PRESIDENT'S MESSAGE
Dear Investor:
I am pleased to present the Semi-Annual Report to Shareholders for Federated
U.S. Government Securities Fund: 5-10 Years. The report covers the six-month
reporting period ended August 31, 1998, and includes an investment review by
the fund's portfolio manager, a complete list of portfolio investments, and
the financial statements.
This mutual fund pursues total return consistent with current income through
the relative safety of a U.S. government portfolio.
During the reporting period, the fund's Institutional Shares produced a total
return of 5.93% through paid income totaling $0.29 per share and a net asset
value increase of $0.31 per share. Institutional Service Shares produced a
total return of 5.78% through paid income totaling $0.27 per share and a net
asset value increase of $0.31 per share.* Net assets totaled $80.8 million on
August 31, 1998.
Thank you for participating in the income opportunities of intermediate-term
government securities through Federated U.S. Government Securities Fund: 5-10
Years. We welcome your comments and questions.
Sincerely,
[Graphic]
Glen R. Johnson
President
October 15, 1998
* 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 U.S. Government Securities Fund: 5-10 Years represents a fully-
invested participation in U.S. Treasury and government agency obligations which
have an average maturity of 5 to 10 years. Since the fund's February 1998 fiscal
year end, the fund has been primarily invested in U.S. Treasury securities.
During the fund's semi-annual reporting period, fixed income performance
continued to reflect above-trend economic growth combined with subdued
inflation and a stronger dollar. Consumer prices increased at only a 1.6%
annual rate through August 1998 and the Asian financial crisis eliminated the
possibility of a tightening of Federal Reserve Board (the "Fed") monetary
policy. The Fed maintained its "wait and see" approach due to the
counteracting forces of the underlying strength in the U.S. economy and the
potential deflationary impact of the Asian financial crisis. The federal
funds target rate remained at 5.5%, where it had been since the Fed last
tightened near the end of March 1997, and the yield spread between 5-year and
10-year Treasury notes hovered mostly between 5 and -5 basis points. However,
in August, market expectations of an easing of Fed policy grew as the global
economic and financial crisis worsened and U.S. equity markets declined. The
flight to quality bid which had supported the Treasury market during the
fourth quarter of 1997 intensified, and U.S. Treasury securities outperformed
the spread sectors both on a nominal and duration-adjusted basis. U.S.
Treasury yields fell across the curve, ending August well below the federal
funds target rate of 5.50%. Yields of 5-year and 10-year Treasury notes
declined from 5.58% and 5.62% at the end of February to 4.79% and 4.97%
respectively, at the end of August 1998.
Although the fund's average duration has been managed within its neutral
range, its average duration was extended past its midpoint when yields rose in
late April and ended August at 5.5 years. The fund's net total return for the
six months ended August 31, 1998 was 5.93% and 5.78% for Institutional Shares
and Institutional Service Shares, respectively, compared to 6.28% for the
Merrill Lynch 5-10 Year Treasury Index.*
* The Merrill Lynch 5-10 Year Treasury Index is an unmanaged index tracking
U.S. government securities with maturities between 5 and 9.99 years.
Investments cannot be made in an index.
PORTFOLIO OF INVESTMENTS
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
AUGUST 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
U.S. TREASURY OBLIGATIONS--78.8%
U.S. TREASURY BONDS--12.6%
<S> <C> <C>
$ 920,000 10.750%, 2/15/2003 $ 1,126,890
1,300,000 11.125%, 8/15/2003 1,641,900
750,000 12.375%, 5/15/2004 1,016,738
900,000 12.000%, 5/15/2005 1,249,083
1,275,000 10.750%, 8/15/2005 1,692,524
2,133,000 11.250%, 2/15/2015 3,510,214
Total 10,237,349
U.S. TREASURY NOTES--66.2%
1,165,000 5.750%, 8/15/2003 1,200,672
6,200,000 7.250%, 5/15/2004 6,873,692
4,000,000 7.250%, 8/15/2004 4,441,120
5,550,000 7.875%, 11/15/2004 6,368,847
5,375,000 7.500%, 2/15/2005 6,092,455
5,300,000 6.500%, 8/15/2005 5,757,125
3,550,000 5.875%, 11/15/2005 3,725,299
3,500,000 7.000%, 7/15/2006 3,920,490
4,800,000 6.500%, 10/15/2006 5,232,240
2,349,000 6.625%, 5/15/2007 2,592,615
5,750,000 6.125%, 8/15/2007 6,157,100
1,100,000 5.625%, 5/15/2008 1,149,159
Total 53,510,814
TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST $60,945,191) 63,748,163
U.S. GOVERNMENT AGENCY OBLIGATIONS--15.4%
FEDERAL HOME LOAN BANK--15.4%
1,000,000 6.160%, 10/17/2002 1,029,600
1,000,000 6.150%, 10/14/2004 1,033,680
2,750,000 6.900%, 2/7/2007 2,977,287
</TABLE>
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
U.S. GOVERNMENT AGENCY OBLIGATIONS--CONTINUED
FEDERAL HOME LOAN BANK--CONTINUED
<S> <C> <C>
$ 1,600,000 5.905%, 3/27/2008 $ 1,624,608
2,500,000 5.925%, 4/9/2008 2,542,150
3,100,000 6.185%, 5/6/2008 3,209,492
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (IDENTIFIED COST $12,199,726) 12,416,817
(A)REPURCHASE AGREEMENT--5.0%
4,075,000 BT SECURITIES CORP., 5.800%, DATED 8/31/1998,
DUE 9/1/1998 (AT AMORTIZED COST) 4,075,000
TOTAL INVESTMENTS (IDENTIFIED COST $77,219,917(B) $80,239,980
</TABLE>
(a) The repurchase agreement is fully collateralized by U.S. Treasury
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.
(b) The cost of investments for federal tax purposes amounts to $77,219,917.
The net unrealized appreciation of investments on a federal tax basis
amounts to $3,020,063 at August 31, 1998.
Note: The categories of investments are shown as a percentage of net assets
($80,858,709) at August 31, 1998.
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF ASSETS AND LIABILITIES
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
AUGUST 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Total investments in securities, at value (identified and tax cost $77,219,917) $80,239,980
Income receivable 914,417
Receivable for shares sold 132,309
Prepaid 81,328,340
LIABILITIES:
Income distribution expenses 24,095
Deferred organizational costs 17,539
Total assets payable $341,020
Payable to Bank 128,611
Total liabilities 469,631
NET ASSETS for 7,682,251 shares outstanding $80,858,709
NET ASSETS CONSIST OF:
Paid in capital $77,512,775
Net unrealized appreciation of investments 3,020,063
Accumulated net realized gain on investments 331,771
Distributions in excess of net investment income (5,900)
Total Net Assets $80,858,709
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$64,731,322 / 6,150,021 shares outstanding $10.53
INSTITUTIONAL SERVICE SHARES:
$16,127,387 / 1,532,230 shares outstanding $10.53
</TABLE>
(See Notes which are an integral part of the Financial Statements)
STATEMENT OF OPERATIONS
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
SIX MONTHS ENDED AUGUST 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $1,670,786
EXPENSES:
Investment advisory fee $ 143,199 Administrative personnel and services fee
78,137 Custodian fees 2,116 Transfer and dividend disbursing agent fees and
expenses 17,116 Directors'/Trustees' fees 7,219 Auditing fees 7,213 Legal fees
3,260 Portfolio accounting fees 30,031 Distribution services fee--Institutional
Service Shares 5,912 Shareholder services fee--Institutional Shares 65,687
Shareholder services fee--Institutional Service Shares 5,912 Share registration
costs 18,746 Printing and postage 8,397 Insurance premiums 1,445 Miscellaneous
7,888 Total expenses 402,278 WAIVERS-- Waiver of investment advisory fee
$(143,199) Waiver of shareholder services fee--Institutional Shares (55,178)
Waiver of shareholder services fee--Institutional Service Shares (3,783)
Reimbursement of other operating expenses (105,845) Total waivers and
reimbursements (308,005) Net expenses 94,273 Net investment income 1,576,513
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized gain on
investments 247,547 Net change in unrealized appreciation of investments
1,954,709 Net realized and unrealized gain on investments 2,202,256 Change in
net assets resulting from operations $3,778,769 </TABLE> (See Notes which are an
integral part of the Financial Statements)
STATEMENT OF CHANGES IN NET ASSETS
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
AUGUST 31, FEBRUARY 28,
1998 1998
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 1,576,513 $ 1,667,034
Net realized gain on investments ($247,547 and $157,972, respectively, as computed for
federal tax purposes) 247,547 155,982
Net change in unrealized appreciation/depreciation 1,954,709 1,272,447
Change in net assets resulting from operations 3,778,769 3,095,463
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (1,460,153) (1,554,559)
Institutional Service Shares (122,260) (112,475)
Distributions from net realized gains
Institutional Shares -- (60,168)
Institutional Service Shares -- (3,810)
Change in net assets resulting from distributions to shareholders (1,582,413) (1,731,012)
SHARE TRANSACTIONS--
Proceeds from sale of shares 60,657,646 32,759,811
Net asset value of shares issued to shareholders in payment of distributions declared 502,908 702,923
Cost of shares redeemed (24,387,991) (9,944,658)
Change in net assets resulting from share transactions 36,772,563 23,518,076
Change in net assets 38,968,919 24,882,527
NET ASSETS:
Beginning of period 41,889,790 17,007,263
End of period $ 80,858,709 $ 41,889,790
</TABLE>
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
(UNAUDITED) YEAR ENDED ENDED
AUGUST 31, FEBRUARY 28, FEBRUARY 29,
1998 1998 1997 1996(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.22 $ 9.77 $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.29 0.59 0.59 0.21
Net realized and unrealized gain (loss) on investments 0.31 0.47 (0.21) (0.02)
Total from investment operations 0.60 1.06 0.38 0.19
LESS DISTRIBUTIONS
Distributions from net investment income (0.29) (0.59) (0.59) (0.21)
Distributions from net realized gain on investments 0.00 (0.02) 0.00 0.00
Total distributions (0.29) (0.61) (0.59) (0.21)
NET ASSET VALUE, END OF PERIOD $10.53 $10.22 $ 9.77 $ 9.98
TOTAL RETURN(B) 5.93% 11.09% 3.98% 1.85%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.30%* 0.30% 0.13% 0.11%*
Net investment income 5.53%* 5.84% 6.06% 5.75%*
Expense waiver/reimbursement(c) 1.08%* 1.69% 3.95% 12.26%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $64,731 $39,712 $15,225 $4,181
Portfolio turnover 63% 49% 57% 29%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from October 19, 1995 (date of initial
public investment) to February 29, 1996. For the period from September 5,
1995 (start of business) to October 18, 1995, the investment income was
distributed to the Trust's administrator.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
(UNAUDITED) YEAR ENDED ENDED
AUGUST 31, FEBRUARY 28, FEBRUARY 29,
1998 1998 1997 1996(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.22 $ 9.77 $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.27 0.55 0.56 0.20
Net realized and unrealized gain (loss) on investments 0.31 0.48 (0.21) (0.02 )
Total from investment operations 0.58 1.03 0.35 0.18
LESS DISTRIBUTIONS
Distributions from net investment income (0.27 ) (0.56) (0.56) (0.20 )
Distributions from net realized gain on investments 0.00 (0.02) 0.00 0.00
Total distributions (0.27 ) (0.58) (0.56) (0.20 )
NET ASSET VALUE, END OF PERIOD $10.53 $10.22 $ 9.77 $ 9.98
TOTAL RETURN(B) 5.78 % 10.76% 3.62% 1.75 %
RATIOS TO AVERAGE NET ASSETS
Expenses 0.61%* 0.60% 0.47% 0.45%*
Net investment income 5.25%* 5.56% 5.70% 5.25%*
Expense waiver/reimbursement(c) 0.99%* 1.64% 3.86% 12.17%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $16,127 $2,178 $1,782 $1,046
Portfolio turnover 63 % 49% 57% 29 %
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from October 19, 1995 (date of initial
public investment) to February 29, 1996. For the period from September 5,
1995 (start of business) to October 18, 1995, the investment income was
distributed to the Trust's administrator.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
NOTES TO FINANCIAL STATEMENTS
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
AUGUST 31, 1998 (UNAUDITED)
ORGANIZATION
Federated U.S. Government Securities Fund: 5-10 Years (the "Trust") is
registered under the Investment Company Act of 1940, as amended (the "Act"),
as a diversified, open-end management investment company. The Trust offers
two classes of shares: Institutional Shares and Institutional Service Shares.
The investment objective of the Trust is to pursue total return consistent
with current income.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
U.S. government 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 sixty
days or less at the time of purchase may be valued at amortized cost, which
approximates fair market value.
REPURCHASE AGREEMENTS
It is the policy of the Trust 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 Trust 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 Trust will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Trust'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 Trust 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 Trust'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.
The Trust, for federal tax purposes, had a capital loss carryforward of
$7,780, in 1997 which was utilized to reduce the Trust's taxable income in
1998 from net realized gain on investments.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS
The Trust may engage in when-issued or delayed delivery transactions. The
Trust 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.
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) for
each class of shares.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
AUGUST 31, 1998 FEBRUARY 28, 1998
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
Shares sold 4,516,814 $ 46,274,316 3,178,581 $31,719,467
Shares issued to shareholders in payment of distributions declared 44,283 453,029 61,313 612,595
Shares redeemed (2,297,399) (23,531,260) (911,650) (9,117,344)
Net change resulting from Institutional Share transactions 2,263,698 $ 23,196,085 2,328,244 $23,214,718
PERIOD ENDED YEAR ENDED
AUGUST 31, 1998 FEBRUARY 28, 1998
<S> <C> <C> <C> <C>
INSTITUTIONAL SERVICE SHARES SHARES AMOUNT SHARES AMOUNT
Shares sold 1,397,248 $ 14,383,330 104,104 $ 1,040,344
Shares issued to shareholders in payment of
distributions declared 4,876 49,879 9,043 90,328
Shares redeemed (83,010) (856,731) (82,376) (827,314)
Net change resulting from Institutional Service
Share transactions 1,319,114 $ 13,576,478 30,771 $ 303,358
Net change resulting from share transactions 3,582,812 $ 36,772,563 2,359,015 $ 23,518,076
</TABLE>
At August 31, 1998, capital paid-in aggregated $77,512,775.
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE
Federated Management, the Trust's investment adviser (the "Adviser"),
receives for its services an annual investment advisory fee equal to 0.50% of
the Trust's average daily net assets. The Adviser may voluntarily choose to
waive any portion of its fee and reimburse certain operating expenses of the
Trust. The Adviser can modify or terminate this voluntary waiver and
reimbursement at any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Trust 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. 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 Trust has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act. Under the terms of the Plan, the Trust will compensate
Federated Securities Corp. ("FSC"), the principal distributor, from the net
assets of the Trust to finance activities intended to result in the sale of
the Trust's Institutional Service Shares. The Plan provides that the
Institutional Service Shares may incur distribution expenses up to 0.25% of
the average daily net assets of the Institutional Service Shares annually, to
compensate FSC.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated
Shareholder Services ("FSS"), the Trust will pay FSS up to 0.25% of average
daily net assets of the Trust 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 Trust. 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 $42,365 were borne initially by FServ. The Trust
has agreed to reimburse FServ for the organizational expenses during the
five-year period following effective date. For the period ended August 31,
1998, the Trust paid $11,411 pursuant to this agreement.
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 August 31, 1998, were as follows:
PURCHASES $68,811,789
SALES $35,735,718
YEAR 2000
Similar to other financial organizations, the Trust could be adversely
affected if the computer systems used by the Trust's service providers do not
properly process and calculate date-related information and data from and
after January 1, 2000. The Trust'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 Trust'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 Trust.
TRUSTEES
John F. Donahue
Thomas G. Bigley
John T. Conroy, Jr.
Nicholas P. Constantakis
William J. Copeland
James E. Dowd, Esq.
Lawrence D. Ellis, M.D.
Edward L. Flaherty, Jr., Esq.
Peter E. Madden
John E. Murray, Jr., J.D., S.J.D.
Wesley W. Posvar
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, Treasurer, and Secretary
Richard B. Fisher
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 trust's prospectus which contains facts
concerning its objective and policies, management fees, expenses, and other
information.
Federated U.S. Government Securities Fund:
5-10 Years
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
AUGUST 31, 1998
[GRAPHIC]
Federated Securities Corp., Distributor
Federated Investors, Inc.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400
www.federatedinvestors.com
Cusip 31428S107
Cusip 31428S206
G01393-01 (10/98)
