SEMI-ANNUAL REPORT
President's Message
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Federated
Institutional Short-Duration Government Fund, a portfolio of Federated
Institutional Trust. This report covers the first half of the fund's fiscal
year, which is the six-month period ended January 31, 1999. It begins with an
investment review on the short-term market from the fund's portfolio manager.
Following the investment review are the fund's portfolio of investments and its
financial statements.
Federated Institutional Short-Duration Government Fund offers an extremely
high-quality, conservative approach to total return consistent with income. At
the end of the reporting period, the fund's assets were invested in government
agency obligations (67.7%) and repurchase agreements (34.2%).
Over the six-month reporting period, dividends paid to shareholders totaled
$0.05 per share. On the first day and the last day of the reporting period, the
fund's net asset value remained at $2.00. The fund's total return for the
reporting period was 2.76%. 1 Net assets totaled $196.8 million.
Thank you for participating in this high-quality fund. As always, we welcome
your questions, comments, or suggestions.
Sincerely,
[Graphic]
Glen R. Johnson
President
March 15, 1999
1 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
Federated Institutional Short-Duration Government Fund invests in
U.S. government securities, including U.S. Treasuries, U.S. government
agencies, and U.S. government agency-sponsored mortgage-backed securities,
either directly or through repurchase agreements. The Fund seeks to maintain
a duration of one year or less. Federated Institutional Short-Duration
Government Fund became effective on July 10, 1997. The Fund was assigned a
AAAf credit rating 1 from Standard & Poor's on July 31, 1997.
There were two central themes in the government markets over the reporting
period ended January 31, 1999. First, the economy continued to advance at a
robust pace of growth, with GDP expanding in the third and fourth quarters of
1998 at 3.7% and 6.1%, respectively, with all indications that this same
strength has spilled over into 1999. Although the manufacturing sector was soft,
the housing and retail sectors continued to propel the economy forward. While
this pace of growth is in excess of what has traditionally been viewed to be the
non-inflationary potential of the economy, inflation nevertheless has remained
benign, perhaps reflecting advances in productivity that have enabled growth to
be achieved without upward pressure on prices. Under normal circumstances,
however, the growth trajectory of the economy would have been sufficient to make
Federal Reserve Board (the "Fed") officials concerned about the inflationary
threat that could result from such above-trend growth.
Circumstances were not normal, however, as economic crises in countries overseas
and in Latin America were the second, and ultimately more dominant, theme over
the reporting period. In August 1998, the economic troubles in Asia spread to
encompass Russia and then Latin America. As fears that the United States could
not continue to be immune from what had become a global economic crisis weighed
heavily on the U.S. equity market, investors, both domestic and abroad, fled to
the perceived safety of the U.S. Treasury market. Yields on Treasury-and to a
lesser extent U.S. government agency-securities plummeted, as investors shunned
credit- sensitive markets in favor of the safe haven of U.S. government
securities, and a credit/liquidity crisis in the U.S. financial markets became
evident. Faced with this scenario, the Fed voted to ease monetary policy by 25
basis points, bringing the Fed funds target down to 5.25%, in late September in
an attempt to calm investor fears. Market participants viewed this move to be
too tentative, however, and it was not until the Fed took two additional easing
steps-in mid-October and November, bringing the Fed funds target to 4.75%-that
some semblance of calm returned to the markets.
The front end of the Treasury yield curve ended the reporting period flatter
than when it began, as measured by the spread between the three-month Treasury
bill and 2-year Treasury note which narrowed from 40 basis points to just 14
basis points. At one point, at the height of the liquidity crisis in
mid-October, this area of the curve inverted with the yield on the two-year
Treasury plummeting from 5.5% to 3.8% on October 15, but then retraced a portion
of that decline to end the reporting period at 4.5%. A reduced supply of
Treasury securities resulting from the vast improvement in the budget
situation-with current projections of a surplus in the neighborhood of $100
billion for fiscal year 1999-kept the Treasury market well-bid over the entire
period, and exacerbated the flight-to- quality influence in this sector.
1 An AAAf rating by Standard & Poor's means that the fund's portfolio holdings
and counterparties provide extremely strong protection against losses from
credit defaults. Ratings do not remove market risks and are subject to change.
As investors shunned risk early in the reporting period, all spread product
(corporate, mortgage-backed, asset-backed) suffered from reduced demand and
spread widening as market volatility increased along with the demand for
liquidity. Falling market yields reduced 30-year mortgage rates to levels last
seen in the 1960s. The combination of volatility, risk aversion and prepayment
concerns drove mortgage-backed security spreads to the widest levels of the past
10 years. We believe these wide spreads offered an investment opportunity.
Despite prepayment and accompanying supply concerns, mortgages offered
fundamental value as the spreads appeared to more than compensate investors for
the given risks. The mortgage allocation was raised during September through
October from approximately 30% to nearly 36%. Purchases were concentrated in
15-year 6.0% and 6.5% coupons. The 15-year mortgage-backed security sector has
proven to be relatively stable from a prepayment standpoint, and the coupons
purchased were near- par and slight premium securities, offering additional
prepayment protection.
Also, adjustable rate mortgage spreads widened to historically attractive
levels. Seasoned adjustable rate GNMA securities were purchased in October as
spreads gapped wider. Since the widest levels reached in early October, fixed
rate and adjustable rate mortgage spreads have tightened significantly. Despite
this tightening, the sector offers value to investors. The mortgage-backed
security allocation is approximately one-third of assets.
Aside from the mortgage allocation, the rest of the portfolio remained invested
in traditional government money market instruments. Purchases of securities
favored U.S. government agency discount notes and debentures over Treasury
securities because of the expensive nature of the Treasury market. The Fund also
maintained a position in repurchase agreements which helped to provide price
stability and to meet liquidity needs.
The Fund's net asset value ended the reporting period at $2.00 per share. The
portfolio's effective duration was 0.6 years at the end of January 1999,
modestly longer than its intended benchmark, the Merrill Lynch 6- Month Treasury
Bill Index. 2 The performance of the Fund relative to the benchmark remained
favorable over the reporting period, with a total return of 2.76% 3 compared to
the index at 2.47%.
Since the end of January, rates across the government yield curve have risen
significantly, as speculation that the Fed might have to tighten monetary policy
because of the strength of the economy has mounted. The yield on the two-year
Treasury stood at close to 5.2% at the end of February, a level not seen since
last August. In the absence of inflation and with the outlook for the world
economy still somewhat uncertain, such speculation appears to be premature at
this juncture. The Fed is likely to remain on hold for the next few months,
barring any external shocks or inflationary pressures.
2 Merrill Lynch 6-Month Treasury Bill Index is an unmanaged index tracking
six-month U.S. government securities. The index is produced by Merrill Lynch,
Pierce, Fenner, and Smith, Inc. Investments cannot be made in an index.
3 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.
Portfolio of Investments
JANUARY 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
LONG-TERM GOVERNMENT OBLIGATIONS-67.7%
FEDERAL HOME LOAN BANK-3.0%
$ 4,000,000 4.790%, 2/4/2000 $ 3,996,240
2,000,000 5.615%, 4/22/1999 2,004,280
TOTAL 6,000,520
FEDERAL HOME LOAN BANK, FLOATING RATE NOTE-4.1%
3,000,000 1 4.800%, 10/21/1999 3,001,380
5,000,000 1 5.050%, 12/1/1999 4,997,890
TOTAL 7,999,270
FEDERAL HOME LOAN MORTGAGE ASSOCIATION-9.9%
8,000,000 4.920% - 5.040%, 2/25/1999 - 2/26/1999 7,974,620
11,197,896 6.500%, 11/1/2013 11,386,916
TOTAL 19,361,536
FEDERAL NATIONAL MORTGAGE ASSOCIATION-41.3%
29,500,000 4.680% - 5.090%, 2/19/1999 - 7/30/1999 29,236,670
1,000,000 4.780%, 11/30/1999 999,970
2,000,000 5.370%, 2/26/1999 2,001,540
3,000,000 5.520%, 8/9/1999 3,012,540
5,000,000 5.650%, 5/26/1999 5,015,150
10,000,000 6.000%, 1/1/2014 10,034,400
29,955,855 6.500%, 6/1/2013 - 1/1/2014 30,433,352
397,756 10.00%, 2/1/2025 432,934
TOTAL 81,166,556
FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTE-2.0%
2,000,000 1 4.790%, 2/17/1999 2,000,660
2,000,000 1 4.912%, 4/28/1999 2,001,260
TOTAL 4,001,920
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-1.5%
1,929,377 8.500%, 6/15/2021 2,063,237
880,779 9.000%, 12/15/2019 946,564
TOTAL 3,009,801
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
LONG-TERM GOVERNMENT OBLIGATIONS-continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION, ARM-5.4%
$ 5,508,228 6.125%, 10/20/2023 - 11/20/2023 $ 5,587,467
5,038,922 6.625%, 7/20/2024 - 9/20/2024 5,119,726
TOTAL 10,707,193
STUDENT LOAN MARKETING ASSOCIATION-0.5%
1,000,000 5.580%, 3/11/1999 1,001,180
TOTAL LONG-TERM GOVERNMENT OBLIGATIONS (IDENTIFIED
COST $133,110,979) 133,247,976
REPURCHASE AGREEMENTS-34.2% 2
2,325,000 Deutsche Morgan Grenfell, 4.740%, dated 1/29/1999, due
2/1/1999 2,325,000
15,000,000 Goldman Sachs Group, LP, 4.820%, dated 1/29/1999, due
2/1/1999 15,000,000
5,000,000 3 J.P. Morgan & Co., Inc., 4.830%, dated 1/19/1999, due
2/18/1999 5,000,000
15,000,000 Paribas Corp., 4.820%, dated 1/29/1999, due 2/1/1999 15,000,000
15,000,000 Prudential Securities, Inc., 4.820%, dated 1/29/1999, due
2/1/1999 15,000,000
15,000,000 Salomon Brothers, Inc., 4.820%, dated 1/29/1999, due
2/1/1999 15,000,000
TOTAL REPURCHASE AGREEMENTS (AT AMORTIZED COST) 67,325,000
TOTAL INVESTMENTS (IDENTIFIED COST $200,435,979) 4 $ 200,572,976
</TABLE>
1 Current rate shown.
2 The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
3 Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase agreement
within seven days.
4 The cost of investments for federal tax purposes amounts to $200,435,979. The
net unrealized appreciation of investments on a federal tax basis amounts to
$136,997 which is comprised of $199,880 appreciation and $62,883 depreciation at
January 31, 1999.
Note: The categories of investments are shown as a percentage of net assets
($196,754,031) at January 31, 1999.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
JANUARY 31, 1999 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS:
Investments in repurchase agreements $ 67,325,000
Investments in securities 133,247,976
Total investments in securities, at value
(identified and tax cost $200,435,979) $200,572,976
Income receivable 706,185
Receivable for shares sold 2,214,795
TOTAL ASSETS 203,493,956
LIABILITIES:
Payable for investments purchased 3,995,760
Payable for shares redeemed 724
Income distribution payable 711,307
Payable to Bank 2,032,134
TOTAL LIABILITIES 6,739,925
Net assets for 98,206,296 shares outstanding $ 196,754,031
NET ASSETS CONSIST OF:
Paid in capital $ 196,447,336
Net unrealized appreciation of investments 136,997
Accumulated net realized gain on investments 193,849
Distributions in excess of net investment income (24,151)
TOTAL NET ASSETS $ 196,754,031
NET ASSET VALUE, OFFERING PRICE, AND
REDEMPTION PROCEEDS PER SHARE:
$196,754,031 / 98,206,296 shares outstanding $2.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
SIX MONTHS ENDED JANUARY 31, 1999 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest (net of dollar roll expense of $23,894) $ 3,744,012
EXPENSES:
Investment advisory fee $ 269,806
Administrative personnel and services fee 63,014
Custodian fees 8,810
Transfer and dividend disbursing agent fees and expenses 10,944
Directors'/Trustees' fees 5,804
Auditing fees 7,004
Legal fees 1,818
Portfolio accounting fees 26,786
Share registration costs 10,914
Printing and postage 6,356
Insurance premiums 1,131
Miscellaneous 2,749
TOTAL EXPENSES 415,136
WAIVER:
Waiver of investment advisory fee $ (256,185)
TOTAL WAIVER (256,185)
Net expenses 158,951
Net investment income 3,585,061
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 200,456
Net change in unrealized appreciation of investments 152,074
Net realized and unrealized gain on investments 352,530
Change in net assets resulting from operations $ 3,937,591
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
(unaudited) ENDED
JANUARY 31, JULY 31,
1999 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income $ 3,585,061 $ 4,628,050
Net realized gain on investments ($200,456 and $57,875,
respectively, as computed for federal tax purposes) 200,456 57,875
Net change in unrealized appreciation/(depreciation) of
investments 152,074 (15,049)
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 3,937,591 4,670,876
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income (3,586,347) (4,650,695)
Distributions from net realized gains on investments (61,004) (3,478)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS (3,647,351) (4,654,173)
SHARE TRANSACTIONS:
Proceeds from sale of shares 157,711,760 206,279,411
Net asset value of shares issued to shareholders in payment
of distributions declared 2,534,082 4,190,491
Cost of shares redeemed (81,714,176) (103,654,400)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 78,531,666 106,815,502
Change in net assets 78,821,906 106,832,205
NET ASSETS:
Beginning of period 117,932,125 11,099,920
End of period $ 196,754,031 $ 117,932,125
</TABLE>
See Notes which are an integral part of the Financial Statements
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited)
JANUARY 31, YEAR ENDED JULY 31,
1999 1998 1997 1
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 2.00 $ 2.00 $ 2.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.05 0.11 0.01
LESS DISTRIBUTIONS:
Distributions from net investment income (0.05) (0.11) (0.01)
Distributions from net realized gains on investments (0.00)2 (0.00)2 -
TOTAL DISTRIBUTIONS (0.05) (0.11) (0.01)
NET ASSET VALUE, END OF PERIOD $ 2.00 $ 2.00 $ 2.00
TOTAL RETURN 3 2.76% 5.86% 0.34%
RATIOS TO AVERAGE NET ASSETS:
Expenses 0.24% 4 0.15% 0.00% 4
Net investment income 5.32% 4 5.62% 5.75% 4
Expense waiver/reimbursement 5 0.38% 4 0.63% 77.80% 4
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $196,754 $117,932 $11,100
Portfolio turnover 66% 145% 0%
</TABLE>
1 Reflects operations for the period from July 10, 1997 (start of performance)
to July 31, 1997. For the period from August 1, 1996 to July 9, 1997 all income
was distributed to the Administrator.
2 Per share amount does not round to ($0.01).
3 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
JANUARY 31, 1999 (UNAUDITED)
ORGANIZATION
Federated Institutional 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 one diversified portfolio, Federated
Institutional Short Duration Government Fund (the "Fund"). The investment
objective of the Fund is current income.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
U.S. government securities and mortgage-backed securities are generally valued
at the mean of the latest bid and asked price as 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 60 days or less at the time of purchase may be valued at amortized
cost, which approximates fair market value.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank or broker to take
possession, to have legally segregated in the Federal Reserve Book Entry System,
or to have segregated within the custodian bank's vault, all securities held as
collateral under repurchase agreement transactions. Additionally, procedures
have been established by the Fund to monitor, on a daily basis, the market value
of each repurchase agreement's collateral to ensure that the value of collateral
at least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the "Trustees").
Risks may arise from the potential inability of counterparties to honor the
terms of the repurchase agreement. Accordingly, the Fund could receive less than
the repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex- dividend
date.
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 taxes
are necessary.
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.
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 involve "to be announced"
securities and are treated as short-term financing arrangements which will not
exceed 12 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.
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). At
January 31, 1999, capital paid-in aggregated $196,447,336.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JANUARY 31, JULY 31,
1999 1998
<S> <C> <C>
Shares sold 78,825,618 103,139,705
Shares issued to shareholders in payment of
distributions declared 1,265,802 2,095,246
Shares redeemed (40,842,959) (51,827,200)
NET CHANGE RESULTING FROM SHARE TRANSACTIONS 39,248,461 53,407,751
</TABLE>
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 0.40% of the Fund's
average daily net assets. The Adviser may voluntarily choose to waive any
portion of its fee and/or reimburse certain operating expenses of the Fund. The
Adviser can modify or terminate this voluntary waiver and/or reimbursement at
any time at its sole discretion.
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, Inc.
for the period.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts. For the
period ended January 31, 1999, the Fund did not incur a shareholder services
fee.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary 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.
GENERAL
Certain of the Officers and Trustees of the Trust are Officers and Directors or
Trustees of the above companies.
INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended January 31, 1999, were as follows:
Purchases $121,996,924
Sales $ 55,301,623
YEAR 2000
Similar to other financial organizations, the Fund could be adversely affected
if the computer systems used by the Fund's service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Fund's other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Fund.
SUBSEQUENT EVENT
Effective March 31, 1999, Federated Management, Adviser to the Fund, merged into
Federated Investment Management Company (formerly Federated Advisers).
Trustees
JOHN F. DONAHUE
THOMAS G. BIGLEY
JOHN T. CONROY, JR.
NICHOLAS P. CONSTANTAKIS
WILLIAM J. COPELAND
JOHN F. CUNNINGHAM
LAWRENCE D. ELLIS, M.D.
PETER E. MADDEN
JOHN E. MURRAY, JR., J.D., S.J.D.
MARJORIE P. SMUTS
Officers
JOHN F. DONAHUE
Chairman
GLEN R. JOHNSON
President
J. CHRISTOPHER DONAHUE
Executive Vice President
EDWARD C. GONZALES
Executive Vice President
JOHN W. MCGONIGLE
Executive Vice President and Secretary
RICHARD B. FISHER
Vice President
RICHARD J. THOMAS
Treasurer
NICHOLAS J. SEITANAKIS
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses, and other information.
SEMI-ANNUAL REPORT
[Graphic]
Federated Institutional Short-Duration Government Fund
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
JANUARY 31, 1999
[Graphic]
Federated Institutional Short-Duration Government Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Cusip 31420B102
G02287-05 (3/99)
[Graphic]
