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MANAGED SERIES TRUST Federated Managed Aggressive Growth Fund Federated Managed
Growth Fund Federated Managed Growth and Income Fund Federated Managed Income
Fund Supplement to Prospectuses Dated January 31, 1999
I. At a special meeting of shareholders to be held on November 23,
1999, shareholders of the above-named Funds will be asked to vote
on the changes described below. If approved by shareholders, these
changes will take effect on or after December 1, 1999.
Shareholders will be notified if any of these changes are not
approved at the special meeting or any adjournment thereof. Please
keep this supplement for your records.
Shareholders will be asked to consider the following proposals:
(1) To elect seven Trustees.
(2) To make changes to the fundamental investment policies of each
Fund:
(a) To amend the Funds' fundamental investment policies
regarding diversification to read as follows:
"With respect to securities comprising 75% of the value of
its total assets, the Fund will not purchase securities of
any one issuer (other than cash; cash items; securities
issued or guaranteed by the government of the United
States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government
securities; and securities of other investment companies)
if, as a result, more than 5% of the value of its total
assets would be invested in the securities of that issuer,
or the Fund would own more than 10% of the outstanding
voting securities of that issuer."
(b) To amend the Funds' fundamental investment policies
regarding borrowing money and issuing senior securities to
read as follows:
"The Fund may borrow money, directly or indirectly, and
issue senior securities to the maximum extent permitted
under the 1940 Act."
(c) To amend the Funds' fundamental investment policies
regarding investments in real estate to read as follows:
"The Fund may not purchase or sell real estate, provided
that this restriction does not prevent the Fund from
investing in issuers which invest, deal, or otherwise
engage in transactions in real estate or interests
therein, or investing in securities that are secured by
real estate or interests therein. The Fund may exercise
its rights under agreements relating to such securities,
including the right to enforce security interests and to
hold real estate acquired by reason of such enforcement
until that real estate can be liquidated in an orderly
manner."
(d) To amend the Funds' fundamental investment policies
regarding investments in commodities to read as follows:
"The Fund may not purchase or sell physical commodities,
provided that the Fund may purchase securities of
companies that deal in commodities."
(e) To amend the Funds' fundamental investment policies
regarding underwriting securities to read as follows:
"The Fund may not underwrite the securities of other
issuers, except that the Fund may engage in transactions
involving the acquisition, disposition or resale of its
portfolio securities, under circumstances where it may be
considered to be an underwriter under the Securities Act
of 1933."
(f) To amend the Funds' fundamental investment policies
regarding lending by the Funds to read as follows:
"The Fund may not make loans, provided that this
restriction does not prevent the Fund from purchasing debt
obligations, entering into repurchase agreements, lending
its assets to broker/dealers or institutional investors
and investing in loans, including assignments and
participation interests."
(g) To amend the Funds' fundamental investment policies
regarding concentration of the Funds' investments in the
securities of companies in the same industry to read as
follows:
"The Fund will not make investments that will result in
the concentration of its investments in the securities of
issuers primarily engaged in the same industry. Government
securities, municipal securities and bank instruments will
not be deemed to constitute an industry."
(h) To amend, and to make non-fundamental, the Funds'
fundamental investment policies regarding buying
securities on margin to read as follows:
"The Fund will not purchase securities on margin, provided
that the Fund may obtain short-term credits necessary for
the clearance of purchases and sales of securities, and
further provided that the Fund may make margin deposits in
connection with its use of financial options and futures,
forward and spot currency contracts, swap transactions and
other financial contracts or derivative instruments."
(i) To amend, and to make non-fundamental, the Funds'
fundamental investment policies regarding pledging assets
to read as follows:
"The Fund will not mortgage, pledge, or hypothecate any of
its assets, provided that this shall not apply to the
transfer of securities in connection with any permissible
borrowing or to collateral arrangements in connection with
permissible activities."
(3) To eliminate the Funds' fundamental investment policies
prohibiting selling securities short.
(4) To restate the fundamental investment objectives of the
Federated Managed Growth Fund, Federated Managed Growth and
Income Fund and Federated Managed Income Fund, to read as
follows:
(a) For Federated Managed Growth Fund:
"To seek capital appreciation with income as a secondary
objective."
(b) For Federated Managed Growth and Income Fund:
"To seek total return with an emphasis on income and capital
appreciation."
(c) For Federated Managed Income Fund:
"To seek total return with an emphasis on income and
potential for capital appreciation."
(5) To approve amendments to, and a restatement of, the
Declaration of Trust for Managed Series Trust:
(a) To require the approval of a majority of the outstanding
voting securities of Managed Series Trust in the event of
the sale and conveyance of the assets of the Trust to
another trust or corporation; and
(b) To permit the Board of Trustees to liquidate assets of
Managed Series Trust, its series or classes, and
distribute the proceeds of such assets to the holders of
such shares representing such interests, without seeking
shareholder approval.
II. The following actions have been taken by the Board of Trustees
with regard to certain non-fundamental investment policies and
limitations of the Funds:
(1) Approved the elimination of the Funds' non-fundamental
investment limitations regarding purchasing put options and
writing call options.
(2) Approved the elimination of the following undertakings for
each of the Funds:
"The Fund does not expect to borrow money in excess of 5% of
the value of its net assets during the coming fiscal year."
(3) Approved revisions to the following non-fundamental investment
policies of the Funds:
(a) Approved revisions to the Funds' non-fundamental
investment policies regarding investments in illiquid
securities to read as follows:
"The Fund will not purchase securities for which there is
no readily available market, or enter into repurchase
agreements or purchase time deposits maturing in more than
seven days, if immediately after and as a result, the
value of such securities would exceed, in the aggregate,
15% of the Fund's net assets."
(b) Approved revisions to Federated Managed Income Fund's
non-fundamental current asset class model to provide that
5-25% of Federated Managed Income Fund's total assets will
be allocated to stocks, and 75-95% of Federated Managed
Income Fund's total assets will be allocated to bonds (for
Federated Managed Income Fund only).
(4) Approved the deletion, from Managed Series Trust's
registration statement, of the disclosure identifying the
acceptable underlying investment asset categories for each of
the Funds.
(5) Delegated to the Funds' investment adviser responsibility for
the determination of the appropriate benchmark weightings and
ranges of asset categories for each Fund, which weightings and
ranges shall in the future be modified as necessary, in the
best judgment of the Funds' investment adviser, to achieve the
Funds' stated investment objectives.
(6) Approved changing the name of the Trust from "Managed Series
Trust" to "Federated Managed Allocation Portfolios."
(7) Approved changes to the names of the Funds, to become
effective in January, 2000, as follows:
(a) Changed the name of "Federated Managed Aggressive Growth
Fund" to "Federated Managed Growth Portfolio;"
(b) Changed the name of "Federated Managed Growth Fund" to
"Federated Managed Moderate Growth Portfolio;"
(c) Changed the name of "Federated Managed Growth and Income
Fund" to "Federated Managed Conservative Growth
Portfolio;" and
(d) Changed the name of "Federated Managed Income Fund" to
"Federated Managed Income Portfolio."
(8) Approved the adoption of the following non-fundamental
investment limitations pertaining to concentration for the
Funds:
"(a) utility companies will be divided according to their
services (for example, gas, gas transmission, electric and
telephone will be considered a separate industry); (b)
financial service companies will be classified according to
the end users of their services (for example, automobile
finance, bank finance and diversified finance will each be
considered a separate industry); and (c) asset-backed
securities will be classified according to the underlying
assets securing such securities. To conform to the current
view of the SEC staff that only domestic bank instruments may
be excluded from industry concentration limitations, as a
matter of non-fundamental policy, the Fund will not exclude
foreign bank instruments from industry concentration
limitation tests so long as the policy of the SEC remains in
effect. In addition, investments in bank instruments, and
investments in certain industrial development bonds funded by
activities in a single industry, will be deemed to constitute
investment in an industry, except when held for temporary
defensive purposes. The investment of more than 25% of the
value of the Fund's total assets in any one industry will
constitute `concentration.'"
(9) Approved the adoption of the following non-fundamental
investment limitation for each Fund when applying its
commodities restriction:
"As a matter of non-fundamental policy, for purposes of the
commodities policy, investments in transactions involving
futures contracts and options, forward currency contracts,
swap transactions and other financial contracts that settle by
payment of cash are not deemed to be investments in
commodities."
October 29, 1999
Federated Investors
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Cusip 56166K 107 Cusip 56166K 305 Cusip 56166K 503 Cusip 56166K 701 Cusip 56166K
206 Cusip 56166K 404 Cusip 56166K 602 Cusip 56166K 800
G02715-02 (10/99)
