FEDERATED US GOVERNMENT SECURITIES FUND 5 10 YEARS, 485BPOS, 1998-04-24

FEDERATED US GOVERNMENT SECURITIES FUND 5 10 YEARS
485BPOS, 1998-04-24

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1933 Act File No. 33-60411
1940 Act File No. 811-07309

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 x
---

Pre-Effective Amendment No. ______...................... ___
----

Post-Effective Amendment No. 4 ...................... x
----- ---

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 x

Amendment No. 5 .................................. x
-------- ----

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds, 5800 Corporate Drive,
Pittsburgh, Pennsylvania 15237-7000
(Address of Principal Executive Offices)

(412) 288-1900
(Registrant's Telephone Number)

John W. McGonigle, Esquire,
Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
x on April 30, 1998 pursuant to paragraph (b)
60 days after filing pursuant to paragraph (a) (i) on pursuant to paragraph
(a) (i). 75 days after filing pursuant to paragraph (a)(ii) on
_________________ pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Copies To:

Matthew G. Maloney, Esquire
Dickstein, Shapiro, Morin & Oshinsky, LLP
2101 L Street, N.W.
Washington, D.C. 20037

<PAGE>

CROSS REFERENCE SHEET

This Registration Statement of FEDERATED U.S. GOVERNMENT SECURITIES FUND:
5-10 YEARS consists of one portfolio which is offered in two classes of shares:
(a) Institutional Shares and (b) Institutional Service Shares, and is comprised
of the following:

PART A. INFORMATION REQUIRED IN A PROSPECTUS.

Prospectus Heading
(Rule 404(c) Cross Reference)

Item 1. Cover Page....................(a,b) Cover Page.
Item 2. Synopsis......................(a) Summary of Trust Expenses -
Institutional Shares; (b) Summary of
Trust Expenses -
--------
Institutional Service Shares.
Item 3. Condensed Financial
Information (a,b) Financial Highlights;
(a,b) Performance Information;
(a,b) Financial Statements.
Item 4. General Description of
Registrant (a,b) General Information;
..............................(a,b) Investment Information; (a,b)
Investment Objective; (a,b)
Investment Policies; (a,b)
Investment Limitations; (a,b)
Addresses.

Item 5. Management of the Fund........(a,b) Trust Information; (a,b)
Management of the Trust; (a)
Distribution of Institutional Shares;
(b) Distribution of Institutional
Service Shares; (a, b) Administration
of the Trust.
Item 6. Capital Stock and Other
Securities....................(a,b) Dividends; (a,b) Capital Gains;
(a,b) Shareholder Information; (a,b)
Voting Rights; (a,b)
Tax Information; (a,b) Federal Income
Tax; (a,b) State and Local Taxes;
(a-b) Other Classes of
Shares.
Item 7. Purchase of Securities Being
Offered.......................(a,b) Net Asset Value; (a) Investing
in Institutional Shares; (b) Investing
in Institutional Service Shares; (a,b)
Share Purchases; (a,b) Minimum
Investment Required; (a,b) What Shares
Cost;(a,b)Confirmations and Account
Statements.

Item 8. Redemption or Repurchase......(a) Redeeming Institutional Shares;
(b) Redeeming Institutional Service
Shares; (a,b) Telephone
------------------------
Redemption; (a,b) Written Requests;
(a,b) Accounts With Low Balances.

Item 9. Pending Legal Proceedings None.

<PAGE>

PART B. INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION.

Item 10. Cover Page....................(a, b) Cover Page.
Item 11. Table of Contents.............(a, b) Table of Contents.
Item 12. General Information and
History.......................(a, b) General Information about the
Trust; (a, b) About Federated
Investors.
Item 13. Investment Objectives and
Policies......................(a, b) Investment Objective and
Policies.
Item 14. Management of the Trust.......(a, b) Federated U.S. Government
Securities Fund: 5-10 Years
Management; (a,b) Trustee
-----------------------
Compensation; (a,b) Trustee Liability.
Item 15. Control Persons and Principal
Holders of Securities (a, b) Trust Ownership.
Item 16. Investment Advisory and Other
Services......................(a, b)Investment Advisory Services;
(a,b) Other Services.
Item 17. Brokerage Allocation..........(a,b) Brokerage Transactions.
Item 18. Capital Stock and Other
Securities....................(a,b) Massachusettes Partnership Law.
Item 19. Purchase, Redemption and
Pricing of Securities Being
Offered.......................(a, b) Purchasing Shares; (a,b)
Determining Net Asset Value; (a,b)
Redeeming Shares; (a,b)
Redemption in Kind.
Item 20. Tax Status....................(a, b) Tax Status.
Item 21. Underwriters Not applicable.
Item 22. Calculations of Performance
Data..........................(a, b) Total Return; (a,b) Yield;
(a,b) Performance Comparisons; (a,b)
Duration.
----
Item 23. Financial Statements..........Filed in Part A.
--------------------

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

Institutional Shares

PROSPECTUS

The Institutional Shares offered by this prospectus represent interests in a
diversified portfolio of securities of Federated U.S. Government Securities
Fund: 5-10 Years (the "Trust"). The Trust is an open-end management
investment company (a mutual fund).

The investment objective of the Trust is to pursue total return consistent
with current income. The Trust invests in U.S. government securities.
Institutional Shares are sold at net asset value.

THE INSTITUTIONAL SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

This prospectus contains the information you should read and know before you
invest in Institutional Shares of the Trust. Keep this prospectus for future
reference. The Trust has also filed a Statement of Additional Information
for Institutional Shares and Institutional Service Shares dated April 30, 1998,
with the Securities and Exchange Commission ("SEC"). The information contained
in the Statement of Additional Information is incorporated by reference into
this prospectus. You may request a copy of the Statement of Additional
Information or a paper copy of this prospectus, if you have received your
prospectus electronically, free of charge by calling 1-800-341-7400. To obtain
other information or make inquiries about the Trust, contact the Trust at the
address listed in the back of this prospectus. The Statement of Additional
Information, material incorporated by reference into this document, and other
information regarding the Trust is maintained electronically with the SEC at
Internet Web site (http://www.sec.gov). THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated April 30, 1998

TABLE OF CONTENTS

Summary of Trust Expenses 1 Financial Highlights--Institutional Shares 2
General Information 3 Investment Information 3 Investment Objective 3
Investment Policies 3 Investment Limitations 4 Trust Information 4 Management
of the Trust 4 Distribution of Institutional Shares 5 Administration of the
Trust 6 Net Asset Value 6 Investing in Institutional Shares 6 Share Purchases 6
Minimum Investment Required 7 What Shares Cost 7 Confirmations and Account
Statements 7 Dividends 7 Capital Gains 7 Redeeming Institutional Shares 7
Telephone Redemption 7 Written Requests 7 Accounts with Low Balances 8
Shareholder Information 8 Voting Rights 8 Tax Information 8 Federal Income Tax
8 State and Local Taxes 9 Performance Information 9 Other Classes of Shares 9
Financial Highlights--Institutional Service Shares 10 Financial Statements 11
Report of Ernst & Young LLP, Independent Auditors 19

SUMMARY OF TRUST EXPENSES

<TABLE>
<CAPTION>
INSTITUTIONAL SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of offering price) None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable) None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None

<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver)(1) 0.00%
12b-1 Fee None
Total Other Expenses (after expense reimbursement) 0.30%
Shareholder Services Fee (after waiver)(2) 0.04%
Total Operating Expenses(3) 0.30%

</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee is 0.50%.

(2) The shareholder service fee has been reduced to reflect the voluntary waiver
of a portion of the shareholders service fee. The shareholder service provider
can terminate this voluntary waiver at any time at its sole discretion. The
maximum shareholder services fee is 0.25%.

(3) The total operating expenses would have been 1.99% absent the voluntary
waivers of the management fee and a portion of the shareholder services fee and
the voluntary reimbursement of certain other operating expenses.

The purpose of this table is to assist an investor in understanding the various
costs and expenses that a shareholder of Institutional Shares of the Trust will
bear, either directly or indirectly. For more complete descriptions of the
various costs and expenses, see "Trust Information" and "Investing in
Institutional Shares." Wire-transferred redemptions of less than $5,000 may be
subject to additional fees.

<TABLE>
<CAPTION>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period.
<S> <C>
1 Year $ 3
3 Years $10
5 Years $17
10 Years $38
</TABLE>
THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 19.

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
FEBRUARY 28, FEBRUARY 29,
<S> <C> <C> <C>
1998 1997 1996(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.77 $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.59 0.59 0.21
Net realized and unrealized gain (loss) on 0.47 (0.21) (0.02)
investments
Total from investment operations 1.06 0.38 0.19
LESS DISTRIBUTIONS
Distributions from net investment income (0.59) (0.59) (0.21)
Distributions from net realized gain on (0.02) 0.00 0.00
investments
Total distributions (0.61) (0.59) (0.21)
NET ASSET VALUE, END OF PERIOD $10.22 $ 9.77 $ 9.98
TOTAL RETURN(B) 11.09% 3.98% 1.85%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.30% 0.13% 0.11%*
Net investment income 5.84% 6.06% 5.75%*
Expense waiver/reimbursement(c) 1.69% 3.95% 12.26%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $39,712 $15,225 $4,181
Portfolio turnover 49.1% 57% 29%
</TABLE>
* Computed on an annualized basis.

(a) Reflects operations for the period from October 19, 1995 (date of initial
public offering) 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.

(See Notes which are an integral part of the Financial Statements)

FURTHER INFORMATION ABOUT THE TRUST'S PERFORMANCE IS CONTAINED IN THE
TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998, WHICH CAN
BE OBTAINED FREE OF CHARGE.

GENERAL INFORMATION

The Trust was established as a Massachusetts business trust under a Declaration
of Trust dated June 14, 1995. The Declaration of Trust permits the Trust to
offer separate series of shares of beneficial interest representing interests in
separate portfolios of securities. The shares in any one portfolio may be
offered in separate classes. As of the date of this prospectus, the Board of
Trustees (the "Trustees") has established two classes of shares of the Trust,
known as Institutional Shares and Institutional Service Shares. This prospectus
relates only to Institutional Shares.

Institutional Shares ("Shares") are sold primarily to accounts for which
financial institutions act in a fiduciary or agency capacity, or other accounts
where the financial institution maintains master accounts with an aggregate
investment of at least $400 million in certain funds which are advised or
distributed by affiliates of Federated Investors. Shares are also made available
to financial intermediaries, as well as public and private organizations. An
investment in the Trust serves as a convenient means of accumulating an interest
in a professionally managed, diversified portfolio of U.S. government
securities. A minimum initial investment of $25,000 over a 90-day period is
required.

Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Trust.

INVESTMENT INFORMATION

INVESTMENT OBJECTIVE

The investment objective of the Trust is to pursue total return consistent with
current income. The investment objective cannot be changed without approval of
shareholders. While there is no assurance that the Trust will achieve its
investment objective, it endeavors to do so by following the investment policies
described in this prospectus.

INVESTMENT POLICIES

The Trust pursues its investment objective by investing only in securities which
are guaranteed as to payment of principal and interest by the U.S. government or
U.S. government agencies or instrumentalities. The Trust will maintain a dollar
weighted average portfolio maturity between five and ten years, although the
Trust may purchase individual securities with longer maturities. Unless
otherwise noted, the investment policies of the Trust may be changed by the
Trustees without shareholder approval. Shareholders will be notified before any
material change in these policies becomes effective.

ACCEPTABLE INVESTMENTS

The U.S. government securities in which the Trust invests are either issued
or guaranteed by the U.S. government, its agencies, or instrumentalities.
These securities are limited to:

* direct obligations of the U.S. Treasury, such as U.S. Treasury bills,
notes, and bonds;
* notes, bonds, and discount notes issued or guaranteed by U.S.
government agencies or instrumentalities, supported by the full faith
and credit of the United States;
* notes, bonds, and discount notes of U.S. government agencies or
instrumentalities which receive or have access to federal funding; and
* notes, bonds, and discount notes of other U.S. government
instrumentalities supported only by the credit of the
instrumentalities.

Some obligations issued or guaranteed by agencies or instrumentalities of
the U.S. government are backed by the full faith and credit of the U.S.
Treasury. No assurances can be given that the U.S. government will provide
financial support to other agencies or instrumentalities, since it is not
obligated to do so. These agencies and instrumentalities are supported by:

* the issuer's right to borrow an amount limited to a specific line of
credit from the U.S. Treasury;
* discretionary authority of the U.S. government to purchase certain
obligations of an agency or instrumentality; or
* the credit of the agency or instrumentality.

The prices of fixed income securities fluctuate inversely to the direction of
interest rates.

The interest rates paid on some of the floating rate securities in which the
Trust may invest will be readjusted at certain intervals to an increment over
some predetermined interest rate index. Commonly used indices include the
one-year and five-year constant maturity Treasury rates, the three-month
Treasury Bill rate, the 180-day Treasury Bill rate, rates on longer-term
Treasury Note securities, the National Median Cost of Funds, the one-month or
three-month London Interbank Offered Rate, or commercial paper rates. Some
indices closely mirror changes in market interest rate levels. Others tend to
lag changes in market rate levels, and tend to have somewhat less volatile
interest rates. To the extent that a floating rate security reflects current
market rates, the market value of a floating rate security will tend to be less
sensitive to interest rate changes than a fixed rate security of the same stated
maturity. Hence, adjustable rate floating rate securities which use indices that
lag changes in market rates should experience greater price volatility than
floating rate securities that closely mirror the market.

REPURCHASE AGREEMENTS

Repurchase agreements are arrangements in which banks, broker/dealers, and other
recognized financial institutions sell U.S. government securities to the Trust
and agree at the time of sale to repurchase them at a mutually agreed upon time
and price. To the extent that the original seller does not repurchase the
securities from the Trust, the Trust could receive less than the repurchase
price on any sale of such securities.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

The Trust may purchase securities on a when-issued or delayed delivery basis.
These transactions are arrangements in which the Trust purchases securities with
payment and delivery scheduled for a future time. The seller's failure to
complete these transactions may cause the Trust to miss a price or yield
considered to be advantageous. Settlement dates may be a month or more after
entering into these transactions, and the market values of the securities
purchased may vary from the purchase prices. Accordingly, the Trust may pay
more/less than the market value of the securities on the settlement date.

The Trust may dispose of a commitment prior to settlement if the adviser deems
it appropriate to do so. In addition, the Trust may enter into transactions to
sell its purchase commitments to third parties at current market values and
simultaneously acquire other commitments to purchase similar securities at later
dates. The Trust may realize short-term profits or losses upon the sale of such
commitments. INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Trust may invest its assets in securities of other investment companies as
an efficient means of carrying out its investment policies. It should be noted
that investment companies incur certain expenses, such as management fees, and,
therefore, any investment by the Trust in shares of other investment companies
may be subject to duplicate expenses.

LENDING OF PORTFOLIO SECURITIES

In order to generate additional income, the Trust may lend portfolio securities
on a short-term or long-term basis to broker/dealers, banks, or other
institutional borrowers of securities. As a matter of operating policy, which
may be changed by the Trustees without shareholder approval, the Trust will
limit its lending to one-third of the value of its total assets. The Trust will
only enter into loan arrangements with broker/dealers, banks, or other
institutions which the Trust's investment adviser has determined are
creditworthy and will receive collateral in the form of cash or U.S. government
securities equal to the value of the securities loaned.

There is the risk that when lending portfolio securities, the securities may not
be available to the Trust on a timely basis and the Trust may, therefore, lose
the opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
INVESTMENT LIMITATIONS

The Trust will not borrow money directly or through reverse repurchase
agreements (arrangements in which the Trust sells a portfolio instrument for a
percentage of its cash value with an agreement to buy it back on a set date) or
pledge securities except, under certain circumstances, the Trust may borrow up
to one-third of the value of its total assets and pledge securities to secure
such borrowings.

The above investment limitation cannot be changed without shareholder approval.

TRUST INFORMATION

MANAGEMENT OF THE TRUST

BOARD OF TRUSTEES

The Trust is managed by a Board of Trustees. The Trustees are responsible for
managing the Trust's business affairs and for exercising all the Trust's powers
except those reserved for the shareholders. The Executive Committee of the Board
of Trustees handles the Board's responsibilities between meetings of the Board.

INVESTMENT ADVISER

Investment decisions for the Trust are made by Federated Management, the Trust's
investment adviser, subject to direction by the Trustees. The adviser
continually conducts investment research and supervision for the Trust and is
responsible for the purchase or sale of portfolio instruments, for which it
receives an annual fee from the Trust.

ADVISORY FEES

The Trust's adviser receives an annual investment advisory fee equal to 0.50% of
the Trust's average daily net assets. This does not include reimbursement to the
Trust of any expenses incurred by shareholders who use the transfer agent's
subaccounting facilities.

ADVISER'S BACKGROUND

Federated Management, a Delaware business trust organized on April 11, 1989, is
a registered investment adviser under the Investment Advisers Act of 1940. It is
a subsidiary of Federated Investors. All of the Class A (voting) shares of
Federated Investors are owned by a trust, the trustees of which are John F.
Donahue, Chairman and Trustee of Federated Investors, Mr. Donahue's wife, and
Mr. Donahue's son, J. Christopher Donahue, who is President and Trustee of
Federated Investors. Federated Management and other subsidiaries of
Federated Investors serve as investment advisers to a number of investment
companies and private accounts. Certain other subsidiaries also provide
administrative services to a number of investment companies. With over $120
billion invested across more than 300 funds under management and/or
administration by its subsidiaries, as of December 31, 1997, Federated Investors
is one of the largest mutual fund investment managers in the United States. With
more than 2,000 employees, Federated continues to be led by the management who
founded the company in 1955. Federated funds are presently at work in and
through 4,000 financial institutions nationwide.

Susan M. Nason has been the Trust's portfolio manager since its inception.
Ms. Nason joined Federated Investors in 1987 and has been a Senior Vice
President of the Trust's investment adviser since April 1997. Ms. Nason
served as Vice President of the investment adviser from 1993 to 1997, and as
an Assistant Vice president from 1990 until 1992. Ms. Nason is a Chartered
Financial Analyst and received her M.S.I.A. concentrating in Finance from
Carnegie Mellon University.

Donald T. Ellenberger has been the Trust's portfolio manager since October 1997.
Mr. Ellenberger joined Federated in 1996 as a Vice President of a Federated
advisory subsidiary. He has been a Vice President of the Trust's adviser since
March 1997. From 1986 to 1996, he served as a Trader/Portfolio Manager for
Mellon Bank, N.A. Mr. Ellenberger received his M.B.A. in Finance from Stanford
University. Both the Trust and the Adviser have adopted strict codes of
ethics governing the conduct of all employees who manage the Trust and its
portfolio securities. These codes recognize that such persons owe a fiduciary
duty to the Trust's shareholders and must place the interests of shareholders
ahead of the employees' own interest. Among other things, the codes: require
preclearance and periodic reporting of personal securities transactions;
prohibit personal transactions in securities being purchased or sold, or being
considered for purchase or sale, by the Trust; prohibit purchasing securities in
initial public offerings; and prohibit taking profits on securities held for
less than sixty days. Violations of the codes are subject to review by the
Trustees, and could result in severe penalties.

DISTRIBUTION OF INSTITUTIONAL SHARES

Federated Securities Corp. is the principal distributor for the Shares. It
is a Pennsylvania corporation organized on November 14, 1969, and is the
principal distributor for a number of investment companies. Federated
Securities Corp. is a subsidiary of Federated Investors.

SHAREHOLDER SERVICES

The Trust has entered into a Shareholder Services Agreement with Federated
Shareholder Services, a subsidiary of Federated Investors, under which the Trust
may make payments up to 0.25% of the average daily net asset value of
Institutional Shares, computed at an annual rate, to obtain certain personal
services for shareholders and to maintain shareholder accounts. From time to
time and for such periods as deemed appropriate, the amount stated above may be
reduced voluntarily. Under the Shareholder Services Agreement, Federated
Shareholder Services will either perform shareholder services directly or will
select financial institutions to perform shareholder services. Financial
institutions will receive fees based upon Shares owned by their clients or
customers. The schedules of such fees and the basis upon which fees will be paid
will be determined from time to time by the Trust and Federated Shareholder
Services.

SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS

In addition to payments made pursuant to the Shareholder Services Agreement,
Federated Securities Corp. and Federated Shareholder Services, from their own
assets, may pay financial institutions supplemental fees for the performance of
substantial sales services, distribution-related support services, or
shareholder services. The support may include sponsoring sales, educational and
training seminars for their employees, providing sales literature, and
engineering computer software programs that emphasize the attributes of the
Trust. Such assistance will be predicated upon the amount of shares the
financial institution sells or may sell, and/or upon the type and nature of
sales or marketing support furnished by the financial institution. Any payments
made by the distributor may be reimbursed by the Trust's investment adviser or
its affiliates.

ADMINISTRATION OF THE TRUST

ADMINISTRATIVE SERVICES

Federated Services Company, a subsidiary of Federated Investors, provides
administrative personnel and services (including certain legal and financial
reporting services) necessary to operate the Trust. Federated Services Company
provides these at an annual rate which relates to the average aggregate daily
net assets of all funds advised by subsidiaries of Federated Investors
("Federated Funds") as specified below:
MAXIMUM AVERAGE AGGREGATE
FEE DAILY NET ASSETS
0.150% on the first $250 million
0.125% on the next $250 million
0.100% on the next $250 million
0.075% on assets in excess of $750 million

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Services Company may choose voluntarily to waive a portion of its fee.

NET ASSET VALUE

The Trust's net asset value per share fluctuates. The net asset value for Shares
is determined by adding the interest of the Shares in the market value of all
securities and other assets of the Trust, subtracting the interest of the Shares
in the liabilities of the Trust and those attributable to Shares, and dividing
the remainder by the total number of Shares outstanding. The net asset value of
Institutional Shares may exceed that of Institutional Service Shares due to the
variance in daily net income realized by each class. Such variance will reflect
only accrued net income to which the shareholders of a particular class are
entitled.

INVESTING IN INSTITUTIONAL SHARES

SHARE PURCHASES

Shares are sold on days on which the New York Stock Exchange is open for
business. Shares may be purchased either by wire or mail.

To purchase Shares, open an account by calling Federated Securities Corp.
Information needed to establish an account will be taken over the telephone. The
Trust reserves the right to reject any purchase request.

BY WIRE

To purchase Shares by Federal Reserve Wire, call the Trust before 4:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal wire funds must be received before 3:00 p.m. (Eastern time)
on the next business day following the order. Federal funds should be wired as
follows: Federated Shareholder Services Company c/o State Street Bank and Trust
Company, Boston, Massachusetts; Attention: EDGEWIRE; For Credit to: Federated
U.S. Government Securities Fund: 5-10 Years -- Institutional Shares; Trust
Number (this number can be found on the account statement or by contacting the
Trust); Group Number or Wire Order Number; Nominee or Institution Name; and ABA
Number 011000028. Shares cannot be purchased by wire on holidays when wire
transfers are restricted. Questions on wire purchases should be directed to your
shareholder services representative at the telephone number listed on your
account statement.

BY MAIL

To purchase Shares by mail, send a check made payable to Federated U.S.
Government Securities Fund: 5-10 Years --Institutional Shares to: Federated
Shareholder Services Company, P.O. Box 8600, Boston, Massachusetts
02266-8600. Orders by mail are considered received after payment by check is
converted by the transfer agent's bank, State Street Bank and Trust Company,
into federal funds. This is generally the next business day after State
Street Bank and Trust Company receives the check.

MINIMUM INVESTMENT REQUIRED

The minimum initial investment in Shares is $25,000 plus any financial
intermediary's fee, if applicable. However, an account may be opened with a
smaller amount as long as the $25,000 minimum is reached within 90 days. An
institutional investor's minimum investment will be calculated by combining all
accounts it maintains with the Trust. Accounts established through a financial
intermediary may be subject to a smaller minimum investment.

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Trust. Investors who purchase
Shares through a financial intermediary may be charged a service fee by that
financial intermediary. The net asset value is determined as of the close of
trading (normally 4:00 p.m., Eastern time) on the New York Stock Exchange,
Monday through Friday, except on (i) days on which there are not sufficient
changes in the value of the Trust's portfolio securities such that its net asset
value might be materially affected; (ii) days during which no Shares are
tendered for redemption and no orders to purchase Shares are received; and (iii)
the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
and Christmas Day.

CONFIRMATIONS AND ACCOUNT STATEMENTS

Shareholders will receive detailed confirmations of transactions. In addition,
shareholders will receive periodic statements reporting all account activity,
including dividends paid. The Trust will not issue share certificates.
DIVIDENDS

Dividends are declared daily and paid monthly. Dividends are declared just prior
to determining net asset value. If an order for Shares is placed on the
preceding business day, Shares purchased by wire begin earning dividends on the
business day wire payment is received by State Street Bank and Trust Company. If
the order for Shares and payment by wire are received on the same day, Shares
begin earning dividends on the next business day. Shares purchased by check
begin earning dividends on the business day after the check is converted by the
transfer agent into federal funds. Dividends are automatically reinvested on
payment dates in additional Shares unless cash payments are requested by
contacting the Trust.

CAPITAL GAINS

Capital gains realized by the Trust, if any, will be distributed at least once
every 12 months.

REDEEMING INSTITUTIONAL SHARES

The Trust redeems Shares at their net asset value next determined after
Federated Shareholder Services Company receives the redemption request.
Investors who redeem shares through a financial intermediary may be charged a
service fee by that financial intermediary. Redemptions will be made on days on
which the Trust computes its net asset value. Redemption requests must be
received in proper form and can be made by telephone request or by written
request.

TELEPHONE REDEMPTION

Shareholders may redeem their Shares by telephoning the Trust before 4:00 p.m.
(Eastern time). Telephone redemption instructions may be recorded. All proceeds
will normally be wire transferred the following business day, but in no event
more than seven days, to the shareholder's account at a domestic commercial bank
that is a member of the Federal Reserve System. Proceeds from redemption
requests received on holidays when wire transfers are restricted will be wired
the following business day. Questions about telephone redemptions on days when
wire transfers are restricted should be directed to your shareholder services
representative at the telephone number listed on your account statement. If at
any time the Trust shall determine it necessary to terminate or modify this
method of redemption, shareholders would be promptly notified.

An authorization form permitting the Trust to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp.

In the event of drastic economic or market changes, a shareholder may experience
difficulty in redeeming by telephone. If such a case should occur, another
method of redemption, such as "Written Requests," should be considered. If
reasonable procedures are not followed by the Trust, it may be liable for losses
due to unauthorized or fraudulent telephone instructions.

WRITTEN REQUESTS

Shares may also be redeemed by sending a written request to Federated
Shareholder Services Company, P.O. Box 8600, Boston, MA 02266-8600. Call the
Trust for specific instructions before redeeming by letter. The shareholder will
be asked to provide in the request his name, the Trust name and class of shares
name, his account number, and the share or dollar amount requested. If share
certificates have been issued, they should be sent unendorsed with the written
request by registered or certified mail to the address noted above.

SIGNATURES

Shareholders requesting a redemption of any amount to be sent to an address
other than that on record with the Trust, or a redemption payable other than to
the shareholder of record must have their signatures guaranteed by:

* a trust company or commercial bank whose deposits are insured by the Bank
Insurance Fund ("BIF"), which is administered by the Federal Deposit
Insurance Corporation ("FDIC");
* a member of the New York, American, Boston, Midwest, or Pacific Stock
Exchange;
* a savings bank or savings association whose deposits are insured by the
Savings Association Insurance Fund ("SAIF"), which is administered by the
FDIC; or
* any other "eligible guarantor institution," as defined in the Securities
Exchange Act of 1934.

The Trust does not accept signatures guaranteed by a notary public.

The Trust and its transfer agent have adopted standards for accepting signature
guarantees from the above institutions. The Trust may elect in the future to
limit eligible signature guarantors to institutions that are members of a
signature guarantee program. The Trust and its transfer agent reserve the right
to amend these standards at any time without notice.

RECEIVING PAYMENT

Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.

ACCOUNTS WITH LOW BALANCES

Due to the high cost of maintaining accounts with low balances, the Trust may
redeem Shares in any account and pay the proceeds to the shareholder if the
account balance falls below a required minimum value of $25,000. This
requirement does not apply, however, if the balance falls below $25,000 because
of changes in the Trust's net asset value.

Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.

SHAREHOLDER INFORMATION

VOTING RIGHTS

Each share of the Trust gives the shareholder one vote in Trustee elections and
other matters submitted to shareholders for vote. All shares of all classes of
each portfolio in the Trust have equal voting rights except that in matters
affecting only a particular portfolio or class, only shares of that portfolio or
class are entitled to vote. As a Massachusetts business trust, the Trust is not
required to hold annual shareholder meetings. Shareholder approval will be
sought only for certain changes in the Trust's operation and for the election of
Trustees under certain circumstances.

Trustees may be removed by the Trustees or by shareholders at a special meeting.
A special meeting of the shareholders for this purpose shall be called by the
Trustees upon the written request of shareholders owning at least 10% of the
outstanding shares of the Trust entitled to vote. As of April 8, 1998,
Holdon, The Ohio Bank and its various affiliates and subsidiaries, acting in
various capacities for numerous accounts, were the owners of record of in excess
of 25% of the outstanding Institutional Service Shares of the Trust, and
therefore may, for certain purposes, be deemed to control the Trust and be able
to affect the outcome of certain matters presented for a vote of shareholders.
TAX INFORMATION

FEDERAL INCOME TAX

The Trust will pay no federal income tax because it expects to meet requirements
of the Internal Revenue Code applicable to regulated investment companies and to
receive the special tax treatment afforded to such companies.

Unless otherwise exempt, shareholders are required to pay federal income tax on
any dividends and other distributions received. This applies whether dividends
and distributions are received in cash or as additional shares.

STATE AND LOCAL TAXES

Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.

PERFORMANCE INFORMATION

From time to time, the Trust advertises its total return and yield for Shares.

Total return represents the change, over a specified period of time, in the
value of an investment in Shares of the Trust after reinvesting all income and
capital gain distributions. It is calculated by dividing that change by the
initial investment and is expressed as a percentage.

The yield of Shares of the Trust is calculated by dividing the net investment
income per share (as defined by the Securities and Exchange Commission) earned
by Shares over a thirty-day period by the maximum offering price per share of
Shares on the last day of the period. This number is then annualized using
semi-annual compounding. The yield does not necessarily reflect income actually
earned by Shares and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.

Institutional Shares are sold without any sales charge or other similar
non-recurring charges.

Total return and yield will be calculated separately for Institutional Shares
and Institutional Service Shares.

From time to time, advertisements for the Trust's Institutional Shares may refer
to ratings, rankings, and other information in certain financial publications
and/or compare the Trust's Institutional Shares performance to certain indices.

OTHER CLASSES OF SHARES

The Trust also offers another class of shares called Institutional Service
Shares. Institutional Service Shares are sold at net asset value primarily to
retail and private banking customers of financial institutions and are subject
to a minimum initial investment of $25,000 over a 90-day period.

Institutional Shares and Institutional Service Shares are subject to certain of
the same expenses; however, Institutional Service Shares are distributed under a
12b-1 Plan adopted by the Trust. This, plus other expense differences between
Institutional Shares and Institutional Service Shares, may affect the
performance of each class.

To obtain more information and a prospectus for Institutional Service Shares,
investors may call 1-800-341-7400.

FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 19.

<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
FEBRUARY 28, FEBRUARY 29,
<S> <C> <C> <C>
1998 1997 1996(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.77 $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.55 0.56 0.20
Net realized and unrealized gain (loss) on 0.48 (0.21) (0.02)
investments
Total from investment operations 1.03 0.35 0.18
LESS DISTRIBUTIONS
Distributions from net investment income (0.56) (0.56) (0.20)
Distributions from net realized gain on (0.02) 0.00 0.00
investments
Total distributions (0.58) (0.56) (0.20)
NET ASSET VALUE, END OF PERIOD $10.22 $ 9.77 $ 9.98
TOTAL RETURN(B) 10.76% 3.62% 1.75%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.60% 0.47% 0.45%*
Net investment income 5.56% 5.70% 5.25%*
Expense waiver/reimbursement(c) 1.64% 3.86% 12.17%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $2,178 $1,782 $1,046
Portfolio turnover 49.1% 57% 29%
</TABLE>

* Computed on an annualized basis.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

(See Notes which are an integral part of the Financial Statements)

FURTHER INFORMATION ABOUT THE TRUST'S PERFORMANCE IS CONTAINED IN THE
TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998, WHICH CAN
BE OBTAINED FREE OF CHARGE.

PORTFOLIO OF INVESTMENTS

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

FEBRUARY 28, 1998

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE

<C> <S> <C>
U.S. TREASURY OBLIGATIONS--90.6%
U.S. TREASURY BONDS--21.9%
$ 2,340,000 7.250%, 5/15/2004 $ 2,537,239
920,000 10.750%, 2/15/2003 1,121,443
1,275,000 10.750%, 8/15/2005 1,662,447
1,300,000 11.125%, 8/15/2003 1,630,837
900,000 12.000%, 5/15/2005 1,231,965
750,000 12.375%, 5/15/2004 1,010,595
TOTAL 9,194,526
U.S. TREASURY NOTES--68.7%
2,400,000 5.625%, 12/31/2002 2,402,064
2,665,000 5.750%, 8/15/2003 2,681,550
2,050,000 5.875%, 11/15/2005 2,074,600
1,400,000 5.875%, 9/30/2002 1,414,210
4,300,000 6.500%, 10/15/2006 4,529,491
2,550,000 6.500%, 8/15/2005 2,677,194
3,249,000 6.625%, 5/15/2007 3,462,589
1,900,000 6.875%, 5/15/2006 2,044,457
2,700,000 7.000%, 7/15/2006 2,929,851
1,750,000 7.250%, 8/15/2004 1,902,005
2,000,000 7.500%, 2/15/2005 2,208,480
400,000 7.875%, 11/15/2004 449,096
TOTAL 28,775,587
TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST $36,966,510) 37,970,113

U.S. GOVERNMENT AGENCY OBLIGATIONS--7.4%
FEDERAL HOME LOAN BANK--7.4%
1,000,000 6.150%, 10/14/2004 1,014,930
1,000,000 6.160%, 10/17/2002 1,015,940
1,000,000 6.900%, 2/7/2007 1,065,220
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(IDENTIFIED COST $3,034,339) 3,096,090
</TABLE>
FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE

<C> <S> <C>
(A)REPURCHASE AGREEMENT--0.8%
$ 320,000 BT Securities Corp., 5.640%, dated 2/27/1998,
due 3/2/1998 (at amortized cost) $ 320,000
TOTAL INVESTMENTS (IDENTIFIED COST $40,320,849)(B) $ 41,386,203
</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 $40,322,839. The
net unrealized appreciation of investments on a federal tax basis amounts to
$1,063,364 which is comprised of $1,077,030 appreciation and $13,666
depreciation at February 28, 1998.

Note: The categories of investments are shown as a percentage of net assets
($41,889,790) at February 28, 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

FEBRUARY 28, 1998

<TABLE>
<S> <C> <C>
ASSETS:
Total investments in securities, at value (identified cost $40,320,849 $ 41,386,203
and tax cost $40,322,839)
Income receivable 528,454
Receivable for shares sold 184,655
Prepaid expenses 4,191
Deferred organizational costs 28,950
Total assets 42,132,453
LIABILITIES:
Payable for shares redeemed $ 20,647
Income distribution payable 115,242
Payable to Bank 106,774
Total liabilities 242,663
NET ASSETS for 4,099,439 shares outstanding $ 41,889,790
NET ASSETS CONSIST OF:
Paid in capital $ 40,740,212
Net unrealized appreciation of investments 1,065,354
Accumulated net realized gain on investments 84,224
Total net assets $ 41,889,790
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE:
INSTITUTIONAL SHARES:
$39,712,070 / 3,886,323 shares outstanding $10.22
INSTITUTIONAL SERVICE SHARES:
$2,177,720 / 213,116 shares outstanding $10.22
</TABLE>

(See Notes which are an integral part of the Financial Statements)

STATEMENT OF OPERATIONS

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

YEAR ENDED FEBRUARY 28, 1998

<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 1,760,315
EXPENSES:
Investment advisory fee $ 143,246
Administrative personnel and services fee 155,001
Custodian fees 1,025
Transfer and dividend disbursing agent fees and expenses 57,127
Directors'/Trustees' fees 10,174
Auditing fees 14,106
Legal fees 5,118
Portfolio accounting fees 53,959
Distribution services fee--Institutional Service Shares 5,062
Shareholder services fee--Institutional Shares 66,561
Shareholder services fee--Institutional Service Shares 5,062
Share registration costs 26,624
Printing and postage 15,727
Insurance premiums 2,863
Miscellaneous 13,624
Total expenses 575,279
Waivers and reimbursements--
Waiver of investment advisory fee $ (143,246)
Waiver of shareholder services fee--Institutional Shares (55,911)
Waiver of shareholder services fee--Institutional (3,240)
Service Shares
Reimbursement of other operating expenses (279,601)
Total waivers and reimbursements (481,998)
Net expenses 93,281
Net investment income 1,667,034
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments 155,982
Net change in unrealized appreciation of investments 1,272,447
Net realized and unrealized gain on investments 1,428,429
Change in net assets resulting from operations $ 3,095,463
</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>
YEAR ENDED FEBRUARY 28,
<S> <C> <C>
1998 1997
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 1,667,034 $ 635,887
Net realized gain (loss) on investments ($157,972 net gain 155,982 (7,780)
and $7,780 net loss, respectively, as computed for federal
tax purposes)
Net change in unrealized appreciation/(depreciation) 1,272,447 (113,698)
Change in net assets resulting from operations 3,095,463 514,409
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (1,554,559) (566,566)
Institutional Service Shares (112,475) (69,321)
Distributions from net realized gains
Institutional Shares (60,168) --
Institutional Service Shares (3,810) --
Change in net assets resulting from distributions to (1,731,012) (635,887)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 32,759,811 14,011,685
Net asset value of shares issued to shareholders in payment 702,923 364,163
of distributions declared
Cost of shares redeemed (9,944,658) (2,474,358)
Change in net assets resulting from share transactions 23,518,076 11,901,490
Change in net assets 24,882,527 11,780,012
NET ASSETS:
Beginning of period 17,007,263 5,227,251
End of period $ 41,889,790 $ 17,007,263
</TABLE>

(See Notes which are an integral part of the Financial Statements)

NOTES TO FINANCIAL STATEMENTS

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

FEBRUARY 28, 1998

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:

YEAR ENDED FEBRUARY 28,
1998 1997
<S> <C> <C> <C> <C>
INSTITUTIONAL SERVICE SHARES SHARES AMOUNT SHARES AMOUNT
Shares sold 104,104 $ 1,040,344 75,118 $ 737,944
Shares issued to shareholders in payment
of distributions declared 9,043 90,328 6,492 63,370
Shares redeemed (82,376) (827,314) (4,028) (39,359)
Net change resulting from Institutional
Service Share transactions 30,771 $ 303,358 77,582 $ 761,955
Net change resulting from share transactions 2,359,015 $ 23,518,076 1,216,789 $ 11,901,490
</TABLE>

At February 28, 1998, capital paid-in aggregated $40,740,212.

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 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 Services 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

Federated Services Company 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 February 28, 1998, the
Trust paid $10,120 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
year ended February 28, 1998, were as follows:

PURCHASES $36,895,004
SALES $13,688,605

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Trustees and Shareholders of FEDERATED U.S. GOVERNMENT SECURITIES
FUND: 5-10 YEARS:

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Federated U.S. Government Securities Fund: 5-10
Years as of February 28, 1998, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights (see pages 2 and 10
of this prospectus) for the periods presented therein. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
February 28, 1998, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Federated U.S. Government Securities Fund: 5-10 Years as of February 28, 1998,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and financial
highlights for the periods presented therein, in conformity with generally
accepted accounting principles.

ERNST & YOUNG LLP

Pittsburgh, Pennsylvania
April 15, 1998

NOTES

[Graphic]

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

Institutional Shares

PROSPECTUS

APRIL 30, 1998

An Open-End, Diversified Management Investment Company

FEDERATED
U.S. GOVERNMENT SECURITIES FUND:
5-10 YEARS INSTITUTIONAL SHARES Federated Investors Funds 5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER
Federated Management
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

CUSTODIAN
State Street Bank
and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

TRANSFER AGENT
AND DIVIDEND
DISBURSING AGENT
Federated Shareholder
Services Company
P.O. Box 8600
Boston, MA 02266-8600

INDEPENDENT AUDITORS
Ernst & Young LLP
One Oxford Centre
Pittsburgh, PA 15219

Federated Securities Corp., Distributor
1-800-341-7400
www.federatedinvestors.com

Cusip 31428S107
G01209-01-IS (4/98)

[Graphic]

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

Institutional Service Shares

PROSPECTUS

The Institutional Service Shares offered by this prospectus represent
interests in a diversified portfolio of securities of Federated U.S.
Government Securities Fund: 5-10 Years (the "Trust"). The Trust is an
open-end management investment company (a mutual fund).

The investment objective of the Trust is to pursue total return consistent with
current income. The Trust invests in U.S. government securities. Institutional
Service Shares are sold at net asset value.

THE INSTITUTIONAL SERVICE SHARES OFFERED BY THIS PROSPECTUS ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

This prospectus contains the information you should read and know before you
invest in Institutional Service Shares of the Trust. Keep this prospectus for
future reference. The Trust has also filed a Statement of Additional
Information for Institutional Shares and Institutional Service Shares dated
April 30, 1998, with the Securities and Exchange Commission ("SEC"). The
information contained in the Statement of Additional Information is incorporated
by reference into this prospectus. You may request a copy of the Statement of
Additional Information or a paper copy of this prospectus, if you have received
your prospectus electronically, free of charge by calling 1-800-341-7400. To
obtain other information or make inquiries about the Trust, contact the Trust at
the address listed in the back of this prospectus. The Statement of Additional
Information, material incorporated by reference into this document, and other
information regarding the Trust is maintained electronically with the SEC at
Internet Web site (http://www.sec.gov). THESE SECURITIES HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prospectus dated April 30, 1998

TABLE OF CONTENTS

Summary of Trust Expenses 1 Financial Highlights--Institutional Service Shares
2 General Information 3 Investment Information 3 Investment Objective 3
Investment Policies 3 Investment Limitations 4 Trust Information 4 Management
of the Trust 4 Distribution of Institutional Service Shares 5 Administration of
the Trust 6 Net Asset Value 6 Investing in Institutional Service Shares 6 Share
Purchases 6 Minimum Investment Required 7 What Shares Cost 7 Confirmations and
Account Statements 7 Dividends 7 Capital Gains 7 Redeeming Institutional
Service Shares 7 Telephone Redemption 7 Written Requests 8 Accounts with Low
Balances 8 Shareholder Information 8 Voting Rights 8 Tax Information 9 Federal
Income Tax 9 State and Local Taxes 9 Performance Information 9 Other Classes of
Shares 9 Financial Highlights--Institutional Shares 10 Financial Statements 11
Report of Ernst & Young LLP, Independent Auditors 19

SUMMARY OF TRUST EXPENSES

<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE SHARES
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum Sales Charge Imposed on Purchases (as a percentage of offering price) None
Maximum Sales Charge Imposed on Reinvested Dividends (as a percentage of offering price) None
Contingent Deferred Sales Charge (as a percentage of original purchase price or
redemption proceeds, as applicable) None
Redemption Fee (as a percentage of amount redeemed, if applicable) None
Exchange Fee None

<CAPTION>
ANNUAL OPERATING EXPENSES
(As a percentage of average net assets)
<S> <C> <C>
Management Fee (after waiver)(1) 0.00%
12b-1 Fee 0.25%
Total Other Expenses (after expense reimbursement) 0.35%
Shareholder Services Fee (after waiver)(2) 0.09%
Total Operating Expenses(3) 0.60
</TABLE>
(1) The management fee has been reduced to reflect the voluntary waiver of the
management fee. The adviser can terminate this voluntary waiver at any time at
its sole discretion. The maximum management fee is 0.50%.

(2) The shareholder services fee has been reduced to reflect the voluntary
waiver of a portion of the shareholders service fee. The shareholder service
provider can terminate this voluntary waiver at any time at its sole discretion.
The maximum shareholder services fee is 0.25%.

(3) The total operating expenses would have been 2.24% absent the voluntary
waivers of the management fee and a portion of the shareholder services fee and
the voluntary reimbursement of certain other operating expenses.

The purpose of this table is to assist an investor in understanding the various
costs and expenses that a shareholder of Institutional Service Shares of the
Trust will bear, either directly or indirectly. For more complete descriptions
of the various costs and expenses, see "Trust Information" and "Investing in
Institutional Service Shares". Wire-transferred redemptions of less than $5,000
may be subject to additional fees. LONG TERM SHAREHOLDERS MAY PAY MORE THAN
THE ECONOMIC EQUIVALENT OF THE MAXIMUM FRONT-END SALES CHARGES PERMITTED UNDER
THE RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC.
<TABLE>
<CAPTION>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the end of each time period.
<S> <C>
1 year $ 6
3 years $19
5 years $33
10 years $75
</TABLE>

THE ABOVE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

FINANCIAL HIGHLIGHTS--INSTITUTIONAL SERVICE SHARES

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 19.
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
FEBRUARY 28, FEBRUARY 29,
<S> <C> <C> <C>
1998 1997 1996(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.77 $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.55 0.56 0.20
Net realized and unrealized gain (loss) on 0.48 (0.21) (0.02)
investments
Total from investment operations 1.03 0.35 0.18
LESS DISTRIBUTIONS
Distributions from net investment income (0.56) (0.56) (0.20)
Distributions from net realized gain on (0.02) 0.00 0.00
investments
Total distributions (0.58) (0.56) (0.20)
NET ASSET VALUE, END OF PERIOD $10.22 $ 9.77 $ 9.98
TOTAL RETURN(B) 10.76% 3.62% 1.75%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.60% 0.47% 0.45%*
Net investment income 5.56% 5.70% 5.25%*
Expense waiver/reimbursement(c) 1.64% 3.86% 12.17%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $2,178 $1,782 $1,046
Portfolio turnover 49.1% 57% 29%
</TABLE>
* Computed on an annualized basis.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

(See Notes which are an integral part of the Financial Statements)

FURTHER INFORMATION ABOUT THE TRUST'S PERFORMANCE IS CONTAINED IN THE
TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998, WHICH CAN
BE OBTAINED FREE OF CHARGE.

GENERAL INFORMATION

Institutional Service Shares ("Shares") are designed primarily for retail and
private banking customers of financial institutions as a convenient means of
accumulating an interest in a professionally managed, diversified portfolio of
U.S. government securities. A minimum initial investment of $25,000 over a
90-day period is required.

Shares are currently sold and redeemed at net asset value without a sales charge
imposed by the Trust.

INVESTMENT INFORMATION

INVESTMENT OBJECTIVE

INVESTMENT POLICIES

ACCEPTABLE INVESTMENTS

The U.S. government securities in which the Trust invests are either issued
or guaranteed by the U.S. government, its agencies, or instrumentalities.
These securities are limited to:

The prices of fixed income securities fluctuate inversely to the direction of
interest rates.

REPURCHASE AGREEMENTS

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

LENDING OF PORTFOLIO SECURITIES

The above investment limitation cannot be changed without shareholder approval.

TRUST INFORMATION

MANAGEMENT OF THE TRUST

BOARD OF TRUSTEES

INVESTMENT ADVISER

ADVISORY FEES

ADVISER'S BACKGROUND

Donald T. Ellenberger has been the Trust's portfolio manager since October 1997.
Mr. Ellenberger joined Federated in 1996 as a Vice President of a Federated
advisory subsidiary. He has been a Vice President of the Trust's adviser since
March 1997. From 1986 to 1996, he served as a Trader/Portfolio Manager for
Mellon Bank, N.A. Mr. Ellenberger received his M.B.A. in Finance from Stanford
University. Both the Trust and the adviser have adopted strict codes of
ethics governing the conduct of all employees who manage the Trust and its
portfolio securities. These codes recognize that such persons owe a fiduciary
duty to the Trust's shareholders and must place the interests of shareholders
ahead of the employees' own interest. Among other things, the codes: require
preclearance and periodic reporting of personal securities transactions;
prohibit personal transactions in securities being purchased or sold, or being
considered for purchase or sale, by the Trust; prohibit purchasing securities in
initial public offerings; and prohibit taking profits on securities held for
less than sixty days. Violations of the codes are subject to review by the
Trustees, and could result in severe penalties.

DISTRIBUTION OF INSTITUTIONAL SERVICE SHARES

DISTRIBUTION PLAN AND SHAREHOLDER SERVICES

Under a distribution plan adopted in accordance with Rule 12b-1 under the
Investment Company Act of 1940 (the "Plan"), the Trust may pay to the
distributor an amount, computed at an annual rate of 0.25% of the average daily
net asset value of Shares. The distributor may select financial institutions
such as banks, fiduciaries, custodians for public funds, investment advisers,
and broker/dealers to provide sales services or distribution-related support
services as agents for their clients or customers.

The Plan is a compensation-type plan. As such, the Trust makes no payments to
the distributor except as described above. Therefore, the Trust does not pay for
unreimbursed expenses of the distributor, including amounts expended by the
distributor in excess of amounts received by it from the Trust, interest,
carrying, or other financing charges in connection with excess amounts expended,
or the distributor's overhead expenses. However, the distributor may be able to
recover such amounts or may earn a profit from future payments made by the Trust
under the Plan.

In addition, the Trust has entered into a Shareholder Services Agreement with
Federated Shareholder Services, a subsidiary of Federated Investors, under which
the Trust may make payments up to 0.25% of the average daily net asset value of
Institutional Service Shares to obtain certain personal services for
shareholders and to maintain shareholder accounts. Under the Shareholder
Services Agreement, Federated Shareholder Services will either perform
shareholder services directly or will select financial institutions to perform
shareholder services. Financial institutions will receive fees based upon shares
owned by their clients or customers. The schedules of such fees and the basis
upon which fees will be paid will be determined from time to time by the Trust
and Federated Shareholder Services.

SUPPLEMENTAL PAYMENTS TO FINANCIAL INSTITUTIONS

In addition to payments made pursuant to the Plan and Shareholder Services
Agreement, Federated Securities Corp. and Federated Shareholder Services, from
their own assets, may pay financial institutions supplemental fees for the
performance of substantial sales services, distribution-related support
services, or shareholder services. The support may include sponsoring sales,
educational and training seminars for their employees, providing sales
literature, and engineering computer software programs that emphasize the
attributes of the Trust. Such assistance will be predicated upon the amount of
shares the financial institution sells or may sell, and/or upon the type and
nature of sales or marketing support furnished by the financial institution. Any
payments made by the distributor may be reimbursed by the Trust's investment
adviser or its affiliates.

ADMINISTRATION OF THE TRUST

ADMINISTRATIVE SERVICES

The administrative fee received during any fiscal year shall be at least
$125,000 per portfolio and $30,000 per each additional class of shares.
Federated Administrative Services may choose voluntarily to waive a portion of
its fee.

NET ASSET VALUE

INVESTING IN INSTITUTIONAL SERVICE SHARES

SHARE PURCHASES

Shares are sold on days on which the New York Stock Exchange is open for
business. Shares may be purchased either by wire or mail.

BY WIRE

To purchase Shares by Federal Reserve Wire, call the Trust before 4:00 p.m.
(Eastern time) to place an order. The order is considered received immediately.
Payment by federal wire funds must be received before 3:00 p.m. (Eastern time)
on the next business day following the order. Federal funds should be wired as
follows: Federated Shareholder Services Company c/o State Street Bank and Trust
Company, Boston, Massachusetts; Attention: EDGEWIRE; For Credit to: Federated
U.S. Government Securities Fund: 5-10 Years--Institutional Service Shares; Trust
Number (this number can be found on the account statement or by contacting the
Trust); Group Number or Wire Order Number; Nominee or Institution Name; and ABA
Number 011000028. Shares cannot be purchased by wire on holidays when wire
transfers are restricted. Questions on wire purchases should be directed to your
shareholder services representative at the telephone number listed on your
account statement.

BY MAIL

To purchase Shares by mail, send a check made payable to Federated U.S.
Government Securities Fund: 5-10 Years--Institutional Service Shares to
Federated Shareholder Services Company, P.O. Box 8600, Boston, Massachusetts
02266-8600. Orders by mail are considered received after payment by check is
converted by the transfer agent's bank, State Street Bank and Trust Company,
into federal funds. This is generally the next business day after State Street
Bank and Trust Company receives the check.

MINIMUM INVESTMENT REQUIRED

WHAT SHARES COST

Shares are sold at their net asset value next determined after an order is
received. There is no sales charge imposed by the Trust. Investors who purchase
Shares through a financial intermediary may be charged a service service fee by
that financial intermediary. The net asset value is determined as of the
close of trading (normally 4:00 p.m., Eastern time) on the New York Stock
Exchange, Monday through Friday, except on (i) days on which there are not
sufficient changes in the value of the Trust's portfolio securities such that
its net asset value might be materially affected; (ii) days during which no
Shares are tendered for redemption and no orders to purchase Shares are
received; and (iii) the following holidays: New Year's Day, Martin Luther King,
Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, and Christmas Day.

CONFIRMATIONS AND ACCOUNT STATEMENTS

CAPITAL GAINS

Capital gains realized by the Trust, if any, will be distributed at least once
every 12 months.

REDEEMING INSTITUTIONAL SERVICE SHARES

TELEPHONE REDEMPTION

An authorization form permitting the Trust to accept telephone requests must
first be completed. Authorization forms and information on this service are
available from Federated Securities Corp.

WRITTEN REQUESTS

SIGNATURES

The Trust does not accept signatures guaranteed by a notary public.

RECEIVING PAYMENT

Normally, a check for the proceeds is mailed within one business day, but in no
event more than seven days, after receipt of a proper written redemption
request.

ACCOUNTS WITH LOW BALANCES

Before Shares are redeemed to close an account, the shareholder is notified in
writing and allowed 30 days to purchase additional Shares to meet the minimum
requirement.

SHAREHOLDER INFORMATION

VOTING RIGHTS

FEDERAL INCOME TAX

STATE AND LOCAL TAXES

Shareholders are urged to consult their own tax advisers regarding the status of
their accounts under state and local tax laws.

PERFORMANCE INFORMATION

From time to time, the Trust advertises its total return and yield for Shares.

Institutional Service Shares are sold without any sales charge or other similar
non-recurring charges.

Total return and yield will be calculated separately for Institutional Shares
and Institutional Service Shares.

From time to time, advertisements for the Trust's Institutional Service Shares
may refer to ratings, rankings, and other information in certain financial
publications and/or compare the Trust's Institutional Service Shares performance
to certain indices.

OTHER CLASSES OF SHARES

The Trust also offers another class of shares called Institutional Shares.
Institutional Shares are sold at net asset value primarily to accounts for which
financial institutions act in a fiduciary or agency capacity, or other accounts
where the financial institution maintains master accounts with an aggregate
investment of at least $400 million in certain funds which are advised or
distributed by affiliates of Federated Investors. Institutional Shares are also
made available to financial intermediaries, as well as private and public
organizations and are subject to a minimum initial investment of $25,000 over a
90-day period.

To obtain more information and a prospectus for Institutional Shares, investors
may call 1-800-341-7400.

FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Reference is made to the Report of Ernst & Young LLP, Independent Auditors, on
page 19.
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
FEBRUARY 28, FEBRUARY 29,
<S> <C> <C> <C>
1998 1997 1996(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.77 $ 9.98 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income 0.59 0.59 0.21
Net realized and unrealized gain (loss) on 0.47 (0.21) (0.02)
investments
Total from investment operations 1.06 0.38 0.19
LESS DISTRIBUTIONS
Distributions from net investment income (0.59) (0.59) (0.21)
Distributions from net realized gain on (0.02) 0.00 0.00
investments
Total distributions (0.61) (0.59) (0.21)
NET ASSET VALUE, END OF PERIOD $10.22 $ 9.77 $ 9.98
TOTAL RETURN(B) 11.09% 3.98% 1.85%
RATIOS TO AVERAGE NET ASSETS
Expenses 0.30% 0.13% 0.11%*
Net investment income 5.84% 6.06% 5.75%*
Expense waiver/reimbursement(c) 1.69% 3.95% 12.26%*
SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $39,712 $15,225 $4,181
Portfolio turnover 49.1% 57% 29%
</TABLE>
* Computed on an annualized basis.

(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.

(See Notes which are an integral part of the Financial Statements)

FURTHER INFORMATION ABOUT THE TRUST'S PERFORMANCE IS CONTAINED IN THE
TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998, WHICH CAN
BE OBTAINED FREE OF CHARGE.

PORTFOLIO OF INVESTMENTS

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

FEBRUARY 28, 1998

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--90.6%
U.S. TREASURY BONDS--21.9%
$ 2,340,000 7.250%, 5/15/2004 $ 2,537,239
920,000 10.750%, 2/15/2003 1,121,443
1,275,000 10.750%, 8/15/2005 1,662,447
1,300,000 11.125%, 8/15/2003 1,630,837
900,000 12.000%, 5/15/2005 1,231,965
750,000 12.375%, 5/15/2004 1,010,595
TOTAL 9,194,526
U.S. TREASURY NOTES--68.7%
2,400,000 5.625%, 12/31/2002 2,402,064
2,665,000 5.750%, 8/15/2003 2,681,550
2,050,000 5.875%, 11/15/2005 2,074,600
1,400,000 5.875%, 9/30/2002 1,414,210
4,300,000 6.500%, 10/15/2006 4,529,491
2,550,000 6.500%, 8/15/2005 2,677,194
3,249,000 6.625%, 5/15/2007 3,462,589
1,900,000 6.875%, 5/15/2006 2,044,457
2,700,000 7.000%, 7/15/2006 2,929,851
1,750,000 7.250%, 8/15/2004 1,902,005
2,000,000 7.500%, 2/15/2005 2,208,480
400,000 7.875%, 11/15/2004 449,096
TOTAL 28,775,587
TOTAL U.S. TREASURY OBLIGATIONS
(IDENTIFIED COST $36,966,510) 37,970,113
U.S. GOVERNMENT AGENCY OBLIGATIONS--7.4%
FEDERAL HOME LOAN BANK--7.4%
1,000,000 6.150%, 10/14/2004 1,014,930
1,000,000 6.160%, 10/17/2002 1,015,940
1,000,000 6.900%, 2/7/2007 1,065,220
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(IDENTIFIED COST $3,034,339) 3,096,090

</TABLE>

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE

<C> <S> <C>
(A)REPURCHASE AGREEMENT--0.8%
$ 320,000 BT Securities Corp., 5.640%, dated 2/27/1998, due 3/2/1998 $ 320,000
(AT AMORTIZED COST)
TOTAL INVESTMENTS (IDENTIFIED COST $40,320,849)(B) $ 41,386,203
</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.

Note: The categories of investments are shown as a percentage of net assets
($41,889,790) at February 28, 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

FEBRUARY 28, 1998

(See Notes which are an integral part of the Financial Statements)

STATEMENT OF OPERATIONS

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

YEAR ENDED FEBRUARY 28, 1998

(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>
YEAR ENDED FEBRUARY 28,
<S> <C> <C>
1998 1997
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS--
Net investment income $ 1,667,034 $ 635,887
Net realized gain (loss) on investments ($157,972 net gain 155,982 (7,780)
and $7,780 net loss respectively, as computed for federal
tax purposes)
Net change in unrealized appreciation/(depreciation) 1,272,447 (113,698)
Change in net assets resulting from operations 3,095,463 514,409
DISTRIBUTIONS TO SHAREHOLDERS--
Distributions from net investment income
Institutional Shares (1,554,559) (566,566)
Institutional Service Shares (112,475) (69,321)
Distributions from net realized gains
Institutional Shares (60,168) --
Institutional Service Shares (3,810) --
Change in net assets resulting from distributions to (1,731,012) (635,887)
shareholders
SHARE TRANSACTIONS--
Proceeds from sale of shares 32,759,811 14,011,685
Net asset value of shares issued to shareholders in payment 702,923 364,163
of distributions declared
Cost of shares redeemed (9,944,658) (2,474,358)
Change in net assets resulting from share transactions 23,518,076 11,901,490
Change in net assets 24,882,527 11,780,012
NET ASSETS:
Beginning of period 17,007,263 5,227,251
End of period $ 41,889,790 $ 17,007,263
</TABLE>

(See Notes which are an integral part of the Financial Statements)

NOTES TO FINANCIAL STATEMENTS

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

FEBRUARY 28, 1998

ORGANIZATION

SIGNIFICANT ACCOUNTING POLICIES

INVESTMENT VALUATIONS

REPURCHASE AGREEMENTS

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

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

USE OF ESTIMATES

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>
YEAR ENDED FEBRUARY 28,
1998 1997
<S> <C> <C> <C> <C>
INSTITUTIONAL SHARES SHARES AMOUNT SHARES AMOUNT
Shares sold 3,178,581 $ 31,719,467 1,356,949 $ 13,273,741
Shares issued to shareholders in payment of 61,313 612,595 30,780 300,793
distributions declared
Shares redeemed (911,650) (9,117,344) (248,522) (2,434,999)
Net change resulting from Institutional 2,328,244 $ 23,214,718 1,139,207 $ 11,139,535
Share transactions
<CAPTION>
YEAR ENDED FEBRUARY 28,
1998 1997
<S> <C> <C> <C> <C>
INSTITUTIONAL SERVICE SHARES SHARES AMOUNT SHARES AMOUNT
Shares sold 104,104 $ 1,040,344 75,118 $ 737,944
Shares issued to shareholders in payment
of distributions declared 9,043 90,328 6,492 63,370
Shares redeemed (82,376) (827,314) (4,028) (39,359)
Net change resulting from Institutional
Service Share transactions 30,771 $ 303,358 77,582 $ 761,955
Net change resulting from share transactions 2,359,015 $ 23,518,076 1,216,789 $ 11,901,490
</TABLE>
At February 28, 1998, capital paid-in aggregated $40,740,212.

INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES

INVESTMENT ADVISORY FEE

ADMINISTRATIVE FEE

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 Services Shares annually, to compensate FSC.

SHAREHOLDER SERVICES FEE

TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES

PORTFOLIO ACCOUNTING FEES

ORGANIZATIONAL 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
year ended February 28, 1998, were as follows:
PURCHASES $36,895,004
SALES $13,688,605

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Trustees and Shareholders of FEDERATED U.S. GOVERNMENT SECURITIES
FUND: 5-10 YEARS:

ERNST & YOUNG LLP

Pittsburgh, Pennsylvania
April 15, 1998

NOTES

[Graphic]

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

Institutional Service Shares

PROSPECTUS

APRIL 30, 1998

An Open-End, Diversified Management Investment Company

FEDERATED
U.S. GOVERNMENT
SECURITIES FUND:
5-10 YEARS
INSTITUTIONAL
SERVICE SHARES
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000

DISTRIBUTOR
Federated Securities Corp.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

INVESTMENT ADVISER
Federated Management
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779

CUSTODIAN
State Street Bank
and Trust Company
P.O. Box 8600
Boston, MA 02266-8600

TRANSFER AGENT
AND DIVIDEND
DISBURSING AGENT
Federated Shareholder
Services Company
P.O. Box 8600
Boston, MA 02266-8600

INDEPENDENT AUDITORS
Ernst & Young LLP
One Oxford Centre
Pittsburgh, PA 15219

Federated Securities Corp., Distributor
1-800-341-7400
www.federatedinvestors.com

Cusip 31428S206
G01209-04-SS (4/98)

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FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

INSTITUTIONAL SHARES

INSTITUTIONAL SERVICE SHARES

STATEMENT OF ADDITIONAL INFORMATION

The Institutional Shares and Institutional Service Shares represent interests in
a diversified portfolio of securities of Federated U.S. Government Securities
Fund: 5-10 Years (the "Trust"). This Statement of Additional Information should
be read with the respective prospectuses for Institutional Shares and
Institutional Service Shares dated April 30, 1998. This Statement is not a
prospectus itself. You may request a copy of either prospectus or a paper copy
of this Statement of Additional Information, if you have received it
electronically, free of charge by calling 1-800-341-7400.

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
FEDERATED INVESTORS FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7000

Statement dated April 30, 1998

[Graphic]
Federated Investors
Federated Securities Corp., Distributor
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
1-800-341-7400

WWW.FEDERATEDINVESTORS.COM

Cusip 31428S107-IS
Cusip 31428S206-ISS

G01209-02 (4/98)

[Graphic]

TABLE OF CONTENTS

GENERAL INFORMATION ABOUT THE TRUST 1
INVESTMENT OBJECTIVE AND POLICIES 1
Types of Investments 1
When-Issued And Delayed Delivery Transactions 1
Repurchase Agreements 1
Reverse Repurchase Agreements 1
Lending of Portfolio Securities 1
Investing in Securities of Other Investment Companies 2
Portfolio Turnover 2
Investment Limitations 2
FEDERATED U. S. GOVERNMENT SECURITIES FUND: 5-10 YEARS MANAGEMENT 3
Trust Ownership 7
Trustee Compensation 8
Trustee Liability 8
INVESTMENT ADVISORY SERVICES 8
Adviser To The Trust 8
Advisory Fees 9
BROKERAGE TRANSACTIONS 9
OTHER SERVICES 9
Trust Administration 9
Custodian and Portfolio Accountant 9
Transfer Agent 9
Independent Auditors 10
PURCHASING SHARES 10
Distribution Plan (Institutional Service Shares only) and Shareholder
Services 10
Conversion to Federal Funds 10
DETERMINING NET ASSET VALUE 10
Determining Market Value Of Securities 10
REDEEMING SHARES 11
Redemption In Kind 11
MASSACHUSETTS PARTNERSHIP LAW 11
TAX STATUS 12
The Trust's Tax Status 11
Shareholders' Tax Status 12
TOTAL RETURN 12
YIELD 12
PERFORMANCE COMPARISONS 13
Duration 13
ABOUT FEDERATED INVESTORS 13
Mutual Fund Market 14
Institutional Clients 14
Broker/Dealers and Bank Broker/Dealer Subsidiaries 14

GENERAL INFORMATION ABOUT THE TRUST

Federated U.S. Government Securities Fund: 5-10 Years was established as a
Massachusetts business trust under a Declaration of Trust dated June 14,
1995.

Shares of the Trust are offered in two classes, known as Institutional Shares
and Institutional Service Shares (individually and collectively referred to as
"Shares," as the context may require). This Statement of Additional Information
relates to the above mentioned Shares of the Trust.

INVESTMENT OBJECTIVE AND POLICIES

The Trust's investment objective is to pursue total return consistent with
current income. The investment objective may not be changed by the Board of
Trustees ("Trustees") without shareholder approval.

TYPES OF INVESTMENTS

The Trust invests only in U.S. government securities. Unless indicated
otherwise, the investment policies of the Trust may be changed without
shareholder approval. Shareholders will be notified before any material change
in the policies becomes effective.

WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS

These transactions are made to secure what is considered to be an advantageous
price or yield for the Trust. No fees or other expenses, other than normal
transaction costs, are incurred. However, liquid assets of the Trust sufficient
to make payment for the securities to be purchased are segregated on the Trust's
records at the trade date. These assets are marked to market daily and are
maintained until the transaction has been settled. The Trust does not intend to
engage in when-issued and delayed delivery transactions to an extent that would
cause the segregation of more than 20% of the total value of its assets.

REPURCHASE AGREEMENTS

The Trust requires its custodian to take possession of the securities subject to
repurchase agreements, and these securities are marked to market daily. To the
extent that the original seller does not repurchase the securities from the
Trust, the Trust could receive less than the repurchase price on any sale of
such securities. In the event that such a defaulting seller filed for bankruptcy
or became insolvent, disposition of such securities by the Trust might be
delayed pending court action. The Trust believes that under the regular
procedures normally in effect for custody of the Trust's portfolio securities
subject to repurchase agreements, a court of competent jurisdiction would rule
in favor of the Trust and allow retention or disposition of such securities. 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 guidelines established by the Trustees.

REVERSE REPURCHASE AGREEMENTS

The Trust may also enter into reverse repurchase agreements. These transactions
are similar to borrowing cash. In a reverse repurchase agreement, the Trust
transfers possession of a portfolio instrument to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash, and agrees that on a stipulated date in the
future the Trust will repurchase the portfolio instrument by remitting the
original consideration plus interest at an agreed upon rate. The use of reverse
repurchase agreements may enable the Trust to avoid selling portfolio
instruments at a time when a sale may be deemed to be disadvantageous, but the
ability to enter into reverse repurchase agreements does not ensure that the
Trust will be able to avoid selling portfolio instruments at a disadvantageous
time.

LENDING OF PORTFOLIO SECURITIES

The collateral received when the Trust lends portfolio securities must be valued
daily and, should the market value of the loaned securities increase, the
borrower must furnish additional collateral to the Trust. During the time
portfolio securities are on loan, the borrower pays the Trust any dividends or
interest paid on such securities. Loans are subject to termination at the option
of the Trust or the borrower. The Trust may pay reasonable administrative and
custodial fees in connection with a loan and may pay a negotiated portion of the
interest earned on the cash or equivalent collateral to the borrower or placing
broker. The Trust does not have the right to vote securities on loan. In
circumstances where the Trust does not, the Trust would terminate the loan and
regain the right to vote if that were considered important with respect to the
investment.

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES

The Trust may invest in the securities of affiliated money market funds as an
efficient means of managing the Trust's uninvested cash.

PORTFOLIO TURNOVER

The Trust may trade or dispose of portfolio securities as considered necessary
to meet its investment objective. It is not anticipated that the portfolio
trading engaged in by the Trust will result in its annual rate of portfolio
turnover exceeding 100%. During the fiscal years ended February 28, 1998 and
February 28, 1997, the portfolio turnover rates were 49.1% and 57%,
respectively. INVESTMENT LIMITATIONS

SELLING SHORT AND BUYING ON MARGIN

The Trust will not sell any securities short or purchase any securities on
margin but may obtain such short-term credits as may be necessary for clearance
of transactions.

ISSUING SENIOR SECURITIES AND BORROWING MONEY

The Trust will not issue senior securities, except that the Trust may borrow
money directly or through reverse repurchase agreements in amounts up to
one-third of the value of its total assets, including the amounts borrowed.

The Trust will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the portfolio by enabling the Trust to
meet redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Trust will not purchase any
securities while borrowings in excess of 5% of its total assets are outstanding.

PLEDGING ASSETS

The Trust will not mortgage, pledge, or hypothecate any assets except to secure
permitted borrowings.

INVESTING IN REAL ESTATE

The Trust will not purchase or sell real estate, including limited partnership
interests, although it may invest in the securities of companies whose business
involves the purchase or sale of real estate or in securities which are secured
by real estate or interests in real estate.

INVESTING IN COMMODITIES

The Trust will not purchase or sell commoditites, commodity contracts, or
commodity futures contracts.

DIVERSIFICATION OF INVESTMENTS

With respect to securities comprising 75% of the value of its total assets, the
Trust will not purchase securities issued by any one issuer if, as a result,
more than 5% of the value of its total assets would be invested in the
securities of that issuer or if it would own more than 10% of the outstanding
voting securities of any one issuer.

LENDING CASH OR SECURITIES

The Trust will not lend any of its assets, except portfolio securities. This
shall not prevent the Trust from purchasing or holding money market instruments,
repurchase agreements, obligations of the U.S. government, its agencies, or
instrumentalities, or certain debt instruments as permitted by its investment
objective, policies, and limitations or the Trust's Declaration of Trust.

CONCENTRATION

The Trust will not invest 25% or more of the value of its total assets in any
one industry, except that the Trust may invest 25% or more of the value of its
total assets in securities issued or guaranteed by the U.S. government, its
agencies, or instrumentalities, and repurchase agreements collateralized by such
securities. The above investment limitations cannot be changed without
shareholder approval. The following limitations, however, may be changed by the
Trustees without shareholder approval. Shareholders will be notified before any
material change in these limitations becomes effective.

INVESTING IN ILLIQUID SECURITIES

The Trust will not invest more than 15% of the value of its net assets in
illiquid securities, including repurchase agreements providing for settlement in
more than seven days after notice, and certain securities not determined by the
Trustees to be liquid.

PURCHASING SECURITIES TO EXERCISE CONTROL

The Trust will not purchase securities of a company for purpose of exercising
control or management.

DEALING IN PUTS AND CALLS

The Trust will not buy or sell puts, calls, straddles, spreads, or any
combination of these.

Except with respect to borrowing money, if a percentage limitation is adhered to
at the time of investment, a later increase or decrease in percentage resulting
from any change in value or net assets will not result in a violation of such
restriction. The Trust does not intend to borrow money, pledge securities,
or invest in illiquid securities in excess of 5% of the value of its net assets
during the coming fiscal year. For purposes of its policies and limitations, the
Trust considers certificates of deposit and demand and time deposits issued by a
U.S. branch of a domestic bank or savings association having capital, surplus,
and undivided profits in excess of $100,000,000 at the time of investment to be
"cash items." FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS
MANAGEMENT

Officers and Trustees are listed with their addresses, birthdates, present
positions with Federated U.S. Government Securities Fund: 5-10 Years, and
principal occupations.

John F. Donahue@*
Federated Investors Tower
Pittsburgh, PA

Birthdate: July 28, 1924

Chairman and Trustee

Chairman and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; Chairman and Director, Federated
Research Corp. and Federated Global Research Corp.; Chairman, Passport
Research, Ltd.; Chief Executive Officer and Director or Trustee of the
Funds. Mr. Donahue is the father of J. Christopher Donahue, Executive Vice
President of the Company.

Thomas G. Bigley
15 Old Timber Trail
Pittsburgh, PA

Birthdate: February 3, 1934

Trustee

Director, Member of the Executive Committee, Children's Hospital of
Pittsburgh; formerly, Senior Partner, Ernst & Young LLP; Director, MED 3000
Group, Inc.; Director, Member of Executive Committee, University of
Pittsburgh; Director or Trustee of the Funds.

John T. Conroy, Jr.
Wood/IPC Commercial Department
John R. Wood and Associates, Inc., Realtors
3255 Tamiami Trail North
Naples, FL

Birthdate: June 23, 1937

Trustee

President, Investment Properties Corporation; Senior Vice President, John R.
Wood and Associates, Inc., Realtors; Partner or Trustee in private real
estate ventures in Southwest Florida; formerly, President, Naples Property
Management, Inc. and Northgate Village Development Corporation; Director or
Trustee of the Funds.

Nicholas P. Constantakis
175 Woodshire Drive
Pittsburgh, PA

Birthdate: September 3, 1939

Trustee

Formerly, Partner, Andersen Worldwide SC; Director or Trustee of the Funds.

William J. Copeland
One PNC Plaza--23rd Floor
Pittsburgh, PA

Birthdate: July 4, 1918

Trustee

Director and Member of the Executive Committee, Michael Baker, Inc.;
formerly, Vice Chairman and Director, PNC Bank, N.A. and PNC Bank Corp.;
Director, Ryan Homes, Inc.; Director or Trustee of the Funds.

James E. Dowd
571 Hayward Mill Road
Concord, MA

Birthdate: May 18, 1922

Trustee

Attorney-at-law; Director, The Emerging Germany Fund, Inc.; Director or
Trustee of the Funds.

Lawrence D. Ellis, M.D.*
3471 Fifth Avenue, Suite 1111
Pittsburgh, PA

Birthdate: October 11, 1932

Trustee

Professor of Medicine, University of Pittsburgh; Medical Director, University of
Pittsburgh Medical Center--Downtown; Member, Board of Directors, University of
Pittsburgh Medical Center; formerly, Hematologist, Oncologist, and Internist,
Presbyterian and Montefiore Hospitals; Director or Trustee of the Funds.

Edward L. Flaherty, Jr.@
Miller, Ament, Henny & Kochuba
205 Ross Street
Pittsburgh, PA

Birthdate: June 18, 1924

Trustee

Attorney of Counsel, Miller, Ament, Henny & Kochuba; Director, Eat'N Park
Restaurants, Inc.; formerly, Counsel, Horizon Financial, F.A., Western
Region; Director or Trustee of the Funds.

Peter E. Madden
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL

Birthdate: March 16, 1942

Trustee

Consultant; Former State Representative, Commonwealth of Massachusetts;
formerly, President, State Street Bank and Trust Company and State Street Boston
Corporation; Director or Trustee of the Funds.

John E. Murray, Jr., J.D., S.J.D.

President, Duquesne University
Pittsburgh, PA

Birthdate: December 20, 1932

Trustee

President, Law Professor, Duquesne University; Consulting Partner, Mollica &
Murray; Director or Trustee of the Funds.

Wesley W. Posvar
1202 Cathedral of Learning
University of Pittsburgh
Pittsburgh, PA

Birthdate: September 14, 1925

Trustee

Professor, International Politics; Management Consultant; Trustee, Carnegie
Endowment for International Peace, RAND Corporation, Online Computer Library
Center, Inc., National Defense University, and U.S. Space Foundation;
President Emeritus, University of Pittsburgh; Founding Chairman, National
Advisory Council for Environmental Policy and Technology, Federal Emergency
Management Advisory Board, and Czech Management Center, Prague; Director or
Trustee of the Funds.

Marjorie P. Smuts
4905 Bayard Street
Pittsburgh, PA

Birthdate: June 21, 1935

Trustee

Public Relations/Marketing/Conference Planning; Director or Trustee of the
Funds.

Glen R. Johnson
Federated Investors Tower
Pittsburgh, PA

Birthdate: May 2, 1929

President

Trustee, Federated Investors; President and/or Trustee of some of the Funds;
staff member, Federated Securities Corp.

J. Christopher Donahue
Federated Investors Tower
Pittsburgh, PA

Birthdate: April 11, 1949

Executive Vice President

President and Trustee, Federated Investors, Federated Advisers, Federated
Management, and Federated Research; President and Director, Federated
Research Corp. and Federated Global Research Corp.; President, Passport
Research, Ltd.; Trustee, Federated Shareholder Services Company, and
Federated Shareholder Services; Director, Federated Services Company;
President or Executive Vice President of the Funds; Director or Trustee of
some of the Funds. Mr. Donahue is the son of John F. Donahue, Chairman and
Trustee of the Company.

Edward C. Gonzales
Federated Investors Tower
Pittsburgh, PA

Birthdate: October 22, 1930

Executive Vice President

Vice Chairman, Treasurer, and Trustee, Federated Investors; Vice President,
Federated Advisers, Federated Management, Federated Research, Federated
Research Corp., Federated Global Research Corp., and Passport Research,
Ltd.; Executive Vice President and Director, Federated Securities Corp.;
Trustee, Federated Shareholder Services Company; Trustee or Director of some
of the Funds; President, Executive Vice President and Treasurer of some of
the Funds.

John W. McGonigle
Federated Investors Tower
Pittsburgh, PA

Birthdate: October 26, 1938

Executive Vice President, Secretary, and Treasurer

Executive Vice President, Secretary, and Trustee, Federated Investors; Trustee,
Federated Advisers, Federated Management, and Federated Research; Director,
Federated Research Corp. and Federated Global Research Corp.; Trustee, Federated
Shareholder Services Company; Director, Federated Services Company; President
and Trustee, Federated Shareholder Services; Director, Federated Securities
Corp.; Executive Vice President and Secretary of the Funds; Treasurer of some of
the Funds.

Richard B. Fisher
Federated Investors Tower
Pittsburgh, PA

Birthdate: May 17, 1923

Vice President

Executive Vice President and Trustee, Federated Investors; Chairman and
Director, Federated Securities Corp.; President or Vice President of some of
the Funds; Director or Trustee of some of the Funds.

* This Trustee is deemed to be an "interested person" as defined in the
Investment Company Act of 1940.

@ Member of the Executive Committee. The Executive Committee of the Board of
Trustees handles the responsibilities of the Board between meetings of the
Board. As used in the table above, "The Funds" and "Funds" mean the
following investment companies: 111 Corcoran Funds; Automated Government Money
Trust; Blanchard Funds; Blanchard Precious Metals Fund, Inc.; Cash Trust Series
II; Cash Trust Series, Inc.; DG Investor Series; Edward D. Jones & Co. Daily
Passport Cash Trust; Federated Adjustable Rate U.S. Government Fund, Inc.;
Federated American Leaders Fund, Inc.; Federated ARMs Fund; Federated Core
Trust; Federated Equity Funds; Federated Equity Income Fund, Inc.; Federated
Fund for U.S. Government Securities, Inc.; Federated GNMA Trust; Federated
Government Income Securities, Inc.; Federated Government Trust; Federated High
Income Bond Fund, Inc.; Federated High Yield Trust; Federated Income Securities
Trust; Federated Income Trust; Federated Index Trust; Federated Institutional
Trust; Federated Insurance Series; Federated Investment Portfolios; Federated
Investment Trust; Federated Master Trust; Federated Municipal Opportunities
Fund, Inc.; Federated Municipal Securities Fund, Inc.; Federated Municipal
Trust; Federated Short-Term Municipal Trust; Federated Short-Term U.S.
Government Trust; Federated Stock and Bond Fund, Inc.; Federated Stock Trust;
Federated Tax-Free Trust; Federated Total Return Series, Inc.; Federated U.S.
Government Bond Fund; Federated U.S. Government Securities Fund: 1-3 Years;
Federated U.S. Government Securities Fund: 2-5 Years; Federated U.S. Government
Securities Fund: 5-10 Years; Federated Utility Fund, Inc.; First Priority Funds;
Fixed Income Securities, Inc.; High Yield Cash Trust; Intermediate Municipal
Trust; International Series, Inc.; Investment Series Funds, Inc.; Investment
Series Trust; Liberty Term Trust, Inc.--1999; Liberty U.S. Government Money
Market Trust; Liquid Cash Trust; Managed Series Trust; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Obligations Trust II; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds; RIMCO Monument
Funds; Targeted Duration Trust; Tax-Free Instruments Trust; The Planters Funds;
The Virtus Funds; Trust for Financial Institutions; Trust for Government Cash
Reserves; Trust for Short-Term U.S. Government Securities; Trust for U.S.
Treasury Obligations; WesMark Funds; WCT Funds; and World Investment Series,
Inc. TRUST OWNERSHIP

Officers and Trustees own less than 1% of the Trust's outstanding shares. As
of April 8, 1998, the following shareholders of record owned 5% or more of the
outstanding Institutional Shares of the Trust: NBO National Bank, Scranton, PA
owned approximately 250,770 (5.26%) shares; Union Planters National Bank,
Memphis, TN, owned approximately 743,096 (15.58%) shares; Charles Schwab &
Company (as record owner holding Institutional Shares for its clients), San
Fransisco CA, owned approximately 1,112,829 Institutional Shares (23.33%); and
FNB Nominee Co., First Commonwealth Trust Co., Indiana, PA, owned approximately
377,752 (7.92%) shares.

As of April 8, 1998, the following shareholders of record owned 5% or more of
the outstanding Institutional Service Shares of the Trust: Jesco & Co., Citizens
First National Bank, Princeton, IL, owned approximately 22,572 (9.14%) shares;
National Investor Services Corp. (as record owner for the exclusive benefit of
its customers), New York, NY, owned approximately 13,365 (5.41%) shares; and
CIBC Oppenheimer Corp., New York, NY, owned approximately 24,748 (10.02%)
shares.

As of April 8, 1998, Holdon, The Ohio Bank (as record owner holding
Institutional Service Shares for its clients), Findley, OH, owned approximately
115,687 Institutional Service Shares (46.83%) and therefore may, for certain
purposes, be deemed to control the Trust and be able to affect the outcome of
certain matters presented for a vote of shareholders. TRUSTEE COMPENSATION
<TABLE> <CAPTION>
AGGREGATE
NAME, COMPENSATION
POSITION WITH FROM TOTAL COMPENSATION PAID
TRUST TRUST*# FROM FUND COMPLEX+
<S> <C> <C>
John F. Donahue $0 $0 for the Trust and
Chairman and Trustee 56 other investment companies
in the Fund Complex

Thomas G. Bigley $1,038.97 $111,222 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

John T. Conroy, Jr. $1,143.03 $122,362 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

Nicholas P. Constantakis++ $278.80 $0 for the Trust and
Trustee 34 other investment companies
in the Fund Complex

William J. Copeland $1,143.03 $122,362 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

James E. Dowd $1,143.03 $122,362 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

Lawrence D. Ellis, M.D. $1,038.97 $111,222 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

Edward L. Flaherty, Jr. $1,143.03 $122,362 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

Peter E. Madden $1,038.97 $111,222 for Trust and
Trustee 56 other investment companies
in the Fund Complex

John E. Murray, Jr. $1,038.97 $111,222 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

Wesley W. Posvar $1,038.97 $111,222 for the Trust and
Trustee 56 other investment companies
in the Fund Complex

Marjorie P. Smuts $1,038.97 $111,222 for the Trust and
Trustee 56 other investment companies
in the Fund Complex
</TABLE>

* Information is furnished for the fiscal year ended February 28, 1998.

# The aggregate compensation is provided for the Trust which is comprised of
one portfolio.

+ The information is provided for the last calendar year.

++ Mr. Constantakis became a member of the Board of Trustees on February 23,
1998.

TRUSTEE LIABILITY

The Trust's Declaration of Trust provides that the Trustees will not be liable
for errors of judgment or mistakes of fact or law. However, they are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.

INVESTMENT ADVISORY SERVICES

ADVISER TO THE TRUST

The Trust's investment adviser is Federated Management. It is a subsidiary of
Federated Investors. All of the voting securities of Federated Investors are
owned by a trust, the trustees of which are John F. Donahue, his wife, and his
son, J. Christopher Donahue. The adviser shall not be liable to the Trust or any
shareholder of the Trust for any losses that may be sustained in the purchase,
holding, or sale of any security, or for anything done or omitted by it, except
acts or omissions involving willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties imposed upon it by its contract with the Trust.

ADVISORY FEES

For its advisory services, Federated Management receives an annual investment
advisory fee as described in the prospectus.

During the fiscal years ended February 28, 1998 and February 28, 1997, and for
the period from September 5, 1995 (start of business) to February 29, 1996, the
adviser earned $143,246, $52,801, and $4,537, respectively, of which $143,246,
$52,801, and $4,537 were waived. BROKERAGE TRANSACTIONS

When selecting brokers and dealers to handle the purchase and sale of portfolio
instruments, the adviser looks for prompt execution of the order at a favorable
price. In working with dealers, the adviser will generally use those who are
recognized dealers in specific portfolio instruments, except when a better price
and execution of the order can be obtained elsewhere. The adviser makes
decisions on portfolio transactions and selects brokers and dealers subject to
guidelines established by the Trustees.

The adviser may select brokers and dealers who offer brokerage and research
services. These services may be furnished directly to the Trust or to the
adviser and may include: advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services.
Research services provided by brokers and dealers may be used by the adviser or
by affiliates in advising the Trust and other accounts. To the extent that
receipt of these services may supplant services for which the adviser or its
affiliates might otherwise have paid, it would tend to reduce their expenses.
The adviser and its affiliates exercise reasonable business judgment in
selecting brokers who offer brokerage and research services to execute
securities transactions. They determine in good faith that commissions charged
by such persons are reasonable in relationship to the value of the brokerage and
research services provided. For the period from September 5, 1995 (start of
business) to February 28, 1997, and during the fiscal year ended February 28,
1998, the Trust paid no brokerage commissions. Although investment
decisions for the Trust are made independently from those of the other accounts
managed by the adviser, investments of the type the Trust may make may also be
made by those other accounts. When the Trust and one or more other accounts
managed by the adviser are prepared to invest in, or desire to dispose of, the
same security, available investments or opportunities for sales will be
allocated in a manner believed by the adviser to be equitable to each. In some
cases, this procedure may adversely affect the price paid or received by the
Trust or the size of the position obtained or disposed of by the Trust. In other
cases, however, it is believed that coordination and the ability to participate
in volume transactions will be to the benefit of the Trust.

OTHER SERVICES

TRUST ADMINISTRATION

Federated Services Company, a subsidiary of Federated Investors, provides
administrative personnel and services to the Trust for a fee as described in the
prospectus. From March 1, 1994 to March 1, 1996, Federated Administrative
Services, a subsidiary of Federated Investors, served as the Trust's
Administrator. For purposes of this Statement of Additional Information,
Federated Services Company, and Federated Administrative Services may
hereinafter collectively be referred to as, the "Administrators." For the fiscal
years ended February 28, 1998 and February 28, 1997, and for the period from
September 5, 1995, (start of business) to February 29, 1996, the Administrators
earned $155,001, $155,001, and $56,749, respectively. CUSTODIAN AND
PORTFOLIO ACCOUNTANT

State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Trust. Federated Services Company, Pittsburgh,
Pennsylvania, provides certain accounting and recordkeeping services with
respect to the Trust's portfolio investments. The fee paid for this service is
based upon the level of the Trust's average net assets for the period plus
out-of-pocket expenses.

TRANSFER AGENT

Federated Services Company, through its registered transfer agent, Federated
Shareholder Services Company, maintains all necessary shareholder records. For
its services, the transfer agent receives a fee based upon the size, type, and
number of accounts and transactions made by shareholders.

INDEPENDENT AUDITORS

The independent auditors for the Trust are Ernst & Young LLP, Pittsburgh, PA.

PURCHASING SHARES

Shares are sold at their net asset value without a sales charge on days the New
York Stock Exchange is open for business. The procedure for purchasing Shares is
explained in the respective prospectuses under "Investing in Institutional
Shares" or "Investing in Institutional Service Shares." DISTRIBUTION PLAN
(INSTITUTIONAL SERVICE SHARES ONLY) AND SHAREHOLDER SERVICES

As explained in the respective prospectuses, with respect to Shares of the
Trust, the Trust has adopted a Shareholder Services Agreement, and, with respect
to Institutional Service Shares the Trust has adopted a Distribution Plan.
These arrangements permit the payment of fees to financial institutions, the
distributor, and Federated Shareholder Services to stimulate distribution
activities and to cause services to be provided to shareholders by a
representative who has knowledge of the shareholder's particular circumstances
and goals. These activities and services may include, but are not limited to,
marketing efforts; providing office space, equipment, telephone facilities, and
various clerical, supervisory, computer, and other personnel as necessary or
beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries; and assisting
clients in changing dividend options, account designations, and addresses.

With respect to the Institutional Service Shares class of the Trust, by adopting
the Distribution Plan, the Board of Trustees expects that the Trust will be able
to achieve a more predictable flow of cash for investment purposes and to meet
redemptions. This will facilitate more efficient portfolio management and assist
the Trust in pursuing its investment objectives. By identifying potential
investors whose needs are served by the Trust's objectives, and properly
servicing these accounts, it may be possible to curb sharp fluctuations in rates
of redemptions and sales.

Other benefits, which may be realized under either arrangement, may include: (1)
providing personal services to shareholders; (2) investing shareholder assets
with a minimum of delay and administrative detail; (3) enhancing shareholder
recordkeeping systems; and (4) responding promptly to shareholders' requests and
inquiries concerning their accounts. For the fiscal year ended February 28,
1998, payments in the amount of $5,062 were made by Institutional Service Shares
pursuant to the Plan, $0 of which was waived. In addition, for the fiscal year
ended February 28, 1998, the Trust paid shareholder service fees in the amount
of $5,062, (Institutional Service Shares) and $66,561, (Institutional Shares),
of which $3,240, (Institutional Service Shares) and $55,911, (Institutional
Shares) was waived. CONVERSION TO FEDERAL FUNDS

It is the Trust's policy to be as fully invested as possible so that maximum
interest may be earned. To this end, all payments from shareholders must be in
federal funds or be converted into federal funds. Federated Shareholder Services
Company acts as the shareholder's agent in depositing checks and converting them
to federal funds.

DETERMINING NET ASSET VALUE

Net asset value generally changes each day. The days on which net asset value is
calculated by the Trust are described in the respective prospectuses.

DETERMINING MARKET VALUE OF SECURITIES

Market values of the Trust's portfolio securities are determined as follows:

* according to the mean between the over-the-counter bid and asked prices
provided by an independent pricing service, if available, or at fair value
as determined in good faith by the Trust's Board of Trustees; or
* for short-term obligations with remaining maturities of less than 60 days
at the time of purchase, at amortized cost unless the Trustees determine
that particular circumstances of the security indicate otherwise.

Prices provided by independent pricing services may be determined without
relying exclusively on quoted prices. Pricing services may consider:

* yield;
* quality;
* coupon rate;
* maturity;
* type of issue;
* trading characteristics; and
* other market data.

REDEEMING SHARES

The Trust redeems Shares at the next computed net asset value after the Trust
receives the redemption request. Redemption procedures are explained in the
respective prospectuses under "Redeeming Institutional Shares" and "Redeeming
Institutional Service Shares." Although Federated Shareholder Services Company
does not charge for telephone redemptions, it reserves the right to charge a fee
for the cost of wire-transferred redemptions of less than $5,000.
REDEMPTION IN KIND

The Trust is obligated to redeem Shares solely in cash up to $250,000 or 1% of
the respective class net asset value, whichever is less, for any one shareholder
within a 90-day period.

Any redemption beyond this amount will also be in cash unless the Trustees
determine that further cash payments will have a material adverse effect on
remaining shareholders. In such a case, the Trust will pay all or a portion of
the remainder of the redemption in portfolio instruments, valued in the same way
as the Trust determines net asset value. The portfolio instruments will be
selected in a manner that the Trustees deem fair and equitable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving their securities and selling them before their
maturity could receive less than the redemption value of their securities and
could incur certain transaction costs.

Although the Trust intends to redeem shares in cash, it reserves the right under
certain circumstances to pay the redemption price in whole or in part by a
distribution of securities from the Trust's portfolio. To the extent available,
such securities will be readily marketable.

MASSACHUSETTS PARTNERSHIP LAW

Under certain circumstances, shareholders may be held personally liable as
partners under Massachusetts law for obligations of the Trust. To protect the
shareholders of the Trust, the Trust has filed legal documents with
Massachusetts that expressly disclaim the liability of its shareholders for such
acts or obligations of the Trust. These documents require notice of this
disclaimer to be given in each agreement, obligation, or instrument that the
Trust or its Trustees enter into or sign on behalf of the Trust.

In the unlikely event a shareholder is held personally liable for the Trust's
obligations, the Trust is required to use its property to protect or compensate
the shareholder. On request, the Trust will defend any claim made and pay any
judgment against a shareholder for any act or obligation of the Trust.
Therefore, financial loss resulting from liability as a shareholder will occur
only if the Trust itself cannot meet its obligations to indemnify shareholders
and pay judgments against them from its assets.

TAX STATUS

THE TRUST'S TAX STATUS

The Trust will pay no federal income tax because it expects to meet the
requirements of Subchapter M of the Internal Revenue Code applicable to
regulated investment companies and to receive the special tax treatment afforded
to such companies. To qualify for this treatment, the Trust must, among other
requirements:

* derive at least 90% of its gross income from dividends, interest, and
gains from the sale of securities;

* invest in securities within certain statutory limits; and

* distribute to its shareholders at least 90% of its net income earned
during the year.

SHAREHOLDERS' TAX STATUS

Shareholders are subject to federal income tax on dividends and capital gains
received as cash or additional Shares. No portion of any income dividend paid by
the Trust is eligible for the dividends received deduction available to
corporations. These dividends, and any short-term capital gains, are taxable as
ordinary income.

CAPITAL GAINS

Long-term capital gains distributed to shareholders will be treated as long-term
capital gains regardless of how long shareholders have held Shares.

TOTAL RETURN

The Trust's average annual total return for Institutional Shares for the
one-year period ended February 28, 1998, and for the period from October 19,
1995, (date of initial public investment) to February 28, 1997, were 11.09% and
7.10%, respectively.

The Trust's average annual total return for Institutional Service Shares for the
one-year period ended February 28, 1998, and for the period from October 19,
1995, (date of initial public offering) to February 28, 1997, were 10.76% and
6.77%, respectively. The average annual total return for both classes of
Shares of the Trust is the average compounded rate of return for a given period
that would equate a $1,000 initial investment to the ending redeemable value of
that investment. The ending redeemable value is computed by multiplying the
number of shares owned at the end of the period by the net asset value per share
at the end of the period. The number of shares owned at the end of the period is
based on the number of shares purchased at the beginning of the period with
$1,000, less any applicable sales charge, adjusted over the period by any
additional shares, assuming the reinvestment of all dividends and distributions.

YIELD

The yield for both classes of shares of the Trust is determined by dividing the
net investment income per share (as defined by the Securities and Exchange
Commission) earned by either class of shares over a thirty-day period by the
maximum offering price per share of either class on the last day of the period.
This value is annualized using semi-annual compounding. This means that the
amount of income generated during the thirty-day period is assumed to be
generated each month over a twelve month period and is reinvested every six
months. The yield does not necessarily reflect income actually earned by the
Trust because of certain adjustments required by the Securities and Exchange
Commission and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.

To the extent that financial institutions and broker/dealers charge fees in
connection with services provided in conjunction with an investment in either
class of shares, performance will be reduced for those shareholders paying those
fees. The thirty-day SEC yields for the Institutional Shares and the
Institutional Service Shares, for the period ended February 28, 1998, were 5.37%
and 5.07%, respectively. PERFORMANCE COMPARISONS

The performance of both classes of Shares depends upon such variables as:

* portfolio quality;
* average portfolio maturity;
* type of instruments in which the portfolio is invested; * changes in
interest rates and market value of portfolio securities; * changes in the
Trust's expenses or either class of Share's expenses;
and
* various other factors.

Either class of Shares' performance fluctuates on a daily basis largely because
net earnings and offering price per share fluctuate daily. Both net earnings and
offering price per share are factors in the computation of yield and total
return.

Investors may use financial publications and/or indices to obtain a more
complete view of the Trust's performance. When comparing performance, investors
should consider all relevant factors such as the composition of any index used,
prevailing market conditions, portfolio compositions of other funds, and methods
used to value portfolio securities and compute offering price. The financial
publications and/or indices which the Trust uses in advertising may include:

* LIPPER ANALYTICAL SERVICES, INC. ranks funds in various categories by
making comparative calculations using total return. Total return assumes
the reinvestment of all capital gains distributions and income dividends
and takes into account any change in net asset value over a specific period
of time. From time to time, the Trust will quote its Lipper ranking in the
"U.S. government funds" category in advertising and sales literature.

* MERRILL LYNCH 5-10 YEAR TREASURY INDEX is an unmanaged index tracking
U.S. government securities with maturities between 5 and 9.99 years.

Advertisements and other sales literature for both classes of shares may quote
total returns which are calculated on nonstandardized base periods. These total
returns also represent the historic change in the value of an investment in
either class of shares based on monthly reinvestment of dividends over a
specified period of time.

DURATION

Duration is a commonly used measure of the potential volatility in the price of
a bond, or other fixed income security, or in a portfolio of fixed income
securities, prior to maturity. Volatility is the magnitude of the change in the
price of a bond relative to a given change in the market rate of interest. A
bond's price volatility depends on three primary variables: the bond's coupon
rate; maturity date; and the level of market yields of similar fixed income
securities. Generally, bonds with lower coupons or longer maturities will be
more volatile than bonds with higher coupons or shorter maturities. Duration
combines these variables into a single measure.

Duration is calculated by dividing the sum of the time-weighted present values
of the cash flows of a bond or bonds, including interest and principal payments,
by the sum of the present values of the cash flows. A more complete description
of this calculation is available upon request from the Trust.

ABOUT FEDERATED INVESTORS

Federated Investors is dedicated to meeting investor needs which is reflected in
its investment decision making--structured, straightforward, and consistent.
This has resulted in a history of competitive performance with a range of
competitive investment products that have gained the confidence of thousands of
clients and their customers.

The company's disciplined security selection process is firmly rooted in sound
methodologies backed by fundamental and technical research. Investment decisions
are made and executed by teams of portfolio managers, analysts, and traders
dedicated to specific market sectors. In the government sector, as of
December 31, 1997, Federated Investors managed 9 mortgaged-backed, 6
government/agency, and 18 government money market mutual funds, with assets
approximating $5.9 billion, $1.5 billion, and $35 billion, respectively.
Federated trades approximately $400 million in U.S. government and
mortgage-backed securities daily and places approximately $23 billion in
repurchase agreements each day. Federated introduced the first U.S. government
fund to invest in U.S. government bond securities in 1969. Federated has been a
major force in the short- and intermediate-term government markets since 1982
and currently manages nearly $36 billion in government funds within these
maturity ranges. J. Thomas Madden, Executive Vice President, oversees
Federated Investors' equity and high yield corporate bond management while
William D. Dawson, Executive Vice President, oversees Federated Investors'
domestic fixed income management. Henry A. Frantzen, Executive Vice President,
oversees the management of Federated Investors' international and global
portfolios.

MUTUAL FUND MARKET

Thirty-seven percent of American households are pursuing their financial goals
through mutual funds. These investors, as well as businesses and institutions,
have entrusted over $4.4 trillion to the more than 6,700 funds available.*
Federated Investors, through its subsidiaries, distributes mutual funds for a
variety of investment applications. Specific markets include:

INSTITUTIONAL CLIENTS

Federated Investors meets the needs of approximately 900 institutional clients
nationwide by managing and servicing separate accounts and mutual funds for a
variety of applications, including defined benefit and defined contribution
programs, cash management, and asset/liability management. Institutional clients
include corporations, pension funds, tax-exempt entities,
foundations/endowments, insurance companies, and investment and financial
advisors. The marketing effort to these institutional clients is headed by John
B. Fisher, President, Institutional Sales Division. BANK MARKETING
Other institutional clients include close relationships with more than 1,600
banks and trust organizations. Virtually all of the trust divisions of the top
100 bank holding companies use Federated funds in their clients' portfolios. The
marketing effort to trust clients is headed by Timothy C. Pillon, Senior Vice
President, Bank Marketing & Sales. BROKER/DEALERS AND BANK BROKER/DEALER
SUBSIDIARIES

Federated funds are available to consumers through major brokerage firms
nationwide -- we have over 2,200 broker/dealer and bank broker/dealer
relationships across the country -- supported by more wholesalers than any other
mutual fund distributor. Federated's service to financial professionals and
institutions has earned it high ratings in several surveys performed by DALBAR,
Inc. DALBAR is recognized as the industry benchmark for service quality
measurement. The marketing effort to these firms is headed by James F. Getz,
President, Federated Securities Corp. *Source: Investment Company Institute

PART C. OTHER INFORMATION.

Item 24. Financial Statements and Exhibits:

(a) Financial Statements (Filed in Part A).
(b) Exhibits:
(1) (i)Conformed copy of Declaration of Trust of the Registrant; (1)
(ii) Conformed copy of Amendment No. 1 (dated July 19, 1995) to
Declaration of Trust; (2)
(2) Copy of the By-laws of the Registrant;(1)
(3) Not applicable;
(4) (i) Copy of Specimen Certificate of Shares of Benefifical Interest of
the Registrant/ Institutional Shares; (2)
(ii) Copy of Specimen Certificate of Shares of Benefifical Interest of
the Registrant/ Institutional Service Shares;
(2)
(5) Conformed copy of the Investment Advisory Contract; (2)
(6) (i) Conformed copy of the Distributor's Contract for the Institutional
Service Shares; (3)
(ii) The Registrant hereby incorporates the conformed
copy of the specimen Mutual Funds Sales and Service
Agreement; Mutual Funds Service Agreement; and Plan
Trustee/ Mutual Funds Service Agreement from Item 4
(b)(6) of the Cash Trust Series II Registration
Statement on Form N-1A, filed with the Commission on
July 24, 1995. (File Numbers 33-38550 and 811-6269).
(7) Not applicable;
(8) (i) Copy of the Custodian Contract of the Registrant;
(2) (ii)Conformed copy of Domestic Custody Fee
Schedule;+
(9) (i) Conformed copy of Agreement for Fund Accounting
Services, Administrative Services, Shareholder
Recordkeeping Services, and Custody Services
Procurement; (3) (ii) Conformed copy of Amended and
Restated Shareholder Services Agreement;+ (iii) The
responses described in Item 24(b)(6)(ii) are hereby
incorporated by reference. (iv) The Registrant hereby
incorporates the conformed copy of the Shareholder
Services Sub-Contract between Fidelity and Federated
Shareholder Services from Item 24(b)(9)(iii) of the
Federated GNMA Trust Registration Statement on Form
N-1A, filed with the Commission on March 26, 1996. (File
Nos. 2-75670 and 811-3375).

+ All exhibits have been filed electronically.
1. Response is incoportated by Reference to Registrant's Initial Registration
Statement on Form N-1A filed June 20, 1995. (Files Nos.
033-60411 and 811-07309).
2...................................Response is incoportated by Reference
to Registrant's Pre-Effective Amendment Number 1 on
Form N-1A filed September 12, 1995. (Files Nos. 033-60411 and 811-07309).
3. Response is incoportated by Reference to Registrant's Post-Effective
Amendment Number 2 on Form N-1A filed April 30, 1996. (Files
Nos. 033-60411 and 811-07309).

(10) Conformed copy of Opinion and Consent of Counsel as to
legality of shares being registered; (2);
(11) Conformed copy of Consent of Independent Auditors; +
(12) Not applicable;
(13) Conformed copy of Initial Capital Undertstanding; (2)
(14) Not applicable;
(15) Conformed copy of Distribution Plan; (2)
(16) Schedule for Computation of Trust Performance Data; (3)
(17) Financial Data Schedules;+
(18) The Registrant hereby incorporates the conformed copy
of the specimen Multiple Class Plan from Item 24(b)(18)
of the World Investment Series, Inc. Registration
Statement on Form N-1A, filed with the Commission on
January 26, 1996. (File Nos. 33-52149 and 811-07141);
(19) Conformed copy of Power of Attorney;+

Item 25. Persons Controlled by or Under Common Control with Registrant:

None

Item 26. Number of Holders of Securities:

Number of Record Holders
Title of Class as of April 8, 1998
-------------- ---------------------

Shares of Beneficial Interest
(No par value)
Institutional Shares 500
Institutional Service Shares 349

Item 27. Indemnification: (1)

+ All exhibits have been filed electronically.

1. Response is incoportated by Reference to Registrant's Initial Registration
Statement on Form N-1A filed June 20, 1995. (Files Nos. 033-60411 and
811-07309).

2. Response is incoportated by Reference to Registrant's Pre-Effective
Amendment Number 1 on Form N-1A filed September 12, 1995. (Files Nos.
033-60411 and 811-07309).

3. Response is incoportated by Reference to Registrant's Post-Effective
Amendment Number 2 on Form N-1A filed April 30, 1996. (Files Nos. 033-60411
and 811-07309).

<PAGE>

Item 28. Business and Other Connections of Investment Adviser:

(a) For a description of the other business of the investment adviser, see
the section entitled "Trust Information - Management of the Trust" in
Part A. The affiliations with the Registrant of four of the Trustees
and one of the Officers of the investment adviser are included in Part
B of this Registration Statement under "Federated U.S. Government
Securities Fund: 5-10 Years Management". The remaining Trustee of the
investment adviser, his position with the investment adviser, and, in
parentheses, his principal occupation is: Mark D. Olson (Partner,
Wilson, Halbrook & Bayard), 107 W. Market Street, Georgetown, Delaware
19947.

The remaining Officers of the investment adviser are:

Executive Vice Presidents: William D. Dawson, III
Henry A. Frantzen
J. Thomas Madden

Senior Vice Presidents: Josephn M. Balestrino
Drew J. Collins
Jonathan C. Conley
Deborah A. Cunningham
Mark E. Durbiano
Sandra L. McInerney
J. Alan Minteer
Susan M. Nason
Mary Jo Ochson
Robert J. Ostrowski

Vice Presidents: Todd A. Abraham
J. Scott Albrecht
Randall S. Bauer
David A. Briggs
Micheal W. Casey
Kenneth J. Cody
Alexandre de Bethmann
Michael P. Donnelly
Linda A. Duessel
Donald T. Ellenberger
Kathleen M. Foody-Malus
Thomas M. Franks
Edward C. Gonzales
James E. Grefenstette
Susan R. Hill
Stephen A. Keen
Robert K. Kinsey
Robert M. Kowit
Jeff A. Kozemchak
Steven Lehman
Marian R. Marinack
Charles A. Ritter
Scott B. Schermerhorn
Frank Semack
Aash M. Shah
Christopher Smith
William F. Stotz
Tracy P. Stouffer
Edward J. Tiedge
Paige M. Wilhelm
Jolanta M. Wysocka

<PAGE>

Assistant Vice Presidents:
Stefanie L. Bachhuber
Arthur J. Barry
Robert E. Cauley
Lee R. Cunningham, II
Paul S. Drotch
Salvatore A. Esposito
Donna M. Fabiano
John T. Gentry
William R. Jamison
Constantine Kartsonsas
Natalie F. Metz
Joseph M. Natoli
Keith J. Sabol
John Sheehy
Michael W. Sirianni
Gregg S. Tenser
Leonardo A. Vila
Lori A. Wolff

Secretary: Stephen A. Keen

Treasurer: Thomas R. Donahue

Assistant Secretaries: Thomas R. Donahue
Richard B. Fisher
Christine I. McGonigle

Assistant Treasurer: Richard B. Fisher

The business address of each of the Officers of the investment adviser
is Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779.
These individuals are also officers of a majority of the investment
advisers to the Funds listed in Part B of this Registration Statement.

1. Response is incoportated by Reference to Registrant's Initial Registration
Statement on Form N-1A filed June 20, 1995. (Files Nos. 033-60411 and
811-07309).

<PAGE>

Item 29. Principal Underwriters:

(a)...Federated Securities Corp. the Distributor for shares of the Registrant,
acts as principal underwriter for the following .. open-end investment
companies, including the Registrant:

111 Corcoran Funds; Automated Government Money Trust; Blanchard Funds; Blanchard
Precious Metals Fund, Inc.; Cash Trust Series II; Cash Trust Series, Inc.; DG
Investor Series; Edward D. Jones & Co. Daily Passport Cash Trust; Federated
Adjustable Rate U.S. Government Fund, Inc.; Federated American Leaders Fund,
Inc.; Federated ARMs Fund; Federated Core Trust; Federated Equity Funds;
Federated Equity Income Fund, Inc.; Federated Fund for U.S. Government
Securities, Inc.; Federated GNMA Trust; Federated Government Income Securities,
Inc.; Federated Government Trust; Federated High Income Bond Fund, Inc.;
Federated High Yield Trust; Federated Income Securities Trust; Federated Income
Trust; Federated Index Trust; Federated Institutional Trust; Federated Insurance
Series; Federated Investment Portfolios; Federated Investment Trust; Federated
Master Trust; Federated Municipal Opportunities Fund, Inc.; Federated Municipal
Securities Fund, Inc.; Federated Municipal Trust; Federated Short-Term Municipal
Trust; Federated Short-Term U.S. Government Trust; Federated Stock and Bond
Fund, Inc.; Federated Stock Trust; Federated Tax-Free Trust; Federated Total
Return Series, Inc.; Federated U.S. Government Bond Fund; Federated U.S.
Government Securities Fund: 1-3 Years; Federated U.S. Government Securities
Fund: 2-5 Years; Federated U.S. Government Securities Fund: 5-10 Years;
Federated Utility Fund, Inc.; First Priority Funds; Fixed Income Securities,
Inc.; High Yield Cash Trust; Independence One Mutual Funds; Intermediate
Municipal Trust; International Series, Inc.; Investment Series Funds, Inc.;
Investment Series Trust; Liberty U.S. Government Money Market Trust; Liquid Cash
Trust; Managed Series Trust; Marshall Funds, Inc.; Money Market Management,
Inc.; Money Market Obligations Trust; Money Market Obligations Trust II; Money
Market Trust; Municipal Securities Income Trust; Newpoint Funds; Peachtree
Funds; RIMCO Monument Funds; SouthTrust Vulcan Funds; Star Funds; Targeted
Duration Trust; Tax-Free Instruments Trust; The Planters Funds; The Virtus
Funds; The Wachovia Funds; The Wachovia Municipal Funds; Tower Mutual Funds;
Trust for Financial Institutions; Trust for Government Cash Reserves; Trust for
Short-Term U.S. Government Securities; Trust for U.S. Treasury Obligations;
Vision Group of Funds, Inc.; and World Investment Series, Inc.

Federated Securities Corp. also acts as principal underwriter for the following
closed-end investment company: Liberty Term Trust, Inc.- 1999.

(b)

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Richard B. Fisher Director, Chairman, Chief Vice President
Federated Investors Tower Executive Officer, Chief
Pittsburgh, PA 15222-3779 Operating Officer, Asst.
Secretary and Asst.
Treasurer, Federated
Securities Corp.

Edward C. Gonzales Director, Executive Vice Executive Vice
Federated Investors Tower President, Federated, President
Pittsburgh, PA 15222-3779 Securities Corp.
(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Thomas R. Donahue Director, Assistant Secretary
Federated Investors Tower and Assistant Treasurer
Pittsburgh, PA 15222-3779 Federated Securities Corp

James F. Getz President-Broker/Dealer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John B. Fisher President-Institutional Sales, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David M. Taylor Executive Vice President --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark W. Bloss Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard W. Boyd Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Laura M. Deger Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Theodore Fadool, Jr. Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bryant R. Fisher Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Christopher T. Fives Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James S. Hamilton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James M. Heaton Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Keith Nixon Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Solon A. Person, IV Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Timothy C. Pillion Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Thomas E. Territ Senior Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Ernest G. Anderson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Teresa M. Antoszyk Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John B. Bohnet Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Byron F. Bowman Vice President, Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jane E. Broeren-Lambesis Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David J. Callahan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mary J. Combs Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Edmond Connell, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

R. Leonard Corton, Jr. Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Kevin J. Crenny Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Daniel T. Culbertson Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

G. Michael Cullen Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Marc C. Danile Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Doyle Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Jill Ehrenfeld Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Mark D. Fisher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Joseph D. Gibbons Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John K. Goettlicher Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Craig S. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Gonzales Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Raymond Hanley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Bruce E. Hastings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Beth A. Hetzel Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

James E. Hickey Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Charlene H. Jennings Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Brian G. Kelly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

H. Joseph Kennedy Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael W. Koenig Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael R. Manning Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Mark J. Miehl Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard C. Mihm Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

J. Michael Miller Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Alec H. Neilly Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas A. Peters III Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert F. Phillips Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard A. Recker Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Eugene B. Reed Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul V. Riordan Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John Rogers Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Brian S. Ronayne Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Thomas S. Schinabeck Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward L. Smith Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David W. Spears Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John A. Staley Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Colin B. Starks Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Jeffrey A. Stewart Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

William C. Tustin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Paul A. Uhlman Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Miles J. Wallace Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

John F. Wallin Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Richard B. Watts Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward J. Wojnarowski Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Michael P. Wolff Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Edward R. Bozek Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Terri E. Bush Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Beth C. Dell Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

David L. Immonen Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Renee L. Martin Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Robert M. Rossi Assistant Vice President, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

(1) (2) (3)
Name and Principal Positions and Offices Positions and Offices
Business Address With Distributor With Registrant

Denis McAuley Treasurer, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Leslie K. Platt Assistant Secretary, --
Federated Investors Tower Federated Securities Corp.
Pittsburgh, PA 15222-3779

Item 30. Location of Accounts and Records:

All accounts and records required to be maintained by Section 31(a)
of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3
promulgated thereunder are maintained at one of the following
locations:

FEDERATED U.S. GOVERNMENT Federated Investors Tower
SECURITIES FUND: 5-10 YEARS. Pittsburgh, Pennsylvania
15222-3779

Federated Shareholder Services
Company P.O. Box 8600
("Transfer Agent, Dividend Boston, MA 02266-8600
Disbursing Agent and
Portfolio Recordkeeper")

Federated Services Company Federated Investors Tower
("Administrator") Pittsburgh, Pennsylvania
15222-3779

Federated Management Federated Investors Tower
("Adviser") Pittsburgh, Pennsylvania
15222-3779

State Street Bank and Trust P.O. Box 8600
Company Boston, MA 02266-8600
("Custodian")

Item 31. Management Services: Not applicable.

Item 32. Undertakings:

Registrant hereby undertakes to comply with the provisions of
Section 16(c) of the 1940 Act with respect to the removal of
Trustees and the calling of special shareholder meetings by
shareholders.

Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant, FEDERATED U.S. GOVERNMENT
SECURITIES FUND: 5-10 YEARS, certifies that it meets all of the requirements for
effectiveness of this Amendment to its Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 24th day of April 1998.

FEDERATED U.S. GOVERNMENT SECURITIES FUND: 5-10 YEARS

BY: /s/ Karen M. Brownlee
Karen M. Brownlee, Assistant Secretary
Attorney in Fact for John F. Donahue
April 24, 1998

Pursuant to the requirements of the Securities Act of 1933, this Amendment
to its Registration Statement has been signed below by the following person in
the capacity and on the date indicated:

NAME TITLE DATE
By: /s/ Karen M. Brownlee
Karen M. Brownlee Attorney In Fact April 24, 1998
ASSISTANT SECRETARY For the Persons
Listed Below

NAME TITLE

John F. Donahue* Chairman and Trustee
(Chief Executive Officer)

Glen R. Johnson* President

John W. McGonigle* Treasurer, Executive
Vice President and Secretary
(Principal Financial and
Accounting Officer)

Thomas G. Bigley* Trustee

Nicholas P. Constantakis* Trustee

John T. Conroy, Jr.* Trustee

William J. Copeland* Trustee

James E. Dowd* Trustee

Lawrence D. Ellis, M.D.* Trustee

Edward L. Flaherty, Jr.* Trustee

Peter E. Madden* Trustee

John E. Murray, Jr.* Trustee

Wesley W. Posvar* Trustee

Marjorie P. Smuts* Trustee

* By Power of Attorney

Exhibit (11) under N-1A
Exhibit 23 under Item 601/Reg SK

CONSENT OF ERNST & YOUNG LLP,INDEPENDENT AUDITORS

We consent to the reference to our firm under the caption "Financial Highlights"
and to the use of our report dated April 15, 1998, with respect to the financial
statements of Federated U.S. Government Securities Fund: 5-10 Years, in
Post-Effective Amendment Number 4 to the Registration Statement (Form N-1A No.
9-46868) and the related Prospectuses (Institutional and Institutional Services
Shares)of Federated U.S. Government Securities Fund: 5-10 Years, dated April 30,
1998.

By: ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
April 24, 1998

Exhibit 9(ii)under Form N-1A

Exhibit 10 under Item 601/Reg. S-K

Amended and Restated
SHAREHOLDER SERVICES AGREEMENT

THIS AGREEMENT, amended and restated as of the first day of September,
1995, (originally made and enterered into as of the first day of March, 1994),
by and between those investment companies listed on Exhibit 1, as may be amended
from time to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 and who have approved this
form of Agreement (individually referred to herein as a "Fund" and collectively
as "Funds") and Federated Shareholder Services, a Delaware business trust,
having its principal office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 ("FSS").

1. The Funds hereby appoint FSS to render or cause to be rendered personal
services to shareholders of the Funds and/or the maintenance of accounts
of shareholders of the Funds ("Services"). In addition to providing
Services directly to shareholders of the Funds, FSS is hereby appointed
the Funds' agent to select, negotiate and subcontract for the performance
of Services. FSS hereby accepts such appointments. FSS agrees to provide
or cause to be provided Services which, in its best judgment (subject to
supervision and control of the Funds' Boards of Trustees or Directors, as
applicable), are necessary or desirable for shareholders of the Funds. FSS
further agrees to provide the Funds, upon request, a written description
of the Services which FSS is providing hereunder.

2. During the term of this Agreement, each Fund will pay FSS and FSS agrees
to accept as full compensation for its services rendered hereunder a fee
at an annual rate, calculated daily and payable monthly, up to 0.25% of 1%
of average net assets of each Fund.

For the payment period in which this Agreement becomes effective or
terminates with respect to any Fund, there shall be an appropriate
proration of the monthly fee on the basis of the number of days that this
Agreement is in effect with respect to such Fund during the month.

3. This Agreement shall continue in effect for one year from the date of its
execution, and thereafter for successive periods of one year only if the
form of this Agreement is approved at least annually by the Board of each
Fund, including a majority of the members of the Board of the Fund who are
not interested persons of the Fund ("Independent Board Members") cast in
person at a meeting called for that purpose.

4. Notwithstanding paragraph 3, this Agreement may be terminated as follows:

(a) at any time, without the payment of any penalty, by the vote of a
majority of the Independent Board Members of any Fund or by a vote of
a majority of the outstanding voting securities of any Fund as
defined in the Investment Company Act of 1940 on sixty (60) days'
written notice to the parties to this Agreement;

(b) automatically in the event of the Agreement's assignment as defined in
the Investment Company Act of 1940; and

(c) by any party to the Agreement without cause by giving the other party
at least sixty (60) days' written notice of its intention to
terminate.

5. FSS agrees to obtain any taxpayer identification number certification from
each shareholder of the Funds to which it provides Services that is
required under Section 3406 of the Internal Revenue Code, and any
applicable Treasury regulations, and to provide each Fund or its designee
with timely written notice of any failure to obtain such taxpayer
identification number certification in order to enable the implementation
of any required backup withholding.

6. FSS shall not be liable for any error of judgment or mistake of law or for
any loss suffered by any Fund in connection with the matters to which this
Agreement relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or
from reckless disregard by it of its obligations and duties under this
Agreement. FSS shall be entitled to rely on and may act upon advice of
counsel (who may be counsel for such Fund) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to
such advice. Any person, even though also an officer, trustee, partner,
employee or agent of FSS, who may be or become a member of such Fund's
Board, officer, employee or agent of any Fund, shall be deemed, when
rendering services to such Fund or acting on any business of such Fund
(other than services or business in connection with the duties of FSS
hereunder) to be rendering such services to or acting solely for such Fund
and not as an officer, trustee, partner, employee or agent or one under the
control or direction of FSS even though paid by FSS.

This Section 6 shall survive termination of this Agreement.

7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which an enforcement of the change, waiver, discharge or
termination is sought.

8. FSS is expressly put on notice of the limitation of liability as set forth
in the Declaration of Trust of each Fund that is a Massachusetts business
trust and agrees that the obligations assumed by each such Fund pursuant
to this Agreement shall be limited in any case to such Fund and its assets
and that FSS shall not seek satisfaction of any such obligations from the
shareholders of such Fund, the Trustees, Officers, Employees or Agents of
such Fund, or any of them.

9. The execution and delivery of this Agreement have been authorized by the
Trustees of FSS and signed by an authorized officer of FSS, acting as
such, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of
them individually or to impose any liability on any of them personally,
and the obligations of this Agreement are not binding upon any of the
Trustees or shareholders of FSS, but bind only the trust property of FSS
as provided in the Declaration of Trust of FSS.

10. Notices of any kind to be given hereunder shall be in writing (including
facsimile communication) and shall be duly given if delivered to any Fund
and to such Fund at the following address: Federated Investors Tower,
Pittsburgh, PA 15222-3779, Attention: President and if delivered to FSS at
Federated Investors Tower, Pittsburgh, PA 15222-3779, Attention:
President.

11. This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto
and their respective successors and shall be governed by Pennsylvania law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission
thereunder.

12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the
same instrument.

13. This Agreement shall not be assigned by any party without the prior
written consent of FSS in the case of assignment by any Fund, or of the
Funds in the case of assignment by FSS, except that any party may assign
to a successor all of or a substantial portion of its business to a party
controlling, controlled by, or under common control with such party.
Nothing in this Section 14 shall prevent FSS from delegating its
responsibilities to another entity to the extent provided herein.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.

Investment Companies (listed on Exhibit
1)

Attest: /s/John W. McGonigle By: /s/ John F. Donahue
John W. McGonigle John F. Donahue
Secretary Chairman

Federated Shareholder Services

Attest: /s/ Joseph M Huber By: /s/ John W. McGonigle
Secretary President

<PAGE>

Exhibit 1 Exhibit 1

Amended and Restated Shareholder Services Agreement
Automated Government Money Trust
Cash Trust Series, Inc.:
Government Cash Series
Municipal Cash Series
Prime Cash Series
Treasury Cash Series
Federated Adjustable Rate U.S. Government Fund, Inc.
Federated American Leaders Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Federated ARMs Fund
Institutional Service Shares
Institutional Shares
Federated Equity Funds:
Federated Aggressive Growth Fund
Class A Shares
Class B Shares
Class C Shares
Federated Capital Appreciation Fund
Class A Shares
Class B Shares
Class C Shares
Federated Growth Strategies Fund
Class A Shares
Class B Shares
Class C Shares
Federated Small Cap Strategies Fund
Class A Shares
Class B Shares
Class C Shares

Amended and Restated Shareholder Services Agreement
Federated Equity Income Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Federated Fund for U.S. Government Securities, Inc.
Class A Shares
Class B Shares
Class C Shares
Federated GNMA Trust
Institutional Service Shares
Institutional Shares
Federated Government Income Securities, Inc.
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Federated Government Trust"
Automated Government Cash Reserves
Automated Treasury Cash Reserves
U.S. Treasury Cash Reserves
Institutional Service Shares
Institutional Shares
Federated High Income Bond Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Federated High Yield Trust
Federated Income Securities Trust:
Federated Short-Term Income Fund
Institutional Service Shares
Institutional Shares
Federated Intermediate Income Fund
Institutional Service Shares
Institutional Shares
Amended and Restated Shareholder Services Agreement
Federated Income Trust
Institutional Service Shares
Institutional Shares
Federated Index Trust:
Federated Max-Cap Fund
Class C Shares
Institutional Service Shares
Institutional Shares
Federated Mid-Cap Fund
Federated Mini-Cap Fund
Class C shares
Institutional Shares
Federated Institutional Trust:
Federated Institutional Short-Term Government Fund
Federated Investment Trust:
Federated Bond Index Fund
Institutional Shares
Institutional Service Shares
Federated Master Trust
Federated Municipal Opportunities Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Federated Municipal Securities Fund, Inc.
Class A Shares
Class B Shares
Class C Shares

<PAGE>

Amended and Restated Shareholder Services Agreement
Federated Municipal Trust:
Alabama Municipal Cash Trust
California Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Connecticut Municipal Cash Trust
Institutional Service Shares
Florida Municipal Cash Trust
Cash II Shares
Institutional Shares
Georgia Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
Institutional Service Shares
Boston 1784 Funds Shares
Michigan Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Minnesota Municipal Cash Trust
Cash Series Shares
Institutional Shares
New Jersey Municipal Cash Trust
Institutional Service Shares
Institutional Shares
New York Municipal Cash Trust
Cash II Shares
Institutional Service Shares
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Cash II Shares
Institutional Shares
Institutional Service Shares

Amended and Restated Shareholder Services Agreement

Pennsylvania Municipal Cash Trust
Cash Series Shares
Institutional Service Shares
Institutional Shares
Tennessee Municipal Cash Trust
Institutional Shares
Institutional Service Shares
Virginia Municipal Cash Trust
Institutional Service Shares
Institutional Shares
Federated Short-Term Municipal Trust
Institutional Service Shares
Institutional Shares
Federated Short-Term U.S. Government Trust
Federated Stock and Bond Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Federated Stock Trust
Federated Tax-Free Trust
Amended and Restated Shareholder Services Agreement
Federated U.S. Government Bond Fund
Federated U.S. Government Securities Fund: 1-3 Years
Institutional Service Shares
Institutional Shares
Federated U.S. Government Securities Fund: 2-5 Years
Institutional Service Shares
Institutional Shares
Federated U. S. Government Securities Fund: 5-10 Years
Institutional Service Shares
Institutional Shares

Amended and Restated Shareholder Services Agreement

Fixed Income Securities, Inc.:
Federated Limited Term Fund
Class A Shares
Class F Shares
Federated Limited Term Municipal Fund
Class A Shares
Class F Shares
Federated Strategic Income Fund
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Federated Total Return Series, Inc.:
Federated Limited Duration Government Fund
Institutional Shares
Institutional Service Shares
Federated Total Return Bond Fund
Institutional Shares
Institutional Service Shares
Federated Total Return Government Fund
Institutional Shares
Institutional Service Shares
Federated Total Return Limited Duration Fund
Institutional Shares
Institutional Service Shares
Federated Utility Fund, Inc.
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Intermediate Municipal Trust:
Federated Intermediate Municipal Trust
Federated Ohio Intermediate Municipal Trust
Federated Pennsylvania Intermediate Municipal Trust
Amended and Restated Shareholder Services Agreement
International Series, Inc.:
Federated International Equity Fund
Class A Shares
Class B Shares
Class C Shares
Federated International Income Fund
Class A Shares
Class B Shares
Class C Shares
Investment Series Funds, Inc.:
Federated Bond Fund
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Edward D. Jones & Co. Daily Passport Cash Trust
Liberty Term Trust, Inc. -- 1999
Liberty U.S. Government Money Market Trust
Class A Shares
Class B Shares
Liquid Cash Trust
Managed Series Trust:
Federated Aggressive Growth Fund
Institutional Shares
Select Shares
Federated Managed Growth and Income Fund
Institutional Shares
Select Shares
Federated Managed Growth Fund
Institutional Shares
Select Shares
Federated Managed Income Fund
Institutional Shares
Select Shares
Money Market Management, Inc.
Amended and Restated Shareholder Services Agreement
Money Market Obligations Trust:
Automated Cash Management Trust
Cash II Shares
Institutional Shares
Government Obligations Fund
Institutional Shares
Institutional Service Shares
Government Obligations Tax-Managed Fund
Institutional Shares
Institutional Service Shares
Prime Obligations Fund
Institutional Shares
Institutional Service Shares
Tax-Free Obligations Fund
Institutional Shares
Institutional Service Shares
Treasury Obligations Fund
Institutional Capital Shares
Institutional Shares
Institutional Service Shares
Money Market Obligations Trust II:
Municipal Obligations Fund
Institutional Capital Shares
Institutional Service Shares
Institutional Shares
Prime Cash Obligations Fund
Institutional Capital Shares
Institutional Service Shares
Institutional Shares
Prime Value Obligations Fund
Institutional Capital Shares
Institutional Service Shares
Institutional Shares
Money Market Trust

Amended and Restated Shareholder Services Agreement

Municipal Securities Income Trust:
Federated California Municipal Income Fund
Class F Shares
Federated Michigan IntermediateMunicipal Trust
Federated New York Municipal Income Fund
Class F Shares
Federated Ohio Municipal Income Fund
Class F Shares
Federated Pennsylvania Municipal Income Fund
Class A Shares
Class B Shares
Tax-Free Instruments Trust
Institutional Service Shares
Investment Shares
Trust for Government Cash Reserves
Trust for Short-Term U.S. Government Securities
Trust for U.S. Treasury Obligations
Amended and Restated Shareholder Services Agreement
World Investment Series, Inc.:
Federated Asia Pacific Growth Fund
Class A Shares
Class B Shares
Class C Shares
Federated Emerging Markets Fund
Class A Shares
Class B Shares
Class C Shares
Federated European Growth Fund
Class A Shares
Class B Shares
Class C Shares

Amended and Restated Shareholder Services Agreement

Federated International Growth Fund
Class A Shares
Class B Shares
Class C Shares
Federated International High Income Fund
Class A Shares
Class B Shares
Class C Shares
Federated International Small Company Fund
Class A Shares
Class B Shares
Class C Shares
Federated Latin American Growth Fund
Class A Shares
Class B Shares
Class C Shares
Federated World Utility Fund
Class A Shares
Class B Shares
Class C Shares
Class F Shares

Exhibit 8(ii) under Form N-1A
Exhibit 10 under Item 601/Reg S-K

STATE STREET
DOMESTIC CUSTODY

FEE SCHEDULE

Federated Funds

I. Custody Services

Maintain custody of fund assets. Settle portfolio purchases and sales.
Report buy and sell fails. Determine and collect portfolio income. Make
cash disbursements and report cash transactions. Monitor corporate
actions.

ANNUAL FEES

ASSET

Per Fund .25 Basis Points

Wire Fees $3.00 per wire

Settlements:

o Each DTC Transaction $5.00
o Each Federal Reserve Book Entry Transaction $3.75
o Each Repo Transaction (All Repo) $3.75
o Each Physical Transaction (NY/Boston, Private Placement) $15.00
o Each Option Written/Exercised/Expired $18.75
Each Book Entry Muni (Sub-custody) Transaction $15.00
o Government Paydowns $5.00
o Maturity Collections $8.00
o PTC Transactions $6.00

II. Special Services

Fees for activities of a non-recurring nature such as fund consolidation
or reorganization, extraordinary security shipments and the preparation of
special reports will be subject to negotiation.

III. Balance Credit

Municipal Funds
A balance credit equal to 75% of the average demand deposit account
balance in the custodian account for the month billed times the 30 day
T-Bill Rate on the last Monday of the month billed, will be applied
against the month's custodian bill.

Transfer Agent
A balance credit equal to 100% of the average balance in the transfer
agent demand deposit accounts, less the reserve requirement and applicable
related expenses, times 75% of the 30 average Fed Funds Rate.

IV. Payment

The above fees will be charged against the funds' custodian checking
account thirty (30) days after the invoice is mailed to the funds' offices.

V. Term of Contract

The parties agree that this fee schedule shall become effective January 1,
1997.

FEDERATED SERVICES COMPANY STATE STREET

BY: /s/ Douglas L. Hein BY: /s/ Michael E. Hagerty

TITLE: Senior Vice President TITLE: Vice President

DATE: April 15, 1997 DATE: April 8, 1997
----------------------------------- -------------

Exhibit 19 under Form N-1A
Exhibit 24 under Item 601/Reg. S-K
POWER OF ATTORNEY

Each person whose signature appears below hereby constitutes and appoints
the Secretary and Assistant Secretary of FEDERATED U.S. GOVERNMENT SECURITIES
FUND: 5-10 YEARS, and the Deputy General Counsel of Federated Services Company,
and each of them, their true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution for them and in their names, place and
stead, in any and all capacities, to sign any and all documents to be filed with
the Securities and Exchange Commission pursuant to the Securities Act of 1933,
the Securities Exchange Act of 1934 and the Investment Company Act of 1940, by
means of the Securities and Exchange Commission's electronic disclosure system
known as EDGAR; and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to sign and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully to all intents and
purposes as each of them might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
thereof.

SIGNATURES TITLE DATE

/s/ John F. Donahue Chairman March 31, 1998
- ---------------------------
John F. Donahue and Trustee
(Chief Executive Officer)

/s/Glen R. Johnson President March 31, 1998
Glen R. Johnson

/s/John W. McGonigle Treasurer, Executive March 31, 1998
John W. McGonigle Vice President and Secretary
(Principal Financial and
Accounting Officer)

/s/ Thomas G. Bigley Trustee March 31, 1998
- ---------------------------
Thomas G. Bigley

/s/ Nicholas P. Constantakis Trustee March 31, 1998
- ---------------------------------
Nicholas P. Constantakis

/s/ John T. Conroy, Jr. Trustee March 31, 1998
- ---------------------------
John T. Conroy, Jr.

/s/ William J. Copeland Trustee March 31, 1998
- ---------------------------
William J. Copeland

/s/ James E. Dowd Trustee March 31, 1998
- ---------------------------
James E. Dowd

/s/ Lawrence D. Ellis, M.D. Trustee March 31, 1998
Lawrence D. Ellis, M.D.

/s/ Edward L. Flaherty, Jr. Trustee March 31, 1998
- ---------------------------------
Edward L. Flaherty, Jr.

/s/ Peter E. Madden Trustee March 31, 1998
- ---------------------------
Peter E. Madden

/s/ John E. Murray, Jr. Trustee March 31, 1998
- ---------------------------
John E. Murray, Jr.

/s/ Wesley W. Posvar Trustee March 31, 1998
- ---------------------------
Wesley W. Posvar

/s/ Marjorie P. Smuts Trustee March 31, 1998
- ---------------------------
Marjorie P. Smuts

Sworn to and subscribed before me this 31st day of March, 1998.

/s/ Cheri S. Good
Notary Public

<S> <C>

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<NAME> Federated U.S. Government
Securities Fund 5-10 Years
Institutional Shares

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<S> <C>

<ARTICLE> 6
<SERIES>
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<NAME> Federated U.S. Government
Securities Fund 5-10 Years
Institutional Service Shares

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