United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-6447
(Investment Company Act File Number)
Federated Fixed Income Securities, Inc.
_______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
4000 Ericsson Drive
Warrendale, Pennsylvania 15086-7561
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
Peter J. Germain, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End: 11/30/17
Date of Reporting Period: 11/30/17
Item 1. | Reports to Stockholders |
Share Class | Ticker | A | STIAX | B | SINBX | C | SINCX |
F | STFSX | Institutional | STISX | R6 | STILX |
1 | The Fund's Class R6 Shares commenced operations on January 27, 2017. For the period prior to commencement of operations of the Class R6 Shares, the performance information shown is for the Class A Shares adjusted for the removal of any voluntary waivers/reimbursements of fund expenses that may have occurred prior to the commencement of operations of the Class R6 Shares. The performance information has also been adjusted to reflect any applicable differences between the sales loads and charges imposed on the purchase and redemption of Class R6 Shares and Class A Shares. |
2 | Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Blended Index. |
3 | The Fund's broad-based securities market index is the Bloomberg Barclays U.S. Aggregate Bond Index (BBAB). Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the BBAB. The BBAB's return for the 12-month reporting period was 3.21%. The Blended Index is being used for comparison purposes because, although it is not the Fund's broad-based securities market index, the Fund's Adviser believes it more closely reflects the market sectors in which the Fund invests. |
4 | Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the LMSIFA. |
5 | Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations. |
6 | The Bloomberg Barclays U.S. Corporate Credit Index is composed of all publicly issued, fixed-rate, nonconvertible, investment-grade corporate debt and a non-corporate component that includes foreign agencies, sovereigns, supranationals and local authorities.* |
7 | High-yield, lower-rated securities generally entail greater market, credit and liquidity risks than investment-grade securities and may include higher volatility and higher risk of default. |
8 | The Bloomberg Barclays U.S. Corporate High Yield 2% Issuer Capped Index is an issuer-constrained version of the Bloomberg Barclays U.S. Corporate High-Yield Index that measures the market of USD-denominated, noninvestment-grade, fixed-rate, taxable corporate bonds. The index follows the same rules as the uncapped index but limits the exposure of each issuer to 2% of the total market value and redistributes any excess market value index-wide on a pro-rata basis.* |
9 | The Bloomberg Barclays Emerging Markets USD Aggregate Index is a flagship hard currency emerging markets (EM) debt benchmark that included fixed- and floating-rate U.S. dollar-denominated debt issued from sovereign, quasi-sovereign and corporate EM issuers.* |
10 | The value of some mortgage-backed securities may be particularly sensitive to changes in prevailing interest rates, and although the securities are generally supported by some form of government or private insurance, there is no assurance that private guarantors or insurers will meet their obligations. |
11 | International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards. Prices of emerging-market securities can be significantly more volatile than the prices of securities in developed countries and currency risk and political risks are accentuated in emerging markets. |
12 | The Fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional instruments. |
13 | Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices. |
* | The index is unmanaged, and it is not possible to invest directly in an index. |
Federated Strategic Income Fund - | Institutional Shares | Class C Shares | Class A Shares | BBAB | Blended Index | LMSIFA |
F | F | F | I | I | I | |
11/30/2007 | 10,000 | 10,000 | 9,550 | 10,000 | 10,000 | 10,000 |
11/30/2008 | 8,130 | 8,077 | 7,768 | 10,174 | 8,399 | 8,403 |
11/30/2009 | 11,432 | 11,236 | 10,899 | 11,357 | 11,647 | 10,961 |
11/30/2010 | 12,679 | 12,350 | 12,055 | 12,041 | 12,996 | 12,186 |
11/30/2011 | 13,288 | 12,799 | 12,600 | 12,705 | 13,605 | 12,563 |
11/30/2012 | 14,829 | 14,153 | 14,037 | 13,405 | 15,287 | 14,101 |
11/30/2013 | 14,949 | 14,140 | 14,130 | 13,190 | 15,619 | 14,398 |
11/30/2014 | 15,638 | 14,642 | 14,742 | 13,885 | 16,504 | 15,106 |
11/30/2015 | 15,300 | 14,184 | 14,389 | 14,019 | 16,388 | 14,920 |
11/30/2016 | 16,390 | 15,038 | 15,370 | 14,324 | 17,563 | 15,635 |
11/30/2017 | 17,575 | 15,947 | 16,423 | 14,784 | 18,725 | 16,738 |
■ | Total returns shown for the Class A Shares include the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550). |
■ | Total returns shown for Class C Shares include the maximum contingent deferred sales charge of 1.00%, as applicable. |
1 Year | 5 Years | 10 Years | |
Class A Shares | 2.02% | 2.24% | 5.09% |
Class B Shares | 0.56% | 2.07% | 4.94% |
Class C Shares | 5.04% | 2.42% | 4.78% |
Class F Shares | 4.72% | 2.97% | 5.46% |
Institutional Shares5 | 7.23% | 3.46% | 5.80% |
Class R6 Shares6 | 7.20% | 3.26% | 5.61% |
BBAB | 3.21% | 1.98% | 3.99% |
Blended Index | 6.61% | 4.14% | 6.47% |
LMSIFA | 6.73% | 3.44% | 5.17% |
1 | Represents a hypothetical investment of $10,000 in the Fund after deducting the applicable sales charges: for Class A Shares, the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge = $9,550); for Class B Shares, the maximum contingent deferred sales charge is 5.50% on any redemption less than one year from the purchase date; for Class C Shares, a 1.00% contingent deferred sales charge would be applied to any redemption less than one year from the purchase date; for Class F Shares, the maximum sales charge of 1.00% ($10,000 investment minus $100 sales charge = $9,900) and a contingent deferred sales charge of 1.00% would be applied on any redemption less than four years from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The BBAB, the Blended Index and the LMSIFA have been adjusted to reflect the reinvestment of dividends on securities in the indexes and average. |
2 | The BBAB is a broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-backed securities (agency fixed-rate and hybrid ARM pass-through), asset-backed securities and commercial mortgage-backed securities. The index is not adjusted to reflect sales loads, expenses or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The index is unmanaged and, unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index. |
3 | The BBEMAI is a flagship hard currency emerging markets (EM) debt benchmark that includes fixed- and floating-rate U.S. dollar-denominated debt issued from sovereign, quasi-sovereign and corporate EM issuers. The BBHY2%ICI is an issuer-constrained version of the Bloomberg Barclays U.S. Corporate High-Yield Index that measures the market of USD-denominated, noninvestment-grade, fixed-rate, taxable corporate bonds. The index follows the same rules as the uncapped index but limits the exposure of each issuer to 2% of the total market value and redistributes any excess market value |
index-wide on a pro-rata basis. The BBMB tracks agency mortgage backed pass-through securities (both fixed-rate and hybrid ARM) guaranteed by Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC). The indexes are not adjusted to reflect sales loads, expenses or other fees that the SEC requires to be reflected in the Fund's performance. The indexes are unmanaged and, unlike the Fund, are not affected by cash flows. It is not possible to invest directly in an index. | |
4 | Lipper figures represent the average of the total returns reported by all funds designated by Lipper, Inc., as falling into the respective category and is not adjusted to reflect any sales charges. The Lipper figures in the Growth of $10,000 line graph are based on historical return information published by Lipper and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Lipper as falling into the category can change over time, the Lipper figures in the line graph may not match the Lipper figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category. |
5 | The Fund's Institutional Shares commenced operations on January 28, 2008. For the period prior to the commencement of operations of the Institutional Shares, the performance information shown is for the Fund's Class A Shares. In relation to the Institutional Shares, the performance of the Class A Shares has not been adjusted to reflect the expenses of the Institutional Shares, since the Institutional Shares have a lower expense ratio than the expense ratio of the Class A Shares. The performance of the Class A Shares has been adjusted to remove any voluntary waiver of Fund expenses related to the Class A Shares that may have occurred during the period prior to the commencement of operations of the Institutional Shares. Additionally, the performance information shown has been adjusted to reflect the absence of sales charges applicable to Class A Shares. |
6 | The Fund's R6 class commenced operations on January 27, 2017. For the period prior to commencement of operations of the R6 class, the performance information shown is for the A class adjusted for the removal of any voluntary waivers/reimbursements of fund expenses that may have occurred prior to the commencement of operations of the R6 class. The performance information has also been adjusted to reflect any applicable differences between the sales loads and charges imposed on the purchase and redemption of R6 class and A class. |
Security Type | Percentage of Total Net Assets2 |
Corporate Debt Securities | 65.4% |
Mortgage-Backed Securities3 | 12.7% |
Foreign Government Securities | 9.1% |
Collateralized Mortgage Obligations | 2.8% |
Asset-Backed Securities | 1.1% |
Commercial Mortgage-Backed Securities | 0.6% |
Municipal Bond | 0.1% |
U.S. Treasury Security | 0.1% |
Derivative Contracts4,5 | 0.0% |
Other Security Types6 | 4.5% |
Cash Equivalents7 | 3.9% |
Other Assets and Liabilities—Net8 | (0.3)% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus and Statement of Additional Information for a description of these security types. |
2 | As of the date specified above, the Fund owned shares of one or more affiliated investment companies. For purposes of this table, the affiliated investment company (other than an affiliated money market mutual fund) is not treated as a single portfolio security, but rather the Fund is treated as owning a pro rata portion of each security and each other asset and liability owned by the affiliated investment company. Accordingly, the percentages of total net assets shown in the table will differ from those presented on the Portfolio of Investments. |
3 | For purposes of this table, Mortgage-Backed Securities include mortgage-backed securities guaranteed by Government Sponsored Entities and adjustable rate mortgage-backed securities. |
4 | Based upon net unrealized appreciation (depreciation) or value of the derivative contracts as applicable. Derivative contracts may consist of futures, forwards, options and swaps. The impact of a derivative contract on the Fund's performance may be larger than its unrealized appreciation (depreciation) or value may indicate. In many cases, the notional value or amount of a derivative contract may provide a better indication of the contract's significance to the portfolio. More complete information regarding the Fund's direct investments in derivative contracts, including unrealized appreciation (depreciation), value, and notional values or amounts of such contracts, can be found in the table at the end of the Portfolio of Investments included in this Report. |
5 | Represents less than 0.1%. |
6 | Other Security Types consist of common stock, preferred stock and purchased options. |
7 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. |
8 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—5.5% | |||
Basic Industry - Chemicals—0.3% | |||
$135,000 | Albemarle Corp., Sr. Unsecd. Note, 5.450%, 12/01/2044 | $156,160 | |
1,250,000 | Reliance Industries Ltd., Bond, Series 144A, 8.250%, 01/15/2027 | 1,669,946 | |
TOTAL | 1,826,106 | ||
Basic Industry - Metals & Mining—0.1% | |||
200,000 | Southern Copper Corp., Sr. Unsecd. Note, 6.750%, 04/16/2040 | 258,505 | |
175,000 | Worthington Industries, Inc., Sr. Unsecd. Note, 4.550%, 04/15/2026 | 182,099 | |
TOTAL | 440,604 | ||
Basic Industry - Paper—0.0% | |||
250,000 | 1,2,3 | Pope & Talbot, Inc., 8.375%, 6/01/2013 | 0 |
23,000 | Westvaco Corp., Sr. Deb., 7.500%, 06/15/2027 | 23,511 | |
TOTAL | 23,511 | ||
Capital Goods - Aerospace & Defense—0.2% | |||
250,000 | Airbus Group SE, Sr. Unsecd. Note, Series 144A, 3.150%, 04/10/2027 | 250,926 | |
400,000 | Arconic, Inc., Sr. Unsecd. Note, 5.400%, 04/15/2021 | 426,292 | |
160,000 | Huntington Ingalls Industries, Inc., Sr. Unsecd. Note, Series 144A, 3.483%, 12/01/2027 | 160,061 | |
200,000 | Lockheed Martin Corp., Sr. Unsecd. Note, 2.900%, 03/01/2025 | 199,042 | |
185,000 | Northrop Grumman Corp., Sr. Unsecd. Note, 3.250%, 01/15/2028 | 185,416 | |
200,000 | Textron, Inc., Sr. Unsecd. Note, 4.300%, 03/01/2024 | 211,830 | |
TOTAL | 1,433,567 | ||
Capital Goods - Building Materials—0.0% | |||
50,000 | Allegion US Holdings Co., Sr. Unsecd. Note, 3.200%, 10/01/2024 | 49,892 | |
90,000 | Allegion US Holdings Co., Sr. Unsecd. Note, 3.550%, 10/01/2027 | 89,701 | |
TOTAL | 139,593 | ||
Capital Goods - Construction Machinery—0.0% | |||
120,000 | CNH Industrial NV, Sr. Unsecd. Note, Series MTN, 3.850%, 11/15/2027 | 119,420 | |
Capital Goods - Diversified Manufacturing—0.0% | |||
300,000 | Parker-Hannifin Corp., Sr. Unsecd. Note, Series 144A, 3.250%, 03/01/2027 | 302,086 | |
Communications - Cable & Satellite—0.1% | |||
190,000 | Charter Communications Operating LLC, Series WI, 5.375%, 05/01/2047 | 192,487 | |
200,000 | Comcast Corp., Sr. Unsecd. Note, 3.150%, 02/15/2028 | 197,810 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Communications - Cable & Satellite—continued | |||
$300,000 | Comcast Corp., Sr. Unsecd. Note, 3.300%, 02/01/2027 | $302,460 | |
200,000 | NBCUniversal Media LLC, Sr. Unsecd. Note, 2.875%, 01/15/2023 | 201,955 | |
TOTAL | 894,712 | ||
Communications - Media & Entertainment—0.1% | |||
300,000 | 21st Century Fox America, 3.000%, 09/15/2022 | 303,199 | |
165,000 | CBS Corp., Sr. Unsecd. Note, 3.375%, 02/15/2028 | 158,268 | |
200,000 | Discovery Communications, Sr. Unsecd. Note, 4.900%, 03/11/2026 | 212,160 | |
200,000 | Grupo Televisa S.A., Sr. Unsecd. Note, 5.000%, 05/13/2045 | 201,950 | |
TOTAL | 875,577 | ||
Communications - Telecom Wireless—0.1% | |||
250,000 | American Tower Corp., Sr. Unsecd. Note, 5.000%, 02/15/2024 | 274,825 | |
200,000 | Crown Castle International Corp., Sr. Unsecd. Note, 4.450%, 02/15/2026 | 209,763 | |
TOTAL | 484,588 | ||
Communications - Telecom Wirelines—0.2% | |||
300,000 | AT&T, Inc., Sr. Unsecd. Note, 4.250%, 03/01/2027 | 306,126 | |
250,000 | AT&T, Inc., Sr. Unsecd. Note, 4.450%, 04/01/2024 | 264,094 | |
150,000 | AT&T, Inc., Sr. Unsecd. Note, 5.150%, 03/15/2042 | 152,843 | |
200,000 | AT&T, Inc., Sr. Unsecd. Note, 5.300%, 08/14/2058 | 197,194 | |
180,000 | Telefonica Emisiones SAU, Sr. Unsecd. Note, 5.213%, 03/08/2047 | 198,414 | |
427,000 | Verizon Communications, Inc., Sr. Unsecd. Note, 5.012%, 04/15/2049 | 444,002 | |
TOTAL | 1,562,673 | ||
Consumer Cyclical - Automotive—0.1% | |||
200,000 | Daimler Finance NA LLC, Sr. Unsecd. Note, Series 144A, 2.850%, 01/06/2022 | 200,821 | |
200,000 | Ford Motor Co., Sr. Unsecd. Note, 4.750%, 01/15/2043 | 198,670 | |
250,000 | General Motors Co., Sr. Unsecd. Note, 5.200%, 04/01/2045 | 256,754 | |
200,000 | Nissan Motor Acceptance Corp., Sr. Unsecd. Note, Series 144A, 2.250%, 01/13/2020 | 199,718 | |
TOTAL | 855,963 | ||
Consumer Cyclical - Retailers—0.1% | |||
300,000 | Advance Auto Parts, Inc., 4.500%, 12/01/2023 | 314,757 | |
185,000 | AutoZone, Inc., Sr. Unsecd. Note, 3.750%, 06/01/2027 | 186,532 | |
300,000 | CVS Health Corp., Sr. Unsecd. Note, 3.875%, 07/20/2025 | 307,309 | |
140,000 | Dollar General Corp., Sr. Unsecd. Note, 3.875%, 04/15/2027 | 145,444 | |
TOTAL | 954,042 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Consumer Cyclical - Services—0.1% | |||
$200,000 | Alibaba Group Holding Ltd., Sr. Unsecd. Note, 3.600%, 11/28/2024 | $205,861 | |
450,000 | Amazon.com, Inc., Sr. Unsecd. Note, Series 144A, 3.150%, 08/22/2027 | 451,084 | |
80,000 | Visa, Inc., Sr. Unsecd. Note, 2.750%, 09/15/2027 | 78,567 | |
200,000 | Visa, Inc., Sr. Unsecd. Note, 2.800%, 12/14/2022 | 202,392 | |
TOTAL | 937,904 | ||
Consumer Non-Cyclical - Food/Beverage—0.2% | |||
200,000 | Danone SA, Sr. Unsecd. Note, Series 144A, 2.947%, 11/02/2026 | 193,577 | |
300,000 | Grupo Bimbo SAB de CV, Sr. Unsecd. Note, Series 144A, 3.875%, 06/27/2024 | 311,254 | |
90,000 | Heineken NV, Sr. Unsecd. Note, Series 144A, 3.500%, 01/29/2028 | 91,938 | |
140,000 | Kraft Heinz Foods Co., Sr. Unsecd. Note, 4.375%, 06/01/2046 | 135,502 | |
140,000 | Mondelez International Holdings Netherlands BV, Sr. Unsecd. Note, Series 144A, 2.000%, 10/28/2021 | 136,261 | |
250,000 | PepsiCo, Inc., 2.750%, 04/30/2025 | 247,384 | |
130,000 | Smithfield Foods, Inc., Sr. Unsecd. Note, Series 144A, 2.650%, 10/03/2021 | 129,030 | |
50,000 | Smithfield Foods, Inc., Sr. Unsecd. Note, Series 144A, 4.250%, 02/01/2027 | 51,513 | |
300,000 | Tyson Foods, Inc., Sr. Unsecd. Note, 4.500%, 06/15/2022 | 321,485 | |
TOTAL | 1,617,944 | ||
Consumer Non-Cyclical - Health Care—0.1% | |||
200,000 | Agilent Technologies, Inc., Sr. Unsecd. Note, 3.875%, 07/15/2023 | 208,180 | |
200,000 | Becton Dickinson & Co., Sr. Unsecd. Note, 4.669%, 06/06/2047 | 210,853 | |
120,000 | Medtronic Global Holdings, Sr. Unsecd. Note, 3.350%, 04/01/2027 | 122,559 | |
TOTAL | 541,592 | ||
Consumer Non-Cyclical - Pharmaceuticals—0.1% | |||
100,000 | Abbott Laboratories, Sr. Unsecd. Note, 3.750%, 11/30/2026 | 102,132 | |
100,000 | Abbott Laboratories, Sr. Unsecd. Note, 4.900%, 11/30/2046 | 112,150 | |
190,000 | AstraZeneca PLC, Sr. Unsecd. Note, 2.375%, 06/12/2022 | 187,401 | |
200,000 | Celgene Corp., Sr. Unsecd. Note, 4.350%, 11/15/2047 | 202,845 | |
200,000 | Teva Pharmaceutical Finance, Sr. Unsecd. Note, 3.150%, 10/01/2026 | 167,129 | |
TOTAL | 771,657 | ||
Consumer Non-Cyclical - Products—0.0% | |||
200,000 | Reckitt Benckiser Treasury Services PLC, Sr. Unsecd. Note, Series 144A, 3.000%, 06/26/2027 | 195,653 | |
Consumer Non-Cyclical - Supermarkets—0.0% | |||
300,000 | Kroger Co., Sr. Unsecd. Note, 4.450%, 02/01/2047 | 290,314 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Consumer Non-Cyclical - Tobacco—0.1% | |||
$190,000 | Bat Capital Corp., Sr. Unsecd. Note, Series 144A, 3.557%, 08/15/2027 | $190,054 | |
100,000 | Reynolds American, Inc., Sr. Unsecd. Note, 7.000%, 08/04/2041 | 134,259 | |
TOTAL | 324,313 | ||
Energy - Independent—0.1% | |||
320,000 | Anadarko Petroleum Corp., Sr. Unsecd. Note, 5.550%, 03/15/2026 | 356,298 | |
200,000 | Canadian Natural Resources Ltd., Sr. Unsecd. Note, 3.800%, 04/15/2024 | 206,117 | |
200,000 | EOG Resources, Inc., Sr. Unsecd. Note, 4.150%, 01/15/2026 | 211,671 | |
200,000 | Marathon Oil Corp., Sr. Unsecd. Note, 3.850%, 06/01/2025 | 202,236 | |
TOTAL | 976,322 | ||
Energy - Integrated—0.1% | |||
200,000 | BP Capital Markets PLC, Company Guarantee, 3.561%, 11/01/2021 | 208,234 | |
185,000 | BP Capital Markets PLC, Sr. Unsecd. Note, 3.279%, 09/19/2027 | 185,762 | |
90,000 | Shell International Finance, Sr. Unsecd. Note, 2.875%, 05/10/2026 | 88,764 | |
70,000 | Shell International Finance, Sr. Unsecd. Note, 4.000%, 05/10/2046 | 71,768 | |
TOTAL | 554,528 | ||
Energy - Midstream—0.3% | |||
60,000 | Andeavor Logistics LP, Sr. Unsecd. Note, 4.250%, 12/01/2027 | 59,991 | |
300,000 | Energy Transfer Partners LP, Sr. Unsecd. Note, 4.900%, 02/01/2024 | 318,221 | |
250,000 | Enterprise Products Operating LLC, 3.900%, 02/15/2024 | 260,034 | |
200,000 | Kinder Morgan Energy Partners LP, Sr. Unsecd. Note, 6.375%, 03/01/2041 | 230,324 | |
160,000 | MPLX LP, Sr. Unsecd. Note, 4.125%, 03/01/2027 | 162,872 | |
200,000 | ONEOK, Inc., Sr. Unsecured Note, Series 0, 4.950%, 07/13/2047 | 202,259 | |
115,000 | TC Pipelines, LP, Sr. Unsecd. Note, 3.900%, 05/25/2027 | 115,300 | |
100,000 | Williams Partners LP, Sr. Unsecd. Note, 3.900%, 01/15/2025 | 102,005 | |
300,000 | Williams Partners LP, Sr. Unsecd. Note, 4.125%, 11/15/2020 | 311,662 | |
TOTAL | 1,762,668 | ||
Energy - Oil Field Services—0.1% | |||
200,000 | Nabors Industries, Inc., Company Guarantee, 5.000%, 09/15/2020 | 202,750 | |
200,000 | Schlumberger Holdings Corp., Sr. Unsecd. Note, Series 144A, 4.000%, 12/21/2025 | 209,008 | |
200,000 | Weatherford International Ltd., 5.125%, 09/15/2020 | 200,000 | |
TOTAL | 611,758 | ||
Energy - Refining—0.1% | |||
200,000 | HollyFrontier Corp., Sr. Unsecd. Note, 5.875%, 04/01/2026 | 222,240 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Energy - Refining—continued | |||
$200,000 | Valero Energy Corp., Sr. Unsecd. Note, 6.625%, 06/15/2037 | $257,393 | |
TOTAL | 479,633 | ||
Financial Institution - Banking—1.1% | |||
275,000 | American Express Credit Corp., Sr. Unsecd. Note, Series MTN, 2.250%, 05/05/2021 | 273,332 | |
195,000 | BB&T Corp., Sr. Unsecd. Note, Series MTN, 2.750%, 04/01/2022 | 196,401 | |
200,000 | 4 | Bank of America Corp., Sr. Unsecd. Note, 3.705%, 04/24/2028 | 205,083 |
300,000 | Bank of America Corp., Sr. Unsecd. Note, Series GMTN, 3.300%, 01/11/2023 | 306,472 | |
500,000 | Bank of America Corp., Sub. Note, Series MTN, 4.000%, 01/22/2025 | 516,861 | |
200,000 | 4 | Bank of New York Mellon Corp., Sr. Unsecd. Note, Series MTN, 2.661%, 05/16/2023 | 199,757 |
200,000 | Citigroup, Inc., Sr. Unsecd. Note, 2.750%, 04/25/2022 | 199,722 | |
570,000 | Citigroup, Inc., Sr. Unsecd. Note, 3.400%, 05/01/2026 | 572,055 | |
270,000 | Citizens Financial Group, Inc., Sub. Note, 4.300%, 12/03/2025 | 281,654 | |
400,000 | Compass Bank, Birmingham, Sub. Note, Series BKNT, 3.875%, 04/10/2025 | 400,664 | |
300,000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 5.750%, 01/24/2022 | 333,685 | |
300,000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 6.125%, 02/15/2033 | 379,113 | |
400,000 | HSBC Holdings PLC, Sr. Unsecd. Note, 3.900%, 05/25/2026 | 413,979 | |
200,000 | HSBC Holdings PLC, Sr. Unsecd. Note, 4.000%, 03/30/2022 | 209,972 | |
800,000 | 4 | JPMorgan Chase & Co., Sr. Unsecd. Note, 3.782%, 02/01/2028 | 824,113 |
200,000 | Manufacturers & Traders Trust, Sr. Unsecd. Note, Series BKNT, 2.500%, 05/18/2022 | 199,398 | |
800,000 | Morgan Stanley, Sr. Unsecd. Note, 3.625%, 01/20/2027 | 813,603 | |
657,686 | 3 | Regional Diversified Funding, Series 144A, 9.250%, 03/15/2030 | 402,813 |
250,000 | Regions Financial Corp., Sr. Unsecd. Note, 3.200%, 02/08/2021 | 254,782 | |
200,000 | SunTrust Bank, Sub. Note, 3.300%, 05/15/2026 | 197,614 | |
155,000 | SunTrust Bank, Inc., Sr. Unsecd. Note, 2.500%, 05/01/2019 | 155,797 | |
350,000 | Wells Fargo & Co., Sr. Unsecd. Note, 3.000%, 10/23/2026 | 341,981 | |
TOTAL | 7,678,851 | ||
Financial Institution - Broker/Asset Mgr/Exchange—0.1% | |||
200,000 | Jefferies Group LLC, Sr. Unsecd. Note, 5.125%, 01/20/2023 | 216,955 | |
490,000 | Stifel Financial Corp., Sr. Unsecd. Note, 3.500%, 12/01/2020 | 497,291 | |
200,000 | TD Ameritrade Holding Corp, Sr. Unsecd. Note, 3.300%, 04/01/2027 | 202,011 | |
TOTAL | 916,257 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Financial Institution - Finance Companies—0.0% | |||
$200,000 | Discover Financial Services, Sr. Unsecd. Note, 4.100%, 02/09/2027 | $204,335 | |
Financial Institution - Insurance - Life—0.3% | |||
200,000 | Aflac, Inc., Sr. Unsecd. Note, 3.625%, 06/15/2023 | 208,392 | |
400,000 | American International Group, Inc., Sr. Unsecd. Note, 4.125%, 02/15/2024 | 422,565 | |
300,000 | Lincoln National Corp., Sr. Unsecd. Note, 4.200%, 03/15/2022 | 316,905 | |
300,000 | Mass Mutual Global Funding II, Sr. Secd. Note, Series 144A, 3.600%, 04/09/2024 | 313,247 | |
150,000 | Massachusetts Mutual Life, Sub. Note, Series 144A, 4.900%, 04/01/2077 | 167,447 | |
400,000 | MetLife, Inc., Sr. Unsecd. Note, 4.750%, 02/08/2021 | 429,122 | |
180,000 | 4 | Pacific Life Insurance Co, Sub. Note, Series 144A, 4.300%, 10/24/2067 | 179,213 |
200,000 | Principal Life Global Funding II, Series 144A, 2.200%, 04/08/2020 | 199,466 | |
TOTAL | 2,236,357 | ||
Financial Institution - Insurance - P&C—0.1% | |||
300,000 | CNA Financial Corp., Sr. Unsecd. Note, 4.500%, 03/01/2026 | 320,456 | |
400,000 | Liberty Mutual Group, Inc., Sr. Unsecd. Note, Series 144A, 4.250%, 06/15/2023 | 423,099 | |
TOTAL | 743,555 | ||
Financial Institution - REIT - Apartment—0.0% | |||
195,000 | Avalonbay Communities, Inc., Sr. Unsecd. Note, Series MTN, 3.350%, 05/15/2027 | 196,196 | |
Financial Institution - REIT - Healthcare—0.1% | |||
300,000 | Health Care REIT, Inc., Sr. Unsecd. Note, 4.125%, 04/01/2019 | 306,286 | |
200,000 | Healthcare Trust of America, Sr. Unsecd. Note, 3.750%, 07/01/2027 | 199,126 | |
100,000 | Physicians Realty Trust, Sr. Unsecd. Note, 3.950%, 01/15/2028 | 99,303 | |
100,000 | Physicians Realty Trust, Sr. Unsecd. Note, 4.300%, 03/15/2027 | 101,782 | |
TOTAL | 706,497 | ||
Financial Institution - REIT - Office—0.0% | |||
90,000 | Alexandria Real Estate Equities, Inc., Sr. Unsecd. Note, 3.950%, 01/15/2027 | 91,793 | |
50,000 | Alexandria Real Estate Equities, Inc., Sr. Unsecd. Note, 3.950%, 01/15/2028 | 51,163 | |
TOTAL | 142,956 | ||
Financial Institution - REIT - Other—0.1% | |||
335,000 | WP Carey, Inc., Sr. Unsecd. Note, 4.600%, 04/01/2024 | 350,372 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Financial Institution - REIT - Retail—0.0% | |||
$190,000 | Kimco Realty Corp., Sr. Unsecd. Note, 3.800%, 04/01/2027 | $191,517 | |
Technology—0.4% | |||
200,000 | Adobe Systems, Inc., Sr. Unsecd. Note, 3.250%, 02/01/2025 | 205,191 | |
400,000 | Apple, Inc., Sr. Unsecd. Note, 2.500%, 02/09/2022 | 401,721 | |
200,000 | Apple, Inc., Sr. Unsecd. Note, 2.900%, 09/12/2027 | 197,655 | |
100,000 | Apple, Inc., Sr. Unsecd. Note, 4.450%, 05/06/2044 | 110,841 | |
60,000 | Diamond 1 Finance Corp./Diamond 2 Finance Corp., Term Loan-1st Lien, Sr. Secd. Note, Series 144A, 4.420%, 06/15/2021 | 62,674 | |
125,000 | Equifax, Inc., Sr. Unsecd. Note, 2.300%, 06/01/2021 | 121,389 | |
350,000 | Ingram Micro, Inc., Sr. Unsecd. Note, 4.950%, 12/15/2024 | 355,441 | |
100,000 | Microsoft Corporation, Sr. Unsecd. Note, 2.400%, 08/08/2026 | 96,438 | |
600,000 | Molex Electronics Technologies LLC, Unsecd. Note, Series 144A, 3.900%, 04/15/2025 | 613,791 | |
200,000 | Oracle Corp., Sr. Unsecd. Note, 3.250%, 11/15/2027 | 202,761 | |
150,000 | Qualcomm, Inc., Sr. Unsecd. Note, 2.100%, 05/20/2020 | 148,883 | |
80,000 | Total System Services, Inc., Sr. Unsecd. Note, 4.800%, 04/01/2026 | 86,863 | |
TOTAL | 2,603,648 | ||
Transportation - Railroads—0.1% | |||
200,000 | Burlington Northern Santa Fe Corp., 3.050%, 09/01/2022 | 204,891 | |
230,000 | Union Pacific Corp., Sr. Unsecd. Note, 3.875%, 02/01/2055 | 227,121 | |
TOTAL | 432,012 | ||
Transportation - Services—0.0% | |||
140,000 | Ryder System, Inc., Sr. Unsecd. Note, Series MTN, 2.800%, 03/01/2022 | 140,142 | |
Utility - Electric—0.5% | |||
400,000 | Berkshire Hathaway Energy Co., Sr. Unsecd. Note, 3.750%, 11/15/2023 | 418,840 | |
400,000 | Cleveland Electric Illuminating Co., Sr. Unsecd. Note, 5.950%, 12/15/2036 | 497,030 | |
200,000 | EDP Finance BV, Sr. Unsecured Note, Series 144A, 3.625%, 07/15/2024 | 201,697 | |
400,000 | 4 | Electricite de France SA, Jr. Sub. Note, Series 144A, 5.625%, 12/29/2049 | 415,900 |
200,000 | Enel Finance International, Sr. Unsecd. Note, Series 144A, 4.750%, 05/25/2047 | 208,921 | |
300,000 | Exelon Generation Co. LLC, Sr. Unsecd. Note, 4.250%, 06/15/2022 | 316,181 | |
150,000 | Fortis, Inc., Sr. Unsecd. Note, 3.055%, 10/04/2026 | 144,994 | |
110,000 | National Rural Utilities, Sr. Unsecd. Note, 2.950%, 02/07/2024 | 110,947 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Utility - Electric—continued | |||
$400,000 | NextEra Energy Capital Holdings, Inc., Sr. Unsecd. Note, 3.625%, 06/15/2023 | $413,475 | |
65,000 | NiSource Finance Corp., Sr. Unsecd. Note, 4.375%, 05/15/2047 | 69,684 | |
350,000 | Northeast Utilities, Sr. Unsecd. Note, Series H, 3.150%, 01/15/2025 | 352,210 | |
300,000 | PPL Capital Funding, Inc., Sr. Unsecd. Note, 4.200%, 06/15/2022 | 318,048 | |
250,000 | Southern Co., Sr. Unsecd. Note, 3.250%, 07/01/2026 | 246,542 | |
140,000 | Virginia Electric & Power, Sr. Unsecd. Note, Series A, 3.500%, 03/15/2027 | 144,863 | |
TOTAL | 3,859,332 | ||
Utility - Natural Gas—0.1% | |||
200,000 | Atmos Energy Corp., Sr. Unsecd. Note, 3.000%, 06/15/2027 | 199,417 | |
120,000 | Southern Natural Gas, Sr. Unsecd. Note, Series 144A, 4.800%, 03/15/2047 | 130,572 | |
TOTAL | 329,989 | ||
TOTAL CORPORATE BONDS (IDENTIFIED COST $38,745,372) | 39,708,744 | ||
COMMERCIAL MORTGAGE-BACKED SECURITIES—0.6% | |||
Agency Commercial Mortgage-Backed Securities—0.6% | |||
1,225,000 | Federal Home Loan Mortgage Corp., K054, Class A2, 2.745%, 01/25/2026 | 1,212,218 | |
1,000,000 | Federal Home Loan Mortgage Corp., K053, Class A2, 2.995%, 12/25/2025 | 1,009,599 | |
2,000,000 | 4 | FREMF Mortgage Trust 2013-K25, Class B, 3.744%, 11/25/2045 | 2,044,318 |
390,000 | 4 | FREMF Mortgage Trust 2015-K49, Class B, 3.848%, 10/25/2048 | 393,994 |
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $4,661,930) | 4,660,129 | ||
COLLATERALIZED MORTGAGE OBLIGATIONS—1.6% | |||
Commercial Mortgage—1.6% | |||
1,600,000 | 4 | Citigroup Commercial Mortgage Trust 2013-GC11, Class B, 3.732%, 04/10/2046 | 1,621,639 |
2,100,000 | Commercial Mortgage Trust 2013-LC6, Class AM, 3.282%, 01/10/2046 | 2,118,443 | |
1,000,000 | Commercial Mortgage Trust 2015-DC1, Class AM, 3.724%, 02/10/2048 | 1,020,889 | |
625,000 | Deutsche Bank Commercial Mortgage Trust 2016-C3, Class A5, 2.890%, 09/10/2049 | 612,595 | |
2,500,000 | GS Mortgage Securities Corp. II 2012-GCJ7, Class AS, 4.085%, 05/10/2045 | 2,620,275 | |
1,500,000 | JPMBB Commercial Mortgage Securities Trust 2013-C15, Class AS, 3.532%, 10/15/2048 | 1,511,198 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
COLLATERALIZED MORTGAGE OBLIGATIONS—continued | |||
Commercial Mortgage—continued | |||
$900,000 | Morgan Stanley BAML Trust 2014-C15, Class A2, 2.979%, 04/15/2047 | $907,660 | |
1,000,000 | Morgan Stanley Capital I 2012-C4, Class AS, 3.773%, 03/15/2045 | 1,039,444 | |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $11,516,432) | 11,452,143 | ||
COMMON STOCKS—4.4% | |||
Auto Components—0.3% | |||
29,963 | 1 | American Axle & Manufacturing Holdings, Inc. | 537,836 |
30,811 | Goodyear Tire & Rubber Co. | 997,352 | |
3,395 | Lear Corp. | 614,121 | |
TOTAL | 2,149,309 | ||
Building Products—0.1% | |||
21,615 | 1 | U.S.G. Corp. | 821,586 |
Chemicals—0.1% | |||
17,650 | 1 | Axalta Coating Systems Ltd. | 558,799 |
Commercial Services & Supplies—0.1% | |||
11,390 | Multi-Color Corp. | 871,335 | |
Communications Equipment—0.1% | |||
22,487 | 1 | CommScope Holdings Co., Inc. | 809,307 |
Consumer Finance—0.1% | |||
36,085 | Ally Financial, Inc. | 969,243 | |
Containers & Packaging—0.8% | |||
43,035 | Ardagh Group SA | 854,675 | |
14,599 | 1 | Berry Global Group, Inc. | 872,582 |
64,638 | Graphic Packaging Holding Co. | 989,608 | |
41,536 | 1 | Owens-Illinois, Inc. | 1,006,002 |
17,883 | Sealed Air Corp. | 859,278 | |
16,393 | WestRock Co. | 1,023,087 | |
TOTAL | 5,605,232 | ||
Electronic Equipment Instruments & Components—0.3% | |||
10,465 | 1 | Anixter International, Inc. | 748,248 |
12,448 | CDW Corp. | 871,484 | |
28,000 | 1 | TTM Technologies | 457,240 |
TOTAL | 2,076,972 | ||
Food & Staples Retailing—0.2% | |||
36,764 | 1 | US Foods Holding Corp. | 1,070,568 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
COMMON STOCKS—continued | |||
Food Products—0.1% | |||
7,940 | 1 | Post Holding, Inc. | $630,833 |
Gas Utilities—0.1% | |||
39,321 | Suburban Propane Partners LP | 949,209 | |
Health Care Providers & Services—0.1% | |||
20,365 | 1 | Tenet Healthcare Corp. | 287,147 |
Hotels Restaurants & Leisure—0.4% | |||
20,660 | Aramark | 880,116 | |
34,345 | 1 | Eldorado Resorts, Inc. | 1,050,957 |
23,891 | 1 | Penn National Gaming, Inc. | 687,105 |
TOTAL | 2,618,178 | ||
Media—0.3% | |||
51,120 | 1 | Gray Television, Inc. | 736,128 |
7,075 | Nexstar Media Group, Inc. | 480,393 | |
21,370 | Sinclair Broadcast Group, Inc. | 727,648 | |
291,583 | 1 | Urban One, Inc. | 451,954 |
TOTAL | 2,396,123 | ||
Metals & Mining—0.1% | |||
26,305 | Teck Resources Ltd. - Class B | 604,489 | |
Oil Gas & Consumable Fuels—0.2% | |||
21,825 | 1 | RSP Permian, Inc. | 801,632 |
59,975 | 1 | WPX Energy, Inc. | 759,883 |
TOTAL | 1,561,515 | ||
Paper & Forest Products—0.1% | |||
18,209 | 1 | Clearwater Paper Corp. | 864,017 |
Pharmaceuticals—0.1% | |||
8,247 | 1 | Mallinckrodt PLC | 179,950 |
18,095 | 1 | Prestige Brands Holdings, Inc. | 817,894 |
TOTAL | 997,844 | ||
Road & Rail—0.1% | |||
20,100 | 1 | Avis Budget Group, Inc. | 765,810 |
Semiconductors & Semiconductor Equipment—0.2% | |||
18,200 | 1 | Microsemi Corp. | 961,870 |
14,342 | 1 | Tower Semiconductor Ltd. | 504,982 |
TOTAL | 1,466,852 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
COMMON STOCKS—continued | |||
Specialty Retail—0.1% | |||
59,722 | 1 | Party City Holdco, Inc. | $830,136 |
Technology Hardware Storage & Peripherals—0.2% | |||
26,395 | Diebold Nixdorf, Inc. | 506,784 | |
21,265 | 1 | NCR Corp. | 665,382 |
TOTAL | 1,172,166 | ||
Textiles Apparel & Luxury Goods—0.1% | |||
44,470 | Hanesbrands, Inc. | 928,978 | |
Trading Companies & Distributors—0.1% | |||
19,326 | 1 | HD Supply Holdings, Inc. | 714,675 |
TOTAL COMMON STOCKS (IDENTIFIED COST $26,080,467) | 31,720,323 | ||
PREFERRED STOCK—0.0% | |||
Financial Institution - Broker/Asset Mgr/Exchange—0.0% | |||
40,000 | 1,2,3 | Lehman Brothers Holdings, Pfd., Series D, 5.670% (IDENTIFIED COST $3,400) | 400 |
MUNICIPAL BOND—0.1% | |||
700,000 | Washington State, UT GO Refunding Bonds (Series R-2018D), 5.000%, 08/01/2030 (IDENTIFIED COST $846,048) | 845,390 | |
PURCHASED CALL OPTIONS—0.0% | |||
10,000,000 | BNP USD CALL/JPY PUT, Notional Amount $10,000,000, Exercise Price $116.00, Expiration Date 12/28/2017 | 7,200 | |
9,450,000 | Goldman Sachs GBP CALL/USD PUT, Notional Amount $9,450,000, Exercise Price $1.35, Expiration Date 2/13/2018 | 153,752 | |
10,000,000 | Goldman Sachs USD CALL/MXN PUT, Notional Amount $10,000,000, Exercise Price $20.00, Expiration Date 2/8/2018 | 51,740 | |
TOTAL PURCHASED CALL OPTIONS (IDENTIFIED COST $255,422) | 212,692 | ||
PURCHASED PUT OPTIONS—0.0% | |||
11,500,000 | CITI EUR PUT/USD CALL, Notional Amount $11,500,000, Exercise Price $1.15, Expiration Date 1/19/2018 | 8,786 | |
9,030,000 | Goldman Sachs GBP PUT/USD CALL, Notional Amount $9,030,000, Exercise Price $1.29, Expiration Date 2/13/2018 | 17,979 | |
100,000 | Russell 2000 Index, Notional Amount $154,414,000, Exercise Price $1200.00, Expiration Date 12/15/2017 | 27,500 | |
300,000 | United States Treasury Bond Futures, Notional Amount $45,852,000, Exercise Price $149.00, Expiration Date 12/22/2017 | 79,688 |
Principal Amount, Foreign Par Amount or Shares | Value | ||
PURCHASED PUT OPTIONS—continued | |||
500,000 | United States Treasury Note 10-Year Futures, Notional Amount $62,155,000 Exercise Price $123.50, Expiration Date 12/22/2017 | $117,187 | |
TOTAL PURCHASED PUT OPTIONS (IDENTIFIED COST $1,850,794) | 251,140 | ||
INVESTMENT COMPANIES—87.6%5 | |||
Finance—87.6% | |||
19,312,042 | Emerging Markets Core Fund | 196,403,463 | |
11,398,158 | Federated Mortgage Core Portfolio | 111,587,969 | |
5,118,450 | Federated Institutional Prime Value Obligations Fund, Institutional Shares, 1.23%6 | 5,118,962 | |
49,995,827 | High Yield Bond Portfolio | 320,473,251 | |
TOTAL INVESTMENT COMPANIES (IDENTIFIED COST $599,770,349) | 633,583,645 | ||
TOTAL INVESTMENT IN SECURITIES—99.8% (IDENTIFIED COST $683,730,214)7 | 722,434,606 | ||
OTHER ASSETS AND LIABILITIES - NET—0.2%8 | 1,270,490 | ||
TOTAL NET ASSETS—100% | $723,705,096 |
Description | Number of Contracts | Notional Value | Expiration Date | Value and Unrealized Appreciation (Depreciation) |
1United States Treasury Long Bond Long Futures | 95 | $14,413,281 | March 2018 | $(143,688) |
1United States Treasury Note 5-Year Short Futures | 63 | $7,329,656 | March 2018 | $25,015 |
1United States Treasury Note 10-Year Short Futures | 11 | $1,364,516 | March 2018 | $7,391 |
1United States Treasury Notes 10-Year Ultra Short Futures | 170 | $22,639,219 | March 2018 | $148,521 |
NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS | $37,239 |
Settlement Date | Counterparty | Currency Units to Deliver/Receive | In Exchange For | Unrealized Appreciation (Depreciation) |
Contracts Purchased: | ||||
12/4/2017 | CITIBANK N.A. | 7,425,000 BRL | $2,341,459 | $(73,209) |
12/8/2017 | CITIBANK N.A. | 2,635,500 EUR | $3,109,205 | $28,330 |
12/8/2017 | BANK OF AMERICA, N.A. | 328,476,400 JPY | $2,927,989 | $(8,923) |
12/8/2017 | CITIBANK N.A. | 2,811,850 GBP | $3,741,390 | $61,727 |
12/8/2017 | CITIBANK N.A. | 216,200,000 JPY | $1,974,076 | $(52,775) |
12/8/2017 | CITIBANK N.A. | 1,085,300 NZD | $761,280 | $(19,528) |
12/8/2017 | CITIBANK N.A. | 1,160,500 AUD | $910,843 | $(33,067) |
12/8/2017 | BARCLAYS BANK PLC WHOLESALE | 294,420,100 JPY | $2,600,000 | $16,418 |
12/8/2017 | CITIBANK N.A. | 1,294,000 CAD | $1,028,554 | $(25,485) |
Contracts Sold: | ||||
12/4/2017 | CITIBANK N.A. | $1,173,779 | 3,739,424 BRL | $31,429 |
12/4/2017 | CITIBANK N.A. | $1,155,570 | 3,685,576 BRL | $29,671 |
12/8/2017 | CITIBANK N.A. | $920,835 | 1,160,500 AUD | $43,059 |
12/8/2017 | CITIBANK N.A. | $1,036,612 | 1,294,000 CAD | $33,543 |
12/8/2017 | CITIBANK N.A. | $3,152,116 | 2,635,500 EUR | $14,581 |
12/8/2017 | CITIBANK N.A. | $4,976,159 | 544,676,400 JPY | $135,792 |
12/8/2017 | BANK OF AMERICA, N.A. | $2,600,000 | 291,514,600 JPY | $9,402 |
12/8/2017 | CITIBANK N.A. | $777,853 | 1,085,300 NZD | $36,100 |
12/8/2017 | CITIBANK N.A. | $3,645,645 | 2,811,850 GBP | $(157,471) |
NET UNREALIZED APPRECIATION ON FOREIGN EXCHANGE CONTRACTS | $69,594 |
Description | Contracts | Notional Amount | Expiration Date | Exercise Price | Value |
1Bank of America Merrill Lynch USD CALL/JPY PUT (Call Option) | 10,000,000 | $10,000,000 | December 2017 | $115.00 | $(15,860) |
1CITI EUR CALL/USD PUT (Call Option) | 11,900,000 | $11,900,000 | January 2018 | $1.19 | $(96,438) |
1CITI USD CALL/MXN PUT (Call Option) | 10,000,000 | $10,000,000 | December 2017 | $19.50 | $(15,890) |
1Goldman Sachs GBP CALL/USD PUT (Call Option) | 9,310,000 | $9,310,000 | December 2017 | $1.33 | $(181,498) |
1United States Treasury Bond Futures (Call Option) | 200 | $30,568,000 | December 2017 | $152.00 | $(196,875) |
1United States Treasury Note 10-Year Futures (Call Option) | 375 | $46,616,250 | December 2017 | $124.50 | $(93,750) |
1Bank of America Merrill Lynch USD PUT/JPY CALL (Put Option) | 10,000,000 | $10,000,000 | December 2017 | $112.00 | $(75,120) |
1Goldman Sachs GBP PUT/USD CALL (Put Option) | 9,170,000 | $9,170,000 | December 2017 | $1.31 | $(5,062) |
1Goldman Sachs USD PUT/MXN CALL (Put Option) | 10,000,000 | $10,000,000 | February 2018 | $18.75 | $(164,500) |
1United States Treasury Bond Futures (Put Option) | 200 | $30,568,000 | December 2017 | $152.00 | $(253,125) |
1United States Treasury Note 10-Year Futures (Put Option) | 500 | $62,155,000 | December 2017 | $124.50 | $(351,562) |
(PREMIUMS RECEIVED $1,686,128) | $(1,449,680) |
1 | Non-income-producing security. |
2 | Issuer in default. |
3 | Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established by and under the general supervision of the Fund's Board of Directors (the “Directors”). |
4 | Floating/variable note with current rate and current maturity or next reset date shown. Certain variable rate securities are not based on a published reference rate and spread but are determined by the issuer or agent and are based on current market conditions. These securities do not indicate a reference rate and spread in their description above. |
5 | Affiliated holdings. |
Affiliates | Balance of Shares Held 11/30/2016 | Purchases/ Additions | Sales/ Reductions |
Emerging Markets Core Fund | 21,208,933 | 3,052,857 | (4,949,748) |
Federated Mortgage Core Portfolio | 11,242,473 | 2,036,764 | (1,881,079) |
Federated Institutional Prime Value Obligations Fund, Institutional Shares | 2,765,054 | 172,600,776 | (170,247,380) |
High Yield Bond Portfolio | 55,627,881 | — | (5,632,054) |
TOTAL OF AFFILIATED TRANSACTIONS | 90,844,341 | 177,690,397 | (182,710,261) |
Balance of Shares Held 11/30/2017 | Value | Change in Unrealized Appreciation/ (Depreciation) | Net Realized Gain/ (Loss) | Dividend/ Interest Income | Gain Distributions Received |
19,312,042 | $196,403,463 | $5,689,898 | $(22,317) | $11,246,384 | $1,707,143 |
11,398,158 | $111,587,969 | $(263,171) | $(162,371) | $3,369,109 | $— |
5,118,450 | $5,118,962 | $(74) | $(678) | $61,443 | $— |
49,995,827 | $320,473,251 | $6,783,337 | $2,571,941 | $20,205,361 | $— |
85,824,477 | $633,583,645 | $12,209,990 | $2,386,575 | $34,882,297 | $1,707,143 |
6 | 7-day net yield. |
7 | The cost of investments for federal tax purposes amounts to $711,782,919. |
8 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Valuation Inputs | ||||
Level 1— Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Debt Securities: | ||||
Corporate Bonds | $— | $39,305,931 | $402,813 | $39,708,744 |
Commercial Mortgage-Backed Securities | — | 4,660,129 | — | 4,660,129 |
Collateralized Mortgage Obligations | — | 11,452,143 | — | 11,452,143 |
Municipal Bonds | — | 845,390 | — | 845,390 |
Equity Securities: | ||||
Common Stocks | ||||
Domestic | 29,576,227 | — | — | 29,576,227 |
International | 2,144,096 | — | — | 2,144,096 |
Preferred Stocks | ||||
Domestic | — | — | 4001 | 400 |
Purchased Call Options | 212,692 | — | — | 212,692 |
Purchased Put Options | 251,140 | — | — | 251,140 |
Investment Companies2 | 5,118,962 | — | — | 633,583,645 |
TOTAL SECURITIES | $37,303,117 | $56,263,593 | $403,213 | $722,434,606 |
Other Financial Instruments | ||||
Assets | ||||
Futures | $180,927 | $— | $— | $180,927 |
Foreign Exchange Contracts | — | 440,052 | — | 440,052 |
Written Option Contracts | — | — | — | — |
Liabilities | ||||
Futures | $(143,688) | $— | $— | $(143,688) |
Foreign Exchange Contracts | — | (370,458) | — | (370,458) |
Written Option Contracts | — | (1,449,680) | — | (1,449,680) |
TOTAL OTHER FINANCIAL INSTRUMENTS | $37,239 | $(1,380,086) | $— | $(1,342,847) |
1 | Shares were exchanged in conjunction with a corporate action for shares of another security whose fair value is determined using valuation techniques utilizing unobservable market data due to observable market data being unavailable. |
2 | As permitted by U.S. generally accepted accounting principles (GAAP), Investment Company valued at $628,464,683 is measured at fair value using the NAV per share practical expedient and have not been categorized in the chart above but are included in the Total column. The price of shares redeemed in Emerging Markets Core Fund, Federated Mortgage Core Portfolio and High Yield Bond Portfolio is the next determined NAV after receipt of a shareholder redemption request. |
AUD | —Australian Dollar |
BKNT | —Bank Notes |
BRL | —Brazilian Real |
CAD | —Canadian Dollar |
EUR | —Euro |
FREMF | —Freddie Mac Multifamily K-Deals |
GBP | —British Pound |
GMTN | —Global Medium Term Note |
JPY | —Japanese Yen |
MTN | —Medium Term Note |
NZD | —New Zealand Dollar |
REIT | —Real Estate Investment Trust |
USD | —United States Dollar |
Year Ended November 30 | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Asset Value, Beginning of Period | $8.86 | $8.63 | $9.16 | $9.16 | $9.47 |
Income From Investment Operations: | |||||
Net investment income | 0.361 | 0.361 | 0.351 | 0.391 | 0.411 |
Net realized and unrealized gain (loss) on investments, futures contracts, written options, swap contracts and foreign currency transactions | 0.24 | 0.21 | (0.56) | 0.00 | (0.35) |
TOTAL FROM INVESTMENT OPERATIONS | 0.60 | 0.57 | (0.21) | 0.39 | 0.06 |
Less Distributions: | |||||
Distributions from net investment income | (0.38) | (0.34) | (0.32) | (0.39) | (0.37) |
Net Asset Value, End of Period | $9.08 | $8.86 | $8.63 | $9.16 | $9.16 |
Total Return2 | 6.85% | 6.81% | (2.39)% | 4.33% | 0.66% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.96% | 1.26% | 1.27% | 1.26% | 1.26% |
Net investment income | 3.99% | 4.16% | 3.91% | 4.26% | 4.42% |
Expense waiver/reimbursement3 | 0.12% | 0.09% | 0.09% | 0.07% | 0.07% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $342,586 | $392,737 | $437,375 | $527,657 | $635,469 |
Portfolio turnover | 18% | 14% | 17% | 22% | 13% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
Year Ended November 30 | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Asset Value, Beginning of Period | $8.85 | $8.62 | $9.15 | $9.14 | $9.46 |
Income From Investment Operations: | |||||
Net investment income | 0.291 | 0.301 | 0.281 | 0.321 | 0.341 |
Net realized and unrealized gain (loss) on investments, futures contracts, written options, swap contracts and foreign currency transactions | 0.24 | 0.21 | (0.56) | 0.01 | (0.36) |
TOTAL FROM INVESTMENT OPERATIONS | 0.53 | 0.51 | (0.28) | 0.33 | (0.02) |
Less Distributions: | |||||
Distributions from net investment income | (0.31) | (0.28) | (0.25) | (0.32) | (0.30) |
Net Asset Value, End of Period | $9.07 | $8.85 | $8.62 | $9.15 | $9.14 |
Total Return2 | 6.06% | 6.02% | (3.13)% | 3.66% | (0.20)% |
Ratios to Average Net Assets: | |||||
Net expenses | 1.73% | 2.01% | 2.02% | 2.01% | 2.01% |
Net investment income | 3.23% | 3.41% | 3.16% | 3.51% | 3.67% |
Expense waiver/reimbursement3 | 0.12% | 0.09% | 0.09% | 0.07% | 0.07% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $46,640 | $57,432 | $68,623 | $88,374 | $103,142 |
Portfolio turnover | 18% | 14% | 17% | 22% | 13% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
Year Ended November 30 | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Asset Value, Beginning of Period | $8.85 | $8.62 | $9.15 | $9.15 | $9.46 |
Income From Investment Operations: | |||||
Net investment income | 0.291 | 0.301 | 0.281 | 0.321 | 0.341 |
Net realized and unrealized gain (loss) on investments, futures contracts, written options, swap contracts and foreign currency transactions | 0.24 | 0.21 | (0.56) | 0.00 | (0.35) |
TOTAL FROM INVESTMENT OPERATIONS | 0.53 | 0.51 | (0.28) | 0.32 | (0.01) |
Less Distributions: | |||||
Distributions from net investment income | (0.31) | (0.28) | (0.25) | (0.32) | (0.30) |
Net Asset Value, End of Period | $9.07 | $8.85 | $8.62 | $9.15 | $9.15 |
Total Return2 | 6.04% | 6.02% | (3.13)% | 3.55% | (0.09)% |
Ratios to Average Net Assets: | |||||
Net expenses | 1.70% | 2.01% | 2.02% | 2.01% | 2.01% |
Net investment income | 3.25% | 3.41% | 3.16% | 3.51% | 3.67% |
Expense waiver/reimbursement3 | 0.12% | 0.09% | 0.09% | 0.07% | 0.07% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $132,528 | $155,650 | $177,330 | $220,448 | $262,115 |
Portfolio turnover | 18% | 14% | 17% | 22% | 13% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
Year Ended November 30 | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Asset Value, Beginning of Period | $8.81 | $8.58 | $9.11 | $9.11 | $9.42 |
Income From Investment Operations: | |||||
Net investment income | 0.361 | 0.361 | 0.351 | 0.391 | 0.411 |
Net realized and unrealized gain (loss) on investments, futures contracts, written options, swap contracts and foreign currency transactions | 0.23 | 0.21 | (0.56) | 0.00 | (0.35) |
TOTAL FROM INVESTMENT OPERATIONS | 0.59 | 0.57 | (0.21) | 0.39 | 0.06 |
Less Distributions: | |||||
Distributions from net investment income | (0.38) | (0.34) | (0.32) | (0.39) | (0.37) |
Net Asset Value, End of Period | $9.02 | $8.81 | $8.58 | $9.11 | $9.11 |
Total Return2 | 6.79% | 6.86% | (2.40)% | 4.35% | 0.66% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.96% | 1.26% | 1.27% | 1.26% | 1.26% |
Net investment income | 3.99% | 4.16% | 3.91% | 4.24% | 4.42% |
Expense waiver/reimbursement3 | 0.11% | 0.09% | 0.09% | 0.07% | 0.07% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $60,561 | $69,364 | $76,954 | $89,393 | $90,204 |
Portfolio turnover | 18% | 14% | 17% | 22% | 13% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
Year Ended November 30 | 2017 | 2016 | 2015 | 2014 | 2013 |
Net Asset Value, Beginning of Period | $8.81 | $8.58 | $9.11 | $9.11 | $9.43 |
Income From Investment Operations: | |||||
Net investment income | 0.381 | 0.381 | 0.371 | 0.411 | 0.431 |
Net realized and unrealized gain (loss) on investments, futures contracts, written options, swap contracts and foreign currency transactions | 0.25 | 0.21 | (0.56) | 0.00 | (0.36) |
TOTAL FROM INVESTMENT OPERATIONS | 0.63 | 0.59 | (0.19) | 0.41 | 0.07 |
Less Distributions: | |||||
Distributions from net investment income | (0.41) | (0.36) | (0.34) | (0.41) | (0.39) |
Net Asset Value, End of Period | $9.03 | $8.81 | $8.58 | $9.11 | $9.11 |
Total Return2 | 7.23% | 7.12% | (2.16)% | 4.61% | 0.81% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.64% | 1.01% | 1.02% | 1.01% | 1.01% |
Net investment income | 4.24% | 4.41% | 4.16% | 4.51% | 4.66% |
Expense waiver/reimbursement3 | 0.17% | 0.09% | 0.09% | 0.07% | 0.07% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $136,141 | $93,764 | $120,807 | $151,517 | $152,799 |
Portfolio turnover | 18% | 14% | 17% | 22% | 13% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
Period Ended November 30 | 20171 |
Net Asset Value, Beginning of Period | $8.96 |
Income From Investment Operations: | |
Net investment income | 0.312 |
Net realized and unrealized gain on investments, futures contracts, written options, swap contracts and foreign currency transactions | 0.11 |
TOTAL FROM INVESTMENT OPERATIONS | 0.42 |
Less Distributions: | |
Distributions from net investment income | (0.29) |
Net Asset Value, End of Period | $9.09 |
Total Return3 | 4.73% |
Ratios to Average Net Assets: | |
Net expenses | 0.61%4 |
Net investment income | 4.03%4 |
Expense waiver/reimbursement5 | 0.12%4 |
Supplemental Data: | |
Net assets, end of period (000 omitted) | $5,251 |
Portfolio turnover | 18%6 |
1 | Reflects operations for the period from January 27, 2017 (date of initial investment) to November 30, 2017. |
2 | Per share numbers have been calculated using the average shares method. |
3 | Based on net asset value. Total returns for periods of less than one year are not annualized. |
4 | Computed on an annualized basis. |
5 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
6 | Portfolio turnover is calculated at the Fund level. Percentage indicated was for the year ended November 30, 2017. |
Assets: | ||
Investment in securities, at value including $633,583,645 of investment in affiliated holdings (identified cost $683,730,214) | $722,434,606 | |
Restricted cash (Note 2) | 1,336,455 | |
Income receivable | 3,435,224 | |
Receivable for investments sold | 875,154 | |
Receivable for shares sold | 492,298 | |
Unrealized appreciation on foreign exchange contracts | 440,052 | |
Receivable for daily variation margin on futures contracts | 232,841 | |
TOTAL ASSETS | 729,246,630 | |
Liabilities: | ||
Payable for investments purchased | $1,857,827 | |
Payable for shares redeemed | 962,443 | |
Written options outstanding (premium $1,686,128), at value | 1,449,680 | |
Unrealized depreciation on foreign exchange contracts | 370,458 | |
Bank overdraft | 228,990 | |
Income distribution payable | 147,220 | |
Payable to adviser (Note 5) | 8,543 | |
Payable for administrative fees (Note 5) | 1,591 | |
Payable for transfer agent fee | 151,402 | |
Payable for distribution services fee (Note 5) | 110,857 | |
Payable for other service fees (Notes 2 and 5) | 113,114 | |
Accrued expenses (Note 5) | 139,409 | |
TOTAL LIABILITIES | 5,541,534 | |
Net assets for 79,834,733 shares outstanding | $723,705,096 | |
Net Assets Consist of: | ||
Paid-in capital | $811,424,097 | |
Net unrealized appreciation of investments, futures contracts, written options, foreign exchange contracts and translation of assets and liabilities in foreign currency | 39,047,673 | |
Accumulated net realized loss on investments, futures contracts, written options, swap contracts, foreign exchange contracts and foreign currency transactions | (126,366,659) | |
Distributions in excess of net investment income | (400,015) | |
TOTAL NET ASSETS | $723,705,096 |
Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||
Class A Shares: | ||
Net asset value per share ($342,585,807 ÷ 37,722,219 shares outstanding), $0.001 par value, 1,000,000,000 shares authorized | $9.08 | |
Offering price per share (100/95.50 of $9.08) | $9.51 | |
Redemption proceeds per share | $9.08 | |
Class B Shares: | ||
Net asset value per share ($46,639,835 ÷ 5,142,850 shares outstanding), $0.001 par value, 2,000,000,000 shares authorized | $9.07 | |
Offering price per share | $9.07 | |
Redemption proceeds per share (94.50/100 of $9.07) | $8.57 | |
Class C Shares: | ||
Net asset value per share ($132,527,717 ÷ 14,604,899 shares outstanding), $0.001 par value, 1,000,000,000 shares authorized | $9.07 | |
Offering price per share | $9.07 | |
Redemption proceeds per share (99.00/100 of $9.07) | $8.98 | |
Class F Shares: | ||
Net asset value per share ($60,560,535 ÷ 6,711,399 shares outstanding), $0.001 par value, 1,000,000,000 shares authorized | $9.02 | |
Offering price per share (100/99.00 of $9.02) | $9.11 | |
Redemption proceeds per share (99.00/100 of $9.02) | $8.93 | |
Institutional Shares: | ||
Net asset value per share ($136,140,527 ÷ 15,075,532 shares outstanding), $0.001 par value, 1,000,000,000 shares authorized | $9.03 | |
Offering price per share | $9.03 | |
Redemption proceeds per share | $9.03 | |
Class R6 Shares: | ||
Net asset value per share ($5,250,675 ÷ 577,834 shares outstanding), $0.001 par value, 1,000,000,000 shares authorized | $9.09 | |
Offering price per share | $9.09 | |
Redemption proceeds per share | $9.09 |
Investment Income: | |||
Dividends (including $34,882,297 received from affiliated holdings and net of foreign taxes withheld of $1,115) | $35,251,823 | ||
Interest | 2,017,062 | ||
Net income on securities loaned | 810 | ||
TOTAL INCOME | 37,269,695 | ||
Expenses: | |||
Investment adviser fee (Note 5) | $4,331,967 | ||
Administrative fee (Note 5) | 595,793 | ||
Custodian fees | 46,853 | ||
Transfer agent fee (Note 2) | 834,846 | ||
Directors'/Trustees' fees (Note 5) | 10,649 | ||
Auditing fees | 34,386 | ||
Legal fees | 10,595 | ||
Portfolio accounting fees | 180,082 | ||
Distribution services fee (Note 5) | 1,473,393 | ||
Other service fees (Notes 2 and 5) | 1,567,078 | ||
Share registration costs | 103,690 | ||
Printing and postage | 65,022 | ||
Taxes | 150 | ||
Miscellaneous (Note 5) | 37,334 | ||
TOTAL EXPENSES | 9,291,838 |
Waiver and Reimbursements: | |||
Waiver/reimbursement of investment adviser fee (Note 5) | $(834,639) | ||
Reimbursement of other operating expenses (Notes 2 and 5) | (129,928) | ||
TOTAL WAIVER AND REIMBURSEMENTS | $(964,567) | ||
Net expenses | $8,327,271 | ||
Net investment income | 28,942,424 | ||
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Written Options, Swap Contracts, Foreign Exchange Contracts and Foreign Currency Transactions: | |||
Net realized gain on investments (including realized gain of $2,386,575 on sales of investments in affiliated holdings) | 5,368,457 | ||
Net realized loss on foreign currency and foreign currency related transactions | (424,020) | ||
Net realized loss on foreign exchange contracts | (92,870) | ||
Net realized loss on futures contracts | (752,779) | ||
Net realized gain on written options | 4,490,241 | ||
Net realized loss on swap contracts | (656,903) | ||
Realized gain distribution from affiliated investment company shares | 1,707,143 | ||
Net change in unrealized appreciation of investments (including change in unrealized appreciation of $12,209,990 on investments in affiliated holdings) | 11,448,608 | ||
Net change in unrealized appreciation/depreciation of translation of assets and liabilities in foreign currency | 3,692 | ||
Net change in unrealized appreciation of foreign currency exchange contracts | (278,374) | ||
Net change in unrealized appreciation of futures contracts | (225,496) | ||
Net change in unrealized appreciation of written options | 236,448 | ||
Net change in unrealized appreciation of swap contracts | (211,426) | ||
Net realized and unrealized gain on investments, futures contracts, written options, swap contracts and foreign currency transactions | 20,612,721 | ||
Change in net assets resulting from operations | $49,555,145 |
Year Ended November 30 | 2017 | 2016 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $28,942,424 | $32,028,642 |
Net realized gain (loss) on investments, investments including allocation from affiliated partnership, futures contracts, written option transactions, swap contracts, foreign exchange contracts and foreign currency transactions | 9,639,269 | (20,080,886) |
Net change in unrealized appreciation/depreciation of investments, futures contracts, written option transactions, swap contracts, foreign exchange contracts and foreign currency translation of assets and liabilities in foreign currency | 10,973,452 | 42,457,965 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 49,555,145 | 54,405,721 |
Distributions to Shareholders: | ||
Distributions from net investment income | ||
Class A Shares | (15,359,286) | (16,077,829) |
Class B Shares | (1,798,169) | (2,013,686) |
Class C Shares | (4,983,466) | (5,240,100) |
Class F Shares | (2,787,852) | (2,898,700) |
Institutional Shares | (5,415,051) | (4,189,760) |
Class R6 Shares | (131,200) | — |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (30,475,024) | (30,420,075) |
Share Transactions: | ||
Proceeds from sale of shares | 139,235,804 | 93,359,680 |
Net asset value of shares issued to shareholders in payment of distributions declared | 28,493,763 | 28,116,621 |
Cost of shares redeemed | (232,051,538) | (257,605,129) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (64,321,971) | (136,128,828) |
Change in net assets | (45,241,850) | (112,143,182) |
Net Assets: | ||
Beginning of period | 768,946,946 | 881,090,128 |
End of period (including undistributed (distributions in excess of) net investment income of $(400,015) and $52,893, respectively) | $723,705,096 | $768,946,946 |
■ | Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Directors. |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Directors. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Directors, certain factors may be considered such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions. |
■ | With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts; |
■ | Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; |
■ | Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
Transfer Agent Fees Incurred | Transfer Agent Fees Reimbursed | |
Class A Shares | $414,450 | $(28,979) |
Class B Shares | 67,013 | (3,757) |
Class C Shares | 158,107 | (19,727) |
Class F Shares | 70,665 | (1,529) |
Institutional Shares | 123,809 | (75,936) |
Class R6 Shares | 802 | — |
TOTAL | $834,846 | $(129,928) |
Other Service Fees Incurred | |
Class A Shares | $911,733 |
Class B Shares | 129,814 |
Class C Shares | 361,372 |
Class F Shares | 164,159 |
TOTAL | $1,567,078 |
Fair Value of Derivative Instruments | ||||
Asset | Liability | |||
Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |
Derivatives not accounted for as hedging instruments under ASC Topic 815 | ||||
Interest rate contracts | Receivable for daily variation margin on futures contracts | $37,239* | $— | |
Interest rate contracts | Written option contracts outstanding at value | $895,312 | ||
Foreign exchange contracts | Unrealized appreciation on foreign exchange contracts | $440,052 | Unrealized depreciation on foreign exchange contracts | $370,458 |
Foreign exchange contracts | Written option contracts outstanding at value | $554,368 | ||
Total derivatives not accounted for as hedging instruments under ASC Topic 815 | $477,291 | $1,820,138 |
* | Includes cumulative appreciation of futures contracts as reported in the footnotes to the Portfolio of Investments. Only the current day's variation margin is reported within the Statement of Assets and Liabilities. |
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||||
Credit Default Swaps | Futures Contracts | Forward Exchange Contracts | Purchased Options1 | Written Options | Total | |
Interest rate contracts | $— | $(752,779) | $— | $— | $2,689,572 | $1,936,793 |
Foreign exchange contracts | — | — | (92,870) | (276,383) | 2,121,570 | 1,752,317 |
Credit contracts | (656,903) | — | — | — | — | (656,903) |
Equity contracts | — | — | — | — | (320,901) | (320,901) |
TOTAL | $(656,903) | $(752,779) | $(92,870) | $(276,383) | $4,490,241 | $2,711,306 |
1 | The net realized gain (loss) on Purchased Options Contracts is found within the Net realized gain on investments on the Statement of Operations. |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |||||
Credit Default Swaps | Forward Exchange Contracts | Futures Contracts | Written Options | Total | |
Interest rate contracts | $— | $— | $(225,496) | $— | $(225,496) |
Foreign exchange contracts | — | (278,374) | — | — | (278,374) |
Credit contracts | (211,426) | — | — | — | (211,426) |
Written option contracts | — | — | — | 236,448 | 236,448 |
TOTAL | $(211,426) | $(278,374) | $(225,496) | $236,448 | $(478,848) |
Year Ended November 30 | 2017 | 2016 | |||
Class A Shares: | Shares | Amount | Shares | Amount | |
Shares sold | 4,289,846 | $38,792,181 | 4,756,946 | $41,260,593 | |
Shares issued to shareholders in payment of distributions declared | 1,578,718 | 14,228,232 | 1,738,495 | 14,976,155 | |
Shares redeemed | (12,471,186) | (112,799,184) | (12,869,715) | (112,988,911) | |
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS | (6,602,622) | $(59,778,771) | (6,374,274) | $(56,752,163) |
Year Ended November 30 | 2017 | 2016 | |||
Class B Shares: | Shares | Amount | Shares | Amount | |
Shares sold | 152,746 | $1,379,016 | 239,629 | $2,087,354 | |
Shares issued to shareholders in payment of distributions declared | 188,188 | 1,693,387 | 218,368 | 1,875,191 | |
Shares redeemed | (1,688,273) | (15,246,984) | (1,932,059) | (17,384,881) | |
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS | (1,347,339) | $(12,174,581) | (1,474,062) | $(13,422,336) |
Year Ended November 30 | 2017 | 2016 | |||
Class C Shares: | Shares | Amount | Shares | Amount | |
Shares sold | 1,355,740 | $12,257,344 | 1,406,315 | $12,197,645 | |
Shares issued to shareholders in payment of distributions declared | 515,893 | 4,644,521 | 557,180 | 4,789,458 | |
Shares redeemed | (4,852,273) | (43,886,270) | (4,954,365) | (43,814,705) | |
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS | (2,980,640) | $(26,984,405) | (2,990,870) | $(26,827,602) |
Year Ended November 30 | 2017 | 2016 | |||
Class F Shares: | Shares | Amount | Shares | Amount | |
Shares sold | 348,027 | $3,122,290 | 385,981 | $3,322,749 | |
Shares issued to shareholders in payment of distributions declared | 303,000 | 2,714,534 | 329,520 | 2,821,255 | |
Shares redeemed | (1,816,292) | (16,340,292) | (1,811,790) | (16,266,050) | |
NET CHANGE RESULTING FROM CLASS F SHARE TRANSACTIONS | (1,165,265) | $(10,503,468) | (1,096,289) | $(10,122,046) |
Year Ended November 30 | 2017 | 2016 | |||
Institutional Shares: | Shares | Amount | Shares | Amount | |
Shares sold | 8,687,353 | $78,200,357 | 4,001,033 | $34,491,339 | |
Shares issued to shareholders in payment of distributions declared | 565,951 | 5,081,892 | 426,407 | 3,654,562 | |
Shares redeemed | (4,818,580) | (43,387,735) | (7,864,204) | (67,150,582) | |
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS | 4,434,724 | $39,894,514 | (3,436,764) | $(29,004,681) |
Period Ended November 30 | 20171 | 2016 | |||
Class R6 Shares: | Shares | Amount | Shares | Amount | |
Shares sold | 606,276 | $5,484,616 | $— | $— | |
Shares issued to shareholders in payment of distributions declared | 14,434 | 131,197 | — | — | |
Shares redeemed | (42,876) | (391,073) | — | — | |
NET CHANGE RESULTING FROM CLASS R6 SHARE TRANSACTIONS | 577,834 | $5,224,740 | $— | $— | |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | (7,083,308) | $(64,321,971) | (15,372,259) | $(136,128,828) |
1 | Reflects operations from the period from January 27, 2017 (date of initial investment) to November 30, 2017. |
Increase (Decrease) | ||
Paid-In Capital | Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$(27,424,926) | $1,079,692 | $26,345,234 |
2017 | 2016 | |
Ordinary income | $30,475,024 | $30,420,075 |
Distributions in excess of ordinary income | $(307,169) |
Net unrealized appreciation | $12,245,317 |
Capital loss carryforwards | $(99,657,149) |
Expiration Year | Short-Term | Long-Term | Total |
No Expiration | $14,410,587 | $85,246,562 | $99,657,149 |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.100% | on assets up to $50 billion |
0.075% | on assets over $50 billion |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.150% | on the first $5 billion |
0.125% | on the next $5 billion |
0.100% | on the next $10 billion |
0.075% | on assets in excess of $20 billion |
Share Class Name | Percentage of Average Daily Net Assets of Class |
Class B Shares | 0.75% |
Class C Shares | 0.75% |
Class F Shares | 0.05% |
Distribution Services Fees Incurred | |
Class B Shares | $389,442 |
Class C Shares | 1,083,951 |
TOTAL | $1,473,393 |
Purchases | $87,381,705 |
Sales | $154,444,028 |
January 24, 2018
Beginning Account Value 6/1/2017 | Ending Account Value 11/30/2017 | Expenses Paid During Period1 | |
Actual: | |||
Class A Shares | $1,000 | $1,015.80 | $4.75 |
Class B Shares | $1,000 | $1,012.00 | $8.57 |
Class C Shares | $1,000 | $1,011.90 | $8.47 |
Class F Shares | $1,000 | $1,014.80 | $4.70 |
Institutional Shares | $1,000 | $1,017.50 | $3.14 |
Class R6 Shares | $1,000 | $1,017.50 | $3.09 |
Hypothetical (assuming a 5% return before expenses): | |||
Class A Shares | $1,000 | $1,020.40 | $4.76 |
Class B Shares | $1,000 | $1,016.60 | $8.59 |
Class C Shares | $1,000 | $1,016.70 | $8.49 |
Class F Shares | $1,000 | $1,020.40 | $4.71 |
Institutional Shares | $1,000 | $1,022.00 | $3.14 |
Class R6 Shares | $1,000 | $1,022.00 | $3.09 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: |
Class A Shares | 0.94% |
Class B Shares | 1.70% |
Class C Shares | 1.68% |
Class F Shares | 0.93% |
Institutional Shares | 0.62% |
Class R6 Shares | 0.61% |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
J. Christopher Donahue* Birth Date: April 11, 1949 President and Director Indefinite Term Began serving: January 2000 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John B. Fisher* Birth Date: May 16, 1956 Director Indefinite Term Began serving: May 2016 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of certain of the Funds in the Federated Fund Family; Vice President, Federated Investors, Inc.; President, Director/Trustee and CEO, Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company; President of some of the Funds in the Federated Fund Complex and Director, Federated Investors Trust Company. Previous Positions: President and Director of the Institutional Sales Division of Federated Securities Corp.; President and Director of Federated Investment Counseling; President and CEO of Passport Research, Ltd.; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc. and President, Technology, Federated Services Company. |
* | Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Investors, Inc. and due to positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
John T. Collins Birth Date: January 24, 1947 Director Indefinite Term Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Current Chair of the Compensation Committee, KLX Corp. Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO, The Collins Group, Inc. (a private equity firm). Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
G. Thomas Hough Birth Date: February 28, 1955 Director Indefinite Term Began serving: August 2015 | Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Chair of the Audit Committee, Governance Committee, Publix Super Markets, Inc.; Director, Member of the Audit Committee and Technology Committee of Equifax, Inc. Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough is an Executive Committee member of the United States Golf Association, he serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama and is on the Business School Board of Visitors for Wake Forest University. |
Maureen Lally-Green Birth Date: July 5, 1949 Director Indefinite Term Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Dean of the Duquesne University School of Law; Professor and Adjunct Professor of Law, Duquesne University School of Law; formerly, Interim Dean of the Duquesne University School of Law; Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously served as: Associate General Secretary, Diocese of Pittsburgh; a member of the Superior Court of Pennsylvania; and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green also currently holds the positions on either a public or not for profit Board of Directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Director, Saint Vincent College; Member, Pennsylvania State Board of Education (public); and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.), where she currently serves as a member of the Compensation, Nominating and Corporate Governance Committee (Chair) and the Health, Safety and Environmental Committee. Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Regent, St. Vincent Seminary; and Director and Chair, Cardinal Wuerl North Catholic High School, Inc. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Director Indefinite Term Began serving: January 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Thomas M. O'Neill Birth Date: June 14, 1951 Director Indefinite Term Began serving: August 2006 | Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). |
P. Jerome Richey Birth Date: February 23, 1949 Director Indefinite Term Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.) Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.); and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). |
John S. Walsh Birth Date: November 28, 1957 Director Indefinite Term Began serving: January 1999 | Principal Occupations: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors). |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Officer since: April 2013 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. |
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Fund Family. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Investors, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated in 1984 and is a member of the Pennsylvania Bar Association. Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc. |
Richard B. Fisher Birth Date: May 17, 1923 Vice Chairman Officer since: August 2002 | Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Family; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Family; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp. |
Name Birth Date Positions Held with Corporation Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: July 2015 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement. |
Robert J. Ostrowski Birth Date: April 26, 1963 Chief Investment Officer Officer since: May 2004 | Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated's taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University. |
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 31417P601
CUSIP 31417P700
CUSIP 31417P809
CUSIP 31417P841
CUSIP 31417P833
2018 ©Federated Investors, Inc.
Item 2. | Code of Ethics |
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.
(c) There was no amendment to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(d) There was no waiver granted, either actual or implicit, from a provision to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(e) Not Applicable
(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3. Audit Committee Financial Expert
The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item: John T. Collins, G. Thomas Hough and Thomas M. O'Neill.
Item 4. | Principal Accountant Fees and Services |
(a) Audit Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2017 - $65,680
Fiscal year ended 2016 - $63,450
(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2017 - $2,687
Fiscal year ended 2016 - $0
Fiscal year ended 2017- Audit consent fee for N-1A filing.
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(c) Tax Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2017 - $0
Fiscal year ended 2016 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(d) All Other Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2017 - $0
Fiscal year ended 2016 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $32,908 and $30,912 respectively. Fiscal year ended 2017- Service fee for analysis of potential Passive Foreign Investment Company holdings. Fiscal year ended 2016- Service fee for analysis of potential Passive Foreign Investment Company holdings.
(e)(1) Audit Committee Policies regarding Pre-approval of Services.
The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.
Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
The Audit Committee has delegated pre-approval authority to its Chairman. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.
AUDIT SERVICES
The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.
In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.
AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.
TAX SERVICES
The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.
ALL OTHER SERVICES
With respect to the provision of services other than audit, review or attest services the pre-approval requirement is waived if:
(1) | The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided; |
(2) | Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant at the time of the engagement to be non-audit services; and |
(3) | Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee. |
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.
The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.
PRE-APPROVAL FEE LEVELS
Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.
PROCEDURES
Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.
(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2017 – 0%
Fiscal year ended 2016 - 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(c)
Fiscal year ended 2017 – 0%
Fiscal year ended 2016 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(d)
Fiscal year ended 2017 – 0%
Fiscal year ended 2016 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
(f) | NA |
(g) | Non-Audit Fees billed to the registrant, the registrant’s investment adviser, and certain entities controlling, controlled by or under common control with the investment adviser: |
Fiscal year ended 2017 - $167,509
Fiscal year ended 2016 - $223,469
(h) | The registrant’s Audit Committee has considered that the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence. |
In their respective required communications to the Audit Committee of the registrant’s Board, Ernst & Young LLP (“EY”) and KPMG LLP (“KPMG”) (as applicable, “EY/KPMG”), the registrant’s independent public accountants, informed the Audit Committee that EY/KPMG and/or covered person professionals within EY/KPMG maintain lending relationships with certain owners of greater than 10% of the shares of the registrant and/or certain investment companies within the “investment company complex” as defined under Rule 2-01(f)(14) of Regulation S-X, which are affiliates of the registrant. EY/KPMG has advised the Audit Committee that these lending relationships implicate Rule 2-01(c)(1)(ii)(A) of Regulation S-X (referred to as the “Loan Rule”). The Loan Rule prohibits an independent public accountant, or covered person professionals at such firm, from having a financial relationship (such as a loan) with a lender that is a record or beneficial owner of more than 10% of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the registrant, as well as all registered investment companies advised by advisory subsidiaries of Federated Investors, Inc., the Adviser (for which EY serves as independent public accountant), and their respective affiliates (collectively, the “Federated Fund Complex”).
EY/KPMG informed the Audit Committee that EY/KPMG believes that these lending relationships described above do not and will not impair EY/KPMG’s ability to exercise objective and impartial judgment in connection with financial statement audits of their respective funds of the registrant and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY/KPMG has been and is capable of objective and impartial judgment on all issues encompassed within EY/KPMG’s audits.
On June 20, 2016, the Division of Investment Management of the Securities and Exchange Commission (“SEC”) issued a no-action letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to similar Loan Rule matters as those described above (the “Letter”). In the Letter, the SEC Staff confirmed that it would not recommend enforcement action against an investment company that relied on the audit services performed by an independent public accountant where the Loan Rule was implicated in certain specified circumstances provided that: (1) the auditor has complied with PCAOB Rule 3526(b)(1) and 3526(b)(2); (2) the Loan Rule is implicated because of lending relationships; and (3) notwithstanding such lending relationships that implicate the Loan Rule, the auditor has concluded that it is objective and impartial with respect to the issues encompassed within its engagement as auditor of the funds. The circumstances described in the Letter are substantially similar to the circumstances that implicated the Loan Rule with respect to EY/KPMG and the registrant. On September 22, 2017, the SEC issued another no-action letter to Fidelity Management & Research Company et al extending the expiration of the Letter until the effectiveness of any amendments to the Loan Rule designed to address the concerns in the Letter (the “Letters”).
If it were to be determined that the relief available under the Letters was improperly relied upon, or that the independence requirements under the federal securities laws were not otherwise complied with regarding the registrant, for certain periods, any of the registrant’s filings with the SEC which contain financial statements of the registrant for such periods may not comply with applicable federal securities laws, the registrant’s ability to offer shares under its current registration statement may be impacted, and certain financial reporting and/or other covenants with, and representations and warranties to, the registrant’s lender under its committed line of credit may be impacted. Such events could have a material adverse effect on the registrant and the Federated Fund Complex.
Item 5. | Audit Committee of Listed Registrants |
Not Applicable
Item 6. | Schedule of Investments |
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies |
Not Applicable
Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
Not Applicable
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not Applicable
Item 10. | Submission of Matters to a Vote of Security Holders |
No Changes to Report
Item 11. | Controls and Procedures |
(a) The registrant’s President and Treasurer have concluded that the
registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies |
Not Applicable
Item 13. | Exhibits |
(a)(1) Code of Ethics- Not Applicable to this Report.
(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.
(a)(3) Not Applicable.
(b) Certifications pursuant to 18 U.S.C. Section 1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Federated Fixed Income Securities, Inc.
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date January 23, 2018
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /S/ J. Christopher Donahue
J. Christopher Donahue, Principal Executive Officer
Date January 23, 2018
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date January 23, 2018