------
11,000 Hutchison Whampoa 91,566
--------------------------------------------
16,000 (a)New World Development Co. Ltd. 101,594
--------------------------------------------
74,000 Sino Land Co. 86,430
-------------------------------------------- ------------
Total 1,259,456
-------------------------------------------- ------------
INDONESIA--0.1%
--------------------------------------------
47,000 Lippo Bank 47,338
--------------------------------------------
14,000 PT Indosat 41,727
--------------------------------------------
23,500 (a)PT Putra Surya Multidana 28,016
--------------------------------------------
29,467 PT Steady Safe 32,405
-------------------------------------------- ------------
Total 149,486
-------------------------------------------- ------------
IRELAND--0.2%
--------------------------------------------
4,150 (a)Elan Corp. PLC, ADR 169,113
-------------------------------------------- ------------
ITALY--0.3%
--------------------------------------------
14,000 Edison Ord 66,346
--------------------------------------------
10,300 Eni 51,365
--------------------------------------------
595 (a)La Rinascente S.P.A. Warrants, 12/31/1999 225
--------------------------------------------
18,000 STET Societa Finanziaria Telefonica S.P.A. 90,826
--------------------------------------------
42,000 Telecom Italia Mobile 123,190
-------------------------------------------- ------------
Total 331,952
-------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- --------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
---------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------
JAPAN--5.7%
---------------------------------------
8,000 Canare Electric Co. Ltd. $ 267,926
---------------------------------------
9,600 Circle K Japan Co. Ltd. 511,945
---------------------------------------
30,000 Hitachi Ltd. 319,450
---------------------------------------
8,000 Hitachi Maxell 185,487
---------------------------------------
4,000 Honda Motor Co. Ltd. 117,475
---------------------------------------
5,000 Ito-Yokado Co., Ltd. 285,101
---------------------------------------
2,000 Mabuchi Motor Co. 113,697
---------------------------------------
7,000 Matsushita Kotobuki Electric 251,267
---------------------------------------
30,000 (a)Minolta Co. 198,626
---------------------------------------
24,000 (a)Mitsubishi Estate Co. Ltd. 327,694
---------------------------------------
14,000 Mitsubishi Trust & Banking Corp., Tokyo 200,773
---------------------------------------
140,000 (a)Mitsui Osk Lines 312,580
---------------------------------------
2,000 Nintendo Corp. Ltd. 156,290
---------------------------------------
60 Nippon Telegraph & Telephone Corp. 571,919
---------------------------------------
15,000 Nissei ASB Machine Co. 186,775
---------------------------------------
12,000 Sankyo Co. Ltd. 380,249
---------------------------------------
3,000 Sony Corp. 252,726
---------------------------------------
12,000 Sumitomo Bank Ltd., Osaka 165,908
---------------------------------------
50,000 (a)Sumitomo Realty & Development 392,872
---------------------------------------
18,000 (a)Sumitomo Trust & Banking 159,210
---------------------------------------
21,000 Taiyo Yuden Co 335,423
---------------------------------------
33,000 Tokyu Land Corp 137,724
--------------------------------------- ------------
Total 5,831,117
--------------------------------------- ------------
KOREA, REPUBLIC OF--0.3%
---------------------------------------
2,202 Kookmin Bank 39,829
---------------------------------------
2,120 Korea Electric Power Corp. 65,395
---------------------------------------
2,781 (a)SK Telecom Co. Ltd., ADR 25,724
---------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ----------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------------
FOREIGN EQUITY--CONTINUED
-----------------------------------------------
KOREA, REPUBLIC OF--CONTINUED
-----------------------------------------------
251 (a)Samsung Electronics Co. $ 24,711
-----------------------------------------------
251 Samsung Electronics Co. Rights expire 7/1/97 192
-----------------------------------------------
3,260 Shinhan Bank 42,214
-----------------------------------------------
1,270 (a)Sindo Ricoh Co. 73,223
----------------------------------------------- ------------
Total 271,288
----------------------------------------------- ------------
MALAYSIA--0.2%
-----------------------------------------------
64,000 Berjaya Group 84,562
-----------------------------------------------
4,000 Malayan Banking 42,186
-----------------------------------------------
1,000 Malayan United Industries 732
-----------------------------------------------
15,000 UMW Holdings 77,009
----------------------------------------------- ------------
Total 204,489
----------------------------------------------- ------------
MEXICO--0.3%
-----------------------------------------------
2,000 Empresas ICA Sociedad Controladora S.A., ADR 29,000
-----------------------------------------------
13,000 Fomento Economico Mexicano, SA de C.V., Class B 69,035
-----------------------------------------------
215,000 (a)(b)Grupo Financiero Bancomer, S.A. de C.V.,
Class B, ADR 80,737
-----------------------------------------------
1,200 Pan American Beverage, Class A 34,800
-----------------------------------------------
2,300 Telefonos de Mexico, Class L, ADR 102,063
-----------------------------------------------
1,800 (a)Tubos de Acero de Mexico SA, ADR 31,500
----------------------------------------------- ------------
Total 347,135
----------------------------------------------- ------------
NETHERLANDS--0.8%
-----------------------------------------------
8,537 (a)ABN Amro Holding 157,640
-----------------------------------------------
2,800 ABN-Amro Holdings N.V., ADR 52,150
-----------------------------------------------
610 Akzo Nobel N.V. 81,132
-----------------------------------------------
5,252 Bols Wessanen (kon.) 99,986
-----------------------------------------------
3,948 Boskalis Westminster N.V. 82,964
-----------------------------------------------
1,005 (a)Hunter Douglas N.V. 88,607
-----------------------------------------------
1,935 ING Groep, N.V. 85,452
-----------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
---------------------------------------------------------------
FOREIGN EQUITY--CONTINUED
---------------------------------------------------
NETHERLANDS--CONTINUED
---------------------------------------------------
4,500 VNU--Verenigde Nederlandse Uitgeversbedrijven
Verenigd Bezit $ 101,586
---------------------------------------------------
505 Wolters Kluwer N.V. 60,705
--------------------------------------------------- ------------
Total 810,222
--------------------------------------------------- ------------
NEW ZEALAND--0.1%
---------------------------------------------------
22,000 Air New Zealand Ltd., Class B 65,090
---------------------------------------------------
154,000 (a)Guiness Peat Group PLC 88,152
--------------------------------------------------- ------------
Total 153,242
--------------------------------------------------- ------------
PAKISTAN--0.1%
---------------------------------------------------
2,400 (a)(b)Hub Power Co., GDR 56,040
--------------------------------------------------- ------------
PHILIPPINES--0.1%
---------------------------------------------------
114,000 (a)Belle Corp. 30,256
---------------------------------------------------
66,600 (a)Filinvest Land, Inc. 15,151
---------------------------------------------------
1,600 Philippine Commercial International Bank 15,621
---------------------------------------------------
362,000 (a)Universal Rightfield Property 38,430
--------------------------------------------------- ------------
Total 99,458
--------------------------------------------------- ------------
SINGAPORE--0.3%
---------------------------------------------------
7,000 City Developments Ltd. 65,091
---------------------------------------------------
2,000 Singapore Press Holdings Ltd. 39,852
---------------------------------------------------
10,000 (a)Straits Steamship Land Ltd. 29,784
---------------------------------------------------
2,500 (a)Straits Steamship Land Ltd. Warrants, 12/12/2000 2,342
---------------------------------------------------
23,000 (a)(b)Want Want Holdings 83,260
---------------------------------------------------
17,000 Wing Tai Holdings, Ltd. 50,633
--------------------------------------------------- ------------
Total 270,962
--------------------------------------------------- ------------
SPAIN--0.5%
---------------------------------------------------
1,200 Empresa Nac De Electridad 91,644
---------------------------------------------------
2,350 Repsol SA 98,350
---------------------------------------------------
3,750 Telefonica de Espana 108,173
---------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES IN U.S.
OR UNITS DOLLARS
----------- ---------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
----------------------------------------------------
FOREIGN EQUITY--CONTINUED
----------------------------------------
SPAIN--CONTINUED
----------------------------------------
2,600 Vidrala SA $ 109,353
----------------------------------------
693 Zardoya-Otis SA 86,769
---------------------------------------- ------------
Total 494,289
---------------------------------------- ------------
SWEDEN--0.3%
----------------------------------------
7,100 Munksjo AB 68,699
----------------------------------------
19,000 Skand Enskilda BKN, Class A 196,099
----------------------------------------
1,420 Skandia Forsakrings AB 50,104
---------------------------------------- ------------
Total 314,902
---------------------------------------- ------------
SWITZERLAND--1.2%
----------------------------------------
60 ABB AG 82,265
----------------------------------------
800 Credit Suisse Group--Registered 100,395
----------------------------------------
180 Holderbank Financiere Glaris AG, Class B 157,837
----------------------------------------
120 Nestle SA 149,110
----------------------------------------
113 Novartis AG--Registered 153,177
----------------------------------------
450 Oerlikon-Buhrle Holding AG 52,104
----------------------------------------
12 (a)Roche Holding AG 106,580
----------------------------------------
106 (a)Swissair AG 107,916
----------------------------------------
143 UBS--Union Bank of Switzerland 156,690
----------------------------------------
440 Zurich Versicherungsgesellschaft 161,536
---------------------------------------- ------------
Total 1,227,610
---------------------------------------- ------------
THAILAND--0.0%
----------------------------------------
1,200 Bangkok Bank Public Co., Ltd. 10,754
---------------------------------------- ------------
UNITED KINGDOM--3.1%
----------------------------------------
4,393 Barclays PLC 85,445
----------------------------------------
6,700 Bass PLC 87,298
----------------------------------------
6,440 Boc Group PLC 108,194
----------------------------------------
3,800 Boots Co. PLC 44,011
----------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
SHARES OR IN U.S.
UNITS DOLLARS
----------- ----------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------
FOREIGN EQUITY--CONTINUED
-----------------------------------
UNITED KINGDOM--CONTINUED
-----------------------------------
5,041 British Aerospace PLC $ 102,502
-----------------------------------
9,160 British Petroleum Co. PLC 109,387
-----------------------------------
7,400 British Telecommunication PLC 53,627
-----------------------------------
6,000 Burmah Castrol 104,041
-----------------------------------
13,687 Cadbury Schweppes PLC 122,697
-----------------------------------
11,400 Compass Group 127,185
-----------------------------------
26,119 Cookson Group 100,408
-----------------------------------
12,000 Cowie Group PLC 69,884
-----------------------------------
19,710 David S. Smith (Holdings) PLC 71,579
-----------------------------------
11,600 Delta PLC 61,103
-----------------------------------
4,035 EMI Group PLC 77,360
-----------------------------------
21,900 FKI PLC 63,769
-----------------------------------
6,406 GKN PLC 110,871
-----------------------------------
6,280 General Accident 92,561
-----------------------------------
10,890 General Electric Co. PLC 62,173
-----------------------------------
5,052 Glaxo Wellcome PLC 100,990
-----------------------------------
6,200 Granada Group PLC 88,035
-----------------------------------
8,458 (a)Grand Metropolitan PLC 78,589
-----------------------------------
17,613 Guardian Royal Exchange 80,675
-----------------------------------
8,000 (a)Imperial Chemical Industries PLC 106,658
-----------------------------------
221 Inchcape PLC 1,041
-----------------------------------
13,354 Ladbroke Group PLC 50,244
-----------------------------------
8,500 Marks & Spencer PLC 70,671
-----------------------------------
20,600 Mirror Group PLC 73,800
-----------------------------------
10,170 Morgan Crucible Co 76,030
-----------------------------------
4,600 Pearson 54,180
-----------------------------------
2,653 RTZ Corp. PLC 45,569
-----------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES,
UNITS OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- ----------------------------------------------- ------------
<C> <S> <C>
STOCKS--CONTINUED
-----------------------------------------------------------
FOREIGN EQUITY--CONTINUED
-----------------------------------------------
UNITED KINGDOM--CONTINUED
-----------------------------------------------
4,800 Rank Group PLC $ 33,764
-----------------------------------------------
4,758 Reckitt & Colman PLC 67,093
-----------------------------------------------
10,200 Reed International PLC 100,281
-----------------------------------------------
31,600 Rugby Group PLC 60,998
-----------------------------------------------
16,266 Salvesen Christian 63,595
-----------------------------------------------
28,250 Sedgwick Group PLC 57,766
-----------------------------------------------
5,942 Siebe PLC 93,509
-----------------------------------------------
5,861 Smithkline Beecham PLC 100,767
-----------------------------------------------
12,841 Tomkins PLC 55,771
-----------------------------------------------
2,720 Zeneca Group 82,818
----------------------------------------------- ------------
Total 3,196,939
----------------------------------------------- ------------
TOTAL FOREIGN EQUITY 19,674,232
----------------------------------------------- ------------
TOTAL STOCKS (IDENTIFIED COST $51,467,556) 60,673,712
----------------------------------------------- ------------
BONDS--29.8%
-----------------------------------------------------------
TREASURY--13.4%
-----------------------------------------------
$ 635,000 United States Treasury Note, 5.000%, 2/15/1999 623,653
-----------------------------------------------
1,200,000 United States Treasury Note, 5.500%, 12/31/2000 1,165,056
-----------------------------------------------
500,000 United States Treasury Note, 6.250%, 2/15/2003 493,280
-----------------------------------------------
1,500,000 United States Treasury Note, 6.250%, 2/28/2002 1,484,700
-----------------------------------------------
975,000 United States Treasury Note, 6.375%, 3/31/2001 972,407
-----------------------------------------------
1,605,000 United States Treasury Note, 6.375%, 8/15/2002 1,595,996
-----------------------------------------------
2,310,000 United States Treasury Note, 6.375%, 9/30/2001 2,300,021
-----------------------------------------------
2,025,000 United States Treasury Note, 6.500%, 5/15/2005 2,006,775
-----------------------------------------------
1,000,000 United States Treasury Note, 6.625%, 3/31/2002 1,004,660
-----------------------------------------------
1,630,000 United States Treasury Note, 6.875%, 5/15/2006 1,650,994
-----------------------------------------------
350,000 United States Treasury Note, 7.500%, 2/15/2005 367,931
----------------------------------------------- ------------
TOTAL TREASURY 13,665,473
----------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- -------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
MORTGAGE-BACKED SECURITIES--4.6%
--------------------------------------------------
GOVERNMENT AGENCY--4.6%
--------------------------------------------------
$ 497,504 Federal Home Loan Mortgage Corp., 7.00%, 1/1/2027 $ 485,066
--------------------------------------------------
317,660 Federal Home Loan Mortgage Corp., 7.50%, 10/1/2025 317,561
--------------------------------------------------
158,726 Federal Home Loan Mortgage Corp., 7.00%, 4/1/2009 158,628
--------------------------------------------------
462,174 Federal Home Loan Mortgage Corp., 6.50%, 10/1/2010 452,048
--------------------------------------------------
78,541 Federal National Mortgage Association, 7.00%,
5/1/2001 79,105
--------------------------------------------------
202,701 Federal National Mortgage Association, 8.00%,
7/1/2023 207,262
--------------------------------------------------
452,031 Federal National Mortgage Association, 7.00%,
8/1/2011 449,911
--------------------------------------------------
524,193 Federal National Mortgage Association, 6.50%,
7/1/2026 498,094
--------------------------------------------------
480,478 Federal National Mortgage Association, 7.50%,
8/1/2026 478,527
--------------------------------------------------
204,071 Government National Mortgage Association, 9.00%,
10/15/2019 217,399
--------------------------------------------------
428,407 Government National Mortgage Association, 8.50%,
10/15/2022 447,553
--------------------------------------------------
444,601 Government National Mortgage Association, 8.00%,
7/15/2025 453,075
--------------------------------------------------
498,388 Government National Mortgage Association, 7.00%,
10/15/2026 484,683
-------------------------------------------------- ------------
TOTAL MORTGAGE-BACKED SECURITIES 4,728,912
-------------------------------------------------- ------------
INVESTMENT GRADE BONDS--2.9%
--------------------------------------------------
BANKING--0.8%
--------------------------------------------------
250,000 Bank Of Montreal, Sub. Note, 7.80%, 4/1/2007 258,273
--------------------------------------------------
250,000 Exp-Imp BK Korea, Note, 6.50%, 5/15/2000 248,014
--------------------------------------------------
250,000 Santander Finance Issuances, Bank Guarantee,
7.875%, 4/15/2005 258,400
-------------------------------------------------- ------------
Total 764,687
-------------------------------------------------- ------------
CABLE TELEVISION--0.3%
--------------------------------------------------
230,000 Continental Cablevision, Sr. Deb., 9.50%, 8/1/2013 260,107
-------------------------------------------------- ------------
CHEMICALS & PLASTICS--0.2%
--------------------------------------------------
250,000 (b)Bayer Corp., Deb., 6.50%, 10/1/2002 246,025
-------------------------------------------------- ------------
FINANCIAL INTERMEDIARIES--0.3%
--------------------------------------------------
150,000 DLJ, Note, 6.875%, 11/1/2005 144,990
--------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
INVESTMENT GRADE BONDS--CONTINUED
---------------------------------------------------
FINANCIAL INTERMEDIARIES--CONTINUED
---------------------------------------------------
$ 200,000 Green Tree Financial Corp, Sr. Sub. Note, 10.25%,
6/1/2002 $ 226,326
--------------------------------------------------- ------------
Total 371,316
--------------------------------------------------- ------------
FOOD & DRUG RETAILERS--0.3%
---------------------------------------------------
250,000 Hook-Superx, Inc., Sr. Note, 10.125%, 6/1/2002 263,393
--------------------------------------------------- ------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.3%
---------------------------------------------------
250,000 Joy Technologies Inc, Sr. Note, 10.25%, 9/1/2003 272,965
--------------------------------------------------- ------------
INSURANCE--0.1%
---------------------------------------------------
100,000 American General Corp., S.F. Deb., 9.625%, 2/1/2018 106,575
--------------------------------------------------- ------------
LEISURE & ENTERTAINMENT--0.2%
---------------------------------------------------
250,000 Viacom, Inc., Sr. Note, 7.75%, 6/1/2005 248,813
--------------------------------------------------- ------------
METALS & MINING--0.2%
---------------------------------------------------
250,000 (b)Southern Peru Ltd., Note, 7.90%, 5/30/2007 252,423
--------------------------------------------------- ------------
SOVEREIGN GOVERNMENT--0.2%
---------------------------------------------------
250,000 Republic of Colombia, Note, 7.25%, 2/15/2003 241,875
--------------------------------------------------- ------------
TOTAL INVESTMENT GRADE BONDS 3,028,179
--------------------------------------------------- ------------
HIGH-YIELD BONDS--3.9%
---------------------------------------------------
AUTOMOBILE--0.1%
---------------------------------------------------
25,000 (b)Collins & Aikman Products, Sr. Sub. Note,
11.50%, 4/15/2006 28,094
---------------------------------------------------
50,000 Lear Corporation, Sub. Note, 9.50%, 7/15/2006 52,813
--------------------------------------------------- ------------
Total 80,907
--------------------------------------------------- ------------
BANKING--0.1%
---------------------------------------------------
1,000 California Federal Preferred Capital Corp., REIT
Perpetual
Pfd. Stock, Series A, $2.28 25,500
---------------------------------------------------
50,000 First Nationwide Escrow, Sr. Sub. Note, 10.625%,
10/1/2003 54,500
--------------------------------------------------- ------------
Total 80,000
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT IN U.S.
OR UNITS DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH-YIELD BONDS--CONTINUED
---------------------------------------------------
BROADCAST RADIO & TV--0.3%
---------------------------------------------------
American Radio Systems Corp., 511 Exchangeable Pfd.
Shares, $11.375 $ 54,422
---------------------------------------------------
(b)Chancellor Broadcasting Co., 500 Exchangeable
Pfd. Shares,
12.00% 54,125
---------------------------------------------------
$ 37,000 Chancellor Radio Broad., Sr. Sub. Note, 12.50%,
10/1/2004 43,475
---------------------------------------------------
50,000 Heritage Media Corp., Sr. Sub. Note, 8.75%,
2/15/2006 51,813
---------------------------------------------------
(b)Sinclair Broadcast Group, Inc., 500 Pfd. Shares,
Series A, $11.625 53,000
---------------------------------------------------
50,000 Young Broadcasting Corp., Sr. Sub. Note, 10.125%,
2/15/2005 52,500
--------------------------------------------------- ------------
Total 309,335
--------------------------------------------------- ------------
BUSINESS EQUIPMENT & SERVICES--0.1%
---------------------------------------------------
50,000 Knoll, Inc., Sr. Sub. Note, 10.875%, 3/15/2006 55,125
---------------------------------------------------
25,000 United Stationers Supply, Sr. Sub. Note, 12.75%,
5/1/2005 27,969
--------------------------------------------------- ------------
Total 83,094
--------------------------------------------------- ------------
CABLE TELEVISION--0.4%
---------------------------------------------------
25,000 Australis Holding Pty Ltd, Unit, 0/15.00%,
11/1/2002 15,125
---------------------------------------------------
25 Australis Holdings Pty Limited--Warrant 0
---------------------------------------------------
50,000 Bell Cablemedia PLC, Sr. Disc. Note, 0/11.95%,
7/15/2004 44,750
---------------------------------------------------
14 (b)CS Wireless Systems, Inc., Unit, 0/11.75%,
3/1/2006 0
---------------------------------------------------
25,000 Cablevision Systems Corp., Sr. Sub. Note, 9.875%,
5/15/2006 26,063
---------------------------------------------------
25,000 Cablevision Systems, Sr. Sub. Note, 9.25%,
11/1/2005 25,250
---------------------------------------------------
50,000 Charter Communication Southeast, Sr. Note, 11.25%,
3/15/2006 53,500
---------------------------------------------------
50,000 Comcast Corp., Sr. Sub. Deb., 9.375%, 5/15/2005 52,125
---------------------------------------------------
75,000 (b)Diamond Cable, Sr. Disc. Note, 0/10.75%,
2/15/2007 43,969
---------------------------------------------------
50,000 Echostar Satellite Broadcasting Corp. Sr. Disc.
Note,
0/13.125%, 3/15/2004 34,000
---------------------------------------------------
100,000 International Cabletel, Sr. Disc. Note, 0/12.75%,
4/15/2005 75,250
---------------------------------------------------
25,000 Pegasus Media, Note, 12.50%, 7/1/2005 27,125
---------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH-YIELD BONDS--CONTINUED
---------------------------------------------------
CABLE TELEVISION--CONTINUED
---------------------------------------------------
$ 50,000 Rogers Cablesystems Inc., Sr. Secd. 2nd Priority
Note, 10.00%,
12/1/2007 $ 53,063
---------------------------------------------------
25,000 Telewest PLC, Sr. Disc. Deb., 0/11.00%, 10/1/2007 17,500
---------------------------------------------------
25,000 UIH Australia/Pacific, Sr. Disc. Note, 0/14.00%,
5/15/2006 14,125
--------------------------------------------------- ------------
Total 481,845
--------------------------------------------------- ------------
CHEMICALS & PLASTICS--0.0%
---------------------------------------------------
33,000 Polymer Group, Sr. Note, 12.25%, 7/15/2002 36,135
---------------------------------------------------
25,000 RBX Corp., Sr. Sub. Note, Series B, 11.25%,
10/15/2005 21,406
--------------------------------------------------- ------------
Total 57,541
--------------------------------------------------- ------------
CLOTHING & TEXTILES--0.1%
---------------------------------------------------
50,000 (a)Collins & Aikman Floors, Sr. Sub. Note, 10.00%,
1/15/2007 50,250
---------------------------------------------------
50,000 (b)Glenoit Corporation, Sr. Sub. Note, 11.00%,
4/15/2007 51,375
---------------------------------------------------
50,000 Westpoint Stevens, Inc., Sr. Sub. Deb., 9.375%,
12/15/2005 52,000
--------------------------------------------------- ------------
Total 153,625
--------------------------------------------------- ------------
CONSUMER PRODUCTS--0.2%
---------------------------------------------------
50,000 Herff Jones, Inc., Sr. Sub. Note, 11.00%, 8/15/2005 53,813
---------------------------------------------------
50,000 ICON Fitness Corp., Sr. Disc. Note, 0/14.00%,
11/15/2006 26,750
---------------------------------------------------
50,000 Playtex Family Products Corp., Sr. Sub. Note,
9.00%,
12/15/2003 50,500
---------------------------------------------------
50,000 (b)Renaissance Cosmetics, Sr. Note, 11.75%,
2/15/2004 52,125
---------------------------------------------------
25,000 Simmons Co., Sr. Sub. Note, 10.75%, 4/15/2006 26,438
--------------------------------------------------- ------------
Total 209,626
--------------------------------------------------- ------------
CONTAINER & GLASS PRODUCTS--0.1%
---------------------------------------------------
50,000 Owens Illinois, Inc., Sr. Sub. Note, 9.75%,
8/15/2004 52,688
---------------------------------------------------
25,000 Packaging Resources Inc., Sr. Note, 11.625%,
5/1/2003 26,125
--------------------------------------------------- ------------
Total 78,813
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH-YIELD BONDS--CONTINUED
---------------------------------------------------
ECOLOGICAL SERVICES & EQUIPMENT--0.1%
---------------------------------------------------
$ 50,000 (b)Allied Waste, Sr. Sub. Note, 10.25%, 12/1/2006 $ 53,375
---------------------------------------------------
25,000 *(a)Mid-American Waste System, Sr. Sub. Note,
12.25%, 2/15/2003 13,625
--------------------------------------------------- ------------
Total 67,000
--------------------------------------------------- ------------
ELECTRONICS--0.1%
---------------------------------------------------
50,000 Advanced Micro Devices, Sr. Secd. Note, 11.00%,
8/1/2003 55,813
---------------------------------------------------
50,000 (b)Fairchild Semiconductor, Sr. Sub. Note, 10.125%,
3/15/2007 51,750
--------------------------------------------------- ------------
Total 107,563
--------------------------------------------------- ------------
FOOD & DRUG RETAILERS--0.1%
---------------------------------------------------
25,000 Carr Gottstein Foods Co., Sr. Sub. Note, 12.00%,
11/15/2005 27,781
---------------------------------------------------
50,000 Ralph's Grocery Co., Sr. Note, 10.45%, 6/15/2004 55,000
--------------------------------------------------- ------------
Total 82,781
--------------------------------------------------- ------------
FOOD PRODUCTS--0.1%
---------------------------------------------------
50,000 International Home Foods, Sr. Sub. Note, 10.375%,
11/1/2006 51,875
---------------------------------------------------
50,000 (b)MBW Foods Inc., Sr. Sub. Note, 9.875%, 2/15/2007 50,375
---------------------------------------------------
25,000 Specialty Foods, Sr. Sub. Note, 11.25%, 8/15/2003 22,875
---------------------------------------------------
25,000 Van De Kamp's, Inc., Sr. Sub. Note, 12.00%,
9/15/2005 27,750
--------------------------------------------------- ------------
Total 152,875
--------------------------------------------------- ------------
FOREST PRODUCTS--0.1%
---------------------------------------------------
25,000 Four M Corp, Sr. Note, 12.00%, 6/1/2006 25,375
---------------------------------------------------
50,000 Stone Container, Sr. Note, 11.50%, 10/1/2004 52,750
--------------------------------------------------- ------------
Total 78,125
--------------------------------------------------- ------------
HEALTHCARE--0.2%
---------------------------------------------------
50,000 Dade International, Inc., Sr. Sub. Note, 11.125%,
5/1/2006 56,125
---------------------------------------------------
50,000 Tenet Healthcare, Sr. Sub. Note, 10.125%, 3/1/2005 54,625
--------------------------------------------------- ------------
Total 110,750
--------------------------------------------------- ------------
HOTELS, MOTELS, INNS & CASINOS--0.1%
---------------------------------------------------
50,000 Courtyard By Marriott, Sr. Note, 10.75%, 2/1/2008 53,938
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH-YIELD BONDS--CONTINUED
---------------------------------------------------
INDUSTRIAL PRODUCTS & EQUIPMENT--0.3%
---------------------------------------------------
$ 25,000 Cabot Safety Corp., Sr. Sub. Note, 12.50%,
7/15/2005 $ 27,625
---------------------------------------------------
50,000 (b)Continental Global, Sr. Note, 11.00%, 4/1/2007 52,313
---------------------------------------------------
50,000 Euramax International PLC, Sr. Sub. Note, 11.25%,
10/1/2006 53,000
---------------------------------------------------
50,000 Mettler-Toledo, Inc., Sr. Sub. Note, 9.75%,
10/1/2006 52,750
---------------------------------------------------
50,000 Unifrax Investment Corp., Sr. Note, 10.50%,
11/1/2003 52,000
--------------------------------------------------- ------------
Total 237,688
--------------------------------------------------- ------------
LEISURE & ENTERTAINMENT--0.1%
---------------------------------------------------
50,000 AMF Group, Inc., Sr. Sub. Disc. Note, 0/12.25%,
3/15/2006 35,125
---------------------------------------------------
25,000 Cobblestone Golf, Sr. Note, 11.50%, 6/1/2003 26,281
---------------------------------------------------
50,000 Premier Parks, Sr. Note, 9.75%, 1/15/2007 52,125
---------------------------------------------------
50,000 Six Flags Theme Parks, Sr. Sub. Disc. Note,
0/12.25%, 6/15/2005 51,125
---------------------------------------------------
50,000 Viacom Inc, Sub. Deb., 8.00%, 7/7/2006 49,000
--------------------------------------------------- ------------
Total 213,656
--------------------------------------------------- ------------
MACHINERY & EQUIPMENT--0.2%
---------------------------------------------------
50,000 Alvey Systems, Sr. Sub. Note, 11.375%, 1/31/2003 51,625
---------------------------------------------------
50,000 Clark Material Handling, Sr. Note, 10.75%,
11/15/2006 52,750
---------------------------------------------------
17,000 Primeco Inc., Sr. Sub. Note, 12.75%, 3/1/2005 19,465
---------------------------------------------------
25,000 Tokheim Corp., Sr. Sub. Note, 11.50%, 8/1/2006 27,125
--------------------------------------------------- ------------
Total 150,965
--------------------------------------------------- ------------
OIL & GAS--0.3%
---------------------------------------------------
50,000 Abraxas Petroleum Corp., Sr. Note, 11.50%,
11/1/2004 54,250
---------------------------------------------------
50,000 Falcon Drilling Company, Sr. Note, 9.75%, 1/15/2001 52,063
---------------------------------------------------
50,000 Forcenergy Inc., Sr. Sub. Note, 9.50%, 11/1/2006 51,875
--------------------------------------------------- ------------
Total 158,188
--------------------------------------------------- ------------
PRINTING & PUBLISHING--0.1%
---------------------------------------------------
50,000 Garden State Newspapers, Inc., Sr. Sub. Note,
12.00%, 7/1/2004 55,500
---------------------------------------------------
50,000 Hollinger International, Sr. Sub. Note, 9.25%,
3/15/2007 50,750
---------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH-YIELD BONDS--CONTINUED
---------------------------------------------------
PRINTING & PUBLISHING--CONTINUED
---------------------------------------------------
K-III Communications Corp., 500 Pfd. Shares, Series
D, $10.00 $ 50,250
--------------------------------------------------- ------------
Total 156,500
--------------------------------------------------- ------------
REAL ESTATE--0.1%
---------------------------------------------------
$ 50,000 Trizec Finance, Sr. Note, 10.875%, 10/15/2005 55,625
--------------------------------------------------- ------------
SERVICES--0.0%
---------------------------------------------------
25,000 Coinmach Corp., Sr. Note, 11.75%, 11/15/2005 27,750
--------------------------------------------------- ------------
STEEL--0.1%
---------------------------------------------------
25,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 24,375
---------------------------------------------------
50,000 GS Technologies Operating Co., Inc., Sr. Note,
12.00%, 9/1/2004 53,875
--------------------------------------------------- ------------
Total 78,250
--------------------------------------------------- ------------
SURFACE TRANSPORTATION--0.2%
---------------------------------------------------
25,000 Ameritruck Distribution, Sr. Sub. Note, 12.25%,
11/15/2005 25,125
---------------------------------------------------
50,000 Gearbulk Holding Limited, Sr. Note, 11.25%,
12/1/2004 55,250
---------------------------------------------------
50,000 Statia Terminals, 1st Mtg. Note, 11.75%, 11/15/2003 53,500
---------------------------------------------------
25,000 Stena AB, Sr. Note, 10.50%, 12/15/2005 27,125
--------------------------------------------------- ------------
Total 161,000
--------------------------------------------------- ------------
TELECOMMUNICATIONS & CELLULAR--0.1%
---------------------------------------------------
50,000 American Communications, Sr. Disc. Note, 0/12.75%,
4/1/2006 24,500
---------------------------------------------------
50,000 Arch Communications, Sr. Disc. Note, 0/10.875%,
3/15/2008 26,500
---------------------------------------------------
50,000 Brooks Fiber Properties, Inc. Sr. Disc. Note,
0/10.875%, 3/1/2006 34,125
---------------------------------------------------
50,000 Intermedia Communications, Sr. Disc. Note,
0/12.50%, 5/15/2006 34,500
---------------------------------------------------
50,000 Millicom International, Sr. Disc. Note, 0/13.50%,
6/1/2006 36,750
---------------------------------------------------
50,000 Nextel Communications, Inc., Sr. Disc. Note,
0/11.50%, 9/1/2003 43,063
---------------------------------------------------
25,000 Paging Network, Inc., Sr. Sub. Note, 10.00%,
10/15/2008 23,625
---------------------------------------------------
25,000 Paging Network, Sr. Sub. Note, 10.125%, 8/1/2007 23,875
---------------------------------------------------
50,000 Phonetel Technologies, Sr. Note, 12.00%, 12/15/2006 50,250
---------------------------------------------------
50,000 (b)Qwest Communications, Sr. Note, 10.875%,
4/1/2007 53,750
---------------------------------------------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
FOREIGN
CURRENCY VALUE
PAR IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
HIGH-YIELD BONDS--CONTINUED
---------------------------------------------------
TELECOMMUNICATIONS & CELLULAR--CONTINUED
---------------------------------------------------
$ 25,000 Sygnet Wireless, Inc., Sr. Note, 11.50%, 10/1/2006 $ 25,031
---------------------------------------------------
50,000 Teleport Communications, Sr. Disc. Note, 0/11.125%,
7/1/2007 35,813
---------------------------------------------------
50,000 Vanguard Cellular Systems, Deb., 9.375%, 4/15/2006 50,500
--------------------------------------------------- ------------
Total 462,282
--------------------------------------------------- ------------
UTILITIES--0.2%
---------------------------------------------------
50,000 California Energy Co., Sr. Note, 10.25%, 1/15/2004 54,188
---------------------------------------------------
El Paso Electric Co., 572 PIK Pfd. Shares, Series
A, 11.40% 62,777
--------------------------------------------------- ------------
Total 116,965
--------------------------------------------------- ------------
TOTAL HIGH YIELD BONDS 4,006,687
--------------------------------------------------- ------------
FOREIGN BONDS--5.0%
---------------------------------------------------
AUSTRALIA DOLLAR--0.4%
---------------------------------------------------
89,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 5/14/2003 70,119
---------------------------------------------------
57,000 Queensland Treas Global, Local Government
Guarantee, 8.00%, 8/14/2001 45,315
---------------------------------------------------
60,000 State Bank Of New South, 12.25%, 2/26/2001 53,384
---------------------------------------------------
260,000 West Aust T Corp, Local Government Guarantee,
8.00%, 7/15/2003 205,798
--------------------------------------------------- ------------
Total 374,616
--------------------------------------------------- ------------
BELGIUM FRANC--0.0%
---------------------------------------------------
514,000 Belgian Government, Bond, 6.50%, 3/31/2005 15,280
--------------------------------------------------- ------------
CANADA DOLLAR--0.3%
---------------------------------------------------
204,000 Canada Government, Deb., 6.50%, 6/1/2004 149,941
---------------------------------------------------
155,000 Ontario Hydro, 9.00%, 6/24/2002 126,063
---------------------------------------------------
68,000 Ontario Hydro, Bond, 7.75%, 11/3/2005 53,083
--------------------------------------------------- ------------
Total 329,087
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN
CURRENCY VALUE
PAR IN U.S.
AMOUNT DOLLARS
------------ ------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
--------------------------------------------------------------
FOREIGN BONDS--CONTINUED
-------------------------------------------------
DANISH KRONE--0.4%
-------------------------------------------------
1,927,000 Denmark--Bullet, Bond, 8.00%, 3/15/2006 $ 326,974
-------------------------------------------------
500,000 Denmark, 8.00%, 5/15/2003 85,562
------------------------------------------------- ------------
Total 412,536
------------------------------------------------- ------------
DEUTSCHE MARK--0.9%
-------------------------------------------------
150,000 Bundesobligationen, Deb., 7.25%, 10/20/1997 89,082
-------------------------------------------------
91,000 DG-HYPBK, 5.75%, 1/22/2007 52,137
-------------------------------------------------
20,000,000 KFW International Finance, 6.00%, 11/29/1999 190,854
-------------------------------------------------
150,000 KFW International Finance, Bank Guarantee, 6.75%,
6/20/2005 93,141
-------------------------------------------------
600,000 KFW International Finance, 7.00%, 5/12/2000 111,566
-------------------------------------------------
435,000 Treuhandanstalt, 7.75%, 10/1/2002 286,004
------------------------------------------------- ------------
Total 822,784
------------------------------------------------- ------------
FRENCH FRANC--0.3%
-------------------------------------------------
324,000 France O.A.T., Bond, 7.25%, 4/25/2006 62,117
-------------------------------------------------
187,500 France O.A.T., Bond, 7.50%, 4/25/2005 235,317
------------------------------------------------- ------------
Total 297,434
------------------------------------------------- ------------
GREEK DRACHMA--0.1%
-------------------------------------------------
22,800,000 Hellenic Republic, FRN, 14.00%, 10/23/2003 87,088
------------------------------------------------- ------------
IRISH POUND--0.1%
-------------------------------------------------
92,000 Treasury, Deb., 6.25%, 4/1/1999 139,367
------------------------------------------------- ------------
ITALIAN LIRA--0.4%
-------------------------------------------------
150,000,000 Btps, Bond, 10.50%, 11/1/2000 98,084
-------------------------------------------------
380,000,000 Buoni Poliennali Del Tes, 9.50%, 1/1/2005 250,051
------------------------------------------------- ------------
Total 348,135
------------------------------------------------- ------------
JAPANESE YEN--0.1%
------------------------------------------------- ------------
11,000,000 Interamerican Development, Deb., 7.25%, 5/15/2000 109,811
------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN
CURRENCY VALUE
PAR IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
FOREIGN BONDS--CONTINUED
---------------------------------------------------
NETHERLANDS GUILDER--0.5%
---------------------------------------------------
255,000 Bank Ned Gemeenten, Bond, 6.375%, 1/4/2006 $ 137,715
---------------------------------------------------
340,000 Bk Ned Gemeenten, Bond, 7.75%, 12/20/2004 199,137
---------------------------------------------------
130,000 Lkb-global Bd, Bank Guarantee, 6.00%, 1/25/2006 76,558
---------------------------------------------------
90,000 Netherlands Government, 6.00%, 1/15/2006 47,704
--------------------------------------------------- ------------
Total 461,114
--------------------------------------------------- ------------
NEW ZEALAND DOLLAR--0.1%
---------------------------------------------------
61,000 New Zealand Government, 8.00%, 2/15/2001 43,103
---------------------------------------------------
55,000 New Zealand Government, Bond, 8.00%, 7/15/1998 38,364
--------------------------------------------------- ------------
Total 81,467
--------------------------------------------------- ------------
NORWEGIAN KRONE--0.1%
---------------------------------------------------
641,000 NGB, Bond, 9.00%, 1/31/1999 96,987
---------------------------------------------------
330,000 Norwegian Government, Bond, 7.00%, 5/31/2001 49,917
---------------------------------------------------
247,000 Norwegian Government, Foreign Government Guarantee,
5.75%, 11/30/2004 34,620
--------------------------------------------------- ------------
Total 181,524
--------------------------------------------------- ------------
PORTUGUESE ESCUDO--0.3%
---------------------------------------------------
50,250,000 Portuguese Ot's, Bond, 11.875%, 2/23/2000 336,181
--------------------------------------------------- ------------
SPANISH PESETA--0.4%
---------------------------------------------------
16,000,000 Spanish Government, 10.00%, 2/28/2005 133,918
---------------------------------------------------
29,000,000 Spanish Government, Bond, 8.80%, 4/30/2006 229,556
---------------------------------------------------
3,410,000 Spanish Government, Bond, 9.40%, 4/30/1999 25,336
---------------------------------------------------
8,540,000 Spanish Government., Deb., 10.10%, 2/28/2001 68,038
--------------------------------------------------- ------------
Total 456,848
--------------------------------------------------- ------------
SWEDISH KRONA--0.1%
---------------------------------------------------
800,000 Sweden, 6.00%, 2/9/2005 97,998
--------------------------------------------------- ------------
</TABLE>
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN
CURRENCY
PAR
AMOUNT OR VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
----------- --------------------------------------------------- ------------
<C> <S> <C>
BONDS--CONTINUED
---------------------------------------------------------------
FOREIGN BONDS--CONTINUED
---------------------------------------------------
UNITED KINGDOM POUND--0.5%
---------------------------------------------------
187,000 British Gas PLC, 8.875%, 7/8/2008 $ 324,451
---------------------------------------------------
38,000 U.K. Treasury, Deb., 8.50%, 12/7/2005 67,184
---------------------------------------------------
92,000 United Kingdom Treasury, Bond, 7.50%, 12/7/2006 153,274
--------------------------------------------------- ------------
Total 544,909
--------------------------------------------------- ------------
TOTAL FOREIGN BONDS 5,096,179
--------------------------------------------------- ------------
TOTAL BONDS (IDENTIFIED COST $30,315,865) 30,525,430
--------------------------------------------------- ------------
CASH EQUIVALENTS--9.7%
---------------------------------------------------------------
(C)REPURCHASE AGREEMENT--9.7%
---------------------------------------------------
$ 9,950,000 BT Securities Corporation, 5.56%, dated 5/30/1997,
due 6/2/1997
(at amortized cost) 9,950,000
--------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $91,733,421) (D) $101,149,142
--------------------------------------------------- ------------
</TABLE>
(a) Non-income procuding security.
(b) Denotes a restricted security which is subject to restrictions on resale
under Federal Securities laws. At May 31, 1997, these securities amounted
to $1,276,256 which represents 1.3% of net assets.
(c) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations. The investment in the repurchase agreement was through
participation in a joint account with other Federated funds.
(d) The cost of investments for federal tax purposes amounts to $91,733,421.
The net unrealized appreciation of investments on a federal tax basis
amounts to $9,415,721 which is comprised of $10,759,495 appreciation and
$1,343,774 depreciation at May 31, 1997.
Note: The categories of investments are shown as a percentage of net assets
($102,347,107) at May 31, 1997.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- -------------------------------------------------------------------------------
The following acronyms are used throughout this portfolio:
ADR--American Depositary Receipt
FRN--Floating Rate Note
GDR--Global Depository Receipt
PIK--Payment in Kind
PLC--Public Limited Company
REIT--Real Estate Investment Trust
* MID-AMERICAN WASTE SYSTEMS, INC.
On January 22, 1997, Mid-American Waste filed for protection under Chapter
11 of the Bankruptcy Code. The company has agreed to be acquired by USA
Waste Services, Inc. The timing and outcome of this potential transaction
are uncertain. Mid-American Waste has been deemed illiquid as a result of
contractual agreements relating to litigation.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------
Total investments in securities, at value
(identified and tax cost $91,733,421) $101,149,142
- --------------------------------------------
Cash denominated in foreign currencies
(identified cost $4,983) 4,955
- --------------------------------------------
Income receivable 629,249
- --------------------------------------------
Receivable for investments sold 1,379,248
- --------------------------------------------
Receivable for shares sold 125,613
- --------------------------------------------
Deferred expenses 10,830
- -------------------------------------------- ------------
Total assets 103,299,037
- --------------------------------------------
LIABILITIES:
- ----------------------------------
Payable for investments purchased $ 845,024
- ----------------------------------
Payable to bank 2,253
- ----------------------------------
Payable for taxes withheld 9,705
- ----------------------------------
Accrued expenses 94,948
- ---------------------------------- ---------
Total liabilities 951,930
- -------------------------------------------- ------------
NET ASSETS for 8,080,446 shares outstanding $102,347,107
- -------------------------------------------- ------------
NET ASSETS CONSIST OF:
- --------------------------------------------
Paid in capital $ 91,480,538
- --------------------------------------------
Net unrealized appreciation of investments
and translation of assets
and liabilities in foreign currency 9,410,159
- --------------------------------------------
Accumulated net realized gain on
investments, foreign currency
transactions, and futures contracts 1,038,219
- --------------------------------------------
Undistributed net investment income 418,191
- -------------------------------------------- ------------
Total Net Assets $102,347,107
- -------------------------------------------- ------------
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------
INSTITUTIONAL SHARES:
- --------------------------------------------
$61,391,257 / 4,844,068 shares outstanding $12.67
- -------------------------------------------- ------------
SELECT SHARES:
- --------------------------------------------
$40,955,850 / 3,236,378 shares outstanding $12.65
- -------------------------------------------- ------------
</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, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------
Dividends (net of foreign taxes withheld of $27,648) $ 461,001
- -----------------------------------------------------------------
Interest (net of foreign taxes withheld of $6,238) 1,262,576
- ----------------------------------------------------------------- ----------
Total income 1,723,577
- -----------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------
Investment advisory fee $339,672
- -------------------------------------------------------
Administrative personnel and services fee 77,180
- -------------------------------------------------------
Custodian fees 46,912
- -------------------------------------------------------
Transfer and dividend disbursing agent fees and
expenses 69,231
- -------------------------------------------------------
Directors'/Trustees' fees 1,905
- -------------------------------------------------------
Auditing fees 7,575
- -------------------------------------------------------
Legal fees 1,909
- -------------------------------------------------------
Portfolio accounting fees 37,357
- -------------------------------------------------------
Distribution services fee--Select Shares 133,239
- -------------------------------------------------------
Shareholder services fee--Institutional Shares 68,815
- -------------------------------------------------------
Shareholder services fee--Select Shares 44,413
- -------------------------------------------------------
Share registration costs 21,865
- -------------------------------------------------------
Printing and postage 19,551
- -------------------------------------------------------
Insurance premiums 2,010
- -------------------------------------------------------
Taxes 833
- -------------------------------------------------------
Miscellaneous 11,373
- ------------------------------------------------------- --------
Total expenses 883,840
- -------------------------------------------------------
Waivers--
- --------------------------------------------
Waiver of investment advisory fee $(182,483)
- --------------------------------------------
Waiver of distribution services fee--Select
Shares (44,413)
- --------------------------------------------
Waiver of shareholder services fee-- (55,052)
Institutional Shares ---------
- --------------------------------------------
Total waivers (281,948)
- ------------------------------------------------------- --------
Net expenses 601,892
- ----------------------------------------------------------------- ----------
Net investment income 1,121,685
- ----------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN
CURRENCY, AND FUTURES CONTRACTS:
- -----------------------------------------------------------------
Net realized gain on investments, foreign currency
transactions, and futures contracts
(net of foreign taxes withheld of $237) 1,034,134
- -----------------------------------------------------------------
Net change in unrealized appreciation of investments and
translation of
assets and liabilities in foreign currency 3,023,812
- ----------------------------------------------------------------- ----------
Net realized and unrealized gain on investments, foreign 4,057,946
currency, and futures contracts ----------
- -----------------------------------------------------------------
Change in net assets resulting from operations $5,179,631
- ----------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
MAY 31, 1997 NOVEMBER 30, 1996
- ------------------------------------------- ---------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------
OPERATIONS--
- -------------------------------------------
Net investment income $ 1,121,685 $ 1,560,986
- -------------------------------------------
Net realized gain (loss) on investments and
foreign currency transactions, and future
contracts ($1,034,134 and $2,395,283,
respectively, as computed for federal tax
purposes) 1,034,134 2,610,405
- -------------------------------------------
Net change in unrealized
appreciation/depreciation of investments
and translation of assets and liabilities
in foreign currency, and futures contracts 3,023,812 3,708,316
- -------------------------------------------
------------ ------------
Change in net assets resulting from
operations 5,179,631 7,879,707
- -------------------------------------------
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------
Distributions from net investment income
- -------------------------------------------
Institutional Shares (672,715) (1,071,156)
- -------------------------------------------
Select Shares (316,492) (489,212)
- -------------------------------------------
Distributions from net realized gains on
investments and foreign currency
transactions, and futures contracts
- -------------------------------------------
Institutional Shares (1,462,069) (600,532)
- -------------------------------------------
Select Shares (920,616) (289,253)
- -------------------------------------------
------------ ------------
Change in net assets resulting from
distributions to
shareholders (3,371,892) (2,450,153)
- -------------------------------------------
------------ ------------
SHARE TRANSACTIONS--
- -------------------------------------------
Proceeds from sale of shares 32,871,791 51,526,045
- -------------------------------------------
Net asset value of shares issued to
shareholders in payment of distributions
declared 2,864,873 2,029,232
- -------------------------------------------
Cost of shares redeemed (16,302,491) (15,833,126)
- -------------------------------------------
------------ ------------
Change in net assets resulting from share
transactions 19,434,173 37,722,151
- -------------------------------------------
------------ ------------
Change in net assets 21,241,912 43,151,705
- -------------------------------------------
NET ASSETS:
- -------------------------------------------
Beginning of period 81,105,195 37,953,490
- -------------------------------------------
------------ ------------
End of period (including undistributed net
investment income of $418,191 and $285,713,
respectively) $102,347,107 $ 81,105,195
- -------------------------------------------
------------ ------------
</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
(UNAUDITED) YEAR ENDED NOVEMBER 30,
MAY 31, -------------------------
1997 1996 1995 1994(A)
------------------------------------- ----------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.52 $ 11.59 $ 9.82 $ 10.00
-------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------
Net investment income 0.16 0.33 0.35 0.17
-------------------------------------
Net realized and unrealized gain
(loss) on investments, foreign
currency, and futures contracts 0.50 1.24 1.77 (0.25)
-------------------------------------
------- ------- ------- -------
Total from investment operations 0.66 1.57 2.12 (0.08)
-------------------------------------
------- ------- ------- -------
LESS DISTRIBUTIONS
-------------------------------------
Distributions from net investment
income (0.15) (0.38) (0.33) (0.10)
-------------------------------------
Distributions from net realized gain
on investments, foreign currency
transactions, and futures contracts (0.36) (0.26) (0.02) --
-------------------------------------
------- ------- ------- -------
Total distributions (0.51) (0.64) (0.35) (0.10)
-------------------------------------
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 12.67 $ 12.52 $ 11.59 $ 9.82
-------------------------------------
------- ------- ------- -------
TOTAL RETURN (B) 5.52% 14.13% 21.96% (0.87%)
-------------------------------------
RATIOS TO AVERAGE NET ASSETS
-------------------------------------
Expenses 1.05%* 1.05% 1.00% 0.89%*
-------------------------------------
Net investment income 2.75%* 2.95% 3.42% 3.42%*
-------------------------------------
Expense waiver/reimbursement (c) 0.60%* 0.88% 1.71% 1.72%*(d)
-------------------------------------
SUPPLEMENTAL DATA
-------------------------------------
Net assets, end of period (000
omitted) $61,391 $49,715 $25,611 $15,696
-------------------------------------
Average commission rate paid (e) $0.0040 $0.0037
-------------------------------------
Portfolio turnover 45% 86% 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, 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.
(e) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(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
(UNAUDITED) YEAR ENDED NOVEMBER 30,
MAY 31, -------------------------
1997 1996 1995 1994(A)
------------------------------------- ----------- ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.50 $ 11.59 $ 9.80 $10.00
-------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------
Net investment income 0.12 0.28 0.17 0.13
-------------------------------------
Net realized and unrealized gain
(loss) on investments and foreign
currency, and futures contracts 0.50 1.19 1.89 (0.25)
-------------------------------------
------- ------- ------- ------
Total from investment operations 0.62 1.47 2.06 (0.12)
-------------------------------------
------- ------- ------- ------
LESS DISTRIBUTIONS
-------------------------------------
Distributions from net investment
income (0.11) (0.30) (0.25) (0.08)
-------------------------------------
Distributions from net realized gain
on investments, foreign currency
transactions, and futures contracts (0.36) (0.26) (0.02) --
-------------------------------------
------- ------- ------- ------
Total distributions (0.47) (0.56) (0.27) (0.08)
-------------------------------------
------- ------- ------- ------
NET ASSET VALUE, END OF PERIOD $ 12.65 $ 12.50 $ 11.59 $ 9.80
-------------------------------------
------- ------- ------- ------
TOTAL RETURN (B) 5.17% 13.22% 21.36% (1.20%)
-------------------------------------
RATIOS TO AVERAGE NET ASSETS
-------------------------------------
Expenses 1.75%* 1.75% 1.75% 1.64%*
-------------------------------------
Net investment income 2.06%* 2.26% 2.65% 2.67%*
-------------------------------------
Expense waiver/reimbursement (c) 0.65%* 0.93% 1.71% 1.97%*(d)
-------------------------------------
SUPPLEMENTAL DATA
-------------------------------------
Net assets, end of period (000
omitted) $40,956 $31,390 $12,342 $1,673
-------------------------------------
Average commission rate paid (e) $0.0040 $0.0037
-------------------------------------
Portfolio turnover 45% 86% 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, 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.
(e) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997 (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 investment objective of the Fund is to seek capital
appreciation.
The Fund offers two classes of shares: Institutional Shares and Select Shares.
(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--Listed equity securities are valued at the last sale
price reported on a national securities exchange. U.S. government
securities, listed corporate bonds, (other fixed income and asset-backed
securities), and unlisted securities and private placement securities are
valued at the prices furnished by an independent pricing service. Short-
term securities are valued at the prices provided by an independent pricing
service. However, short-term securities with remaining maturities of sixty
days or less at the time of purchase may be valued at amortized cost, which
approximates fair market value.
With respect to valuation of foreign securities, trading in foreign
countries may be completed at times which vary from the closing of the New
York Stock Exchange. Therefore, foreign securities are valued at the latest
closing price on the exchange on which they are traded prior to the closing
of the New York Stock Exchange. Foreign securities quoted in foreign
currencies are translated into U.S. dollars at the foreign exchange rate in
effect at noon, eastern time on the day the value of the foreign security
is determined.
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 AGGRESSIVE 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 the Fund is reasonably able to obtain
information.
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 over a period not to exceed five years from the Fund's
commencement date.
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 six months ended May 31, 1997, the Fund had realized
gains of $26,181 on future contracts. As of May 31, 1997, the Fund had no
outstanding futures contracts.
FOREIGN EXCHANGE CONTRACTS--The Fund may enter into foreign currency
commitments for the delayed delivery of securities or foreign currency
exchange transactions. Purchased contracts are used to acquire exposure to
foreign currencies; whereas, contracts to sell are used to hedge the Fund's
securities against currency fluctuations. Risks may arise upon entering
these transactions from the potential inability of counter-parties to meet
the terms of their commitments and from unanticipated movements in security
prices or foreign exchange rates. The foreign currency
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- -------------------------------------------------------------------------------
transactions are adjusted by the daily exchange rate of the underlying
currency and any gains or losses are recorded for financial statement
purpose as unrealized until the settlement date. At May 31, 1997, the Fund
had outstanding foreign currency commitments as set forth below:
<TABLE>
<CAPTION>
UNREALIZED
SETTLEMENT CONTRACTS TO IN EXCHANGE CONTRACTS AT APPRECIATION
CONTRACTS SOLD DATE DELIVER/RECEIVE FOR VALUE (DEPRECIATION)
-------------- ---------- --------------- ----------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Belgian Franc 6/2/97 48,600 $1,382 $1,377 $5
Pound Sterling 6/2/97 966 1,581 1,581 0
Netherlands Guilder 6/2/97 1,989 1,038 1,035 3
---
Net unrealized
appreciation on foreign
exchange contracts $8
===
</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 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.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Trustees. The Fund will not incur any
registration costs upon such resales. The Fund's restricted securities are
valued at the price provided by dealers in the secondary market or, if no
market prices are available, at the fair value as determined by the Fund's
pricing committee.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- -------------------------------------------------------------------------------
Additional information on each restricted security held at May 31, 1997 is
as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
---------------------------------------- ---------------- ----------------
<S> <C> <C>
Allied Waste, Sr. Sub. Note 11/25/96 50,000
Bayer Corp., Deb. 05/21/96 245,903
Chancellor Broadcasting Co., Pfd. 01/17/97 50,000
Chilectra S.A., ADR 02/28/96 10,856
Collins & Aikman Products, Sr. Sub. Note 01/29/97 25,000
Continental Global, Sr. Note 03/26/97 50,000
CS Wireless Systems, Inc., Unit 02/16/96 0
Diamond Cable, Sr. Disc. Note 02/21/97 45,821
Fairchild Semiconductor, Sr. Sub. Note 03/06/97 50,000
Glenoit Corp., Sr. Sub. Note 03/26/97 49,905
Grupo Financiero Bancomer, S.A. de C.V.
Class B 5/22/97-5/23/97 85,282
Hub Power Co., GDR 02/13/97 58,700
MBW Foods, Inc., Sr. Sub. Note 02/05/97 50,000
Quest Communications, Sr. Note 03/25/97 50,000
Renaissance Cosmetics, Sr. Note 02/03/97 50,000
Sinclair Broadcast Group, Inc., Pfd. 03/05/97 50,000
Southern Peru Ltd. 05/23/97 250,000
Want Want Holdings 04/11/97 78,277
</TABLE>
DOLLAR ROLL TRANSACTIONS--The Fund enters into dollar roll transactions,
with respect to mortgage securities issued by GNMA, FNMA and FHLMC, in
which the Fund 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.
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 AGGRESSIVE GROWTH FUND
- -------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, 1996
----------------------- -----------------------
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
- --------------------------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Shares sold 1,613,480 $ 19,636,022 2,592,730 $ 30,626,600
- ---------------------------
Shares issued to
shareholders in payment of
distributions declared 143,483 1,735,658 115,076 1,330,109
- ---------------------------
Shares redeemed (883,868) (10,762,949) (946,450) (11,216,939)
- --------------------------- --------- ------------ --------- ------------
Net change resulting from
Institutional Share 873,095 $ 10,608,731 1,761,356 $ 20,739,770
transactions --------- ------------ --------- ------------
- ---------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, 1997 NOVEMBER 30, 1996
---------------------- ----------------------
SELECT SHARES SHARES AMOUNT SHARES AMOUNT
- ----------------------------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Shares sold 1,089,189 $13,235,769 1,775,082 $20,899,445
- -----------------------------
Shares issued to shareholders
in payment of distributions
declared 93,346 1,129,215 60,465 699,123
- -----------------------------
Shares redeemed (457,405) (5,539,542) (389,611) (4,616,187)
- ----------------------------- --------- ----------- --------- -----------
Net change resulting from 725,130 $ 8,825,442 1,445,936 $16,982,381
Select Share transactions --------- ----------- --------- -----------
- -----------------------------
Net change resulting from 1,598,225 $19,434,173 3,207,292 $37,722,151
share transactions --------- ----------- --------- -----------
- -----------------------------
</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.
FEDERATED MANAGED AGGRESSIVE GROWTH FUND
- -------------------------------------------------------------------------------
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 expenses of $88,333
were borne initially by Adviser. The Fund has agreed to reimburse Adviser
for the organizational expenses during the five year period following
effective date. For the period ended May 31, 1997, the Fund paid $17,852
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 AGGRESSIVE GROWTH FUND
- -------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended May 31, 1997, were as follows:
<TABLE>
<S> <C>
- ---------
PURCHASES $50,645,490
- --------- -----------
SALES $35,982,192
- --------- -----------
</TABLE>
(6) 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.
At May 31, 1997, the diversification of industries was as follows:
<TABLE>
<CAPTION>
% OF NET % OF NET
INDUSTRY ASSETS INDUSTRY ASSETS
------------------------------- -------- ------------------------------------- --------
<S> <C> <C> <C>
Aerospace & Military Technology 0.1 Hotels, Motels, Inns & Casinos 0.1
Agency 0.6 Industrial Products & Equipment 0.7
Automotive 0.4 Insurance 0.7
Banking 3.1 Leisure & Entertainment 0.7
Basic Industry 1.9 Machinery & Engineering 0.9
Beverage & Tobacco 0.3 Machinery & Equipment 0.2
Broadcast Radio & T.V. 0.3 Manufacturing 0.2
Building Materials & Components 0.2 Merchandising 0.7
Business Equipment & Services 0.3 Metals & Mining 0.3
Cable Television 0.7 Metals & Steel 0.3
Chemicals & Plastics 0.8 Miscellaneous Materials & Commodities 0.8
Clothing & Textiles 0.2 Multi Industry 0.6
Construction & Housing 0.1 Natural Gas Distribution
Consumer Durables 1.7 Oil & Gas 0.4
Consumer Non-Durables 3.5 Printing & Publishing 0.7
Consumer Products 0.2 Pharmaceutical 0.2
Container & Glass Products 0.1 Producer Manufacturing 2.8
Ecological Services & Equipment 0.1 Real Estate 1.6
Electrical & Electronics 2.3 Recreation 0.2
Energy Minerals 3.7 Retail Trade 3.4
Energy Sources 0.7 Services 2.6
Finance 6.5 Sovereign Government 3.6
Financial Intermediaries 0.5 State & Provincial 0.2
Financial Services 0.3 Supranational 0.1
Food & Drug Retailers 0.3 Surface Transportation 0.2
Food & Household Products 1.1 Technology 5.3
Forest Products & Paper 0.2 Telecommunications & Cellular 2.1
Government Agency 4.6 Transportation 1.3
Health & Personal Care 1.0 Treasury Securities 13.4
Healthcare 5.3 Utilities 3.9
</TABLE>
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. Edward C. Gonzales
Glen R. Johnson Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President, Treasurer,
John E. Murray, Jr. and Secretary
Wesley W. Posvar Richard B. Fisher
Marjorie P. Smuts Vice President
Karen M. Brownlee
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectuses which contain facts
concerning its objective and policies, management fees, expenses and other
information.
[LOGO OF MANAGED SERIES TRUST]
