United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-8042
(Investment Company Act File Number)
Federated Insurance Series
_______________________________________________________________
(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)
John W. McGonigle, 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: 12/31/13
Date of Reporting Period: 12/31/13
Item 1. Reports to Stockholders
Share Class |
Primary |
Service |
1 | 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 S&P 500 Index. |
2 | The BAB 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-throughs), asset-backed securities and commercial mortgage-backed securities. The index is unmanaged, and it is not possible to invest directly in an index. |
3 | 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. 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 | The MSCI Emerging Markets Index captures large- and mid-cap representation across 21 Emerging Markets (EM) countries. With 824 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. As of November 2013, the MSCI Emerging Markets Index consisted of the following country indices: Brazil, Chile, Colombia, Mexico, Peru, Czech Republic, Egypt, Greece, Hungary, Poland, Russia, South Africa, Turkey, China, India, Indonesia, Korea, Malaysia, Philippines, Taiwan and Thailand. The index is unmanaged, and it is not possible to invest directly in an index. |
5 | The MSCI ACWI ex USA captures large- and mid-cap representation across 22 of 23 developed markets countries (excluding the United States) and 21 emerging markets countries. With 1,826 constituents, the index covers approximately 85% of the global equity opportunity set outside the United States. The index is unmanaged, and it is not possible to invest directly in an index. |
6 | The Barclays U.S. TIPS Index represents a market index made up of U.S. TIPS. The index is unmanaged, and it is not possible to invest directly in an index. |
7 | The DBIQ Optimum Yield Diversified Commodity Index is based on 14 commodities drawn from the energy, precious metals, industrial metals and agriculture sectors. The index is unmanaged, and it is not possible to invest directly in an index. |
8 | International investing involves special risks including currency risk, increased volatility, political risks and differences in auditing and other financial standards. Prices of emerging markets 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. |
9 | The Fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities or other traditional instruments. |
Share Class | 1 Year | 5 Years | 10 Years |
Primary Shares | 16.45% | 9.29% | 4.41% |
Service Shares | 16.11% | 9.09% | 4.16% |
Federated Managed Tail Risk Fund II - | Primary Shares | S&P 500 | Blended Index |
12/31/2003 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 10,739 | 11,088 | 10,826 |
12/31/2005 | 10,945 | 11,632 | 11,251 |
12/31/2006 | 12,720 | 13,469 | 12,511 |
12/31/2007 | 13,976 | 14,209 | 13,272 |
12/31/2008 | 9,872 | 8,951 | 10,604 |
12/31/2009 | 11,203 | 11,320 | 12,539 |
12/31/2010 | 12,667 | 13,025 | 14,000 |
12/31/2011 | 11,997 | 13,300 | 14,616 |
12/31/2012 | 13,217 | 15,428 | 16,266 |
12/31/2013 | 15,392 | 20,425 | 19,295 |
Federated Managed Tail Risk Fund II - | Service Shares | S&P 500 | Blended Index |
12/31/2003 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 10,711 | 11,088 | 10,826 |
12/31/2005 | 10,893 | 11,632 | 11,251 |
12/31/2006 | 12,612 | 13,469 | 12,511 |
12/31/2007 | 13,827 | 14,209 | 13,272 |
12/31/2008 | 9,725 | 8,951 | 10,604 |
12/31/2009 | 11,016 | 11,320 | 12,539 |
12/31/2010 | 12,448 | 13,025 | 14,000 |
12/31/2011 | 11,763 | 13,300 | 14,616 |
12/31/2012 | 12,942 | 15,428 | 16,266 |
12/31/2013 | 15,027 | 20,425 | 19,295 |
1 | The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 has been adjusted to reflect reinvestment of dividends on securities in the index or average. |
2 | The S&P 500 is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Barclays U.S. Aggregate Bond index 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-throughs), asset-backed securities and commercial mortgage-backed securities. The indexes are 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 indexes are unmanaged and, unlike the Fund, are not affected by cash flows. It is not possible to invest directly in an index. |
Sector | Percentage of Total Net Assets |
Securities Sold Short | (2.9)% |
Derivative Contracts—Short (notional value)2 | (1.5)% |
Domestic Equity Securities | 37.7% |
International Equity Securities | 25.8% |
U.S. Treasury Securities | 11.1% |
Trade Finance Agreements | 7.6% |
Domestic Fixed-Income Securities | 3.7% |
International Fixed-Income Securities | 1.6% |
U.S. Government Agency Mortgage-Backed Securities | 1.5% |
U.S. Government Agency Securities | 0.4% |
Foreign Governments/Agencies | 0.3% |
Non-Agency Mortgage-Backed Securities | 0.3% |
Asset-Backed Securities | 0.1% |
Floating Rate Loan3 | 0.0% |
Adjustment for Derivative Contracts (notional value)2 | 1.4% |
Derivative Contracts3,4 | (0.0)% |
Other Security Types5 | 2.0% |
Cash Equivalents6 | 8.4% |
Other Assets and Liabilities—Net7 | 2.5% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus for a description of the principal types of securities in which the Fund invests. 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. |
2 | Represents the notional value of S&P 500 futures contracts held by the Federated Prudent Bear Fund. |
3 | Represents less than 0.1%. |
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 | Other Security Types consist of exchange-traded funds and purchased put options. |
6 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. |
7 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
Shares or Principal Amount | Value | ||
INVESTMENT COMPANIES—91.2%1 | |||
22,938 | Emerging Markets Fixed Income Core Fund | $762,574 | |
767,853 | Federated Clover Small Value Fund, Institutional Shares | 19,941,131 | |
2,596,500 | Federated Equity Income Fund, Inc., Institutional Shares | 61,952,489 | |
918,379 | Federated Inflation-Protected Securities Core Fund | 9,679,719 | |
605,828 | Federated InterContinental Fund, Institutional Shares | 32,720,795 | |
663,449 | Federated Intermediate Corporate Bond Fund, Institutional Shares | 6,289,500 | |
357,898 | Federated Mortgage Core Portfolio | 3,475,190 | |
1,618,369 | Federated Project and Trade Finance Core Fund | 15,665,814 | |
3,599,066 | Federated Prudent Bear Fund, Institutional Shares | 9,609,506 | |
178,067 | Federated U.S. Gov't Securities Fund: 2-5 Years, Institutional Shares | 1,971,204 | |
281,058 | High Yield Bond Portfolio | 1,860,605 | |
TOTAL INVESTMENT COMPANIES (IDENTIFIED COST $160,528,928) | 163,928,527 | ||
CORPORATE BONDS—0.2% | |||
25,000 | Advance Auto Parts, Inc., 4.500%, 12/01/2023 | 24,997 | |
60,000 | Altria Group, Inc., Sr. Unsecd. Note, 4.000%, 01/31/2024 | 58,666 | |
22,000 | Carpenter Technology Corp., Sr. Unsecd. Note, 4.450%, 03/01/2023 | 21,116 | |
50,000 | 2,3 | Embraer Overseas Ltd., Sr. Unsecd. Note, Series 144A, 5.696%, 09/16/2023 | 50,250 |
40,000 | Energy Transfer Partners LP, Sr. Unsecd. Note, 4.900%, 02/01/2024 | 40,621 | |
50,000 | Exelon Generation Co. LLC, Sr. Unsecd. Note, 4.250%, 06/15/2022 | 47,935 | |
50,000 | ProLogis LP, Sr. Unsecd. Note, 3.350%, 02/01/2021 | 48,570 | |
125,000 | Verizon Communications, Inc., Sr. Unsecd. Note, 5.150%, 09/15/2023 | 134,257 | |
TOTAL CORPORATE BONDS (IDENTIFIED COST $420,020) | 426,412 | ||
EXCHANGE-TRADED FUND—2.0% | |||
137,804 | 4 | PowerShares DB Commodity Index Tracking Fund (IDENTIFIED COST $3,894,851) | 3,534,673 |
REPURCHASE AGREEMENT—6.7% | |||
11,990,000 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845. (AT COST) | 11,990,000 | |
TOTAL INVESTMENTS—100.1% (IDENTIFIED COST $176,833,799)5 | 179,879,612 | ||
OTHER ASSETS AND LIABILITIES - NET—(0.1)%6 | (120,752) | ||
TOTAL NET ASSETS—100% | $179,758,860 |
Description | Number of Contracts | Notional Value | Expiration Date | Unrealized Depreciation |
4United States Ultra Bond Long Futures | 6 | $817,500 | March 2014 | $(11,499) |
1 | Affiliated holdings. |
2 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2013, this restricted security amounted to $50,250, which represented 0.0% of total net assets. |
3 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees (the “Trustees”). At December 31, 2013, this liquid restricted security amounted to $50,250, which represented 0.0% of total net assets. |
4 | Non-income-producing security. |
5 | The cost of investments for federal tax purposes amounts to $176,822,296. |
6 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Valuation Inputs | ||||
Level 1— Quoted Prices and Investments in Certain Investment Companies | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Investment Companies1 | $148,262,713 | $15,665,814 | $— | $163,928,527 |
Corporate Bonds | — | 426,412 | — | 426,412 |
Exchange-Traded Fund | 3,534,673 | — | — | 3,534,673 |
Repurchase Agreement | — | 11,990,000 | — | 11,990,000 |
TOTAL SECURITIES | $151,797,386 | $28,082,226 | $— | $179,879,612 |
OTHER FINANCIAL INSTRUMENTS2 | $(11,499) | $— | $— | $(11,499) |
1 | Emerging Markets Fixed Income Core Fund, Federated Inflation-Protected Securities Core Fund, Federated Mortgage Core Portfolio, High Yield Bond Portfolio and Federated Project and Trade Finance Core Fund are affiliated holdings offered only to registered investment companies and other accredited investors. |
2 | Other financial instruments include futures contracts. |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $6.25 | $6.02 | $6.40 | $5.72 | $5.10 |
Income From Investment Operations: | |||||
Net investment income | 0.111 | 0.07 | 0.04 | 0.04 | 0.051 |
Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions | 0.91 | 0.54 | (0.38) | 0.70 | 0.63 |
TOTAL FROM INVESTMENT OPERATIONS | 1.02 | 0.61 | (0.34) | 0.74 | 0.68 |
Less Distributions: | |||||
Distributions from net investment income | (0.07) | (0.03) | (0.04) | (0.06) | (0.06) |
Distributions from net realized gain on investments, futures contracts and foreign currency transactions | (0.14) | (0.35) | — | — | — |
TOTAL DISTRIBUTIONS | (0.21) | (0.38) | (0.04) | (0.06) | (0.06) |
Net Asset Value, End of Period | $7.06 | $6.25 | $6.02 | $6.40 | $5.72 |
Total Return2 | 16.45% | 10.17% | (5.29)% | 13.07% | 13.48% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.50% | 1.04%3 | 1.13%3 | 1.18%3 | 1.18%3 |
Net investment income | 1.62% | 0.99% | 0.86% | 0.67% | 0.97% |
Expense waiver/reimbursement4 | 0.53% | 0.01% | 0.03% | 0.17% | 0.23% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $169,658 | $165,598 | $176,315 | $72,320 | $60,961 |
Portfolio turnover | 137% | 103% | 229% | 260% | 274% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or inconnection with any variable annuity or variable life insurance contract. |
3 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios were 1.04%, 1.13%, 1.18% and 1.12% for the years ended December 31, 2012, 2011, 2010 and 2009, respectively, after taking into account these expense reductions. |
4 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $6.26 | $6.02 | $6.40 | $5.71 | $5.08 |
Income From Investment Operations: | |||||
Net investment income | 0.141 | 0.06 | 0.04 | 0.02 | 0.031 |
Net realized and unrealized gain (loss) on investments, futures contracts and foreign currency transactions | 0.86 | 0.55 | (0.39) | 0.72 | 0.64 |
TOTAL FROM INVESTMENT OPERATIONS | 1.00 | 0.61 | (0.35) | 0.74 | 0.67 |
Less Distributions: | |||||
Distributions from net investment income | (0.05) | (0.02) | (0.03) | (0.05) | (0.04) |
Distributions from net realized gain on investments, futures contracts and foreign currency transactions | (0.14) | (0.35) | — | — | — |
TOTAL DISTRIBUTIONS | (0.19) | (0.37) | (0.03) | (0.05) | (0.04) |
Net Asset Value, End of Period | $7.07 | $6.26 | $6.02 | $6.40 | $5.71 |
Total Return2 | 16.11% | 10.03% | (5.51)% | 13.01% | 13.27% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.75% | 1.29%3 | 1.40%3 | 1.43%3 | 1.43%3 |
Net investment income | 2.01% | 0.73% | 0.42% | 0.45% | 0.68% |
Expense waiver/reimbursement4 | 0.54% | 0.01% | 0.03% | 0.18% | 0.23% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $10,101 | $4,146 | $4,781 | $7,296 | $4,756 |
Portfolio turnover | 137% | 103% | 229% | 260% | 274% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or inconnection with any variable annuity or variable life insurance contract. |
3 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios were 1.29%, 1.40%, 1.43% and 1.37% for the years ended December 31, 2012, 2011, 2010 and 2009, respectively, after taking into account these expense reductions. |
4 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
December 31, 2013
Assets: | ||
Total investment in securities, at value including $163,928,527 of investment in affiliated holdings (Note 5) (identified cost $176,833,799) | $179,879,612 | |
Cash | 111,014 | |
Cash denominated in foreign currencies (identified cost $57) | 57 | |
Restricted cash (Note 2) | 22,950 | |
Income receivable | 4,419 | |
Receivable for shares sold | 273,606 | |
TOTAL ASSETS | 180,291,658 | |
Liabilities: | ||
Payable for investments purchased | $71,999 | |
Payable for shares redeemed | 389,623 | |
Payable for daily variation margin | 4,875 | |
Payable for Directors'/Trustees' fees (Note 5) | 289 | |
Payable for auditing fees | 25,000 | |
Payable for distribution services fee (Note 5) | 1,609 | |
Payable for printing and postage | 18,895 | |
Accrued expenses (Note 5) | 20,508 | |
TOTAL LIABILITIES | 532,798 | |
Net assets for 25,445,603 shares outstanding | $179,758,860 | |
Net Assets Consist of: | ||
Paid-in capital | $148,609,024 | |
Net unrealized appreciation of investments and futures contracts | 3,034,314 | |
Accumulated net realized gain on investments, futures contracts and foreign currency transactions | 24,812,357 | |
Undistributed net investment income | 3,303,165 | |
TOTAL NET ASSETS | $179,758,860 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||
Primary Shares: | ||
$169,657,890 ÷ 24,016,718 shares outstanding, no par value, unlimited shares authorized | $7.06 | |
Service Shares: | ||
$10,100,970 ÷ 1,428,885 shares outstanding, no par value, unlimited shares authorized | $7.07 |
Year Ended December 31, 2013
Investment Income: | ||
Dividends (including $3,366,510 received from affiliated holdings (Note 5) and net of foreign taxes withheld of $230) | $3,723,773 | |
Investment income allocated from affiliated partnership (Note 5) | 35,354 | |
Interest | 11,227 | |
TOTAL INCOME | 3,770,354 | |
Expenses: | ||
Investment adviser fee (Note 5) | $1,403,891 | |
Administrative fee (Note 5) | 137,222 | |
Custodian fees | 10,360 | |
Transfer agent fee | 19,742 | |
Directors'/Trustees' fees (Note 5) | 2,073 | |
Auditing fees | 25,000 | |
Legal fees | 8,905 | |
Portfolio accounting fees | 59,777 | |
Distribution services fee (Note 5) | 11,678 | |
Printing and postage | 141,570 | |
Insurance premiums (Note 5) | 4,356 | |
Miscellaneous (Note 5) | 5,042 | |
TOTAL EXPENSES | 1,829,616 | |
Waiver/reimbursement of investment adviser fee (Note 5) | (932,377) | |
Net expenses | 897,239 | |
Net investment income | 2,873,115 | |
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts and Foreign Currency Transactions: | ||
Net realized gain on investments (including realized gain of $4,258,133 on sales of investments in affiliated holdings (Note 5)) | 38,357,876 | |
Net realized loss on futures contracts | (21,477) | |
Net realized loss on investments and foreign currency transactions allocated from affiliated partnership (Note 5) | (1,056) | |
Realized gain distribution from affiliated investment company shares (Note 5) | 3,042,265 | |
Net change in unrealized appreciation of investments and translation of assets and liabilities in foreign currency | (17,397,359) | |
Net change in unrealized depreciation of futures contracts | (11,499) | |
Net realized and unrealized gain on investments, futures contracts and foreign currency transactions | 23,968,750 | |
Change in net assets resulting from operations | $26,841,865 |
Year Ended December 31 | 2013 | 2012 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $2,873,115 | $1,777,759 |
Net realized gain on investments, including allocation from partnership, futures contracts and foreign currency transactions | 41,377,608 | 8,552,414 |
Net change in unrealized appreciation/depreciation of investments, futures contracts and translation of assets and liabilities in foreign currency | (17,408,858) | 7,451,127 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 26,841,865 | 17,781,300 |
Distributions to Shareholders: | ||
Distributions from net investment income | ||
Primary Shares | (1,738,489) | (994,889) |
Service Shares | (32,245) | (12,419) |
Distributions from net realized gain on investments, futures contracts and foreign currency transactions | ||
Primary Shares | (3,555,556) | (10,132,142) |
Service Shares | (90,122) | (282,145) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (5,416,412) | (11,421,595) |
Share Transactions: | ||
Proceeds from sale of shares | 9,092,687 | 4,318,826 |
Net asset value of shares issued to shareholders in payment of distributions declared | 5,416,412 | 11,421,595 |
Cost of shares redeemed | (25,919,266) | (33,452,791) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (11,410,167) | (17,712,370) |
Change in net assets | 10,015,286 | (11,352,665) |
Net Assets: | ||
Beginning of period | 169,743,574 | 181,096,239 |
End of period (including undistributed net investment income of $3,303,165 and $1,770,114, respectively) | $179,758,860 | $169,743,574 |
■ | 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. |
■ | Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Fixed-income securities and repurchase agreements acquired with remaining maturities of 60 days or less are valued at their amortized cost (adjusted for the accretion of any discount or amortization of any premium), unless the issuer's creditworthiness is impaired or other factors indicate that amortized cost is not an accurate estimate of the investment's fair value, in which case it would be valued in the same manner as a longer-term security. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, 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 and public trading in similar securities of the issuer or comparable issuers. |
■ | With respect to securities traded 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; and |
■ | Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
Fair Value of Derivative Instruments | ||
Liability | ||
Statement of Assets and Liabilities Location | Fair Value | |
Derivatives not accounted for as hedging instruments under ASC Topic 815 | ||
Interest rate contracts | Payable for daily variation margin | $11,499* |
* | Includes cumulative depreciation 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 | |
Futures | |
Interest rate contracts | $(21,477) |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |
Futures | |
Interest rate contracts | $(11,499) |
Year Ended December 31 | 2013 | 2012 | ||
Primary Shares: | Shares | Amount | Shares | Amount |
Shares sold | 349,190 | $2,368,858 | 612,502 | $3,811,242 |
Shares issued to shareholders in payment of distributions declared | 800,915 | 5,294,045 | 1,749,533 | 11,127,031 |
Shares redeemed | (3,617,118) | (24,434,809) | (5,159,421) | (31,874,303) |
NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | (2,467,013) | $(16,771,906) | (2,797,386) | $(16,936,030) |
Year Ended December 31 | 2013 | 2012 | ||
Service Shares: | Shares | Amount | Shares | Amount |
Shares sold | 965,815 | $6,723,829 | 79,189 | $507,584 |
Shares issued to shareholders in payment of distributions declared | 18,457 | 122,367 | 46,242 | 294,564 |
Shares redeemed | (218,021) | (1,484,457) | (256,628) | (1,578,488) |
NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | 766,251 | $5,361,739 | (131,197) | $(776,340) |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | (1,700,762) | $(11,410,167) | (2,928,583) | $(17,712,370) |
Increase (Decrease) | ||
Paid-In Capital | Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$(11,174) | $430,670 | $(419,496) |
2013 | 2012 | |
Ordinary income1 | $1,770,734 | $1,007,308 |
Long-term capital gain | $3,645,678 | $10,414,287 |
1 | For tax purposes, short-term capital gain distributions are treated as ordinary income distributions. |
Undistributed ordinary income2 | $17,573,615 |
Undistributed long-term capital gains | $22,062,505 |
Net unrealized appreciation | $3,057,316 |
Capital loss carryforwards | $(11,543,600) |
2 | For tax purposes, short-term capital gains are considered ordinary income in determining distributable earnings. |
Expiration Year | Short-Term | Long-Term | Total |
2016 | $9,283,935 | NA | $9,283,935 |
2017 | $2,259,665 | NA | $2,259,665 |
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 |
Primary Shares | 0.25% |
Service Shares | 0.25% |
Distribution Services Fees Incurred | |
Service Shares | $11,678 |
Balance of Shares Held 12/31/2012 | Purchases/ Additions | Sales/ Reductions | Balance of Shares Held 12/31/2013 | Value | Dividend Income/ Allocated Investment Income | Capital Gain Distributions/ Allocated Net Realized Gain (Loss) | |
Emerging Markets Fixed Income Core Fund | — | 36,036 | (13,098) | 22,938 | $762,574 | $35,354 | $(1,056) |
Federated Clover Small Value Fund, Institutional Shares | — | 935,676 | (167,823) | 767,853 | $19,941,131 | $243,685 | $938,636 |
Federated Equity Income Fund, Inc., Institutional Shares | — | 2,727,307 | (130,807) | 2,596,500 | $61,952,489 | $458,981 | $1,476,939 |
Federated Inflation-Protected Securities Core Fund | — | 1,436,876 | (518,497) | 918,379 | $9,679,719 | $126,409 | $— |
Federated InterContinental Fund, Institutional Shares | — | 734,414 | (128,586) | 605,828 | $32,720,795 | $483,795 | $— |
Federated Intermediate Corporate Bond Fund, Institutional Shares | ��� | 865,654 | (202,205) | 663,449 | $6,289,500 | $252,061 | $411,925 |
Federated Mortgage Core Portfolio | — | 616,937 | (259,039) | 357,898 | $3,475,190 | $106,387 | $— |
Federated Project and Trade Finance Core Fund | — | 1,618,369 | — | 1,618,369 | $15,665,814 | $598,224 | $37,736 |
Federated Prudent Bear Fund, Institutional Shares | — | 4,067,421 | (468,355) | 3,599,066 | $9,609,506 | $— | $— |
Federated Strategic Value Dividend Fund, Institutional Shares | — | 6,444,881 | (6,444,881) | — | $— | $952,872 | $138,567 |
Federated U.S. Gov't Securities Fund 2-5 Years, Institutional Shares | — | 332,908 | (154,841) | 178,067 | $1,971,204 | $23,834 | $16,539 |
High Yield Bond Portfolio | — | 365,505 | (84,447) | 281,058 | $1,860,605 | $120,262 | $21,923 |
TOTAL OF AFFILIATED TRANSACTIONS | — | 20,181,984 | (8,572,579) | 11,609,405 | $163,928,527 | $3,401,864 | $3,041,209 |
Purchases | $235,112,803 |
Sales | $228,258,667 |
February 14, 2014
Beginning Account Value 7/1/2013 | Ending Account Value 12/31/2013 | Expenses Paid During Period1 | |
Actual: | |||
Primary Shares | $1,000 | $1,076.20 | $2.042 |
Service Shares | $1,000 | $1,074.50 | $3.35 |
Hypothetical (assuming a 5% return before expenses): | |||
Primary Shares | $1,000 | $1,023.24 | $1.992 |
Service Shares | $1,000 | $1,021.98 | $3.26 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The expenses shown in the table do not include the charges and expenses imposed by the insurance company under the variable insurance product contract. Please refer to the variable insurance product prospectus for a complete listing of these expenses. The annualized net expense ratios are as follows: |
Primary Shares | 0.39% |
Service Shares | 0.64% |
2 | Actual and Hypothetical expenses paid during the period utilizing the Fund's Primary Shares current Fee Limit of 0.35% (as reflected in the Notes to Financial Statements, Note 5 under “Expense Limitation”), multiplied by the average account value over the period, multiplied by 184/365 (to reflect expenses paid as if they had been in effect throughout the most recent one-half-year period) would be $1.83 and $1.79, respectively. |
Name | For | Withheld |
John T. Collins | 300,523,736.140 | 11,005,188.385 |
Maureen Lally-Green | 300,308,651.177 | 11,220,273.348 |
Thomas M. O'Neill | 300,886,250.634 | 10,642,673.891 |
P. Jerome Richey | 300,662,760.971 | 10,866,163.554 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: October 1993 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
J. Christopher Donahue* Birth Date: April 11, 1949 Trustee Began serving: October 1993 | 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, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); 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. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust 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 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: October 1993 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: November 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: 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); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee 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. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: September 1993 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
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 Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; 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 President Officer since: September 1993 | 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. |
John B. Fisher Birth Date: May 16, 1956 President Officer since: November 2004 | Principal Occupations: 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 and CEO of Passport Research, Ltd.; President of some of the Funds in the Federated Fund Family; 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; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc.; President, Technology, Federated Services Company. |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | 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. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Stephen F. Auth Birth Date: September 3, 1956 450 Lexington Avenue Suite 3700 New York, NY 10017-3943 CHIEF INVESTMENT OFFICER Officer since: November 2002 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
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. |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Following a review and recommendation of approval by the Fund's independent trustees, the Fund's Board reviewed and approved at its May 2013 meetings the Fund's investment advisory contract for an additional one-year term. The Board's decision regarding the contract reflects the exercise of its business judgment on whether to continue the existing arrangements.
The Board also received financial information about Federated, including information regarding the compensation and benefits Federated derived from its relationships with the Federated funds. This information covered not only the fees under the advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated funds under separate contracts (e.g., for serving as the Federated funds' administrator). The information also detailed any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated fund trades. In addition, the Board considered the fact that, in order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to fund investors and/or indicated to the Board their intention to do so in the future, where appropriate. Moreover, the Board receives regular reporting as to the institution, adjustment or elimination of these voluntary waivers. In this regard, the Senior Officer proposed, and the Board approved, a reduction in the contractual advisory fee of 10 basis points. This change more closely aligned the contractual fee with the net fee actually charged after the imposition of applicable voluntary waivers and was believed by both the Senior Officer and the Board to improve the market competitiveness of the Fund.
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 313916819
2014 ©Federated Investors, Inc.
1 | 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. 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. |
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 S&P 500 Index. |
3 | The Nasdaq Composite Index is an index that measures all Nasdaq domestic and non-U.S.-based common stocks listed on the Nasdaq stock market. The index is unmanaged, and it is not possible to invest directly in an index. |
4 | Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. |
5 | There are no guarantees that dividend-paying stocks will continue to pay dividends. In addition, dividend-paying stocks may not experience the same capital appreciation potential as non-dividend-paying stocks. |
6 | The Fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities or other traditional instruments. |
7 | 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. |
8 | 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. |
9 | International investing involves special risks including currency risk, increased volatility, political risks and differences in auditing and other financial standards. Prices of emerging markets 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. |
10 | Investment-grade securities are securities that are rated at least “BBB- (minus)” or unrated securities of a comparable quality. Noninvestment-grade securities are securities that are not rated at least “BBB- (minus)” or unrated securities of a comparable quality. Credit ratings are an indication of the risk that a security will default. They do not protect a security from credit risk. Lower-rated bonds typically offer higher yields to help compensate investors for the increased risk associated with them. Among these risks are lower credit-worthiness, greater price volatility, more risk to principal and income than with higher-rated securities and increased possibilities of default. |
11 | The value of some mortgage-backed securities may be particularly sensitive to changes in the 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. |
Average Annual Total Returns for the Period Ended 12/31/2013 | |
1 Year | 21.74% |
5 Years | 15.80% |
10 Years | 8.83% |
Federated Managed Volatility Fund II | S&P 500 | R1000V | Blended Index | |
12/31/2003 | 10,000 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 10,992 | 11,088 | 11,649 | 10,757 |
12/31/2005 | 11,683 | 11,632 | 12,470 | 12,238 |
12/31/2006 | 13,510 | 13,469 | 15,245 | 12,762 |
12/31/2007 | 14,056 | 14,209 | 15,219 | 9,517 |
12/31/2008 | 11,191 | 8,951 | 9,611 | 12,477 |
12/31/2009 | 14,356 | 11,320 | 11,503 | 13,825 |
12/31/2010 | 16,091 | 13,025 | 13,287 | 14,596 |
12/31/2011 | 16,859 | 13,300 | 13,339 | 16,738 |
12/31/2012 | 19,143 | 15,428 | 15,675 | 18,875 |
12/31/2013 | 23,305 | 20,425 | 20,774 | 21,285 |
1 | The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500, R1000V and the Blended Index have been adjusted to reflect reinvestment of dividends on securities in the indexes and average. |
2 | The S&P 500 is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. |
3 | The S&P 500, R1000V and the Blended Index are not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission 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 | The Russell 1000® Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000® Index companies with lower price-to-book ratios and lower expected growth values. The R1000V is constructed to provide a comprehensive and unbiased barometer for the large-cap value segment. The R1000V is completely reconstituted annually to ensure new and growing equities are included and that the represented companies continue to reflect value characteristics. The BEMB tracks total returns for external-currency-denominated debt instruments of the emerging markets. The BHY2%ICI is an issuer-constrained version of the 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 BMB covers agency mortgage-backed pass-through securities (both fixed-rate and hybrid ARM) issued by Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC). |
Portfolio Composition | Percentage of Total Net Assets |
Domestic Fixed-Income Securities | 30.5% |
Domestic Equity Securities | 26.2% |
International Fixed-Income Securities | 19.8% |
International Equity Securities | 14.8% |
U.S. Treasury Securities | 2.6% |
Derivative Contracts2 | 1.3% |
Cash Equivalents3 | 7.4% |
Other Assets and Liabilities—Net4 | (2.6)% |
TOTAL | 100.0% |
Sector Composition of Equity Holdings | Percentage of Equity Securities |
Energy | 20.1% |
Consumer Discretionary | 13.6% |
Financials | 13.6% |
Industrials | 13.2% |
Utilities | 11.3% |
Health Care | 8.2% |
Consumer Staples | 5.9% |
Information Technology | 5.8% |
Telecommunication Services | 5.7% |
Materials | 2.6% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus and Statement of Additional Information for a description of the types of securities in which the Fund invests. 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. |
2 | 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. |
3 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. |
4 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
5 | Sector classifications are based upon, and individual portfolio securities are assigned to, the classifications of the Global Industry Classification Standard (GICS) except that the Adviser assigns a classification to securities not classified by the GICS and to securities for which the Adviser does not have access to the classification made by the GICS. |
Shares or Principal Amount | Value | ||
COMMON STOCKS—29.5% | |||
Consumer Discretionary—2.1% | |||
24,220 | Corus Entertainment, Inc., Class B | $586,433 | |
59,495 | Gannett Co., Inc. | 1,759,862 | |
38,900 | Garmin Ltd. | 1,797,958 | |
135,740 | Regal Entertainment Group | 2,640,143 | |
49,450 | Six Flags Entertainment Corp. | 1,820,749 | |
52,440 | Staples, Inc. | 833,272 | |
TOTAL | 9,438,417 | ||
Consumer Staples—2.4% | |||
83,801 | Altria Group, Inc. | 3,217,120 | |
11,630 | Imperial Tobacco Group PLC | 450,268 | |
44,405 | Lorillard, Inc. | 2,250,446 | |
36,213 | Philip Morris International, Inc. | 3,155,239 | |
36,465 | Reynolds American, Inc. | 1,822,885 | |
TOTAL | 10,895,958 | ||
Energy—7.5% | |||
30,943 | ARC Resources Ltd. | 861,365 | |
57,640 | BP PLC, ADR | 2,801,880 | |
47,565 | Baytex Energy Corp. | 1,864,539 | |
69,947 | Bonavista Energy Corp. | 916,604 | |
37,010 | ConocoPhillips | 2,614,757 | |
73,610 | Crescent Point Energy Corp. | 2,858,473 | |
34,910 | ENI SpA, ADR | 1,692,786 | |
19,013 | HollyFrontier Corp. | 944,756 | |
22,950 | Kinder Morgan, Inc. | 826,200 | |
419,107 | Pengrowth Energy Corp. | 2,592,170 | |
60,575 | Royal Dutch Shell PLC | 4,317,180 | |
154,700 | Ship Finance International Ltd. | 2,533,986 | |
96,413 | Total SA, ADR | 5,907,225 | |
27,555 | Transocean Ltd. | 1,361,768 | |
28,166 | Vermilion Energy, Inc. | 1,653,236 | |
TOTAL | 33,746,925 | ||
Financials—3.8% | |||
98,220 | Ares Capital Corp. | 1,745,369 | |
35,630 | Bank of Montreal | 2,375,096 | |
118,840 | Hospitality Properties Trust | 3,212,245 | |
32,515 | Mercury General Corp. | 1,616,321 | |
156,900 | Old Republic International Corp. | 2,709,663 | |
33,142 | Progressive Corp. Ohio | 903,782 | |
112,165 | Sun Life Financial Services of Canada | 3,962,790 | |
18,735 | Validus Holdings Ltd. | 754,833 | |
1 | Wintrust Financial Corp. | 36 | |
TOTAL | 17,280,135 | ||
Health Care—3.4% | |||
60,712 | AstraZeneca Group PLC, ADR | 3,604,471 | |
22,525 | GlaxoSmithKline PLC, ADR | 1,202,610 | |
42,900 | Lilly (Eli) & Co. | 2,187,900 |
Shares or Principal Amount | Value | ||
COMMON STOCKS—continued | |||
Health Care—continued | |||
63,089 | Merck & Co., Inc. | $3,157,605 | |
164,094 | Pfizer, Inc. | 5,026,199 | |
TOTAL | 15,178,785 | ||
Industrials—4.0% | |||
25,895 | BAE Systems PLC, ADR | 758,465 | |
37,050 | Deluxe Corp. | 1,933,639 | |
54,545 | Donnelley (R.R.) & Sons Co. | 1,106,173 | |
29,005 | General Electric Co. | 813,010 | |
22,405 | Lockheed Martin Corp. | 3,330,727 | |
41,235 | Pitney Bowes, Inc. | 960,775 | |
32,510 | Siemens AG, ADR | 4,502,960 | |
204,973 | 1 | Swift Transportation Co. | 4,552,449 |
TOTAL | 17,958,198 | ||
Information Technology—1.5% | |||
26,670 | CA, Inc. | 897,446 | |
61,135 | Cisco Systems, Inc. | 1,372,481 | |
21,170 | Intel Corp. | 549,573 | |
6,510 | KLA-Tencor Corp. | 419,635 | |
11,660 | Lexmark International, Inc. | 414,163 | |
35,095 | Microsoft Corp. | 1,313,606 | |
34,534 | Seagate Technology | 1,939,429 | |
TOTAL | 6,906,333 | ||
Materials—0.5% | |||
26,787 | LyondellBasell Industries NV, Class A | 2,150,460 | |
Telecommunication Services—2.3% | |||
35,064 | AT&T, Inc. | 1,232,850 | |
36,330 | BCE, Inc. | 1,572,726 | |
62,750 | CenturyLink, Inc. | 1,998,588 | |
184,940 | Frontier Communications Corp. | 859,971 | |
25,435 | Verizon Communications | 1,249,876 | |
93,238 | Vodafone Group PLC, ADR | 3,665,186 | |
TOTAL | 10,579,197 | ||
Utilities—2.0% | |||
79,475 | Ameren Corp. | 2,873,816 | |
12,100 | DTE Energy Co. | 803,319 | |
56,017 | National Grid PLC, ADR | 3,659,031 | |
129,499 | Northland Power, Inc. | 1,887,168 | |
TOTAL | 9,223,334 | ||
TOTAL COMMON STOCKS (IDENTIFIED COST $112,893,787) | 133,357,742 | ||
PREFERRED STOCKS—11.4% | |||
Consumer Discretionary—3.5% | |||
107,395 | 2,3 | ANF, Issued by Royal Bank of Canada, ELN, 17.83%, 5/21/2014 | 3,484,968 |
85,374 | 2,3 | BBY, Issued by Bank of America, ELN, 0.00%, 5/23/2014 | 3,442,706 |
37,255 | 2,3 | GME, Issued By JPMorgan Chase & Co, ELN, 20.00%, 6/24/2014 | 1,830,711 |
46,789 | Goodyear Tire & Rubber Co., Conv. Pfd., 5.875%, 4/1/2014, Annual Dividend $2.94 | 3,127,844 | |
23,679 | 2,3 | WHR, Issued by JPMorgan Chase & Co., ELN, 13.05%, 6/20/2014 | 3,697,239 |
TOTAL | 15,583,468 |
Shares or Principal Amount | Value | ||
PREFERRED STOCKS—continued | |||
Energy—0.8% | |||
58,313 | 2,3 | TSO, Issued by Royal Bank of Canada, ELN, 17.50%, 5/21/2014 | $3,410,727 |
Financials—1.7% | |||
750 | Bank of America, Series L, Pfd,7.25%, 12/31/2049, Annual Dividend $72.50 | 795,750 | |
84,809 | Metlife, Inc., Conv. Pfd., 5.00%, 3/26/2014, Annual Dividend $1.25 | 2,674,876 | |
18,300 | New York Community Cap Trust V, Conv. Pfd, 6.00%, 11/01/2051, Annual Dividend $3.00 | 900,177 | |
3,100 | Wells Fargo Co., Series L, Pfd., 7.50%, 12/31/2049, Annual Dividend $75.00 | 3,425,500 | |
TOTAL | 7,796,303 | ||
Industrials—1.4% | |||
51,900 | Continental Finance Trust II, Conv. Pfd., 6.00%, 11/15/2030, Annual Dividend $3.00 | 2,538,720 | |
59,231 | United Technologies Corp, Conv. Pfd., 7.50%, 8/1/2015, Annual Dividend $3.75 | 3,877,853 | |
TOTAL | 6,416,573 | ||
Information Technology—0.8% | |||
41,800 | Unisys Corp., Conv. Pfd,, Conv. Pfd., 6.25%, 3/1/2014, Annual Dividend $6.25 | 3,732,322 | |
Materials—0.6% | |||
103,005 | ArcelorMittal, Conv. Bond, Pfd., Series MTUS, 6.00%, 1/15/2016, Annual Dividend $1.50 | 2,678,130 | |
Utilities—2.6% | |||
67,765 | AES Trust III, Conv. Pfd., 6.75%, 10/15/2029, Annual Dividend $3.38 | 3,400,448 | |
49,275 | Dominion Resources, Inc., Conv. Pfd., Series B, 6.00%, 7/1/2016, Annual Dividend $3.00 | 2,671,198 | |
45,000 | NextEra Energy, Inc., Conv. Pfd., 5.889%, 9/1/2015, Annual Dividend $2.94 | 2,548,350 | |
58,700 | PPL Corp., Conv. Pfd., 8.75%, 05/01/2014, Annual Dividend $4.38 | 3,104,056 | |
TOTAL | 11,724,052 | ||
TOTAL PREFERRED STOCKS (IDENTIFIED COST $47,345,976) | 51,341,575 | ||
COMMERCIAL MORTGAGE-BACKED SECURITY—0.2% | |||
Agency Commercial Mortgage-Backed Security—0.2% | |||
$1,050,000 | 2,3 | FREMF Mortgage Trust 2013-K25, B, 3.742%, 11/25/2045 (IDENTIFIED COST $1,061,233) | 963,509 |
ADJUSTABLE RATE MORTGAGE—0.0% | |||
23,574 | Federal National Mortgage Association, 5.770%, 9/1/2037 (IDENTIFIED COST $23,743) | 24,956 | |
ASSET-BACKED SECURITY—0.1% | |||
225,000 | Santander Drive Auto Receivables Trust 2013-1, D, 2.270%, 1/15/2019 (IDENTIFIED COST $224,972) | 226,650 | |
COLLATERALIZED MORTGAGE OBLIGATIONS—2.2% | |||
1,000,000 | Citigroup Commercial Mortgage Trust 2013-GC11 B, 3.732%, 4/10/2046 | 946,601 | |
370,000 | Commercial Mortgage Pass-Through Certificates 2012-CR1 AM, 3.912%, 5/15/2045 | 368,086 | |
585,000 | Commercial Mortgage Pass-Through Certificates 2012-CR1 B, 4.612%, 5/15/2045 | 596,439 | |
55,000 | Commercial Mortgage Pass-Through Certificates 2012-LC4 B, 4.934%, 12/10/2044 | 57,863 | |
1,050,000 | 2,3 | Commercial Mortgage Trust 2013-CR8 B, 3.971%, 6/10/2046 | 1,014,094 |
1,000,000 | 2,3 | DBUBS Mortgage Trust 2011-LC2A A4, 4.537%, 7/10/2044 | 1,068,827 |
771,970 | Federal National Mortgage Association REMIC 2006-117 GF, 0.515%, 12/25/2036 | 770,507 | |
631,667 | Federal National Mortgage Association REMIC 2012-1 F, 0.615%, 2/25/2042 | 632,794 | |
525,000 | GS Mortgage Securities Corp. II 2012-GCJ7 AS, 4.085%, 5/10/2045 | 532,553 | |
630,000 | GS Mortgage Securities Corp. II 2012-GCJ7 B, 4.74%, 5/10/2045 | 651,541 | |
1,000,000 | 2,3 | JPMorgan Chase Commercial Mortgage Securities 2011-C3A A4, 4.717%, 2/15/2046 | 1,078,133 |
460,000 | Morgan Stanley Capital I 2007-IQ16 AM, 6.093%, 12/12/2049 | 519,808 | |
590,000 | 2,3 | UBS-Barclays Commercial Mortgage Trust 2013-C6 B, 3.875%, 4/10/2046 | 565,367 |
1,000,000 | UBS-Citigroup Commercial Mortgage Trust 2011-C1 A3, 3.595%, 1/10/2045 | 1,003,038 | |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $10,187,747) | 9,805,651 |
Shares or Principal Amount | Value | ||
CORPORATE BONDS—14.3% | |||
Aerospace/Defense—0.1% | |||
$400,000 | Embraer SA, Sr. Unsecd. Note, 5.150%, 6/15/2022 | $401,000 | |
Automotive—0.4% | |||
200,000 | Hyundai Capital Services, Inc., Series REGS, 3.500%, 9/13/2017 | 206,849 | |
900,000 | 2,3 | Metalsa, Series 144A, 4.900%, 4/24/2023 | 821,250 |
700,000 | 2,3 | NEMAK SA, Series 144A, 5.500%, 2/28/2023 | 687,750 |
TOTAL | 1,715,849 | ||
Banking—1.3% | |||
200,000 | 2,3 | Banco Davivienda SA, Series 144A, 2.950%, 1/29/2018 | 193,500 |
100,000 | Banco de Credito del Peru, Jr. Sub. Note, Series REGS, 9.750%, 11/06/2069 | 115,250 | |
400,000 | Banco Do Brasil SA, 3.875%, 10/10/2022 | 349,000 | |
400,000 | 2,3 | Banco Reservas Rep Domin, Series 144A, 7.000%, 2/01/2023 | 370,000 |
350,000 | BBVA Banco Continental, Series REGS, 5.000%, 8/26/2022 | 350,875 | |
300,000 | Caixa Economica Federal, Series REGS, 2.375%, 11/06/2017 | 279,375 | |
250,000 | ICICI Bank Ltd., Series REGS, 5.750%, 11/16/2020 | 258,128 | |
400,000 | Korea Development Bank, Sr. Unsecd. Note, 3.500%, 8/22/2017 | 417,819 | |
200,000 | SBERBANK, Series REGS, 5.125%, 10/29/2022 | 192,000 | |
400,000 | 2,3 | Sberbank of Russia, Series 144A, 5.125%, 10/29/2022 | 384,000 |
300,000 | 2,3 | Turkiye Garanti Bankasi A.S., Series 144A, 5.250%, 9/13/2022 | 269,550 |
200,000 | 2,3 | Turkiye Is Bankasi (Isbank), Series 144A, 5.500%, 4/21/2019 | 198,840 |
200,000 | 2,3 | Turkiye Vakiflar Bankasi T.A.O., Series 144A, 5.000%, 10/31/2018 | 195,600 |
800,000 | VTB Bank OJSC, Series REGS, 6.000%, 4/12/2017 | 852,000 | |
400,000 | Vnesheconombank, Bank Guarantee, Series REGS, 6.800%, 11/22/2025 | 420,000 | |
800,000 | 2,3 | Vnesheconombank, Series 144A, 4.224%, 11/21/2018 | 805,000 |
200,000 | 2,3 | Vnesheconombank, Sr. Unsecd. Note, Series 144A, 5.375%, 2/13/2017 | 213,760 |
200,000 | 2,3 | Yapi ve Kredi Bankasi A.S., Series 144A, 5.250%, 12/03/2018 | 194,760 |
TOTAL | 6,059,457 | ||
Beverage & Tobacco—0.2% | |||
450,000 | Ajecorp BV, Series REGS, 6.500%, 5/14/2022 | 448,875 | |
300,000 | 2,3 | Corp Lindley SA, Series 144A, 4.625%, 4/12/2023 | 277,500 |
TOTAL | 726,375 | ||
Brewing—0.0% | |||
250,000 | 2,3 | Anadolu Efes Biracilik ve Malt Sanayii A.S., Series 144A, 3.375%, 11/01/2022 | 200,000 |
Broadcast Radio & TV—0.3% | |||
250,000 | Grupo Televisa S.A., 6.625%, 3/18/2025 | 281,855 | |
400,000 | Grupo Televisa S.A., Sr. Note, 8.500%, 3/11/2032 | 505,062 | |
200,000 | Grupo Televisa S.A., Sr. Unsecd. Note, 6.625%, 1/15/2040 | 213,756 | |
400,000 | TV Azteca SA de CV, Series REGS, 7.500%, 5/25/2018 | 407,000 | |
TOTAL | 1,407,673 | ||
Building & Development—0.3% | |||
400,000 | 2,3 | Odebrecht SA, Company Guarantee, Series 144A, 7.500%, 9/29/2049 | 386,000 |
700,000 | 2,3 | Odebrecht SA, Series 144A, 4.375%, 4/25/2025 | 612,500 |
200,000 | 2,3 | Odebrecht SA, Series 144A, 5.125%, 6/26/2022 | 196,250 |
TOTAL | 1,194,750 | ||
Building Materials—0.1% | |||
250,000 | 2,3 | Rearden G Holdings EINS GmbH, Company Guarantee, Series 144A, 7.875%, 3/30/2020 | 261,250 |
Cable & Wireless Television—0.0% | |||
150,000 | Net Servicos de Comunicacao SA, Company Guarantee, 7.500%, 1/27/2020 | 164,250 | |
Chemicals—0.2% | |||
1,096,000 | Ashland, Inc., Conv. Bond, Series UNIT, 6.500%, 6/30/2029 | 956,260 |
Shares or Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Chemicals & Plastics—0.4% | |||
$700,000 | ALPEK SA DE CV, Series REGS, 4.500%, 11/20/2022 | $666,750 | |
200,000 | 2,3 | Braskem Finance Ltd., Company Guarantee, Series 144A, 5.750%, 4/15/2021 | 197,000 |
200,000 | Braskem Finance Ltd., Series REGS, 5.750%, 4/15/2021 | 197,000 | |
500,000 | 2,3 | Mexichem SA de CV, Series 144A, 4.875%, 9/19/2022 | 491,250 |
300,000 | 2,3 | PTT Global Chemical PCL, Series 144A, 4.250%, 9/19/2022 | 281,592 |
TOTAL | 1,833,592 | ||
Communications - Telecom Wireless—0.0% | |||
200,000 | America Movil S.A.B. de C, Floating Rate Note—Sr. Note, 1.243%, 9/12/2016 | 202,208 | |
Communications - Telecom Wirelines—0.2% | |||
700,000 | Verizon Communications, Inc., Sr. Unsecd. Note, 6.550%, 9/15/2043 | 819,153 | |
Communications Equipment—0.2% | |||
1,796,000 | Liberty Media Group, Conv. Bond, 3.500%, 1/15/2031 | 978,640 | |
Conglomerates—0.2% | |||
400,000 | Hutch Whampoa Int. 12 Ltd., Series REGS, 6.00%, 5/29/2049 | 426,500 | |
300,000 | Voto-Votorantim O/S Trad, Series REGS, 6.625%, 9/25/2019 | 332,250 | |
TOTAL | 758,750 | ||
Consumer Non-Cyclical - Food/Beverage—0.1% | |||
270,000 | 2,3 | Grupo Bimbo SAB de CV, Sr. Unsecd. Note, Series 144A, 4.500%, 1/25/2022 | 268,037 |
Consumer Non-Cyclical - Tobacco—0.2% | |||
680,000 | Lorillard Tobacco Co., Sr. Unsecd. Note, 7.000%, 8/04/2041 | 739,651 | |
Consumer Products—0.1% | |||
350,000 | Fomento Economico Mexicano, SA de C.V., 4.375%, 5/10/2043 | 289,504 | |
Farming & Agriculture—0.0% | |||
200,000 | 2,3 | Kazagro Natl Mgmt Hldng., Series 144A, 4.625%, 5/24/2023 | 184,400 |
Finance—0.1% | |||
300,000 | Gruposura Finance, Company Guarantee, Series REGS, 5.700%, 5/18/2021 | 312,000 | |
Financial Institution - Banking—1.0% | |||
150,000 | Bank of America Corp., Sub. Note, 6.500%, 9/15/2037 | 158,945 | |
1,500,000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 6.250%, 2/01/2041 | 1,728,975 | |
850,000 | J.P. Morgan Chase & Co., Sub. Note, 3.375%, 5/01/2023 | 792,478 | |
650,000 | Merrill Lynch & Co., Inc., Sub. Note, 7.750%, 5/14/2038 | 839,355 | |
450,000 | Morgan Stanley, Sr. Unsecd. Note, Series MTN, 6.250%, 8/09/2026 | 520,321 | |
475,000 | Morgan Stanley, Sub. Note, 4.100%, 5/22/2023 | 459,839 | |
TOTAL | 4,499,913 | ||
Financial Institution - Brokerage—0.2% | |||
400,000 | Jefferies Group, Inc., Sr. Unsecd. Note, 6.250%, 1/15/2036 | 388,000 | |
500,000 | Jefferies Group, Inc., Sr. Unsecd. Note, 6.500%, 1/20/2043 | 495,893 | |
200,000 | Legg Mason, Inc., Sr. Unsecd. Note, 5.500%, 5/21/2019 | 218,922 | |
TOTAL | 1,102,815 | ||
Financial Institution - Finance Noncaptive—0.0% | |||
100,000 | HSBC Finance Capital Trust IX, Note, 5.911%, 11/30/2035 | 103,500 | |
Financial Institution - Insurance - P&C—0.2% | |||
500,000 | 2,3 | Nationwide Mutual Insurance Co., Sub. Note, Series 144A, 9.375%, 8/15/2039 | 707,555 |
Financial Intermediaries—0.2% | |||
400,000 | ADIB Capital Invest 1 Ltd, 6.375%, 10/29/2049 | 403,500 | |
150,000 | 2,3 | Banco Santander, S.A., Series 144A, 4.125%, 11/09/2022 | 141,750 |
150,000 | Banco Santander, S.A., Series REGS, 4.125%, 11/09/2022 | 141,750 | |
200,000 | SASOL Financing Int., 4.500%, 11/14/2022 | 186,750 | |
TOTAL | 873,750 |
Shares or Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Food Products—0.2% | |||
$600,000 | 2,3 | BRF-Brasil Foods SA, Series 144A, 3.950%, 5/22/2023 | $520,500 |
400,000 | BRF-Brasil Foods SA, Series REGS, 3.950%, 5/22/2023 | 347,000 | |
200,000 | 2,3 | JBS Investments GmbH, Series 144A, 7.750%, 10/28/2020 | 203,000 |
TOTAL | 1,070,500 | ||
Government Agency—0.2% | |||
500,000 | Banco Nacional de Desenvolvimento Economico e Social, Sr. Unsecd. Note, Series REGS, 5.500%, 7/12/2020 | 510,000 | |
540,000 | Export-Import Bank, Series EMTN, 4.000%, 8/07/2017 | 546,993 | |
TOTAL | 1,056,993 | ||
Marine—0.0% | |||
125,000 | Dryships, Inc., Conv. Bond, 5.000%, 12/01/2014 | 125,938 | |
Metals & Mining—0.8% | |||
600,000 | Alrosa Finance SA, Company Guarantee, Series REGS, 7.750%, 11/03/2020 | 668,100 | |
211,000 | Anglogold Ashanti Holdings PLC, Sr. Unsecd. Note, 5.125%, 8/01/2022 | 182,042 | |
930,000 | Anglogold Ashanti Holdings PLC, Sr. Unsecd. Note, 8.500%, 7/30/2020 | 964,968 | |
200,000 | 2,3 | Codelco, Inc., Series 144A, 3.000%, 7/17/2022 | 180,382 |
200,000 | Codelco, Inc., Series REGS, 3.000%, 7/17/2022 | 180,381 | |
200,000 | 2,3 | Fresnillo PLC, Series 144A, 5.500%, 11/13/2023 | 195,000 |
200,000 | Nord Gold NV, Series REGS, 6.375%, 5/07/2018 | 190,000 | |
300,000 | 2,3 | Polyus Gold International, Ltd., Series 144A, 5.625%, 4/29/2020 | 289,875 |
200,000 | 2,3 | Samarco Mineracao SA, Series 144A, 5.750%, 10/24/2023 | 198,500 |
610,000 | Vale Overseas Ltd., 6.875%, 11/21/2036 | 631,315 | |
TOTAL | 3,680,563 | ||
Oil & Gas—3.7% | |||
200,000 | 2,3 | Afren PLC, Series 144A, 6.625%, 12/09/2020 | 201,000 |
300,000 | 2,3 | Alliance Oil Co., Ltd., Series 144A, 7.000%, 5/04/2020 | 291,000 |
300,000 | CNOOC Finance 2013 Ltd., 3.000%, 5/09/2023 | 268,050 | |
225,000 | Ecopetrol SA, Note, 7.625%, 7/23/2019 | 267,750 | |
300,000 | Empresa Nacional del Petroleo, Note, Series REGS, 5.250%, 8/10/2020 | 310,308 | |
500,000 | Gaz Capital SA, Series REGS, 8.625%, 4/28/2034 | 592,500 | |
900,000 | 2,3 | Gazprom Neft, Series 144A, 6.000%, 11/27/2023 | 918,000 |
200,000 | Gazprom Via Gaz Capital SA, Series REGS, 4.950%, 5/23/2016 | 212,800 | |
250,000 | 2,3 | Gazprom, Note, Series 144A, 8.625%, 4/28/2034 | 296,250 |
250,000 | 2,3 | Gazprom, Series 144A, 4.950%, 7/19/2022 | 243,125 |
400,000 | 2,3 | IPIC GMTN, Ltd., Company Guarantee, Series 144A, 5.000%, 11/15/2020 | 433,500 |
200,000 | KazMunaiGaz Finance Sub B.V., Company Guarantee, Series REGS, 11.750%, 1/23/2015 | 220,000 | |
500,000 | KazMunaiGaz Finance Sub B.V., Series REGS, 6.375%, 4/09/2021 | 545,000 | |
200,000 | 2,3 | Kazmunaygas National Co., Series 144A, 4.400%, 4/30/2023 | 186,000 |
300,000 | 2,3 | Lukoil International Finance BV, Series 144A, 3.416%, 4/24/2018 | 303,375 |
300,000 | 2,3 | Lukoil International Finance BV, Series 144A, 4.563%, 4/24/2023 | 282,300 |
450,000 | Lukoil, Company Guarantee, Series REGS, 6.125%, 11/09/2020 | 489,825 | |
2,225,000 | PDVSA, Company Guarantee, 5.375%, 4/12/2027 | 1,195,937 | |
1,230,000 | PDVSA, Company Guarantee, Series REGS, 8.500%, 11/02/2017 | 1,027,050 | |
200,000 | 2,3 | PTT Public Co. Ltd., Series 144A, 4.500%, 10/25/2042 | 155,405 |
600,000 | PTTEP Canada Internation, Series REGS, 5.692%, 4/05/2021 | 641,603 | |
300,000 | 2,3 | Pacific Rubiales, Series 144A, 5.125%, 3/28/2023 | 276,750 |
700,000 | 2,3 | Pacific Rubiales, Series 144A, 5.375%, 1/26/2019 | 707,000 |
150,000 | Pacific Rubiales, Series REGS, 7.250%, 12/12/2021 | 159,750 | |
200,000 | 2,3 | Pacific Rubiales, Sr. Unsecd. Note, Series 144A, 7.250%, 12/12/2021 | 213,000 |
351,000 | Pertamina PT, Note, Series REGS, 5.250%, 5/23/2021 | 339,592 |
Shares or Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Oil & Gas—continued | |||
$290,000 | 2,3 | Pertamina PT, Series 144A, 4.300%, 5/20/2023 | $253,750 |
825,000 | Petrobras International Finance Co., Company Guarantee, 7.875%, 3/15/2019 | 938,170 | |
200,000 | Petrobras International Finance Co., Sr. Unsecd. Note, 5.375%, 1/27/2021 | 199,241 | |
600,000 | Petroleos de Venezuela, S.A., Series 2014, 4.900%, 10/28/2014 | 549,000 | |
103,000 | Petroleos Mexicanos, 3.500%, 7/18/2018 | 105,961 | |
150,000 | Petroleos Mexicanos, 6.500%, 6/02/2041 | 157,500 | |
200,000 | Petroleos Mexicanos, Company Guarantee, 5.500%, 1/21/2021 | 216,000 | |
150,000 | Petroleos Mexicanos, Company Guarantee, Series WI, 8.000%, 5/03/2019 | 182,250 | |
140,000 | Petroleos Mexicanos, Floating Rate Note - Sr. Note, 2.266%, 7/18/2018 | 144,550 | |
70,833 | Petroleum Co. of Trinidad and Tobago Ltd., Sr. Unsecd. Note, Series REGS, 6.000%, 5/08/2022 | 75,438 | |
600,000 | 2,3 | Petroliam Nasional Berhd, Series 144A, 7.750%, 8/15/2015 | 665,930 |
500,000 | 2,3 | Reliance Industries Ltd., Series 144A, 5.875%, 2/28/2049 | 427,500 |
300,000 | 2,3 | Sinopec Group Oversea 2013, Series 144A, 2.500%, 10/17/2018 | 298,230 |
235,000 | 2,3 | Sinopec Group Oversea 2013, Series 144A, 4.375%, 10/17/2023 | 231,554 |
200,000 | State Oil Co of The Azer, Sr. Unsecd. Note, 5.450%, 2/09/2017 | 213,740 | |
300,000 | 2,3 | Thai Oil PCL, Series 144A, 4.875%, 1/23/2043 | 243,272 |
300,000 | 2,3 | Transport de Gas Peru, Series 144A, 4.250%, 4/30/2028 | 264,000 |
500,000 | 2,3 | Transprtdra De Gas Intl, Series 144A, 5.700%, 3/20/2022 | 531,875 |
200,000 | Transprtdra De Gas Intl, Series REGS, 5.700%, 3/20/2022 | 212,750 | |
TOTAL | 16,687,581 | ||
Paper Products—0.2% | |||
895,000 | Fibria Overseas Finance, Company Guarantee, Series REGS, 6.750%, 3/03/2021 | 984,500 | |
Real Estate—0.1% | |||
200,000 | 2,3 | Qatari Diar Finance QSC, Foreign Gov't. Guarantee, Series 144A, 5.000%, 7/21/2020 | 220,000 |
Retailers—0.0% | |||
200,000 | 2,3 | Saci Falabella, Series 144A, 3.750%, 4/30/2023 | 181,424 |
Sovereign—0.1% | |||
400,000 | 2,3 | Georgia, Government of, Series 144A, 7.750%, 7/05/2017 | 417,621 |
State/Provincial—0.3% | |||
1,510,000 | 2,3 | Brazil Minas SPE, Series 144A, 5.333%, 2/15/2028 | 1,408,075 |
Steel—0.2% | |||
700,000 | OJSC Novo(Steel Funding), Series REGS, 4.950%, 9/26/2019 | 694,750 | |
Technology Services—0.2% | |||
280,000 | STATS ChipPAC Ltd., Series REGS, 4.500%, 3/20/2018 | 280,000 | |
400,000 | 2,3 | Samsung Electron America, Series 144A, 1.750%, 4/10/2017 | 397,607 |
TOTAL | 677,607 | ||
Telecommunications & Cellular—0.9% | |||
400,000 | America Movil S.A.B. de C.V., 3.125%, 7/16/2022 | 369,702 | |
450,000 | 2,3 | Digicel Ltd., Series 144A, 6.000%, 4/15/2021 | 435,375 |
200,000 | MTS International Funding Ltd., Series REGS, 8.625%, 6/22/2020 | 237,000 | |
300,000 | 2,3 | MTS International Funding Ltd., Sr. Unsecd. Note, Series 144A, 8.625%, 6/22/2020 | 355,500 |
200,000 | 2,3 | Qtel International Finance Ltd., Bank Guarantee, Series 144A, 5.000%, 10/19/2025 | 199,500 |
850,000 | 2,3 | Qtel International Finance Ltd., Series 144A, 3.250%, 2/21/2023 | 763,182 |
400,000 | 2,3 | Qtel International Finance Ltd., Series 144A, 3.875%, 1/31/2028 | 342,000 |
200,000 | Qtel International Finance Ltd., Series REGS, 3.375%, 10/14/2016 | 210,008 | |
100,000 | 2,3 | Telemovil Finance Co., Ltd., Company Guarantee, Series 144A, 8.000%, 10/01/2017 | 107,000 |
100,000 | Telemovil Finance Co., Ltd., Company Guarantee, Series REGS, 8.000%, 10/01/2017 | 107,000 | |
200,000 | 2,3 | Telfon Celuar Del Paragu, Series 144A, 6.750%, 12/13/2022 | 208,500 |
400,000 | 2,3 | Vimpelcom, Company Guarantee, Series 144A, 7.504%, 3/01/2022 | 418,848 |
Shares or Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Telecommunications & Cellular—continued | |||
$450,000 | 2,3 | Vimpelcom, Series 144A, 5.950%, 2/13/2023 | $426,375 |
TOTAL | 4,179,990 | ||
Transportation—0.0% | |||
200,000 | 2,3 | Topaz Marine SA, Series 144A, 8.625%, 11/01/2018 | 202,500 |
Utilities—1.4% | |||
200,000 | 2,3 | AES Gener SA, Series 14, Series 144A, 8.375%, 12/18/2073 | 209,000 |
200,000 | 2,3 | Abu Dhabi National Energy Co. PJSC, Series 144A, 3.625%, 1/12/2023 | 187,000 |
300,000 | Abu Dhabi National Energy Co. PJSC, Series REGS, 2.500, 1/12/2018 | 300,750 | |
650,000 | Cent Elet Brasil Elebra, Series REGS, 5.75%, 10/27/2021 | 634,562 | |
200,000 | 2,3 | Comision Fed De Electric, Series 144A, 4.875%, 1/15/2024 | 199,000 |
670,000 | 2,3 | Dubai Electricity & Water, Sr. Unsecd. Note, Series 144A, 7.375%, 10/21/2020 | 783,900 |
800,000 | 2,3 | Enel Finance International SA, Company Guarantee, Series 144A, 6.000%, 10/07/2039 | 767,461 |
200,000 | 2,3 | Eskom Holdings Ltd., Series 144A, 6.750%, 8/06/2023 | 205,500 |
200,000 | Hrvatska Electroprivreda, Series REGS, 6.000%, 11/09/2017 | 204,500 | |
900,000 | Israel Electric Corp. Ltd., Series REGS, 7.250%, 1/15/2019 | 1,000,696 | |
250,000 | 2,3 | Israel Electric Corp. Ltd., Sr. Unsecd. Note, Series 144A, 6.700%, 2/10/2017 | 271,853 |
460,000 | Majapahit Holding BV, Company Guarantee, Series REGS, 7.750%, 1/20/2020 | 507,150 | |
250,000 | National Power Corp., Series REGS, 6.875%, 11/02/2016 | 282,500 | |
150,000 | Power Sector Assets & Liabilities Management Corp., Company Guarantee, Series REGS, 7.390%, 12/02/2024 | 183,750 | |
250,000 | Power Sector Assets & Liabilities Management Corp., Series REGS, 7.250%, 5/27/2019 | 297,813 | |
TOTAL | 6,035,435 | ||
TOTAL CORPORATE BONDS (IDENTIFIED COST $64,819,712) | 64,383,809 | ||
FOREIGN GOVERNMENTS/AGENCIES—5.8% | |||
Banking—0.2% | |||
700,000 | African Export-Import Bank, Series EMTN, 5.750%, 7/27/2016 | 745,500 | |
Sovereign—5.6% | |||
2,100,000 | Argentina, Government of, Note, Series $GDP, 0.000%, 12/15/2035 | 181,650 | |
1,050,000 | Argentina, Government of, Sr. Unsecd. Note, 7.000%, 10/03/2015 | 1,044,750 | |
500,000 | 2,3 | Armenia, Government of, Sr. Unsecd. Note, Series 144A, 6.00%, 9/30/2020 | 496,250 |
400,000 | 2,3 | Bahrain, Government of, Series 144A, 6.125%, 8/01/2023 | 412,600 |
1,850,000 | Brazil, Government of, 4.250%, 1/07/2025 | 1,762,125 | |
118,500 | Brazil, Government of, Note, Series A, 8.00%, 1/15/2018 | 131,535 | |
1,000,000 | Brazil, Government of, Sr. Unsecd. Note, 5.625%, 1/07/2041 | 970,000 | |
200,000 | 2,3 | Central Bank of Nigeria, Series 144A, 5.125%, 7/12/2018 | 205,000 |
250,000 | Colombia, Government of, Note, 7.375%, 1/27/2017 | 289,125 | |
300,000 | Colombia, Government of, Sr. Unsecd. Note, 4.375%, 7/12/2021 | 309,750 | |
200,000 | Croatia, Government of, Sr. Unsecd. Note, Series REGS, 6.250%, 4/27/2017 | 213,000 | |
250,000 | 2,3 | Dominican Republic, Government of, Series 144A, 5.875%, 4/18/2024 | 240,000 |
500,000 | Dubai, Government of, Series EMTN, 5.250%, 1/30/2043 | 415,000 | |
200,000 | 2,3 | Ghana, Government of, Series 144A, 7.875%, 8/07/2023 | 188,500 |
156,000 | Hungary, Government of, 4.125%, 2/19/2018 | 157,716 | |
350,000 | Hungary, Government of, 5.750%, 11/22/2023 | 351,750 | |
356,000 | Hungary, Government of, 6.375%, 3/29/2021 | 381,810 | |
155,000 | Hungary, Government of, Unsecd. Note, 6.250%, 1/29/2020 | 167,206 | |
705,000 | Iceland, Government of, Series REGS, 4.875%, 6/16/2016 | 731,437 | |
1,200,000 | Indonesia, Government of, Series REGS, 4.625%, 4/15/2043 | 961,500 | |
300,000 | Indonesia, Government of, Series REGS, 4.875%, 5/05/2021 | 297,000 | |
800,000 | Indonesia, Government of , Series REGS, 5.875%, 3/13/2020 | 845,600 | |
300,000 | 2,3 | Kingdom of Morocco, Series 144A, 4.250%, 12/11/2022 | 277,500 |
Shares or Principal Amount | Value | ||
FOREIGN GOVERNMENTS/AGENCIES—continued | |||
Sovereign—continued | |||
$400,000 | Kingdom of Morocco, Series REGS, 4.250%, 12/11/2022 | $370,000 | |
415,000 | Lithuania, Government of, Sr. Unsecd. Note, Series REGS, 6.125%, 3/09/2021 | 470,112 | |
630,000 | Mexico, Government of, Sr. Unsecd. Note, Series EMTN, 5.95%, 3/19/2019 | 727,650 | |
200,000 | 2,3 | Mongolia International B, Series 144A, 4.125%, 1/05/2018 | 180,000 |
600,000 | Panama, Government of, 6.700%, 1/26/2036 | 670,500 | |
450,000 | Peru, Government of, Bond, 7.350%, 7/21/2025 | 567,000 | |
600,000 | Philippines, Government of, 6.375%, 1/15/2032 | 704,250 | |
200,000 | Qatar, Government of, Series REGS, 3.125%, 1/20/2017 | 209,500 | |
600,000 | Republic of Poland, Sr. Unsecd. Note, 6.375%, 7/15/2019 | 701,250 | |
200,000 | 2,3 | Republic of Serbia, Series 144A, 7.250%, 9/28/2021 | 210,500 |
800,000 | 2,3 | Russia, Government of, Series 144A, 3.500%, 1/16/2019 | 812,400 |
1,551,550 | Russia, Government of, Unsub., Series REGS, 7.500%, 3/31/2030 | 1,807,866 | |
100,000 | 2,3 | Sri Lanka, Government of, Sr. Unsecd. Note, Series 144A, 6.250%, 10/04/2020 | 98,500 |
850,000 | Turkey, Government of, 3.250%, 3/23/2023 | 699,125 | |
900,000 | Turkey, Government of, 6.875%, 3/17/2036 | 882,900 | |
1,700,000 | Turkey, Government of, 7.000%, 9/26/2016 | 1,865,750 | |
500,000 | Turkey, Government of, Bond, 5.625%, 3/30/2021 | 502,000 | |
150,000 | Turkey, Government of, Note, 7.375%, 2/05/2025 | 161,925 | |
500,000 | United Mexican States, Note, 5.125%, 1/15/2020 | 554,000 | |
1,000,000 | United Mexican States, Sr. Unsecd. Note, 3.625%, 3/15/2022 | 1,000,000 | |
425,000 | Uruguay, Government of, 7.625%, 3/21/2036 | 515,313 | |
400,000 | Uruguay, Government of, Note, 8.000%, 11/18/2022 | 496,000 | |
200,000 | Zambia, Government of, Series REGS, 5.375%, 9/20/2022 | 173,000 | |
TOTAL | 25,410,345 | ||
TOTAL FOREIGN GOVERNMENTS/AGENCIES (IDENTIFIED COST $26,632,135) | 26,155,845 | ||
MORTGAGE-BACKED SECURITIES—4.0% | |||
Federal Home Loan Mortgage Corporation—3.5% | |||
768,496 | Federal Home Loan Mortgage Corp. Pool A95704, 3.500%, 30 Year, 12/1/2040 | 762,492 | |
751,899 | Federal Home Loan Mortgage Corp. Pool G08462, 3.500%, 30 Year, 10/1/2041 | 746,025 | |
745,335 | Federal Home Loan Mortgage Corp. Pool G08554, 3.500%, 30 Year, 10/1/2043 | 739,512 | |
7,700,000 | Federal Home Loan Mortgage Corp. Pool G08563, 4.000%, 30 Year, 1/1/2044 | 7,913,532 | |
34,689 | Federal Home Loan Mortgage Corp. Pool J07260, 4.500%, 15 Year, 3/1/2023 | 36,917 | |
1,487,101 | Federal Home Loan Mortgage Corp. Pool Q19607, 4.000%, 30 Year, 7/1/2043 | 1,528,341 | |
984,276 | Federal Home Loan Mortgage Corp. Pool Q20332, 3.500%, 30 Year, 7/1/2043 | 976,586 | |
746,289 | Federal Home Loan Mortgage Corp. Pool Q21934, 4.000%, 30 Year, 9/1/2043 | 766,985 | |
2,498,022 | Federal Home Loan Mortgage Corp. Pool Q23309, 4.000%, 30 Year, 12/1/2043 | 2,567,296 | |
TOTAL | 16,037,686 | ||
Federal National Mortgage Association—0.5% | |||
85,763 | Federal National Mortgage Association Pool AO8829, 3.500%, 30 Year, 7/1/2042 | 85,267 | |
619,407 | Federal National Mortgage Association Pool AO9674, 3.500%, 30 Year, 7/1/2042 | 615,826 | |
1,066,090 | Federal National Mortgage Association Pool AP0456, 2.500%, 15 Year, 7/1/2027 | 1,055,179 | |
463,902 | Federal National Mortgage Association Pool AQ2962, 2.500%, 15 Year, 12/1/2027 | 459,154 | |
TOTAL | 2,215,426 | ||
Government National Mortgage Association—0.0% | |||
18,525 | Government National Mortgage Association Pool 2796, 7.000%, 8/20/2029 | 21,643 | |
10,202 | Government National Mortgage Association Pool 3040, 7.000%, 2/20/2031 | 11,953 | |
25,374 | Government National Mortgage Association Pool 3188, 6.500%, 1/20/2032 | 29,064 |
Shares or Principal Amount | Value | ||
MORTGAGE-BACKED SECURITIES—continued | |||
Government National Mortgage Association—continued | |||
$37,073 | Government National Mortgage Association Pool 3239, 6.500%, 5/20/2032 | $42,389 | |
TOTAL | 105,049 | ||
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $18,705,848) | 18,358,161 | ||
U.S. TREASURY—2.6% | |||
100,000 | 4,5 | United States Treasury Bill, 0.030%, 1/2/2014 | 100,000 |
800,000 | 4,5 | United States Treasury Bill, 0.025%, 1/9/2014 | 799,997 |
6,300,000 | 4,5 | United States Treasury Bill, 0.010%, 1/16/2014 | 6,299,957 |
1,350,000 | 4,5 | United States Treasury Bill, 0.080%, 2/20/2014 | 1,349,950 |
2,650,000 | 4,5 | United States Treasury Bill, 0.085%, 5/8/2014 | 2,649,421 |
621,780 | 4 | U.S. Treasury Inflation-Protected Note, 0.625%, 7/15/2021 | 630,597 |
TOTAL U.S. TREASURY (IDENTIFIED COST $11,881,503) | 11,829,922 | ||
INVESTMENT COMPANY—24.8% | |||
15,649,980 | 6 | Federated High Income Bond Fund II, Primary Shares (IDENTIFIED COST $105,979,975) | 111,897,359 |
REPURCHASE AGREEMENT—6.8% | |||
30,564,000 | Interest in $2,925,000,000 joint repurchase agreement 0.010%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845. (AT COST) | 30,564,000 | |
TOTAL INVESTMENTS—101.7% (IDENTIFIED COST $430,320,631)7 | 458,909,179 | ||
OTHER ASSETS AND LIABILITIES - NET—(1.7)%8 | (7,842,168) | ||
TOTAL NET ASSETS—100% | $451,067,011 |
Description | Number of Contracts | Notional Value | Expiration Date | Unrealized Appreciation (Depreciation) |
3S&P 500 Long Futures | 543 | $249,929,325 | March 2014 | $5,760,823 |
3United States Treasury Note 5-Year Long Futures | 88 | $10,499,500 | March 2014 | $(137,698) |
3United States Treasury Bond Long Short Futures | 58 | $7,442,125 | March 2014 | $108,666 |
3United States Treasury Bond Ultra Short Futures | 67 | $9,128,750 | March 2014 | $134,098 |
NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS | $5,865,889 |
Settlement Date | Foreign Currency Units to Deliver/Receive | In Exchange For | Unrealized Appreciation (Depreciation) |
Contracts Purchased: | |||
2/05/2014 | 492,587 Euro | $668,293 | $9,348 |
Contracts Sold: | |||
2/05/2014 | 492,587 Euro | $669,859 | $(7,782) |
NET UNREALIZED APPRECIATION ON FOREIGN EXCHANGE CONTRACTS | $1,566 |
1 | Non-income-producing security. |
2 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2013, these restricted securities amounted to $49,933,919, which represented 11.1% of total net assets. |
3 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees (the “Trustees”). At December 31, 2013, these liquid restricted securities amounted to $49,933,919, which represented 11.1% of total net assets. |
4 | Pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding futures contracts. |
5 | Discount rate at time of purchase. |
6 | Affiliated holding. |
7 | The cost of investments for federal tax purposes amounts to $431,330,160. |
8 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Valuation Inputs | ||||
Level 1— Quoted Prices and Investments in Investment Companies | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Equity Securities: | ||||
Common Stocks | ||||
Domestic | $69,126,646 | $— | $— | $69,126,646 |
International | 64,231,096 | — | — | 64,231,096 |
Preferred Stocks | ||||
Domestic | 30,258,374 | 18,405,071 | — | 48,663,445 |
International | 2,678,130 | — | — | 2,678,130 |
Debt Securities: | ||||
Adjustable Rate Mortgage | — | 24,956 | — | 24,956 |
Asset-Backed Security | — | 226,650 | — | 226,650 |
Commercial Mortgage-Backed Security | — | 963,509 | — | 963,509 |
Collateralized Mortgage Obligations | — | 9,805,651 | — | 9,805,651 |
Corporate Bonds | — | 64,383,809 | — | 64,383,809 |
Foreign Governments/Agencies | — | 26,155,845 | — | 26,155,845 |
Mortgage-Backed Securities | — | 18,358,161 | — | 18,358,161 |
U.S. Treasury | — | 11,829,922 | — | 11,829,922 |
Investment Company | 111,897,359 | — | — | 111,897,359 |
Repurchase Agreement | — | 30,564,000 | — | 30,564,000 |
TOTAL SECURITIES | $278,191,605 | $180,717,574 | $— | $458,909,179 |
OTHER FINANCIAL INSTRUMENTS* | $5,865,889 | $1,566 | $— | $5,867,455 |
* | Other financial instruments include futures contracts and foreign exchange contracts. |
ADR | —American Depositary Receipt |
MTN | —Medium Term Note |
REMIC | —Real Estate Mortgage Investment Conduit |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $9.56 | $9.22 | $9.15 | $8.67 | $7.25 |
Income From Investment Operations: | |||||
Net investment income1 | 0.50 | 0.44 | 0.43 | 0.39 | 0.46 |
Net realized and unrealized gain on investments, written options, futures contracts, swap contracts and foreign currency transactions | 1.54 | 0.77 | 0.002 | 0.61 | 1.45 |
TOTAL FROM INVESTMENT OPERATIONS | 2.04 | 1.21 | 0.43 | 1.00 | 1.91 |
Less Distributions: | |||||
Distributions from net investment income | (0.30) | (0.29) | (0.36) | (0.52) | (0.49) |
Distributions from net realized gain on investments, futures contracts, swap contracts and foreign currency transactions | — | (0.58) | — | — | — |
TOTAL DISTRIBUTIONS | (0.30) | (0.87) | (0.36) | (0.52) | (0.49) |
Net Asset Value, End of Period | $11.30 | $9.56 | $9.22 | $9.15 | $8.67 |
Total Return3 | 21.74% | 13.55% | 4.77% | 12.08% | 28.28% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.82% | 0.82% | 1.02%4 | 1.13%4 | 1.13%4 |
Net investment income | 4.80% | 4.75% | 4.74% | 4.50% | 6.03% |
Expense waiver/reimbursement5 | 0.16% | 0.16% | 0.16% | 0.33% | 0.68% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $451,067 | $235,409 | $122,494 | $54,450 | $36,913 |
Portfolio turnover | 52% | 27% | 114% | 96% | 69% |
Portfolio turnover (excluding purchases and sales from dollar-roll transactions) | 52% | 27% | 113% | 96% | 69% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Represents less than $0.01. |
3 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
4 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.02%, 1.11% and 1.12% for the years ended December 31, 2011, 2010 and 2009, respectively, after taking into account these expense reductions. |
5 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
December 31, 2013
Assets: | ||
Total investment in securities, at value including $111,897,359 of investment in an affiliated holding (Note 5) (identified cost $430,320,631) | $458,909,179 | |
Cash | 17,750 | |
Cash denominated in foreign currencies (identified cost $716,855) | 714,024 | |
Income receivable | 1,986,870 | |
Receivable for shares sold | 1,053,420 | |
Unrealized appreciation on foreign exchange contracts | 9,348 | |
Receivable for daily variation margin | 942,175 | |
TOTAL ASSETS | 463,632,766 | |
Liabilities: | ||
Payable for investments purchased | $11,037,195 | |
Payable for shares redeemed | 1,433,760 | |
Unrealized depreciation on foreign exchange contracts | 7,782 | |
Accrued expenses (Note 5) | 87,018 | |
TOTAL LIABILITIES | 12,565,755 | |
Net assets for 39,926,766 shares outstanding | $451,067,011 | |
Net Assets Consist of: | ||
Paid-in capital | $378,023,676 | |
Net unrealized appreciation of investments, futures contracts and translation of assets and liabilities in foreign currency | 34,452,483 | |
Accumulated net realized gain on investments, written options, futures contracts, swap contracts and foreign currency transactions | 22,380,249 | |
Undistributed net investment income | 16,210,603 | |
TOTAL NET ASSETS | $451,067,011 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | ||
$451,067,011 ÷ 39,926,766 shares outstanding, no par value, unlimited shares authorized | $11.30 |
Year Ended December 31, 2013
Investment Income: | ||
Dividends (including $5,133,430 received from an affiliated holding (Note 5) and net of foreign taxes withheld of $236,558) | $14,541,179 | |
Interest | 4,061,697 | |
TOTAL INCOME | 18,602,876 | |
Expenses: | ||
Investment adviser fee (Note 5) | $2,485,141 | |
Administrative fee (Note 5) | 362,793 | |
Custodian fees | 40,999 | |
Transfer agent fee | 29,263 | |
Directors'/Trustees' fees (Note 5) | 2,215 | |
Auditing fees | 29,500 | |
Legal fees | 13,167 | |
Portfolio accounting fees | 130,484 | |
Printing and postage | 129,507 | |
Insurance premiums (Note 5) | 4,518 | |
Miscellaneous (Note 5) | 2,334 | |
TOTAL EXPENSES | 3,229,921 | |
Reimbursement of investment adviser fee (Note 5) | (518,916) | |
Net expenses | 2,711,005 | |
Net investment income | 15,891,871 | |
Realized and Unrealized Gain on Investments, Futures Contracts and Foreign Currency Transactions: | ||
Net realized gain on investments and foreign currency transactions | 2,642,580 | |
Net realized gain on futures contracts | 28,082,554 | |
Net change in unrealized appreciation of investments and translation of assets and liabilities in foreign currency | 13,628,922 | |
Net change in unrealized depreciation of futures contracts | 6,197,614 | |
Net realized and unrealized gain on investments, futures contracts and foreign currency transactions | 50,551,670 | |
Change in net assets resulting from operations | $66,443,541 |
Year Ended December 31 | 2013 | 2012 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $15,891,871 | $8,061,674 |
Net realized gain on investments, futures contracts, swap contracts and foreign currency transactions | 30,725,134 | 3,435,964 |
Net change in unrealized appreciation/depreciation of investments, futures contracts and translation of assets and liabilities in foreign currency | 19,826,536 | 8,838,598 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 66,443,541 | 20,336,236 |
Distributions to Shareholders: | ||
Distributions from net investment income | (8,231,272) | (4,110,897) |
Distributions from net realized gain on investments, futures contracts, swap contracts and foreign currency transactions | — | (8,254,819) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (8,231,272) | (12,365,716) |
Share Transactions: | ||
Proceeds from sale of shares | 210,993,255 | 121,091,557 |
Net asset value of shares issued to shareholders in payment of distributions declared | 8,231,272 | 12,365,716 |
Cost of shares redeemed | (61,778,711) | (28,513,054) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 157,445,816 | 104,944,219 |
Change in net assets | 215,658,085 | 112,914,739 |
Net Assets: | ||
Beginning of period | 235,408,926 | 122,494,187 |
End of period (including undistributed net investment income of $16,210,603 and $8,227,368, respectively) | $451,067,011 | $235,408,926 |
■ | 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. |
■ | Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Fixed-income securities and repurchase agreements acquired with remaining maturities of 60 days or less are valued at their amortized cost (adjusted for the accretion of any discount or amortization of any premium), unless the issuer's creditworthiness is impaired or other factors indicate that amortized cost is not an accurate estimate of the investment's fair value, in which case it would be valued in the same manner as a longer-term security. |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, 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 and public trading in similar securities of the issuer or comparable issuers. |
■ | With respect to securities traded 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; and |
■ | Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
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 | $5,865,889* | ||
Foreign exchange contracts | Unrealized appreciation on foreign exchange contracts | $9,348 | Unrealized depreciation on foreign exchange contracts | $7,782 |
Total derivatives not accounted for as hedging instruments under ASC Topic 815 | $5,875,237 | $7,782 |
* | 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 | ||||
Futures | Forward Currency Contracts | Purchased Option Contracts | Total | |
Interest rate contracts | $28,082,554 | $— | $— | $28,082,554 |
Foreign exchange contracts | — | 23,218 | — | 23,218 |
Equity contracts | — | — | (163,573) | (163,573) |
TOTAL | $28,082,554 | $23,218 | $(163,573) | $27,942,199 |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |||
Futures | Forward Currency Contracts | Total | |
Interest rate contracts | $6,197,614 | $— | $6,197,614 |
Foreign exchange contracts | — | 1,566 | 1,566 |
TOTAL | $6,197,614 | $1,566 | $6,199,180 |
Year Ended December 31 | 2013 | 2012 |
Shares sold | 20,421,198 | 13,074,734 |
Shares issued to shareholders in payment of distributions declared | 827,263 | 1,352,923 |
Shares redeemed | (5,947,464) | (3,087,364) |
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | 15,300,997 | 11,340,293 |
Increase (Decrease) | ||
Paid-In Capital | Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$(1,762) | $322,636 | $(320,874) |
2013 | 2012 | |
Ordinary income | $8,231,272 | $4,110,897 |
Long-term capital gains | $— | $8,254,819 |
Undistributed ordinary income | $27,559,714 |
Undistributed capital gains | $23,044,377 |
Net unrealized appreciation | $27,530,386 |
Capital loss carryforwards | $(5,091,142) |
Expiration Year | Short-Term | Long-Term | Total |
2016 | $2,415,525 | NA | $2,415,525 |
2017 | $2,675,617 | NA | $2,675,617 |
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 |
Federated High Income Bond Fund II, Primary Shares | |
Balance of Shares Held 12/31/2012 | 8,509,999 |
Purchases/Additions | 7,497,128 |
Sales/Reductions | (357,147) |
Balance of Shares Held 12/31/2013 | 15,649,980 |
Value | $111,897,359 |
Dividend Income | $5,133,430 |
Purchases | $321,169,396 |
Sales | $136,367,216 |
Country | Percentage of Net Assets |
United States | 37.6% |
Canada | 4.9% |
Great Britain | 4.6% |
Russia | 2.1% |
Mexico | 2.0% |
Brazil | 1.9% |
France | 1.3% |
Luxembourg | 1.2% |
Cayman Islands | 1.1% |
Turkey | 1.1% |
Germany | 1.0% |
Other1 | 11.3% |
1 | Countries representing less than 1.0% have been aggregated under the designation “Other.” |
February 14, 2014
Beginning Account Value 7/1/2013 | Ending Account Value 12/31/2013 | Expenses Paid During Period1 | |
Actual | $1,000 | $1,132.30 | $4.51 |
Hypothetical (assuming a 5% return before expenses) | $1,000 | $1,020.97 | $4.28 |
1 | Expenses are equal to the Fund's annualized net expense ratio of 0.84%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The expenses shown in the table do not include the charges and expenses imposed by the insurance company under the variable insurance product contract. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
Name | For | Withheld |
John T. Collins | 300,523,736.140 | 11,005,188.385 |
Maureen Lally-Green | 300,308,651.177 | 11,220,273.348 |
Thomas M. O'Neill | 300,886,250.634 | 10,642,673.891 |
P. Jerome Richey | 300,662,760.971 | 10,866,163.554 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: October 1993 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
J. Christopher Donahue* Birth Date: April 11, 1949 Trustee Began serving: October 1993 | 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, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); 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. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust 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 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: October 1993 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: November 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: 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); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee 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. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: September 1993 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
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 Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; 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 President Officer since: September 1993 | 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. |
John B. Fisher Birth Date: May 16, 1956 President Officer since: November 2004 | Principal Occupations: 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 and CEO of Passport Research, Ltd.; President of some of the Funds in the Federated Fund Family; 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; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc.; President, Technology, Federated Services Company. |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | 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. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Stephen F. Auth Birth Date: September 3, 1956 450 Lexington Avenue Suite 3700 New York, NY 10017-3943 CHIEF INVESTMENT OFFICER Officer since: November 2002 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
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. |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
2014 ©Federated Investors, Inc.
Share Class |
Primary |
Service |
1 | Please see the footnotes to the line graphs below for definitions of, and further information about, the BHY2%ICI. |
2 | Please see the footnotes to the line graphs below for definitions of, and further information about, the LVHCYFA. |
3 | High-yield, lower-rated securities generally entail greater market, credit and liquidity risks than investment-grade securities and may include higher volatility and a higher risk of default. |
4 | Credit Suisse High Yield Bond Index serves as a benchmark to evaluate the performance of low-quality bonds. Low-quality is defined as those bonds in the range from “BB” to “CCC” and defaults. The index is unmanaged, and it is not possible to invest directly in an index. |
5 | Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. |
6 | 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 with shorter durations. |
Share Class | 1 Year | 5 Years | 10 Years |
Primary Shares | 6.99% | 17.74% | 8.09% |
Service Shares | 6.73% | 17.42% | 7.81% |
Federated High Income Bond Fund II - | Primary Shares | BHY2%ICI | LVHCYFA |
12/31/2003 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 11,046 | 11,114 | 11,195 |
12/31/2005 | 11,339 | 11,421 | 11,448 |
12/31/2006 | 12,565 | 12,650 | 12,813 |
12/31/2007 | 12,995 | 12,937 | 13,152 |
12/31/2008 | 9,617 | 9,589 | 9,710 |
12/31/2009 | 14,700 | 15,223 | 14,975 |
12/31/2010 | 16,865 | 17,497 | 17,135 |
12/31/2011 | 17,737 | 18,365 | 18,072 |
12/31/2012 | 20,344 | 21,263 | 20,730 |
12/31/2013 | 21,765 | 22,845 | 22,291 |
Federated High Income Bond Fund II - | Service Shares | BHY2%ICI | LVHCYFA |
12/31/2003 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 11,016 | 11,114 | 11,195 |
12/31/2005 | 11,266 | 11,421 | 11,448 |
12/31/2006 | 12,457 | 12,650 | 12,813 |
12/31/2007 | 12,854 | 12,937 | 13,152 |
12/31/2008 | 9,499 | 9,589 | 9,710 |
12/31/2009 | 14,484 | 15,223 | 14,975 |
12/31/2010 | 16,567 | 17,497 | 17,135 |
12/31/2011 | 17,383 | 18,365 | 18,072 |
12/31/2012 | 19,870 | 21,263 | 20,730 |
12/31/2013 | 21,207 | 22,845 | 22,291 |
1 | The Fund's performance assumes the reinvestment of all dividends and distributions. The BHY2%ICI and the LVHCYFA have been adjusted to reflect reinvestment of dividends on securities in the index and average. |
2 | The BHY2%ICI is an issuer-constrained version of the 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 BHY2%ICI is not adjusted to reflect sales charges, 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 | Lipper figures represent the average of the total returns reported by all mutual funds designated by Lipper, Inc., as falling into the respective category and is not adjusted to reflect any sales charges. These total returns are reported net of expenses and other fees that the SEC requires to be reflected in a mutual fund's performance. |
Index Classification | Percentage of Total Net Assets |
Technology | 13.4% |
Health Care | 9.8% |
Energy | 7.5% |
Media—Non-Cable | 7.3% |
Retailers | 5.4% |
Food & Beverage | 5.1% |
Automotive | 5.0% |
Packaging & Containers | 5.0% |
Financial Institutions | 4.4% |
Wireless Communications | 4.0% |
Building Materials | 3.6% |
Consumer Products | 3.6% |
Gaming | 3.6% |
Other2 | 18.4% |
Cash Equivalents3 | 2.3% |
Other Assets and Liabilities—Net4 | 1.6% |
TOTAL | 100.0% |
1 | Index classifications are based upon, and individual portfolio securities are assigned to, the classifications and sub-classifications of the Barclays U.S. Corporate High Yield 2% Issuer Capped Index (BHY2%ICI). Individual portfolio securities that are not included in the BHY2%ICI are assigned to an index classification by the Fund's Adviser. |
2 | For purposes of this table, index classifications which constitute less than 3.5% of the Fund's total net assets have been aggregated under the designation “Other.” |
3 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. |
4 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—95.8% | |||
Aerospace/Defense—0.9% | |||
$700,000 | B/E Aerospace, Inc., Sr. Unsecd. Note, 5.25%, 4/1/2022 | $714,000 | |
200,000 | TransDigm, Inc., 5.50%, 10/15/2020 | 196,500 | |
500,000 | TransDigm, Inc., 7.50%, 7/15/2021 | 540,000 | |
1,150,000 | TransDigm, Inc., Company Guarantee, 7.75%, 12/15/2018 | 1,239,125 | |
TOTAL | 2,689,625 | ||
Automotive—4.9% | |||
825,000 | Affinia Group, Inc., Sr. Unsecd. Note, 7.75%, 5/1/2021 | 870,375 | |
500,000 | 1,2 | Allison Transmission, Inc., Sr. Unsecd. Note, Series 144A, 7.125%, 5/15/2019 | 541,250 |
275,000 | American Axle & Manufacturing Holdings, Inc., 6.25%, 3/15/2021 | 293,563 | |
250,000 | American Axle & Manufacturing Holdings, Inc., Sr. Note, 5.125%, 2/15/2019 | 258,125 | |
875,000 | American Axle & Manufacturing Holdings, Inc., Sr. Note, 6.625%, 10/15/2022 | 925,312 | |
475,000 | American Axle & Manufacturing Holdings, Inc., Sr. Note, 7.75%, 11/15/2019 | 542,688 | |
700,000 | Chrysler Group LLC, Note, Series WI, 8.25%, 6/15/2021 | 799,750 | |
425,000 | Cooper-Standard Automotive, Inc., Company Guarantee, 8.50%, 5/1/2018 | 452,094 | |
325,000 | Delphi Corp., 5.00%, 2/15/2023 | 335,969 | |
625,000 | 3,4 | Exide Technologies, Sr. Secd. Note, 8.625%, 2/1/2018 | 450,000 |
550,000 | 1,2 | IDQ Holdings, Inc., Sr. Secd. Note, Series 144A, 11.50%, 4/1/2017 | 574,750 |
775,000 | 1,2 | International Automotive Components, Sr. Secd. Note, Series 144A, 9.125%, 6/1/2018 | 811,812 |
250,000 | 1,2 | Jaguar Land Rover PLC, Series 144A, 5.625%, 2/1/2023 | 251,250 |
1,025,000 | 1,2 | Jaguar Land Rover PLC, Sr. Unsecd. Note, Series 144A, 8.125%, 5/15/2021 | 1,171,063 |
825,000 | 1,2 | Lear Corp., Sr. Unsecd. Note, Series 144A, 4.75%, 1/15/2023 | 777,562 |
400,000 | 1,2 | Schaeffler AG, 4.75%, 5/15/2021 | 401,000 |
700,000 | 1,2 | Schaeffler AG, Series 144A, 6.875%, 8/15/2018 | 745,500 |
400,000 | 1,2 | Schaeffler AG, Series 144A, 7.75%, 2/15/2017 | 456,000 |
825,000 | 1,2 | Schaeffler AG, Series 144A, 8.50%, 2/15/2019 | 932,250 |
725,000 | 1,2 | Stackpole International, Sr. Secd. Note, 7.75%, 10/15/2021 | 757,625 |
450,000 | Tenneco Automotive, Inc., Company Guarantee, 6.875%, 12/15/2020 | 493,875 | |
400,000 | 1,2 | Titan Wheel International, Inc., Sr. Secd. Note, Series 144A, 6.875%, 10/1/2020 | 419,000 |
318,000 | Tomkins LLC/Tomkins, Inc., Term Loan—2nd Lien, 9.00%, 10/1/2018 | 349,800 | |
1,525,000 | United Components, Inc., Company Guarantee, Series WI, 8.625%, 2/15/2019 | 1,532,625 | |
TOTAL | 15,143,238 | ||
Building Materials—3.6% | |||
450,000 | 1,2 | Allegion US Holdings Co., Inc., 5.75%, 10/1/2021 | 470,250 |
100,000 | 1,2 | American Builders & Contractors Supply Co. Inc., Series 144A, 5.625%, 4/15/2021 | 100,750 |
450,000 | Anixter International, Inc., 5.625%, 5/1/2019 | 475,312 | |
200,000 | 1,2 | Building Materials Corp. of America, Bond, Series 144A, 6.75%, 5/1/2021 | 217,000 |
300,000 | 1,2 | Building Materials Corp. of America, Sr. Note, Series 144A, 7.50%, 3/15/2020 | 325,500 |
475,000 | 1,2 | CPG International, Inc., 8.00%, 10/1/2021 | 496,375 |
700,000 | Interline Brands, Inc., Company Guarantee, 7.50%, 11/15/2018 | 743,750 | |
950,000 | Interline Brands, Inc., Sr. Unsecd. Note, 10.00%, 11/15/2018 | 1,042,625 | |
675,000 | 1,2 | Masonite International Corp., Sr. Note, Series 144A, 8.25%, 4/15/2021 | 745,875 |
400,000 | Nortek, Inc., Sr. Unsecd. Note, Series WI, 10.00%, 12/1/2018 | 443,500 | |
1,400,000 | Nortek, Inc., Sr. Unsecd. Note, Series WI, 8.50%, 4/15/2021 | 1,557,500 | |
165,000 | Ply Gem Industries, Inc., Series WI, 9.375%, 4/15/2017 | 179,025 | |
895,000 | Ply Gem Industries, Inc., Sr. Secd. Note, Series WI, 8.25%, 2/15/2018 | 957,650 | |
725,000 | 1,2 | RSI Home Products Incorporated, Series 144A, 6.875%, 3/1/2018 | 763,062 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Building Materials—continued | |||
$950,000 | 1,2 | Rexel, Inc., Series 144A, 6.125%, 12/15/2019 | $997,500 |
700,000 | 1,2 | Rexel, Inc., Sr. Note, Series 144A, 5.25%, 6/15/2020 | 707,000 |
675,000 | 1,2 | Roofing Supply Group, Series 144A, 10.00%, 6/1/2020 | 762,750 |
350,000 | 1,2 | USG Corp., Sr. Note, 5.875%, 11/1/2021 | 364,438 |
TOTAL | 11,349,862 | ||
Chemicals—2.4% | |||
325,000 | Ashland, Inc., 4.75%, 8/15/2022 | 310,375 | |
300,000 | Chemtura Corp., 5.75%, 7/15/2021 | 305,625 | |
325,000 | Compass Minerals International, Inc., Company Guarantee, 8.00%, 6/1/2019 | 346,531 | |
1,150,000 | 1,2 | Dupont Performance Coatings, Series 144A, 7.375%, 5/1/2021 | 1,231,938 |
100,000 | 1,2 | Georgia Gulf Corp., 4.875%, 5/15/2023 | 94,875 |
325,000 | 1,2 | Georgia Gulf Corp., Series 144A, 4.625%, 2/15/2021 | 319,719 |
625,000 | Hexion U.S. Finance Corp., 6.625%, 4/15/2020 | 643,750 | |
775,000 | Hexion U.S. Finance Corp., Sr. Secd. Note, 8.875%, 2/1/2018 | 808,906 | |
525,000 | Hexion U.S. Finance Corp., Sr. Secd. Note, Series WI, 9.00%, 11/15/2020 | 526,313 | |
275,000 | Huntsman International LLC, Company Guarantee, 8.625%, 3/15/2021 | 312,125 | |
700,000 | Huntsman International LLC, Sr. Unsecd. Note, 4.875%, 11/15/2020 | 693,000 | |
350,000 | Momentive Performance Materials, Inc., Series WI, 10.00%, 10/15/2020 | 368,375 | |
275,000 | 1,2 | Nova Chemicals Corp., Sr. Unsecd. Note, Series 144A, 5.25%, 8/1/2023 | 284,109 |
850,000 | Omnova Solutions, Inc., Company Guarantee, 7.875%, 11/1/2018 | 918,000 | |
225,000 | Union Carbide Corp., Sr. Deb., 7.875%, 4/1/2023 | 268,134 | |
TOTAL | 7,431,775 | ||
Construction Machinery—0.4% | |||
1,150,000 | United Rentals, Inc., Sr. Sub. Note, 8.375%, 9/15/2020 | 1,288,000 | |
Consumer Products—3.6% | |||
1,450,000 | 1,2 | AOT Bedding Super Holdings LLC, Series 144A, 8.125%, 10/1/2020 | 1,584,125 |
400,000 | 1,2 | Activision Blizzard, Inc., Sr. Note, Series 144A, 6.125%, 9/15/2023 | 418,000 |
175,000 | 1,2 | Activision Blizzard, Inc., Sr. Unsecd. Note, 5.625%, 9/15/2021 | 181,562 |
525,000 | 1,2 | Apex Tool Group, Sr. Unsecd. Note, Series 144A, 7.00%, 2/1/2021 | 532,875 |
1,025,000 | FGI Operating Co. LLC/FGI Finance, Inc., 7.875%, 5/1/2020 | 1,101,875 | |
675,000 | 1,2 | First Quality Finance Co. Inc., 4.625%, 5/15/2021 | 644,625 |
743,000 | Libbey Glass, Inc., Series WI, 6.875%, 5/15/2020 | 806,155 | |
525,000 | 1,2 | Prestige Brands Holdings, Inc., 5.375%, 12/15/2021 | 532,875 |
225,000 | Prestige Brands Holdings, Inc., Series WI, 8.125%, 2/1/2020 | 253,125 | |
975,000 | ServiceMaster Co., 7.00%, 8/15/2020 | 971,344 | |
275,000 | ServiceMaster Co., Sr. Unsecd. Note, 7.10%, 3/1/2018 | 269,500 | |
150,000 | ServiceMaster Co., Sr. Unsecd. Note, 7.45%, 8/15/2027 | 127,500 | |
1,000,000 | ServiceMaster Co., Sr. Unsecd. Note, 8.00%, 2/15/2020 | 1,025,000 | |
1,125,000 | Spectrum Brands, Inc., Sr. Unsecd. Note, 6.75%, 3/15/2020 | 1,216,406 | |
575,000 | 1,2 | Springs Industries, Inc., Sr. Secd. Note, Series 144A, 6.25%, 6/1/2021 | 581,469 |
850,000 | Visant Corp., Company Guarantee, Series WI, 10.00%, 10/1/2017 | 828,750 | |
250,000 | Wolverine World Wide, Inc., Sr. Unsecd. Note, 6.125%, 10/15/2020 | 268,750 | |
TOTAL | 11,343,936 | ||
Energy—7.5% | |||
1,150,000 | Antero Resources Corp., 6.00%, 12/1/2020 | 1,213,250 | |
200,000 | 1,2 | Antero Resources Corp., Sr. Unsecd. Note, Series 144A, 5.375%, 11/1/2021 | 202,125 |
750,000 | Approach Resources, Inc., 7.00%, 6/15/2021 | 772,500 | |
600,000 | 1,2 | Athlon Holdings LP, Sr. Note, Series 144A, 7.375%, 4/15/2021 | 633,000 |
125,000 | Basic Energy Services, Inc., Company Guarantee, Series WI, 7.75%, 2/15/2019 | 131,250 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Energy—continued | |||
$575,000 | Basic Energy Services, Inc., Series WI, 7.75%, 10/15/2022 | $596,563 | |
550,000 | BreitBurn Energy Partners L.P., 7.875%, 4/15/2022 | 574,750 | |
825,000 | Carrizo Oil & Gas, Inc., Sr. Unsecd. Note, 7.50%, 9/15/2020 | 907,500 | |
875,000 | Chaparral Energy, Inc., Company Guarantee, 9.875%, 10/1/2020 | 993,125 | |
250,000 | Chaparral Energy, Inc., Series WI, 7.625%, 11/15/2022 | 268,750 | |
75,000 | Chesapeake Energy Corp., 5.375%, 6/15/2021 | 78,000 | |
75,000 | Chesapeake Energy Corp., 5.75%, 3/15/2023 | 77,625 | |
1,350,000 | Chesapeake Energy Corp., Sr. Note, 6.875%, 11/15/2020 | 1,532,250 | |
825,000 | Chesapeake Oilfield Services Co., Sr. Note, 6.625%, 11/15/2019 | 868,312 | |
256,000 | Compagnie Generale de Geophysique Veritas, Company Guarantee, 9.50%, 5/15/2016 | 270,720 | |
400,000 | Compagnie Generale de Geophysique Veritas, Sr. Unsecd. Note, 6.50%, 6/1/2021 | 412,000 | |
450,000 | Compagnie Generale de Geophysique Veritas, Sr. Unsecd. Note, 7.75%, 5/15/2017 | 464,625 | |
275,000 | EP Energy/EP Finance, Inc., Series WI, 9.375%, 5/1/2020 | 318,656 | |
381,210 | 1,2 | EP Energy/EP Finance, Inc., Sr. PIK Deb., Series 144A, 8.875%, 12/15/2017 | 393,599 |
650,000 | Energy XXI Gulf Coast, Inc., 9.25%, 12/15/2017 | 726,375 | |
975,000 | 1,2 | Energy XXI Gulf Coast, Inc., Series 144A, 7.50%, 12/15/2021 | 1,021,312 |
512,000 | Forest Oil Corp., Sr. Note, 7.25%, 6/15/2019 | 501,120 | |
425,000 | Kodiak Oil & Gas Corp., 5.50%, 1/15/2021 | 426,063 | |
575,000 | Linn Energy LLC, Company Guarantee, 7.75%, 2/1/2021 | 610,938 | |
375,000 | 1,2 | Linn Energy LLC, Series 144A, 7.00%, 11/1/2019 | 380,625 |
225,000 | Linn Energy LLC, Series WI, 6.50%, 5/15/2019 | 230,625 | |
500,000 | Linn Energy LLC, Sr. Unsecd. Note, 8.625%, 4/15/2020 | 542,500 | |
75,000 | 3,4 | Lone Pine Resources Canada Ltd., Series WI, 10.375%, 2/15/2017 | 22,875 |
975,000 | Newfield Exploration Co., Sr. Unsecd. Note, 5.625%, 7/1/2024 | 975,000 | |
925,000 | Northern Oil and Gas, Inc., Sr. Note, 8.00%, 6/1/2020 | 973,562 | |
375,000 | Oasis Petroleum, Inc., 6.875%, 1/15/2023 | 401,250 | |
650,000 | Oasis Petroleum, Inc., Company Guarantee, 6.50%, 11/1/2021 | 698,750 | |
150,000 | 1,2 | Oasis Petroleum, Inc., Sr. Note, 6.875%, 3/15/2022 | 159,750 |
450,000 | 1,2 | Ocean Rig Norway AS, Sr. Secd. Note, Series 144A, 6.50%, 10/1/2017 | 488,250 |
750,000 | PHI, Inc., Company Guarantee, Series WI, 8.625%, 10/15/2018 | 810,000 | |
275,000 | Plains Exploration & Production Co., 6.75%, 2/1/2022 | 302,957 | |
275,000 | 1,2 | SM Energy Co., Sr. Note, Series 144A, 5.00%, 1/15/2024 | 263,313 |
600,000 | Sandridge Energy, Inc., 7.50%, 3/15/2021 | 631,500 | |
275,000 | Sandridge Energy, Inc., Series WI, 7.50%, 2/15/2023 | 280,500 | |
550,000 | Sandridge Energy, Inc., Series WI, 8.125%, 10/15/2022 | 585,750 | |
325,000 | Sesi LLC, Series WI, 7.125%, 12/15/2021 | 364,000 | |
425,000 | Sesi LLC, Sr. Note, Series WI, 6.375%, 5/1/2019 | 455,813 | |
775,000 | W&T Offshore, Inc., Sr. Unsecd. Note, Series WI, 8.50%, 6/15/2019 | 823,438 | |
TOTAL | 23,384,866 | ||
Entertainment—0.9% | |||
700,000 | Cedar Fair LP, Company Guarantee, 9.125%, 8/1/2018 | 763,000 | |
225,000 | Cedar Fair LP, Sr. Unsecd. Note, 5.25%, 3/15/2021 | 223,313 | |
175,000 | Cinemark USA, Inc., 5.125%, 12/15/2022 | 170,188 | |
325,000 | Cinemark USA, Inc., Company Guarantee, Series WI, 7.375%, 6/15/2021 | 360,750 | |
775,000 | 1,3,4,5,6 | Hard Rock Park Operations LLC, Sr. Secd. Note, Series 144A, 0.00%, 4/1/2012 | 0 |
375,000 | Regal Cinemas, Inc., Company Guarantee, 8.625%, 7/15/2019 | 404,062 | |
950,000 | 1,2 | Six Flags Entertainment Corp., Sr. Note, Series 144A, 5.25%, 1/15/2021 | 931,000 |
TOTAL | 2,852,313 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Environmental—0.1% | |||
$250,000 | ADS Waste Escrow, Sr. Unsecd. Note, 8.25%, 10/1/2020 | $272,500 | |
Financial Institutions—4.2% | |||
275,000 | Ally Financial, Inc., 3.50%, 7/18/2016 | 284,426 | |
200,000 | Ally Financial, Inc., 4.75%, 9/10/2018 | 210,000 | |
250,000 | Ally Financial, Inc., Company Guarantee, 7.50%, 9/15/2020 | 292,188 | |
325,000 | Ally Financial, Inc., Company Guarantee, 8.00%, 11/1/2031 | 390,406 | |
1,375,000 | Ally Financial, Inc., Company Guarantee, 8.00%, 3/15/2020 | 1,655,156 | |
1,075,000 | Ally Financial, Inc., Company Guarantee, Series WI, 6.25%, 12/1/2017 | 1,202,656 | |
275,000 | Ally Financial, Inc., Sr. Unsecd. Note, 5.50%, 2/15/2017 | 299,063 | |
400,000 | CIT Group, Inc., 5.00%, 5/15/2017 | 429,000 | |
850,000 | CIT Group, Inc., 5.25%, 3/15/2018 | 914,812 | |
150,000 | CIT Group, Inc., 5.375%, 5/15/2020 | 160,125 | |
400,000 | 1,2 | CIT Group, Inc., Series 144A, 4.75%, 2/15/2015 | 415,500 |
150,000 | 1,2 | CIT Group, Inc., Sr. 2nd Priority Note, Series 144A, 6.625%, 4/1/2018 | 169,313 |
550,000 | CIT Group, Inc., Sr. Note, 4.25%, 8/15/2017 | 574,750 | |
300,000 | CIT Group, Inc., Sr. Unsecd. Note, 5.00%, 8/1/2023 | 290,250 | |
150,000 | 1,2 | General Motors Financial Company, Inc., Sr. Note, Series 144A, 2.75%, 5/15/2016 | 152,250 |
100,000 | 1,2 | General Motors Financial Company, Inc., Sr. Note, Series 144A, 4.25%, 5/15/2023 | 95,375 |
375,000 | International Lease Finance Corp., 4.625%, 4/15/2021 | 358,828 | |
625,000 | International Lease Finance Corp., 5.875%, 8/15/2022 | 626,563 | |
150,000 | International Lease Finance Corp., Sr. Unsecd. Note, 5.75%, 5/15/2016 | 161,063 | |
275,000 | International Lease Finance Corp., Sr. Unsecd. Note, 8.625%, 9/15/2015 | 306,281 | |
1,400,000 | International Lease Finance Corp., Sr. Unsecd. Note, 8.75%, 3/15/2017 | 1,655,500 | |
575,000 | 1,2 | Neuberger Berman, Inc., Series 144A, 5.875%, 3/15/2022 | 595,125 |
225,000 | 1,2 | Neuberger Berman, Inc., Sr. Note, Series 144A, 5.625%, 3/15/2020 | 237,375 |
1,475,000 | 1,2 | Nuveen Investments, Inc., Sr. Unsecd. Note, Series 144A, 9.50%, 10/15/2020 | 1,486,062 |
TOTAL | 12,962,067 | ||
Food & Beverage—5.1% | |||
1,575,000 | 1,2 | Aramark Corp., Sr. Unsecd. Note, Series 144A, 5.75%, 3/15/2020 | 1,653,750 |
500,000 | B&G Foods, Inc., Sr. Note, 4.625%, 6/1/2021 | 481,250 | |
250,000 | Constellation Brands, Inc., 4.25%, 5/1/2023 | 233,750 | |
400,000 | 1,2 | Darling International, Inc., Series 144A, 5.375%, 1/15/2022 | 403,500 |
1,900,000 | Del Monte Foods Co., Sr. Unsecd. Note, 7.625%, 2/15/2019 | 1,978,375 | |
1,750,000 | 1,2 | H.J. Heinz Co., 4.25%, 10/15/2020 | 1,697,500 |
1,250,000 | Michael Foods, Inc., Company Guarantee, Series WI, 9.75%, 7/15/2018 | 1,365,625 | |
1,325,000 | 1,2 | Michael Foods, Inc., Series 144A, 8.50%, 7/15/2018 | 1,404,500 |
1,350,000 | 1,2 | Pinnacle Foods Finance LLC/Pinnacle Foods Finance Corp., Sr. Unsecd. Note, Series 144A, 4.875%, 5/1/2021 | 1,282,500 |
650,000 | 1,2 | Shearer's Foods, Inc., Sr. Secd. Note, Series 144A, 9.00%, 11/1/2019 | 689,000 |
1,025,000 | Smithfield Foods, Inc., 6.625%, 8/15/2022 | 1,091,625 | |
350,000 | 1,2 | Smithfield Foods, Inc., Sr. Note, 5.25%, 8/1/2018 | 367,500 |
75,000 | 1,2 | Smithfield Foods, Inc., Sr. Note, 5.875%, 8/1/2021 | 77,063 |
225,000 | Smithfield Foods, Inc., Sr. Note, 7.75%, 7/1/2017 | 264,937 | |
2,725,000 | U.S. Foodservice, Inc., Sr. Unsecd. Note, 8.50%, 6/30/2019 | 2,987,281 | |
TOTAL | 15,978,156 | ||
Gaming—3.6% | |||
775,000 | Affinity Gaming LLC, Sr. Unsecd. Note, 9.00%, 5/15/2018 | 833,125 | |
450,000 | Ameristar Casinos, Inc., Sr. Unsecd. Note, Series WI, 7.50%, 4/15/2021 | 490,500 | |
625,000 | 1,2 | Chester Downs & Marina, Series 144A, 9.25%, 2/1/2020 | 629,688 |
250,000 | 1,2 | Churchill Downs, Inc., Sr. Unsecd. Note, Series 144A, 5.375%, 12/15/2021 | 255,000 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Gaming—continued | |||
$375,000 | Harrah's Operating Co., Inc., Sr. Secd. Note, 11.25%, 6/1/2017 | $382,500 | |
675,000 | MGM Mirage, Inc., 7.75%, 3/15/2022 | 757,687 | |
525,000 | MGM Mirage, Inc., Sr. Note, 7.50%, 6/1/2016 | 590,625 | |
400,000 | MGM Mirage, Inc., Sr. Unsecd. Note, 6.75%, 10/1/2020 | 429,000 | |
525,000 | MGM Mirage, Inc., Sr. Unsecd. Note, 8.625%, 2/1/2019 | 618,187 | |
925,000 | 1,2 | Mohegan Tribal Gaming Authority, Series 144A, 9.75%, 9/1/2021 | 1,001,312 |
625,000 | 1,2 | Penn National Gaming, Inc., Series 144A, 4.875%, 11/1/2020 | 626,563 |
350,000 | 1,2 | Penn National Gaming, Inc., Series 144A, 5.375%, 11/1/2023 | 345,625 |
500,000 | 1,2 | Penn National Gaming, Inc., Series 144A, 5.875%, 11/1/2021 | 495,000 |
175,000 | Pinnacle Entertainment, Inc., 7.75%, 4/1/2022 | 191,625 | |
775,000 | 1,2 | Pinnacle Entertainment, Inc., Series 144A, 6.375%, 8/1/2021 | 796,312 |
770,000 | 1,2 | Rivers Pittsburgh LP, Sr. Secd. Note, Series 144A, 9.50%, 6/15/2019 | 848,925 |
640,000 | 1,2 | Seminole Tribe of Florida, Bond, Series 144A, 7.804%, 10/1/2020 | 707,200 |
1,075,000 | Station Casinos, Inc., Sr. Note, 7.50%, 3/1/2021 | 1,150,250 | |
TOTAL | 11,149,124 | ||
Health Care—9.8% | |||
1,075,000 | Biomet, Inc., Sr. Note, 6.50%, 8/1/2020 | 1,134,125 | |
1,050,000 | Biomet, Inc., Sr. Sub., 6.50%, 10/1/2020 | 1,086,750 | |
1,150,000 | DJO Finance LLC, Company Guarantee, Series WI, 7.75%, 4/15/2018 | 1,175,875 | |
75,000 | DJO Finance LLC, Series WI, 8.75%, 3/15/2018 | 82,688 | |
275,000 | DJO Finance LLC, Series WI, 9.875%, 4/15/2018 | 297,000 | |
650,000 | DaVita HealthCare Partners, Inc., 5.75%, 8/15/2022 | 661,375 | |
878,000 | Emergency Medical Services Corp., Company Guarantee, Series WI, 8.125%, 6/1/2019 | 955,922 | |
700,000 | Grifols, Inc., Sr. Note, Series WI, 8.25%, 2/1/2018 | 747,250 | |
2,125,000 | HCA Holdings, Inc., Sr. Unsecd. Note, Series WI, 7.75%, 5/15/2021 | 2,326,875 | |
100,000 | HCA, Inc., 6.25%, 2/15/2021 | 104,875 | |
675,000 | HCA, Inc., Revolver—1st Lien, 5.875%, 3/15/2022 | 698,625 | |
825,000 | HCA, Inc., Series 1, 5.875%, 5/1/2023 | 816,750 | |
650,000 | HCA, Inc., Sr. Note, 7.50%, 11/6/2033 | 656,500 | |
475,000 | HCA, Inc., Sr. Secd. Note, 6.50%, 2/15/2020 | 523,094 | |
1,050,000 | HCA, Inc., Sr. Unsecd. Note, 7.50%, 2/15/2022 | 1,155,000 | |
550,000 | Hologic, Inc., 6.25%, 8/1/2020 | 583,000 | |
1,325,000 | 1,2 | IMS Health, Inc., Series 144A, 7.375%, 9/1/2018 | 1,384,625 |
1,350,000 | Iasis Healthcare, Sr. Unsecd. Note, 8.375%, 5/15/2019 | 1,437,750 | |
1,125,000 | 1,2 | Jaguar Holding Co., Series 144A, 9.375%, 10/15/2017 | 1,195,312 |
975,000 | 1,2 | Jaguar Holding Co., Sr. Note, 9.50%, 12/1/2019 | 1,101,750 |
600,000 | 1,2 | LifePoint Hospitals, Inc., Sr. Unsecd. Note, 5.50%, 12/1/2021 | 603,750 |
1,200,000 | 1,2 | MPH Intermediate Holding Company 2, Sr. Note, 8.375%, 8/1/2018 | 1,252,500 |
1,425,000 | 1,2 | Multiplan, Inc., Company Guarantee, Series 144A, 9.875%, 9/1/2018 | 1,574,625 |
1,100,000 | Tenet Healthcare Corp., 8.125%, 4/1/2022 | 1,188,000 | |
650,000 | Tenet Healthcare Corp., Note, Series B, 4.375%, 10/1/2021 | 614,250 | |
550,000 | Tenet Healthcare Corp., Sr. Secd. Note, 4.50%, 4/1/2021 | 523,187 | |
775,000 | United Surgical Partners International, Inc., Series WI, 9.00%, 4/1/2020 | 871,875 | |
950,000 | Universal Hospital Service Holdco, Inc., Series WI, 7.625%, 8/15/2020 | 1,007,000 | |
1,450,000 | VWR Funding, Inc., Sr. Unsecd. Note, 7.25%, 9/15/2017 | 1,562,375 | |
250,000 | 1,2 | Valeant Pharmaceuticals International, Inc., 6.75%, 8/15/2018 | 275,938 |
1,600,000 | 1,2 | Valeant Pharmaceuticals International, Inc., 7.50%, 7/15/2021 | 1,764,000 |
225,000 | 1,2 | Valeant Pharmaceuticals International, Inc., Series 144A, 5.625%, 12/1/2021 | 226,688 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Health Care—continued | |||
$650,000 | Wolverine Healthcare, Sr. Note, 10.625%, 6/1/2020 | $738,562 | |
TOTAL | 30,327,891 | ||
Industrial - Other—3.4% | |||
175,000 | 1,2 | Amsted Industries, Inc., Sr. Note, Series 144A, 8.125%, 3/15/2018 | 184,844 |
800,000 | 1,2 | Belden CDT, Inc., Series 144A, 5.50%, 9/1/2022 | 788,000 |
575,000 | 1,2 | Cleaver-Brooks, Inc., Series 144A, 8.75%, 12/15/2019 | 626,750 |
700,000 | Dynacast International LLC, Series WI, 9.25%, 7/15/2019 | 775,250 | |
625,000 | 1,2 | Gardner Denver, Inc., Series 144A, 6.875%, 8/15/2021 | 626,562 |
675,000 | 1,2 | General Cable Corp., Sr. Unsecd. Note, Series 144A, 6.50%, 10/1/2022 | 664,875 |
975,000 | 1,2 | Hamilton Sundstrand Corp., Series 144A, 7.75%, 12/15/2020 | 1,038,375 |
650,000 | 1,2 | J.B. Poindexter, Inc., Series 144A, 9.00%, 4/1/2022 | 697,125 |
250,000 | Mastec, Inc., 4.875%, 3/15/2023 | 236,875 | |
375,000 | 1,2 | Maxim Finance Corp., Sr. Secd. Note, Series 144A, 12.25%, 4/15/2015 | 387,169 |
175,000 | 1,2 | Milacron LLC, Series 144A, 7.75%, 2/15/2021 | 184,625 |
300,000 | 1,2 | Milacron LLC, Series 144A, 8.375%, 5/15/2019 | 336,000 |
925,000 | 1,2 | Mirror Bidco/Dematic, Series 144A, 7.75%, 12/15/2020 | 987,437 |
300,000 | Mueller Water Products, Inc., Company Guarantee, 8.75%, 9/1/2020 | 337,500 | |
650,000 | Mueller Water Products, Inc., Sr. Sub. Note, Series WI, 7.375%, 6/1/2017 | 669,500 | |
1,150,000 | The Hillman Group, Inc., Sr. Unsecd. Note, 10.875%, 6/1/2018 | 1,247,750 | |
725,000 | 1,2 | Unifrax Investment Corp., Series 144A, 7.50%, 2/15/2019 | 754,000 |
TOTAL | 10,542,637 | ||
Lodging—0.6% | |||
450,000 | Choice Hotels International, Inc., 5.75%, 7/1/2022 | 471,938 | |
600,000 | 1,2 | Hilton Worldwide Finance LLC, Sr. Unsecd. Note, 5.625%, 10/15/2021 | 623,625 |
169,000 | Host Marriott LP, Note, Series Q, 6.75%, 6/1/2016 | 171,439 | |
575,000 | Royal Caribbean Cruises Ltd., Sr. Note, 5.25%, 11/15/2022 | 577,875 | |
TOTAL | 1,844,877 | ||
Media - Cable—2.0% | |||
675,000 | 1,2 | Cequel Communications Holdings, Series 144A, 5.125%, 12/15/2021 | 636,187 |
350,000 | 1,2 | Cequel Communications Holdings, Series 144A, 6.375%, 9/15/2020 | 360,500 |
300,000 | Charter Communications Holdings II, 5.125%, 2/15/2023 | 279,750 | |
250,000 | Charter Communications Holdings II, 5.75%, 1/15/2024 | 236,875 | |
225,000 | Charter Communications Holdings II, 6.625%, 1/31/2022 | 232,875 | |
550,000 | Charter Communications Holdings II, 7.375%, 6/1/2020 | 598,125 | |
100,000 | Charter Communications Holdings II, Company Guarantee, Series WI, 8.125%, 4/30/2020 | 109,000 | |
600,000 | 1,2 | Charter Communications Holdings II, Series 144A, 5.75%, 9/1/2023 | 571,500 |
575,000 | Charter Communications Holdings II, Sr. Note, 7.00%, 1/15/2019 | 607,344 | |
300,000 | DISH DBS Corporation, 5.125%, 5/1/2020 | 301,500 | |
100,000 | DISH DBS Corporation, Series WI, 4.625%, 7/15/2017 | 105,000 | |
1,850,000 | DISH DBS Corporation, Series WI, 5.875%, 7/15/2022 | 1,859,250 | |
200,000 | 1,2 | LYNX II Corporation, Series 144A, 6.375%, 4/15/2023 | 204,500 |
TOTAL | 6,102,406 | ||
Media - Non-Cable—7.3% | |||
475,000 | AMC Networks, Inc., Series WI, 7.75%, 7/15/2021 | 536,750 | |
375,000 | AMC Networks, Inc., Sr. Unsecd. Note, 4.75%, 12/15/2022 | 359,063 | |
400,000 | Clear Channel Communications, Inc., 11.25%, 3/1/2021 | 432,000 | |
1,525,000 | Clear Channel Communications, Inc., Company Guarantee, 9.00%, 3/1/2021 | 1,547,875 | |
275,000 | Clear Channel Worldwide, 6.50%, 11/15/2022 | 280,156 | |
150,000 | Clear Channel Worldwide, 7.625%, 3/15/2020 | 156,750 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Media - Non-Cable—continued | |||
$625,000 | Clear Channel Worldwide, Series B, 7.625%, 3/15/2020 | $660,156 | |
1,250,000 | Clear Channel Worldwide, Series WI, 6.50%, 11/15/2022 | 1,282,812 | |
1,375,000 | Crown Media Holdings, Inc., Company Guarantee, 10.50%, 7/15/2019 | 1,567,500 | |
850,000 | Cumulus Media, Inc., Sr. Unsecd. Note, Series WI, 7.75%, 5/1/2019 | 901,000 | |
850,000 | 1,2 | Emerald Expo Holdings, Inc., 9.00%, 6/15/2021 | 869,125 |
825,000 | Entercom Radio LLC, Sr. Sub. Note, Series WI, 10.50%, 12/1/2019 | 938,437 | |
250,000 | 1,2 | Gannett Co., Inc., Sr. Unsecd. Note, Series 144A, 5.125%, 10/15/2019 | 260,625 |
775,000 | 1,2 | Gannett Co., Inc., Sr. Unsecd. Note, Series 144A, 6.375%, 10/15/2023 | 804,062 |
400,000 | Gray Television, Inc., 7.50%, 10/1/2020 | 427,000 | |
675,000 | 1,2 | Intelsat (Luxembourg) S. A., Sr. Unsecd. Note, Series 144A, 7.75%, 6/1/2021 | 726,469 |
775,000 | 1,2 | Intelsat (Luxembourg) S. A., Sr. Unsecd. Note, Series 144A, 8.125%, 6/1/2023 | 834,094 |
200,000 | Intelsat Jackson Holdings S.A., 6.625%, 12/15/2022 | 207,000 | |
450,000 | Intelsat Jackson Holdings S.A., Company Guarantee, 8.50%, 11/1/2019 | 492,750 | |
675,000 | 1,2 | Intelsat Jackson Holdings S.A., Gtd. Sr. Note, Series 144A, 5.50%, 8/1/2023 | 644,625 |
600,000 | Intelsat Jackson Holdings S.A., Sr. Unsecd. Note, Series WI, 7.25%, 4/1/2019 | 651,000 | |
425,000 | Intelsat Jackson Holdings S.A., Sr. Unsecd. Note, Series WI, 7.50%, 4/1/2021 | 470,688 | |
325,000 | Lamar Media Corp., Series WI, 5.00%, 5/1/2023 | 310,375 | |
425,000 | Lamar Media Corp., Series WI, 5.875%, 2/1/2022 | 437,750 | |
725,000 | Nielsen Finance LLC/Nielsen Finance Co., 4.50%, 10/1/2020 | 708,688 | |
600,000 | 1,2 | Nielsen Finance LLC/Nielsen Finance Co., Series 144A, 5.50%, 10/1/2021 | 610,500 |
1,150,000 | SSI Investments II Ltd., Company Guarantee, 11.125%, 6/1/2018 | 1,253,500 | |
150,000 | 1,2 | Sirius XM Radio, Inc., 4.25%, 5/15/2020 | 142,125 |
650,000 | 1,2 | Sirius XM Radio, Inc., 4.625%, 5/15/2023 | 589,875 |
800,000 | 1,2 | Sirius XM Radio, Inc., 5.875%, 10/1/2020 | 818,000 |
450,000 | 1,2 | Sirius XM Radio, Inc., Series 144A, 5.25%, 8/15/2022 | 456,750 |
1,125,000 | 1,2 | Southern Graphics Systems, Inc., Series 144A, 8.375%, 10/15/2020 | 1,170,000 |
950,000 | 1,2 | Townsquare Radio LLC, Series 144A, 9.00%, 4/1/2019 | 1,033,125 |
TOTAL | 22,580,625 | ||
Metals & Mining—0.3% | |||
750,000 | 3,4,5 | Aleris International, Inc., Company Guarantee, 9.00%, 12/15/2014 | 75 |
625,000 | 3,4,5 | Aleris International, Inc., Sr. Sub. Note, 10.00%, 12/15/2016 | 0 |
475,000 | 1,2 | Century Aluminum Co., Sr. Secd. Note, 7.50%, 6/1/2021 | 465,500 |
100,000 | Steel Dynamics, Inc., Sr. Unsecd. Note, 5.25%, 4/15/2023 | 100,500 | |
300,000 | 1,2 | Wise Metals Group LLC, Sr. Secd. Note, Series 144A, 8.75%, 12/15/2018 | 317,250 |
TOTAL | 883,325 | ||
Packaging & Containers—5.0% | |||
1,100,000 | 1,2 | Ardagh Packaging Finance PLC, Company Guarantee, Series 144A, 9.125%, 10/15/2020 | 1,210,000 |
400,000 | 1,2 | Ardagh Packaging Finance PLC, Series 144A, 7.00%, 11/15/2020 | 406,000 |
400,000 | 1,2 | Ardagh Packaging Finance PLC, Sr. Unsecd. Note, 9.125%, 10/15/2020 | 438,000 |
850,000 | Ball Corp., 4.00%, 11/15/2023 | 765,000 | |
500,000 | Ball Corp., 5.00%, 3/15/2022 | 497,500 | |
250,000 | Berry Plastics Corp., 9.75%, 1/15/2021 | 290,625 | |
500,000 | Berry Plastics Corp., Sr. Secd. Note, 9.50%, 5/15/2018 | 538,750 | |
100,000 | 1,2 | Beverage Packaging Holdings II, Sr. Note, Series 144A, 5.625%, 12/15/2016 | 102,250 |
275,000 | 1,2 | Beverage Packaging Holdings II, Sr. Sub. Note, 6.00%, 6/15/2017 | 279,125 |
350,000 | Bway Holding Co., Company Guarantee, Series WI, 10.00%, 6/15/2018 | 380,625 | |
775,000 | 1,2 | Bway Holding Co., Series 144A, 9.50%, 11/1/2017 | 827,313 |
500,000 | Crown Americas LLC, 4.50%, 1/15/2023 | 470,000 | |
200,000 | Crown Americas LLC, Company Guarantee, 6.25%, 2/1/2021 | 218,000 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Packaging & Containers—continued | |||
$675,000 | Greif, Inc., Sr. Unsecd. Note, 7.75%, 8/1/2019 | $769,500 | |
575,000 | 1,2 | Multi Packaging Solutions, Inc., Series 144A, 8.50%, 8/15/2021 | 623,875 |
1,950,000 | Reynolds Group, Series WI, 8.25%, 2/15/2021 | 2,091,375 | |
775,000 | Reynolds Group, Series WI, 8.50%, 5/15/2018 | 821,500 | |
625,000 | Reynolds Group, Series WI, 9.00%, 4/15/2019 | 673,437 | |
1,400,000 | Reynolds Group, Series WI, 9.875%, 8/15/2019 | 1,564,500 | |
200,000 | Reynolds Group, Sr. Secd. Note, Series WI, 7.125%, 4/15/2019 | 214,000 | |
175,000 | Reynolds Group, Sr. Unsecd. Note, 7.95%, 12/15/2025 | 164,938 | |
775,000 | Reynolds GRP ISS/Reynold, Series WI, 5.75%, 10/15/2020 | 794,375 | |
1,250,000 | 1,2 | Sealed Air Corp., Sr. Unsecd. Note, Series 144A, 8.375%, 9/15/2021 | 1,425,000 |
TOTAL | 15,565,688 | ||
Paper—0.3% | |||
100,000 | Clearwater Paper Corp., Company Guarantee, 7.125%, 11/1/2018 | 107,250 | |
350,000 | Clearwater Paper Corp., Sr. Note, 4.50%, 2/1/2023 | 316,750 | |
200,000 | Graphic Packaging International Corp., Sr. Note, 7.875%, 10/1/2018 | 217,750 | |
325,000 | Graphic Packaging International, Inc., 4.75%, 4/15/2021 | 322,563 | |
TOTAL | 964,313 | ||
Restaurants—1.1% | |||
1,000,000 | DineEquity Inc., Company Guarantee, Series WI, 9.50%, 10/30/2018 | 1,115,000 | |
1,125,000 | NPC INTL/OPER CO. A&B, Inc., Series WI, 10.50%, 1/15/2020 | 1,305,000 | |
975,000 | 1,2 | Seminole Hard Rock Entertainment, Inc./Seminole Hard Rock International LLC, Series 144A, 5.875%, 5/15/2021 | 962,813 |
TOTAL | 3,382,813 | ||
Retailers—5.4% | |||
1,200,000 | 1,2 | Academy Finance Corp., Series 144A, 8.00%, 6/15/2018 | 1,236,012 |
850,000 | 1,2 | Academy Finance Corp., Series 144A, 9.25%, 8/1/2019 | 943,500 |
950,000 | 1,2 | Claire's Stores, Inc., Series 144A, 6.125%, 3/15/2020 | 921,500 |
225,000 | Express, LLC, Company Guarantee, 8.75%, 3/1/2018 | 238,219 | |
450,000 | Gymboree Corp., Sr. Unsecd. Note, 9.125%, 12/1/2018 | 416,813 | |
875,000 | 1,2 | Jo-Ann Stores, Inc., Series 144A, 9.75%, 10/15/2019 | 919,844 |
1,550,000 | 1,2 | Jo-Ann Stores, Inc., Sr. Unsecd. Note, Series 144A, 8.125%, 3/15/2019 | 1,629,438 |
300,000 | Limited Brands, Inc., 5.625%, 10/15/2023 | 306,000 | |
625,000 | Limited Brands, Inc., Sr. Unsecd. Note, 5.625%, 2/15/2022 | 642,187 | |
1,100,000 | Michaels Stores, Inc., Company Guarantee, 7.75%, 11/1/2018 | 1,199,000 | |
150,000 | 1,2 | Michaels Stores, Inc., Series 144A, 5.875%, 12/15/2020 | 151,125 |
1,200,000 | 1,2 | Michaels Stores, Inc., Series 144A, 7.50%, 8/1/2018 | 1,254,000 |
275,000 | 1,2 | Neiman-Marcus Group, Inc., Series 144A, 8.00%, 10/15/2021 | 288,750 |
700,000 | 1,2 | Neiman-Marcus Group, Inc., Series 144A, 8.75%, 10/15/2021 | 736,750 |
1,175,000 | 1,2 | PETCO Animal Supplies, Inc., Series 144A, 8.50%, 10/15/2017 | 1,204,375 |
1,150,000 | 1,2 | PETCO Animal Supplies, Inc., Sr. Note, Series 144A, 9.25%, 12/1/2018 | 1,239,125 |
1,325,000 | 1,2 | Party City Holdings, Inc., Sr. Note, 8.75%, 8/15/2019 | 1,366,406 |
875,000 | Party City Holdings, Inc., Sr. Note, Series WI, 8.875%, 8/1/2020 | 984,375 | |
100,000 | Sally Beauty Holdings, Inc., 5.75%, 6/1/2022 | 104,500 | |
725,000 | Sally Hldgs. LLC/Sally Cap, Inc., Series WI, 6.875%, 11/15/2019 | 804,750 | |
300,000 | United Auto Group, Inc., Sr. Sub., 5.75%, 10/1/2022 | 308,250 | |
TOTAL | 16,894,919 | ||
Services—0.4% | |||
475,000 | 1,2 | Garda World Security Corp., Series 144A, 7.25%, 11/15/2021 | 480,938 |
650,000 | Monitronics International, Inc., 9.125%, 4/1/2020 | 692,250 | |
TOTAL | 1,173,188 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Technology—13.4% | |||
$175,000 | 1,2 | ACI Worldwide, Inc., 6.375%, 8/15/2020 | $183,313 |
175,000 | Advanced Micro Devices, Inc., Sr. Unsecd. Note, 7.50%, 8/15/2022 | 170,625 | |
275,000 | Advanced Micro Devices, Inc., Sr. Unsecd. Note, 7.75%, 8/1/2020 | 274,313 | |
375,000 | Aspect Software, Inc., Sr. Note, Series WI, 10.625%, 5/15/2017 | 379,687 | |
1,450,000 | 1,2 | BMC Software, Inc., Series 144A, 8.125%, 7/15/2021 | 1,500,750 |
350,000 | 1,2 | Blackboard, Inc., Sr. Unsecd. Note, Series 144A, 7.75%, 11/15/2019 | 349,125 |
45,000 | CDW LLC/CDW Finance, Company Guarantee, 12.535%, 10/12/2017 | 47,250 | |
1,575,000 | CDW LLC/CDW Finance, Sr. Unsecd. Note, Series WI, 8.50%, 4/1/2019 | 1,748,250 | |
925,000 | 1,2 | CommScope, Inc., Sr. Note, 6.625%, 6/1/2020 | 966,625 |
843,000 | 1,2 | CommScope, Inc., Sr. Note, Series 144A, 8.25%, 1/15/2019 | 928,354 |
650,000 | 1,2 | Compucom System, Inc., 7.00%, 5/1/2021 | 648,375 |
950,000 | CoreLogic, Inc., Sr. Unsecd. Note, Series WI, 7.25%, 6/1/2021 | 1,035,500 | |
400,000 | 1,2 | DataTel Inc., Series 144A, 9.625%, 12/1/2018 | 414,000 |
1,625,000 | 1,2 | DataTel Inc., Series 144A, 9.75%, 1/15/2019 | 1,807,813 |
1,025,000 | Emdeon, Inc., 11.00%, 12/31/2019 | 1,191,562 | |
1,450,000 | Epicor Software Corp., 8.625%, 5/1/2019 | 1,580,500 | |
925,000 | 1,2 | Epicor Software Corp., Series 144A, 9.00%, 6/15/2018 | 968,937 |
375,000 | 1,2 | First Data Corp., Series 144A, 11.25%, 1/15/2021 | 415,781 |
275,000 | 1,2 | First Data Corp., Sr. Secd. 2nd Priority Note, Series 144A, 8.25%, 1/15/2021 | 293,906 |
3,275,000 | 1,2 | First Data Corp., Sr. Secd. 2nd Priority Note, Series 144A, 8.75%, 1/15/2022 | 3,512,438 |
325,000 | Flextronics International Ltd., 4.625%, 2/15/2020 | 318,500 | |
300,000 | Flextronics International Ltd., 5.00%, 2/15/2023 | 282,750 | |
400,000 | Freescale Semiconductor, Inc., Company Guarantee, 10.75%, 8/1/2020 | 456,000 | |
775,000 | 1,2 | Freescale Semiconductor, Inc., Sr. Secd. Note, Series 144A, 6.00%, 1/15/2022 | 786,625 |
1,050,000 | IAC Interactive Corp., 4.75%, 12/15/2022 | 984,375 | |
250,000 | 1,2 | IAC Interactive Corp., 4.875%, 11/30/2018 | 256,875 |
925,000 | IGATE Capital Corp., Sr. Unsecd. Note, Series WI, 9.00%, 5/1/2016 | 987,437 | |
1,150,000 | 1,2 | Igloo Holdings Corp., Sr. Note, Series 144A, 8.25%, 12/15/2017 | 1,173,000 |
750,000 | Interactive Data Corp., Company Guarantee, 10.25%, 8/1/2018 | 825,938 | |
450,000 | Iron Mountain, Inc., Sr. Sub. Note, 7.75%, 10/1/2019 | 504,000 | |
425,000 | Kemet Corp., Sr. Note, 10.50%, 5/1/2018 | 421,813 | |
1,125,000 | Lawson Software, Inc., Series WI, 11.50%, 7/15/2018 | 1,302,187 | |
1,000,000 | Lawson Software, Inc., Series WI, 9.375%, 4/1/2019 | 1,130,000 | |
1,050,000 | Lender Processing Services, 5.75%, 4/15/2023 | 1,092,000 | |
525,000 | MagnaChip Semiconductor S.A., Sr. Unsecd. Note, 6.625%, 7/15/2021 | 536,813 | |
175,000 | 1,2 | NCR Corp., 5.875%, 12/15/2021 | 179,156 |
325,000 | 1,2 | NCR Corp., 6.375%, 12/15/2023 | 333,531 |
500,000 | NCR Corp., Sr. Unsecd. Note, 4.625%, 2/15/2021 | 481,250 | |
550,000 | NCR Corp., Sr. Unsecd. Note, 5.00%, 7/15/2022 | 525,937 | |
350,000 | 1,2 | NXP BV/NXP Funding LLC, Series 144A, 3.75%, 6/1/2018 | 354,375 |
225,000 | 1,2 | NXP BV/NXP Funding LLC, Series 144A, 5.75%, 2/15/2021 | 236,250 |
200,000 | 1,2 | NXP BV/NXP Funding LLC, Series 144A, 5.75%, 3/15/2023 | 204,000 |
1,100,000 | 1,2 | Nuance Communications, Inc., 5.375%, 8/15/2020 | 1,080,750 |
225,000 | SERENA Software, Inc., Sr. Sub. Note, 10.375%, 3/15/2016 | 226,125 | |
1,600,000 | 1,2 | Seagate Technology HDD Holdings, Series 144A, 4.75%, 6/1/2023 | 1,504,000 |
250,000 | Seagate Technology HDD Holdings, Sr. Unsecd. Note, Series WI, 7.00%, 11/1/2021 | 277,187 | |
1,450,000 | 1,2 | Solera Holdings, Inc., 6.00%, 6/15/2021 | 1,526,125 |
50,000 | 1,2 | Solera Holdings, Inc., Series 144A, 6.125%, 11/1/2023 | 51,750 |
1,050,000 | SunGard Data Systems, Inc., 6.625%, 11/1/2019 | 1,107,750 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Technology—continued | |||
$1,500,000 | Syniverse Holdings, Inc., Company Guarantee, 9.125%, 1/15/2019 | $1,646,250 | |
625,000 | TransUnion Holding Co., Inc., 8.125%, 6/15/2018 | 662,500 | |
1,100,000 | TransUnion Holding Co., Inc., Sr. Unsecd. Note, 9.625%, 6/15/2018 | 1,188,000 | |
225,000 | Verisign, Inc., 4.625%, 5/1/2023 | 216,000 | |
400,000 | 1,2 | Viasystems, Inc., Sr. Secd. Note, Series 144A, 7.875%, 5/1/2019 | 434,500 |
TOTAL | 41,710,853 | ||
Textile—0.1% | |||
475,000 | Phillips Van Heusen Corp., Sr. Note, 4.50%, 12/15/2022 | 452,438 | |
Transportation—0.3% | |||
425,000 | HDTFS, Inc., Series WI, 6.25%, 10/15/2022 | 440,938 | |
425,000 | Hertz Corp., Company Guarantee, 6.75%, 4/15/2019 | 460,062 | |
150,000 | Hertz Corp., Series WI, 5.875%, 10/15/2020 | 156,187 | |
TOTAL | 1,057,187 | ||
Utility - Electric—1.3% | |||
175,000 | 1,2 | Calpine Corp., Sr. Secd. Note, Series 144A, 6.00%, 1/15/2022 | 180,250 |
300,000 | 1,2 | Dynegy, Inc., Series 144A, 5.875%, 6/1/2023 | 285,000 |
325,000 | 1,2 | Energy Future Intermediate Holding Company LLC, Series 144A, 6.875%, 8/15/2017 | 338,000 |
900,000 | Energy Future Intermediate Holding Company LLC, Sr. Secd. Note, 10.00%, 12/1/2020 | 960,750 | |
129,708 | 1 | FPL Energy National Wind, Note, Series 144A, 6.125%, 3/25/2019 | 123,849 |
800,000 | NRG Energy, Inc., Company Guarantee, 8.25%, 9/1/2020 | 890,000 | |
125,000 | NRG Energy, Inc., Company Guarantee, Series WI, 7.625%, 1/15/2018 | 143,125 | |
450,000 | NRG Energy, Inc., Sr. Unsecd. Note, 7.875%, 5/15/2021 | 500,625 | |
525,000 | NRG Energy, Inc., Sr. Unsecd. Note, Series WI, 7.625%, 5/15/2019 | 557,812 | |
TOTAL | 3,979,411 | ||
Utility - Natural Gas—3.2% | |||
1,025,000 | Access Midstream Partners LP, Sr. Note, 4.875%, 5/15/2023 | 994,250 | |
375,000 | Chesapeake Midstream Partners LP, Sr. Unsecd. Note, Series WI, 6.125%, 7/15/2022 | 403,125 | |
275,000 | 1,2 | Crestwood Midstream Partners LP, Sr. Unsecd. Note, 6.125%, 3/1/2022 | 283,250 |
700,000 | El Paso Corp., Sr. Unsecd. Note, 6.50%, 9/15/2020 | 753,287 | |
200,000 | El Paso Corp., Sr. Unsecd. Note, 7.25%, 6/1/2018 | 229,227 | |
625,000 | Energy Transfer Equity LP, 5.875%, 1/15/2024 | 619,531 | |
400,000 | Holly Energy Partners LP, Sr. Unsecd. Note, 6.50%, 3/1/2020 | 420,000 | |
350,000 | Inergy Midstream LP, Sr. Unsecd. Note, 6.00%, 12/15/2020 | 362,250 | |
600,000 | 1,2 | Kinder Morgan, Inc., Sr. Unsecd. Note, 5.625%, 11/15/2023 | 583,055 |
350,000 | MarkWest Energy Partners LP, Company Guarantee, 6.75%, 11/1/2020 | 381,500 | |
300,000 | MarkWest Energy Partners LP, Sr. Unsecd. Note, 4.50%, 7/15/2023 | 282,750 | |
341,000 | MarkWest Energy Partners LP, Sr. Unsecd. Note, 6.25%, 6/15/2022 | 362,313 | |
200,000 | Regency Energy Partners LP, 5.50%, 4/15/2023 | 196,000 | |
250,000 | Regency Energy Partners LP, Series WI, 4.50%, 11/1/2023 | 228,750 | |
875,000 | 1,2 | Sabine Pass LNG LP, Series 144A, 5.625%, 2/1/2021 | 859,687 |
225,000 | 1,2 | Sabine Pass LNG LP, Series 144A, 5.625%, 4/15/2023 | 211,500 |
300,000 | 1,2 | Sabine Pass LNG LP, Series 144A, 6.25%, 3/15/2022 | 298,125 |
750,000 | Southern Star Central Corp., Sr. Note, 6.75%, 3/1/2016 | 756,563 | |
698,000 | Suburban Propane Partners LP, Series WI, 7.375%, 8/1/2021 | 764,310 | |
200,000 | 1,2 | Tesoro Logistics LP, Sr. Note, 5.875%, 10/1/2020 | 205,500 |
400,000 | Tesoro Logistics LP, Sr. Unsecd. Note, 5.875%, 10/1/2020 | 411,000 | |
325,000 | Tesoro Logistics LP, Sr. Unsecd. Note, 6.125%, 10/15/2021 | 336,375 | |
TOTAL | 9,942,348 |
Principal Amount or Shares | Value | ||
CORPORATE BONDS—continued | |||
Wireless Communications—4.0% | |||
$275,000 | 1,2 | Digicel Ltd., Series 144A, 6.00%, 4/15/2021 | $266,062 |
100,000 | 1,2 | Digicel Ltd., Sr. Note, Series 144A, 10.50%, 4/15/2018 | 107,500 |
425,000 | 1,2 | Digicel Ltd., Sr. Note, Series 144A, 8.25%, 9/1/2017 | 444,125 |
200,000 | 1,2 | Digicel Ltd., Sr. Unsecd. Note, Series 144A, 7.00%, 2/15/2020 | 203,000 |
1,975,000 | 1,2 | Digicel Ltd., Sr. Unsecd. Note, Series 144A, 8.25%, 9/30/2020 | 2,056,469 |
225,000 | MetroPCS Wireless, Inc., 6.125%, 1/15/2022 | 229,500 | |
250,000 | MetroPCS Wireless, Inc., 6.50%, 1/15/2024 | 253,750 | |
50,000 | MetroPCS Wireless, Inc., 6.731%, 4/28/2022 | 52,313 | |
1,025,000 | MetroPCS Wireless, Inc., Sr. Note, 6.625%, 11/15/2020 | 1,090,344 | |
75,000 | MetroPCS Wireless, Inc., Sr. Note, 6.633%, 4/28/2021 | 79,406 | |
300,000 | MetroPCS Wireless, Inc., Sr. Note, 6.836%, 4/28/2023 | 312,375 | |
400,000 | MetroPCS Wireless, Inc., Sr. Note, 7.875%, 9/1/2018 | 430,500 | |
375,000 | 1,2 | MetroPCS Wireless, Inc., Sr. Note, Series 144A, 6.625%, 4/1/2023 | 388,594 |
1,350,000 | Sprint Capital Corp., Company Guarantee, 6.875%, 11/15/2028 | 1,279,125 | |
1,775,000 | Sprint Capital Corp., Company Guarantee, 6.90%, 5/1/2019 | 1,948,062 | |
925,000 | 1,2 | Sprint Capital Corp., Gtd. Note, Series 144A, 9.00%, 11/15/2018 | 1,116,937 |
750,000 | 1,2 | Sprint Corp., Series 144A, 7.875%, 9/15/2023 | 808,125 |
150,000 | 1,2 | Sprint Corp., Sr. Unsecd. Note, Series 144A, 7.125%, 6/15/2024 | 152,625 |
300,000 | 1,2 | Sprint Nextel Corp., Series 144A, 7.00%, 3/1/2020 | 336,000 |
975,000 | Sprint Nextel Corp., Sr. Unsecd. Note, 6.00%, 11/15/2022 | 955,500 | |
TOTAL | 12,510,312 | ||
Wireline Communications—0.7% | |||
425,000 | Level 3 Financing, Inc., 7.00%, 6/1/2020 | 452,625 | |
300,000 | Level 3 Financing, Inc., 8.875%, 6/1/2019 | 329,250 | |
150,000 | 1,2 | Level 3 Financing, Inc., Series 144A, 6.125%, 1/15/2021 | 151,875 |
600,000 | Level 3 Financing, Inc., Series WI, 8.625%, 7/15/2020 | 675,000 | |
600,000 | Level 3 Financing, Inc., Sr. Unsecd. Note, Series WI, 8.125%, 7/1/2019 | 661,500 | |
TOTAL | 2,270,250 | ||
TOTAL CORPORATE BONDS (IDENTIFIED COST $287,048,303) | 298,030,943 | ||
COMMON STOCKS—0.1% | |||
Automotive—0.1% | |||
10,208 | 3 | General Motors Co. | 417,184 |
2,433 | 3 | Motors Liquidation Co. | 78,221 |
TOTAL | 495,405 | ||
Metals & Mining—0.0% | |||
231 | 3,5 | Royal Oak Ventures, Inc. | 0 |
Other—0.0% | |||
71 | 1,3,5 | CVC Claims Litigation LLC | 0 |
TOTAL COMMON STOCKS (IDENTIFIED COST $1,533,681) | 495,405 | ||
PREFERRED STOCK—0.2% | |||
Financial Institutions—0.2% | |||
600 | 1,2 | Ally Financial, Inc., Pfd., Series 144A, Annual Dividend 7.00% (IDENTIFIED COST $188,868) | 576,056 |
WARRANTS—0.0% | |||
Automotive—0.0% | |||
467 | 3 | General Motors Co., Warrants | 14,577 |
Principal Amount or Shares | Value | ||
WARRANTS—continued | |||
Automotive—continued | |||
468 | 3 | General Motors Co., Warrants | $10,821 |
TOTAL WARRANTS (IDENTIFIED COST $7,188) | 25,398 | ||
REPURCHASE AGREEMENT—2.3% | |||
$7,056,000 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845. (AT COST) | 7,056,000 | |
TOTAL INVESTMENTS—98.4% (IDENTIFIED COST $295,834,040)7 | 306,183,802 | ||
OTHER ASSETS AND LIABILITIES - NET—1.6%8 | 4,894,789 | ||
TOTAL NET ASSETS—100% | $311,078,591 | ||
1 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2013, these restricted securities amounted to $118,626,110, which represented 38.1% of total net assets. |
2 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees (the “Trustees”). At December 31, 2013, these liquid restricted securities amounted to $118,502,261, which represented 38.1% of total net assets. |
3 | Non-income-producing security. |
4 | Issuer in default. |
5 | Market quotations and price evaluations are not available. Fair value determined in accordance with procedures established by and under the general supervision of the Trustees. |
6 | Principal amount and interest were not paid upon final maturity. |
7 | The cost of investments for federal tax purposes amounts to $296,333,312. |
8 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Valuation Inputs | ||||
Level 1— Quoted Prices and Investments in Investment Companies | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Debt Securities: | ||||
Corporate Bonds | $— | $298,030,868 | $75 | $298,030,943 |
Equity Securities: | ||||
Common Stock | ||||
Domestic | 495,405 | — | — | 495,405 |
International | — | — | 0 | 0 |
Preferred Stock | ||||
Domestic | — | 576,056 | — | 576,056 |
Warrants | 25,398 | — | — | 25,398 |
Repurchase Agreement | — | 7,056,000 | — | 7,056,000 |
TOTAL SECURITIES | $520,803 | $305,662,924 | $75 | $306,183,802 |
PIK | —Payment in Kind |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $7.17 | $6.76 | $7.03 | $6.67 | $5.03 |
Income From Investment Operations: | |||||
Net investment income1 | 0.44 | 0.49 | 0.53 | 0.56 | 0.55 |
Net realized and unrealized gain (loss) on investments | 0.04 | 0.46 | (0.18) | 0.36 | 1.78 |
TOTAL FROM INVESTMENT OPERATIONS | 0.48 | 0.95 | 0.35 | 0.92 | 2.33 |
Less Distributions: | |||||
Distributions from net investment income | (0.50) | (0.54) | (0.62) | (0.56) | (0.69) |
Net Asset Value, End of Period | $7.15 | $7.17 | $6.76 | $7.03 | $6.67 |
Total Return2 | 6.99% | 14.70% | 5.17% | 14.73% | 52.85% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.79% | 0.77% | 0.79% | 0.78% | 0.78% |
Net investment income | 6.21% | 7.14% | 7.77% | 8.41% | 9.64% |
Expense waiver/reimbursement3 | — | 0.00%4 | 0.00%4 | 0.00%4 | 0.02% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $246,994 | $205,500 | $157,842 | $164,640 | $168,092 |
Portfolio turnover | 32% | 33% | 38% | 45% | 33% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
4 | Represents less than 0.01%. |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $7.13 | $6.73 | $7.00 | $6.65 | $5.01 |
Income From Investment Operations: | |||||
Net investment income1 | 0.42 | 0.47 | 0.51 | 0.54 | 0.53 |
Net realized and unrealized gain (loss) on investments | 0.04 | 0.45 | (0.18) | 0.36 | 1.78 |
TOTAL FROM INVESTMENT OPERATIONS | 0.46 | 0.92 | 0.33 | 0.90 | 2.31 |
Less Distributions: | |||||
Distributions from net investment income | (0.48) | (0.52) | (0.60) | (0.55) | (0.67) |
Net Asset Value, End of Period | $7.11 | $7.13 | $6.73 | $7.00 | $6.65 |
Total Return2 | 6.73% | 14.31% | 4.92% | 14.38% | 52.47% |
Ratios to Average Net Assets: | |||||
Net expenses | 1.04% | 1.02% | 1.04% | 1.03% | 1.03% |
Net investment income | 5.97% | 6.88% | 7.50% | 8.16% | 9.39% |
Expense waiver/reimbursement3 | — | 0.00%4 | 0.00%4 | 0.00%4 | 0.02% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $64,085 | $76,202 | $71,867 | $84,800 | $81,866 |
Portfolio turnover | 32% | 33% | 38% | 45% | 33% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
4 | Represents less than 0.01%. |
December 31, 2013
Assets: | ||
Total investment in securities, at value (identified cost $295,834,040) | $306,183,802 | |
Cash | 219 | |
Income receivable | 5,211,414 | |
Receivable for investments sold | 67,500 | |
Receivable for shares sold | 142,050 | |
TOTAL ASSETS | 311,604,985 | |
Liabilities: | ||
Payable for investments purchased | $400,938 | |
Payable for shares redeemed | 89,758 | |
Payable for Directors'/Trustees' fees (Note 5) | 199 | |
Payable for distribution services fee (Note 5) | 14,860 | |
Accrued expenses (Note 5) | 20,639 | |
TOTAL LIABILITIES | 526,394 | |
Net assets for 43,580,914 shares outstanding | $311,078,591 | |
Net Assets Consist of: | ||
Paid-in capital | $305,550,234 | |
Net unrealized appreciation of investments | 10,349,762 | |
Accumulated net realized loss on investments | (23,458,285) | |
Undistributed net investment income | 18,636,880 | |
TOTAL NET ASSETS | $311,078,591 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||
Primary Shares: | ||
$246,993,971 ÷ 34,565,688 shares outstanding, no par value, unlimited shares authorized | $7.15 | |
Service Shares: | ||
$64,084,620 ÷ 9,015,226 shares outstanding, no par value, unlimited shares authorized | $7.11 |
Year Ended December 31, 2013
Investment Income: | |
Interest | $20,525,812 |
Dividends | 42,000 |
TOTAL INCOME | 20,567,812 |
Expenses: | |
Investment adviser fee (Note 5) | 1,762,458 |
Administrative fee (Note 5) | 229,244 |
Custodian fees | 16,504 |
Transfer agent fee | 29,075 |
Directors'/Trustees' fees (Note 5) | 2,141 |
Auditing fees | 28,000 |
Legal fees | 8,664 |
Portfolio accounting fees | 131,922 |
Distribution services fee (Note 5) | 172,761 |
Printing and postage | 97,385 |
Insurance premiums (Note 5) | 4,634 |
Miscellaneous (Note 5) | 4,617 |
TOTAL EXPENSES | 2,487,405 |
Net investment income | 18,080,407 |
Realized and Unrealized Gain (Loss) on Investments: | |
Net realized gain on investments | 3,091,203 |
Net change in unrealized appreciation of investments | (1,045,615) |
Net realized and unrealized gain on investments | 2,045,588 |
Change in net assets resulting from operations | $20,125,995 |
Year Ended December 31 | 2013 | 2012 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $18,080,407 | $18,515,936 |
Net realized gain on investments | 3,091,203 | 3,195,741 |
Net change in unrealized appreciation/depreciation of investments | (1,045,615) | 13,001,426 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 20,125,995 | 34,713,103 |
Distributions to Shareholders: | ||
Distributions from net investment income | ||
Primary Shares | (14,976,047) | (13,024,797) |
Service Shares | (4,865,579) | (5,841,657) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (19,841,626) | (18,866,454) |
Share Transactions: | ||
Proceeds from sale of shares | 103,609,223 | 100,963,967 |
Net asset value of shares issued to shareholders in payment of distributions declared | 14,708,195 | 16,268,260 |
Cost of shares redeemed | (89,224,996) | (81,085,876) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 29,092,422 | 36,146,351 |
Change in net assets | 29,376,791 | 51,993,000 |
Net Assets: | ||
Beginning of period | 281,701,800 | 229,708,800 |
End of period (including undistributed net investment income of $18,636,880 and $19,795,179, respectively) | $311,078,591 | $281,701,800 |
■ | Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Fixed-income securities and repurchase agreements acquired with remaining maturities of 60 days or less are valued at their amortized cost (adjusted for the accretion of any discount or amortization of any premium), unless the issuer's creditworthiness is impaired or other factors indicate that amortized cost is not an accurate estimate of the investment's fair value, in which case it would be valued in the same manner as a longer-term security. |
■ | 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. |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, 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 and public trading in similar securities of the issuer or comparable issuers. |
■ | With respect to securities traded 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; and |
■ | Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
Security | Acquisition Date | Cost | Market Value |
CVC Claims Litigation LLC | 3/26/1997 – 6/18/1997 | $590,616 | $0 |
FPL Energy National Wind, Note, Series 144A, 6.125%, 3/25/2019 | 2/16/2005 | $129,708 | $123,849 |
Hard Rock Park Operations LLC, Sr. Secd. Note, Series 144A, 0.00%, 4/1/2012 | 3/23/2006 | $737,477 | $0 |
Year Ended December 31 | 2013 | 2012 | ||
Primary Shares: | Shares | Amount | Shares | Amount |
Shares sold | 12,538,091 | $87,761,358 | 10,718,739 | $73,230,932 |
Shares issued to shareholders in payment of distributions declared | 1,434,784 | 9,842,617 | 1,584,590 | 10,426,602 |
Shares redeemed | (8,074,582) | (56,488,125) | (6,970,243) | (47,671,194) |
NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | 5,898,293 | $41,115,850 | 5,333,086 | $35,986,340 |
Year Ended December 31 | 2013 | 2012 | ||
Service Shares: | Shares | Amount | Shares | Amount |
Shares sold | 2,286,348 | $15,847,865 | 4,013,638 | $27,733,035 |
Shares issued to shareholders in payment of distributions declared | 711,342 | 4,865,578 | 890,496 | 5,841,658 |
Shares redeemed | (4,667,931) | (32,736,871) | (4,895,075) | (33,414,682) |
NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | (1,670,241) | $(12,023,428) | 9,059 | $160,011 |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | 4,228,052 | $29,092,422 | 5,342,145 | $36,146,351 |
Increase (Decrease) | |
Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$602,920 | $(602,920) |
2013 | 2012 | |
Ordinary income | $19,841,626 | $18,866,454 |
Undistributed ordinary income | $18,643,266 |
Net unrealized appreciation | $9,850,490 |
Capital loss carryforwards | $(22,965,399) |
Expiration Year | Short-Term | Long-Term | Total |
2016 | $852,357 | NA | $852,357 |
2017 | $13,179,638 | NA | $13,179,638 |
2018 | $8,933,404 | NA | $8,933,404 |
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 |
Distribution Services Fees Incurred | |
Service Shares | $172,761 |
Purchases | $114,843,202 |
Sales | $92,253,737 |
February 14, 2014
Beginning Account Value 7/1/2013 | Ending Account Value 12/31/2013 | Expenses Paid During Period1 | |
Actual: | |||
Primary Shares | $1,000 | $1,054.60 | $4.14 |
Service Shares | $1,000 | $1,053.30 | $5.43 |
Hypothetical (assuming a 5% return before expenses): | |||
Primary Shares | $1,000 | $1,021.17 | $4.08 |
Service Shares | $1,000 | $1,019.91 | $5.35 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The expenses shown in the table do not include the charges and expenses imposed by the insurance company under the variable insurance product contract. Please refer to the variable insurance product prospectus for a complete listing of these expenses. The annualized net expense ratios are as follows: |
Primary Shares | 0.80% |
Service Shares | 1.05% |
Name | For | Withheld |
John T. Collins | 300,523,736.140 | 11,005,188.385 |
Maureen Lally-Green | 300,308,651.177 | 11,220,273.348 |
Thomas M. O'Neill | 300,886,250.634 | 10,642,673.891 |
P. Jerome Richey | 300,662,760.971 | 10,866,163.554 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: October 1993 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
J. Christopher Donahue* Birth Date: April 11, 1949 Trustee Began serving: October 1993 | 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, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); 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. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust 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 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: October 1993 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: November 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: 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); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee 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. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: September 1993 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
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 Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; 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 PRESIDENT Officer since: September 1993 | 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. |
John B. Fisher Birth Date: May 16, 1956 PRESIDENT Officer since: November 2004 | Principal Occupations: 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 and CEO of Passport Research, Ltd.; President of some of the Funds in the Federated Fund Family; 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; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc.; President, Technology, Federated Services Company. |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | 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. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Stephen F. Auth Birth Date: September 3, 1956 450 Lexington Avenue Suite 3700 New York, NY 10017-3943 CHIEF INVESTMENT OFFICER Officer since: November 2002 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
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. |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 313916843
2014 ©Federated Investors, Inc.
Share Class |
Primary |
Service |
1 | Please see the footnotes to the line graphs below for definitions of, and further information about, the RMCGI. |
2 | Please see the footnotes to the line graphs below for definitions of, and further information about, the MVMCGFA. |
3 | The S&P 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The index is unmanaged, and it is not possible to invest directly in an index. |
4 | The Russell Midcap® Index measures the performance of the mid-cap segment of the U.S. equity universe. The Russell Midcap® Index is a subset of the Russell 1000® Index. It includes approximately 800 of the smallest securities based on a combination of their market cap and current index membership. The Russell Midcap® Index represents approximately 31% of the total market capitalization of the Russell 1000® companies. The Russell Midcap® Index is constructed to provide a comprehensive and unbiased barometer for the mid-cap segment and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap opportunity set. The index is unmanaged, and it is not possible to invest directly in an index. |
5 | The Russell 2000® Index measures the performance of the small-cap segment of the U.S. equity universe. The Russell 2000® Index is a subset of the Russell 3000® Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000® Index is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set. The index is unmanaged, and it is not possible to invest directly in an index. |
6 | The Russell Midcap® Growth Index measures the performance of the mid-cap growth segment of the U.S. equity universe. It includes those Russell Midcap® Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell Midcap® Growth Index is constructed to provide a comprehensive and unbiased barometer of the mid-cap growth market and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap growth market. The index is unmanaged, and it is not possible to invest directly in an index. |
7 | International investing involves special risks including currency risk, increased volatility, political risks and differences in auditing and other financial standards. |
Share Class | 1 Year | 5 Years | 10 Years |
Primary Shares | 40.12% | 16.84% | 8.44% |
Service Shares | 39.67% | 16.54% | 8.16% |
Federated Kaufmann Fund II - | Primary Shares | RMCGI | MVMCGFA |
12/31/2003 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 11,466 | 11,548 | 10,966 |
12/31/2005 | 12,755 | 12,945 | 12,085 |
12/31/2006 | 14,652 | 14,325 | 13,045 |
12/31/2007 | 17,734 | 15,961 | 15,253 |
12/31/2008 | 10,323 | 8,887 | 8,778 |
12/31/2009 | 13,367 | 13,000 | 12,263 |
12/31/2010 | 15,773 | 16,430 | 14,724 |
12/31/2011 | 13,678 | 16,159 | 14,251 |
12/31/2012 | 16,042 | 18,713 | 16,393 |
12/31/2013 | 22,479 | 25,401 | 22,186 |
Federated Kaufmann Fund II - | Service Shares | RMCGI | MVMCGFA |
12/31/2003 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 11,448 | 11,548 | 10,966 |
12/31/2005 | 12,693 | 12,945 | 12,085 |
12/31/2006 | 14,546 | 14,325 | 13,045 |
12/31/2007 | 17,547 | 15,961 | 15,253 |
12/31/2008 | 10,193 | 8,887 | 8,778 |
12/31/2009 | 13,160 | 13,000 | 12,263 |
12/31/2010 | 15,495 | 16,430 | 14,724 |
12/31/2011 | 13,406 | 16,159 | 14,251 |
12/31/2012 | 15,686 | 18,713 | 16,393 |
12/31/2013 | 21,909 | 25,401 | 22,186 |
1 | The Fund's performance assumes the reinvestment of all dividends and distributions. The RMGI and LMCGA have been adjusted to reflect reinvestment of dividends on securities in the index and average. |
2 | The RMCGI measures the performance of the mid-cap growth segment of the U.S. equity universe. It includes those Russell Midcap® Index companies with higher price-to-book ratios and higher forecasted growth values. The RMCGI is constructed to provide a comprehensive and unbiased barometer of the mid-cap growth market. The RMCGI is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true mid-cap growth market. The RMCGI is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission 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 | Morningstar figures represent the average of the total returns reported by all the mutual funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. |
Sector Composition | Percentage of Total Net Assets |
Health Care | 30.4% |
Industrials | 16.1% |
Information Technology | 15.9% |
Consumer Discretionary | 12.7% |
Financials | 9.1% |
Materials | 7.0% |
Energy | 3.8% |
Consumer Staples | 1.8% |
Utilities | 0.6% |
Telecommunication Services | 0.4% |
U.S. Treasury Securities | 0.1% |
Derivative Contracts2,3 | (0.0)% |
Securities Lending Collateral4 | 0.8% |
Cash Equivalents5 | 3.7% |
Other Assets and Liabilities—Net6 | (2.4)% |
TOTAL | 100.0% |
1 | Except for U.S. Treasury Securities, Securities Lending Collateral, Cash Equivalents and Other Assets and Liabilities, sector classifications are based upon, and individual portfolio securities are assigned to, the classifications of the Global Industry Classification Standard (GICS), except that the Adviser assigns a classification to securities not classified by the GICS and to securities for which the Adviser does not have access to the classification made by the GICS. |
2 | Represents less than 0.1%. |
3 | 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. |
4 | Cash collateral received from lending portfolio securities which is invested in short-term investments such as repurchase agreements or money market mutual funds. |
5 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements other than those representing securities lending collateral. |
6 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
Shares or Principal Amount | Value | ||
COMMON STOCKS—97.0% | |||
Consumer Discretionary—12.7% | |||
20,000 | 1,2 | Committed Capital Acquisition Corp. | $111,400 |
13,900 | 1 | Five Below, Inc. | 600,480 |
13,000 | 1 | LKQ Corp. | 427,700 |
18,600 | Las Vegas Sands Corp. | 1,466,982 | |
17,600 | 1 | Melco PBL Entertainment (Macau) Ltd., ADR | 690,272 |
8,507 | 1 | Moncler SpA | 184,909 |
533,200 | NagaCorp Limited | 563,160 | |
131,300 | Prada Holding SpA | 1,164,112 | |
570 | 1 | Priceline.com, Inc. | 662,568 |
14,500 | 1 | RetailMeNot, Inc. | 417,455 |
1,055,000 | Samsonite International SA | 3,197,258 | |
7,600 | 1 | Shutterfly, Inc. | 387,068 |
21,300 | Sinclair Broadcast Group, Inc. | 761,049 | |
8,700 | Six Flags Entertainment Corp. | 320,334 | |
20,500 | Starbucks Corp. | 1,606,995 | |
9,500 | Whirlpool Corp. | 1,490,170 | |
28,750 | 1 | Yoox SpA | 1,290,305 |
5,000 | Yum! Brands, Inc. | 378,050 | |
TOTAL | 15,720,267 | ||
Consumer Staples—1.8% | |||
16,000 | 1 | Darling International, Inc. | 334,080 |
22,754 | 1,3 | Fairway Group Holdings Corp. | 412,302 |
7,400 | 1 | Hain Celestial Group, Inc. | 671,772 |
21,500 | 1 | Sprouts Farmers Market, Inc. | 826,245 |
TOTAL | 2,244,399 | ||
Energy—3.8% | |||
13,300 | 1 | Antero Resources Corp. | 843,752 |
3,400 | Core Laboratories NV | 649,230 | |
45,149 | Frank's International N.V. | 1,219,023 | |
42,600 | 1 | Frontline 2012 Ltd. | 351,178 |
31,700 | Halliburton Co. | 1,608,775 | |
TOTAL | 4,671,958 | ||
Financials—9.1% | |||
75,200 | American International Group, Inc. | 3,838,960 | |
4,400 | BlackRock, Inc. | 1,392,468 | |
145,714 | CETIP SA-Mercados Organizado | 1,495,073 | |
55,200 | EverBank Financial Corp. | 1,012,368 | |
33,300 | J.P. Morgan Chase & Co. | 1,947,384 | |
4,600 | Multiplan Empreendimentos Imobiliarios SA | 97,383 | |
31,300 | Wells Fargo & Co. | 1,421,020 | |
TOTAL | 11,204,656 | ||
Health Care—29.6% | |||
62,600 | 1 | Alkermes, Inc. | 2,545,316 |
4,900 | Allergan, Inc. | 544,292 | |
5,900 | 1 | Biogen Idec, Inc. | 1,650,525 |
198,000 | 1 | Corcept Therapeutics, Inc. | 637,560 |
Shares or Principal Amount | Value | ||
COMMON STOCKS—continued | |||
Health Care—continued | |||
39,200 | 1 | Cubist Pharmaceuticals, Inc. | $2,699,704 |
102,457 | 1 | Dexcom, Inc. | 3,628,002 |
328,478 | 1 | Dyax Corp. | 2,473,439 |
64,900 | 1 | ExamWorks Group, Inc. | 1,938,563 |
52,300 | 1 | Express Scripts Holding Co. | 3,673,552 |
11,568 | 1 | Galapagos NV | 243,486 |
24,600 | 1 | Gilead Sciences, Inc. | 1,848,690 |
3,148 | 1 | Illumina, Inc. | 348,232 |
32,800 | 1 | Insulet Corp. | 1,216,880 |
91,770 | 1 | Nektar Therapeutics | 1,041,590 |
27,300 | 1 | NuVasive, Inc. | 882,609 |
1,074 | 1 | Pharmacyclics, Inc. | 113,608 |
29,192 | 1 | Premier, Inc. | 1,073,098 |
173,000 | 1 | Progenics Pharmaceuticals, Inc. | 922,090 |
156,000 | 1,3 | Protalix Biotherapeutics, Inc. | 606,840 |
7,100 | 1 | Puma Biotechnology, Inc. | 735,063 |
15,432 | 1 | Repligen Corp. | 210,492 |
33,300 | 1 | Salix Pharmaceuticals Ltd. | 2,995,002 |
14,400 | 1 | Seattle Genetics, Inc. | 574,416 |
14,200 | Shire Ltd. | 670,633 | |
10,900 | Thermo Fisher Scientific, Inc. | 1,213,715 | |
39,000 | 1 | Threshold Pharmaceuticals, Inc., Class THL | 182,130 |
14,800 | 1 | Veeva Systems, Inc. | 475,080 |
417,213 | 1 | Zogenix, Inc. | 1,435,213 |
TOTAL | 36,579,820 | ||
Industrials—16.1% | |||
28,200 | Air Lease Corp. | 876,456 | |
5,700 | Boeing Co. | 777,993 | |
21,000 | Chicago Bridge & Iron Co., NV | 1,745,940 | |
7,843 | 1 | Colfax Corp. | 499,521 |
7,200 | Danaher Corp. | 555,840 | |
30,700 | Expeditors International Washington, Inc. | 1,358,475 | |
22,700 | Flowserve Corp. | 1,789,441 | |
22,400 | Fortune Brands Home & Security, Inc. | 1,023,680 | |
2,100 | 1 | IHS, Inc., Class A | 251,370 |
11,441 | KAR Auction Services, Inc. | 338,082 | |
10,091 | Kansas City Southern Industries, Inc. | 1,249,568 | |
127,833 | Louis XIII Holdings Ltd. | 128,586 | |
27,600 | 1 | MRC Global, Inc. | 890,376 |
7,400 | MSC Industrial Direct Co. | 598,438 | |
3,800 | Precision Castparts Corp. | 1,023,340 | |
62,100 | 1 | RPX Corp. | 1,049,490 |
1,100 | Roper Industries, Inc. | 152,548 | |
6,300 | Safran SA | 437,765 | |
38,200 | 1 | Spirit Airlines, Inc. | 1,734,662 |
4,600 | 1 | Teledyne Technologies, Inc. | 422,556 |
21,100 | 1 | Verisk Analytics, Inc. | 1,386,692 |
21,000 | Wabtec Corp. | 1,559,670 | |
TOTAL | 19,850,489 |
Shares or Principal Amount | Value | ||
COMMON STOCKS—continued | |||
Information Technology—15.9% | |||
31,800 | Amadeus IT Holding SA | $1,360,758 | |
15,500 | Avago Technologies Ltd. | 819,795 | |
1,100 | 1 | Baidu.com, Inc., ADR | 195,668 |
8,200 | 1 | ChannelAdvisor Corp. | 342,022 |
7,500 | 1 | Check Point Software Technologies Ltd. | 483,900 |
2,800 | 1 | Cornerstone OnDemand, Inc. | 149,352 |
6,600 | 1 | CoStar Group, Inc. | 1,218,228 |
8,646 | 1 | Cvent, Inc. | 314,628 |
5,700 | 1 | Demandware, Inc. | 365,484 |
18,900 | 1 | eBay, Inc. | 1,037,421 |
14,497 | 1 | Finisar Corp. | 346,768 |
17,200 | 1 | Fleetmatics Group PLC | 743,900 |
7,200 | 1 | Guidewire Software, Inc. | 353,304 |
1,000 | 1 | IPG Photonics Corp. | 77,610 |
2,580 | 1 | LinkedIn Corp. | 559,421 |
42,000 | 1 | Microsemi Corp. | 1,047,900 |
38,000 | 1 | Moneygram International, Inc. | 789,640 |
18,600 | 1 | NCR Corp. | 633,516 |
28,420 | 1 | NIC, Inc. | 706,806 |
35,700 | 1 | NXP Semiconductors NV | 1,639,701 |
1,100 | 1 | NetSuite, Inc. | 113,322 |
31,300 | 1 | RADWARE Ltd. | 562,774 |
9,000 | 1 | Salesforce.com, Inc. | 496,710 |
15,400 | 1 | ServiceNow, Inc. | 862,554 |
3,500 | 1 | Splunk, Inc. | 240,345 |
40,300 | 1,3 | Textura Corp. | 1,206,582 |
11,800 | 1 | Tyler Technologies, Inc. | 1,205,134 |
32,700 | 1 | Vantiv, Inc. | 1,066,347 |
3,900 | 1 | Workday, Inc. | 324,324 |
4,300 | 1 | Zillow, Inc. | 351,439 |
TOTAL | 19,615,353 | ||
Materials—7.0% | |||
7,131 | Eagle Materials, Inc. | 552,153 | |
28,900 | LyondellBasell Industries NV | 2,320,092 | |
6,245 | Martin Marietta Materials | 624,125 | |
8,517 | Rockwood Holdings, Inc. | 612,543 | |
6,400 | Sherwin-Williams Co. | 1,174,400 | |
52,800 | US Silica Holdings, Inc. | 1,801,008 | |
13,000 | Westlake Chemical Corp. | 1,586,910 | |
TOTAL | 8,671,231 | ||
Telecommunication Services—0.4% | |||
7,200 | Crown Castle International Corp. | 528,696 | |
Utilities—0.6% | |||
7,684 | ITC Holdings Corp. | 736,281 | |
TOTAL COMMON STOCKS (IDENTIFIED COST $71,750,990) | 119,823,150 | ||
WARRANTS—0.4% | |||
Health Care—0.4% | |||
5,034 | 1 | Alexza Pharmaceuticals, Inc., Warrants | 1,542 |
17,387 | 1 | Corcept Therapeutics, Inc., Warrants | 16,198 |
Shares or Principal Amount | Value | ||
WARRANTS—continued | |||
Health Care—continued | |||
7,909 | 1 | Cyclacel Pharmaceuticals, Inc., Warrants | $82 |
71,998 | 1 | Dynavax Technologies Corp., Warrants | 73,136 |
32,007 | 1 | Threshold Pharmaceuticals, Inc., Warrants | 83,714 |
128,250 | 1 | Zogenix, Inc., Warrants | 300,387 |
TOTAL WARRANTS (IDENTIFIED COST $16,792) | 475,059 | ||
CORPORATE BONDS—0.4% | |||
Health Care—0.4% | |||
$255,000 | Insulet Corp., Conv. Bond, 3.75%, 6/15/2016 | 377,044 | |
95,000 | 4,5 | Protalix Biotherapeutics, Inc., Conv. Bond, Series 144A, 4.50%, 9/15/2018 | 92,673 |
TOTAL CORPORATE BONDS (IDENTIFIED COST $350,000) | 469,717 | ||
U.S. TREASURY—0.1% | |||
U.S. Treasury Bills—0.1% | |||
22,000 | 6,7 | United States Treasury Bill, 0.025%, 1/9/2014 | 22,000 |
50,000 | 6,7 | United States Treasury Bill, 0.030%, 1/2/2014 | 50,000 |
71,000 | 6,7 | United States Treasury Bill, 0.085%, 5/8/2014 | 70,984 |
TOTAL U.S. TREASURY (IDENTIFIED COST $142,985) | 142,984 | ||
REPURCHASE AGREEMENTS—4.5% | |||
4,643,000 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845. | 4,643,000 | |
954,000 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845 (purchased with proceeds from securities lending collateral). | 954,000 | |
TOTAL REPURCHASE AGREEMENTS (AT COST) | 5,597,000 | ||
TOTAL INVESTMENTS—102.4% (IDENTIFIED COST $77,857,767)8 | 126,507,910 | ||
OTHER ASSETS AND LIABILITIES - NET—(2.4)%9 | (2,956,867) | ||
TOTAL NET ASSETS—100% | $123,551,043 |
Settlement Date | Foreign Currency Units to Receive | In Exchange For | Unrealized Appreciation |
Contracts Sold: | |||
1/2/2014 | 19,313 Brazilian Real | $8,238 | $52 |
Description | Number of Contracts | Notional Value | Expiration Date | Unrealized Depreciation |
1S&P 500 E-Mini Short Futures | 12 | $1,104,660 | March 2014 | $(39,969) |
1 | Non-income-producing security. |
2 | Market quotations and price evaluations are not available. Fair value determined in accordance with procedures established by and under the general supervision of the Fund's Board of Trustees (the “Trustees”). |
3 | All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers. |
4 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2013, these restricted securities amounted to $92,673, which represented 0.1% of total net assets. |
5 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Trustees. At December 31, 2013, these liquid restricted securities amounted to $92,673, which represented 0.1% of total net assets. |
6 | Discount rate at time of purchase. |
7 | Pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding futures contracts. |
8 | The cost of investments for federal tax purposes amounts to $78,513,747. |
9 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Valuation Inputs | ||||
Level 1— Quoted Prices and Investments in Investment Companies | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Equity Securities: | ||||
Common Stock | ||||
Domestic | $94,911,533 | $— | $111,400 | $95,022,933 |
International | 21,566,2781 | 3,233,939 | — | 24,800,217 |
Warrants | — | 475,059 | — | 475,059 |
Debt Securities: | ||||
Corporate Bonds | — | 469,717 | — | 469,717 |
U.S. Treasury | — | 142,984 | — | 142,984 |
Repurchase Agreements | — | 5,597,000 | — | 5,597,000 |
TOTAL SECURITIES | $116,477,811 | $9,918,699 | $111,400 | $126,507,910 |
OTHER FINANCIAL INSTRUMENTS2 | $(39,969) | $52 | $— | $(39,917) |
1 | Includes $6,014,514 of common stock securities transferred from Level 2 to Level 1 because quoted prices on equity securities traded principally in foreign markets were utilized to value securities for which fair value factors were previously applied to account for significant post market close activity. Transfers shown represent the value of the securities at the beginning of the period. |
2 | Other financial instruments include foreign exchange contracts and futures contracts. |
ADR | —American Depositary Receipt |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $15.06 | $12.84 | $14.96 | $12.69 | $9.80 |
Income From Investment Operations: | |||||
Net investment income (loss) | (0.12)1 | (0.05)1 | (0.09)1 | 0.091 | (0.00)1,2 |
Net realized and unrealized gain (loss) on investments, futures contracts, written options and foreign currency transactions | 5.76 | 2.27 | (1.88) | 2.19 | 2.89 |
TOTAL FROM INVESTMENT OPERATIONS | 5.64 | 2.22 | (1.97) | 2.28 | 2.89 |
Less Distributions: | |||||
Distributions from net investment income | — | — | (0.15) | (0.01) | — |
Distributions from net realized gain on investments, futures contracts, written options and foreign currency transactions | (1.48) | — | — | — | — |
TOTAL DISTRIBUTIONS | (1.48) | — | (0.15) | (0.01) | — |
Net Asset Value, End of Period | $19.22 | $15.06 | $12.84 | $14.96 | $12.69 |
Total Return3 | 40.12% | 17.29% | (13.28)% | 17.99% | 29.49% |
Ratios to Average Net Assets: | |||||
Net expenses | 1.53%4 | 1.53%4 | 1.53%4 | 1.53%4 | 1.53%4 |
Net investment income (loss) | (0.75)% | (0.34)% | (0.65)% | 0.67% | (0.00)%5 |
Expense waiver/reimbursement6 | 0.25% | 0.34% | 0.29% | 0.24% | 0.31% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $53,392 | $43,192 | $43,025 | $62,352 | $65,698 |
Portfolio turnover | 71% | 65% | 63% | 58% | 100% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Represents less than $0.01. |
3 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
4 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.53%, 1.53%, 1.53%, 1.53% and 1.53% for the years ended December 31, 2013, 2012, 2011, 2010 and 2009, respectively, after taking into account these expense reductions. |
5 | Represents less than 0.01%. |
6 | This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above. |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $14.79 | $12.64 | $14.73 | $12.51 | $9.69 |
Income From Investment Operations: | |||||
Net investment income (loss) | (0.16)1 | (0.09)1 | (0.13)1 | 0.061 | (0.03)1 |
Net realized and unrealized gain (loss) on investments, futures contracts, written options and foreign currency transactions | 5.63 | 2.24 | (1.84) | 2.16 | 2.85 |
TOTAL FROM INVESTMENT OPERATIONS | 5.47 | 2.15 | (1.97) | 2.22 | 2.82 |
Less Distributions: | |||||
Distributions from net investment income | — | — | (0.12) | — | — |
Distributions from net realized gain on investments, futures contracts, written options and foreign currency transactions | (1.48) | — | — | — | — |
TOTAL DISTRIBUTIONS | (1.48) | — | (0.12) | — | — |
Net Asset Value, End of Period | $18.78 | $14.79 | $12.64 | $14.73 | $12.51 |
Total Return2 | 39.67% | 17.01% | (13.49)% | 17.75% | 29.10% |
Ratios to Average Net Assets: | |||||
Net expenses | 1.78%3 | 1.78%3 | 1.78%3 | 1.78%3 | 1.78%3 |
Net investment income (loss) | (1.00)% | (0.65)% | (0.90)% | 0.47% | (0.27)% |
Expense waiver/reimbursement4 | 0.25% | 0.34% | 0.29% | 0.24% | 0.31% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $70,159 | $51,992 | $97,552 | $120,887 | $94,374 |
Portfolio turnover | 71% | 65% | 63% | 58% | 100% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
3 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.78%, 1.78%, 1.78%, 1.78% and 1.78% for the years ended December 31, 2013, 2012, 2011, 2010 and 2009, respectively, after taking into account these expense reductions. |
4 | This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above. |
December 31, 2013
Assets: | ||
Total investment in securities, at value including $930,375 of securities loaned (identified cost $77,857,767) | $126,507,910 | |
Cash | 572 | |
Cash denominated in foreign currencies (identified cost $92,553) | 91,697 | |
Income receivable | 33,954 | |
Unrealized appreciation on foreign exchange contracts | 52 | |
Receivable for investments sold | 11,391 | |
Receivable for shares sold | 146,094 | |
TOTAL ASSETS | 126,791,670 | |
Liabilities: | ||
Payable for investments purchased | $1,608,771 | |
Payable for shares redeemed | 596,757 | |
Payable for daily variation margin | 3,840 | |
Payable for collateral due to broker for securities lending | 954,000 | |
Payable for Directors'/Trustees' fees (Note 5) | 176 | |
Payable for distribution services fee (Note 5) | 14,910 | |
Accrued expenses (Note 5) | 62,173 | |
TOTAL LIABILITIES | 3,240,627 | |
Net assets for 6,513,396 shares outstanding | $123,551,043 | |
Net Assets Consist of: | ||
Paid-in capital | $63,199,307 | |
Net unrealized appreciation of investments, futures contracts and translation of assets and liabilities in foreign currency | 48,609,326 | |
Accumulated net realized gain on investments, futures contracts and foreign currency transactions | 11,742,410 | |
TOTAL NET ASSETS | $123,551,043 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||
Primary Shares: | ||
$53,392,491 ÷ 2,778,291 shares outstanding, no par value, unlimited shares authorized | $19.22 | |
Service Shares: | ||
$70,158,552 ÷ 3,735,105 shares outstanding, no par value, unlimited shares authorized | $18.78 |
Year Ended December 31, 2013
Investment Income: | |||
Dividends (net of foreign taxes withheld of $22,966) | $785,842 | ||
Interest (including income on securities loaned of $37,776) | 54,264 | ||
TOTAL INCOME | 840,106 | ||
Expenses: | |||
Investment adviser fee (Note 5) | $1,525,109 | ||
Administrative fee (Note 5) | 83,529 | ||
Custodian fees | 114,371 | ||
Transfer agent fee | 13,427 | ||
Directors'/Trustees' fees (Note 5) | 747 | ||
Auditing fees | 28,500 | ||
Legal fees | 8,924 | ||
Portfolio accounting fees | 65,208 | ||
Distribution services fee (Note 5) | 147,834 | ||
Printing and postage | 55,696 | ||
Insurance premiums (Note 5) | 4,131 | ||
Miscellaneous (Note 5) | 6,887 | ||
TOTAL EXPENSES | 2,054,363 | ||
Waivers and Reduction: | |||
Waiver of investment adviser fee (Note 5) | $(263,798) | ||
Waiver of distribution services fee (Note 5) | (175) | ||
Fees paid indirectly from directed brokerage arrangements (Note 6) | (1,529) | ||
TOTAL WAIVERS AND REDUCTION | (265,502) | ||
Net expenses | 1,788,861 | ||
Net investment income (loss) | (948,755) | ||
Realized and Unrealized Gain on Investments, Futures Contracts and Foreign Currency Transactions: | |||
Net realized gain on investments and foreign currency transactions | 15,078,138 | ||
Net realized loss on futures contracts | (172,278) | ||
Net change in unrealized appreciation of investments and translation of assets and liabilities in foreign currency | 22,093,146 | ||
Net change in unrealized depreciation of futures contracts | (39,969) | ||
Net realized and unrealized gain on investments, futures contracts and foreign currency transactions | 36,959,037 | ||
Change in net assets resulting from operations | $36,010,282 |
Year Ended December 31 | 2013 | 2012 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income (loss) | $(948,755) | $(525,064) |
Net realized gain on investments, futures contracts and foreign currency transactions | 14,905,860 | 13,991,737 |
Net change in unrealized appreciation/depreciation of investments, futures contracts and translation of assets and liabilities in foreign currency | 22,053,177 | 5,625,406 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 36,010,282 | 19,092,079 |
Distributions to Shareholders: | ||
Distributions from net realized gain on investments, futures contracts and foreign currency transactions | ||
Primary Shares | (4,141,962) | — |
Service Shares | (5,031,611) | — |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (9,173,573) | — |
Share Transactions: | ||
Proceeds from sale of shares | 18,239,672 | 12,474,146 |
Net asset value of shares issued to shareholders in payment of distributions declared | 9,173,572 | — |
Cost of shares redeemed | (25,882,282) | (76,960,527) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 1,530,962 | (64,486,381) |
Change in net assets | 28,367,671 | (45,394,302) |
Net Assets: | ||
Beginning of period | 95,183,372 | 140,577,674 |
End of period (including accumulated net investment income (loss) of $0 and $(116,131), respectively) | $123,551,043 | $95,183,372 |
■ | 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. |
■ | Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Fund's Board of Trustees (“Trustees”). |
■ | Fixed-income securities and repurchase agreements acquired with remaining maturities of 60 days or less are valued at their amortized cost (adjusted for the accretion of any discount or amortization of any premium), unless the issuer's creditworthiness is impaired or other factors indicate that amortized cost is not an accurate estimate of the investment's fair value, in which case it would be valued in the same manner as a longer-term security. |
■ | Shares of other mutual funds or nonexchange-traded investment companies are valued based upon their reported NAVs. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, 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 and public trading in similar securities of the issuer or comparable issuers. |
■ | With respect to securities traded 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; and |
■ | Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
Market Value of Securities Loaned | Market Value of Collateral |
$930,375 | $954,000 |
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 | ||||
Equity contracts | Payable for daily variation margin | $(39,969)* | ||
Foreign exchange contracts | Unrealized appreciation on foreign exchange contracts | $52 | ||
Total derivatives not accounted for as hedging instruments under ASC Topic 815 | $52 | $(39,969) |
* | Includes cumulative depreciation 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 | |||
Futures | Forward Currency Contracts | Total | |
Equity contracts | $(172,278) | $— | $(172,278) |
Foreign exchange contracts | — | (7,703) | (7,703) |
TOTAL | $(172,278) | $(7,703) | $(179,981) |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |||
Futures | Forward Currency Contracts | Total | |
Equity contracts | $(39,969) | $— | $(39,969) |
Foreign exchange contracts | — | 64 | 64 |
TOTAL | $(39,969) | $64 | $(39,905) |
Year Ended December 31 | 2013 | 2012 | ||
Primary Shares: | Shares | Amount | Shares | Amount |
Shares sold | 173,664 | $2,880,113 | 137,634 | $1,994,721 |
Shares issued to shareholders in payment of distributions declared | 273,758 | 4,141,961 | — | — |
Shares redeemed | (536,222) | (8,839,932) | (620,381) | (8,946,720) |
NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | (88,800) | $(1,817,858) | (482,747) | $(6,951,999) |
Year Ended December 31 | 2013 | 2012 | ||
Service Shares: | Shares | Amount | Shares | Amount |
Shares sold | 925,144 | $15,359,559 | 738,864 | $10,479,425 |
Shares issued to shareholders in payment of distributions declared | 339,515 | 5,031,611 | — | — |
Shares redeemed | (1,045,276) | (17,042,350) | (4,939,909) | (68,013,807) |
NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | 219,383 | $3,348,820 | (4,201,045) | $(57,534,382) |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | 130,583 | $1,530,962 | (4,683,792) | $(64,486,381) |
Increase (Decrease) | ||
Paid-In Capital | Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$(236,359) | $1,064,886 | $(828,527) |
2013 | 2012 | |
Long-term capital gains | $9,173,573 | $— |
Undistributed long-term capital gains | $13,278,252 |
Net unrealized appreciation | $47,993,315 |
Capital loss carryforwards | $(919,831) |
Expiration Year | Short-Term | Long-Term | Total |
2016 | $919,831 | NA | $919,831 |
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 |
Primary Shares | 0.25% |
Service Shares | 0.25% |
Distribution Services Fees Incurred | Distribution Services Fees Waived | |
Service Shares | $147,834 | $(175) |
Purchases | $73,719,805 |
Sales | $80,934,564 |
Country | Percentage of Net Assets |
United States | 77.8% |
Netherlands Antilles | 6.1% |
Ireland | 2.7% |
Luxembourg | 2.6% |
Italy | 2.1% |
Brazil | 1.3% |
Spain | 1.1% |
Cayman Islands | 1.0% |
Israel | 0.8% |
Singapore | 0.7% |
United Kingdom | 0.5% |
France | 0.4% |
Bermuda | 0.3% |
Belgium | 0.2% |
China | 0.2% |
Hong Kong | 0.1% |
February 14, 2014
Beginning Account Value 7/1/2013 | Ending Account Value 12/31/2013 | Expenses Paid During Period1 | |
Actual: | |||
Primary Shares | $1,000 | $1,221.90 | $8.57 |
Service Shares | $1,000 | $1,220.30 | $9.96 |
Hypothetical (assuming a 5% return before expenses): | |||
Primary Shares | $1,000 | $1,017.49 | $7.78 |
Service Shares | $1,000 | $1,016.23 | $9.05 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The expenses shown in the table do not include the charges and expenses imposed by the insurance company under the variable insurance product contract. Please refer to the variable insurance product prospectus for a complete listing of these expenses. The annualized net expense ratios are as follows: |
Primary Shares | 1.53% |
Service Shares | 1.78% |
Name | For | Withheld |
John T. Collins | 300,523,736.140 | 11,005,188.385 |
Maureen Lally-Green | 300,308,651.177 | 11,220,273.348 |
Thomas M. O'Neill | 300,886,250.634 | 10,642,673.891 |
P. Jerome Richey | 300,662,760.971 | 10,866,163.554 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: October 1993 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
J. Christopher Donahue* Birth Date: April 11, 1949 Trustee Began serving: October 1993 | 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, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); 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. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust 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 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: October 1993 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: November 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: 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); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee 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. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: September 1993 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
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 Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; 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 PRESIDENT Officer since: September 1993 | 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. |
John B. Fisher Birth Date: May 16, 1956 PRESIDENT Officer since: November 2004 | Principal Occupations: 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 and CEO of Passport Research, Ltd.; President of some of the Funds in the Federated Fund Family; 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; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc.; President, Technology, Federated Services Company. |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | 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. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Stephen F. Auth Birth Date: September 3, 1956 450 Lexington Avenue Suite 3700 New York, NY 10017-3943 CHIEF INVESTMENT OFFICER Officer since: November 2002 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
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. |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 313916777
2014 ©Federated Investors, Inc.
May Lose Value
Security Type | Percentage of Total Net Assets |
Commercial Paper and Notes | 54.3% |
Bank Instruments | 30.0% |
Variable Rate Instruments | 5.7% |
Repurchase Agreements | 10.0% |
Other Assets and Liabilities—Net2,3 | 0.0% |
TOTAL | 100.0% |
Securities With an Effective Maturity of: | Percentage of Total Net Assets |
1-7 Days | 36.3%5 |
8-30 Days | 24.0% |
31-90 Days | 23.8% |
91-180 Days | 12.0% |
181 Days or more | 3.9% |
Other Assets and Liabilities—Net2,3 | 0.0% |
TOTAL | 100.0% |
1 | Commercial Paper and Notes include any fixed-rate security that is not a bank instrument. A variable rate instrument is any security which has an interest rate that resets periodically. See the Fund's Prospectus for descriptions of commercial paper, repurchase agreements and bank instruments. |
2 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
3 | Represents less than 0.1%. |
4 | Effective maturity is determined in accordance with the requirements of Rule 2a-7 under the Investment Company Act of 1940, which regulates money market mutual funds. |
5 | Overnight securities comprised 16.5 % of the Fund's portfolio. |
Principal Amount | Value | ||
ASSET-BACKED SECURITY—0.7% | |||
Finance - Equipment—0.7% | |||
$1,062,001 | 1,2 | Leaf Equipment Contract Backed Notes, Series 2013-1, Class A1, 0.320%, 10/15/2014 | $1,062,001 |
BANK NOTE—0.7% | |||
Finance - Banking—0.7% | |||
1,000,000 | Bank of America N.A., 0.240%, 1/16/2014 | 1,000,000 | |
CERTIFICATES OF DEPOSIT—30.0% | |||
Finance - Banking—30.0% | |||
3,000,000 | BNP Paribas SA, 0.210%—0.230%, 2/4/2014 - 3/4/2014 | 3,000,000 | |
5,000,000 | Bank of Tokyo-Mitsubishi UFJ Ltd., 0.210%, 3/26/2014 - 4/28/2014 | 5,000,000 | |
2,000,000 | 3 | Canadian Imperial Bank of Commerce, 0.304%, 1/24/2014 | 2,000,000 |
3,000,000 | Credit Agricole Corporate and Investment Bank, 0.250%, 1/17/2014 | 3,000,000 | |
3,000,000 | Credit Suisse, Zurich, 0.240%, 4/21/2014 | 3,000,000 | |
4,000,000 | Deutsche Bank AG, 0.220%, 2/28/2014 | 4,000,000 | |
1,000,000 | Fifth Third Bank, Cincinnati, 0.300%, 1/3/2014 | 1,000,000 | |
3,000,000 | Natixis, 0.240%, 2/24/2014 - 3/3/2014 | 3,000,000 | |
1,000,000 | Rabobank Nederland NV, Utrecht, 0.275%, 3/6/2014 | 999,512 | |
2,000,000 | 3 | Royal Bank of Canada, Montreal, 0.280%, 1/2/2014 | 2,000,000 |
2,000,000 | 3 | Royal Bank of Canada, Montreal, 0.300%, 1/2/2014 | 2,000,000 |
4,500,000 | Societe Generale, Paris, 0.210%—0.240%, 3/5/2014 - 3/10/2014 | 4,500,000 | |
4,000,000 | Standard Chartered Bank PLC, 0.230%, 1/3/2014 | 4,000,000 | |
4,000,000 | Sumitomo Mitsui Banking Corp., 0.220%, 1/24/2014 | 4,000,000 | |
5,000,000 | Toronto Dominion Bank, 0.240%—0.320%, 3/4/2014 - 7/10/2014 | 5,000,000 | |
TOTAL CERTIFICATES OF DEPOSIT | 46,499,512 | ||
COLLATERALIZED LOAN AGREEMENTS—14.8% | |||
Finance - Banking—14.8% | |||
1,000,000 | BNP Paribas Securities Corp., 0.406%, 1/15/2014 | 1,000,000 | |
7,000,000 | Citigroup Global Markets, Inc., 0.537%, 1/2/2014 | 7,000,000 | |
2,000,000 | Mitsubishi UFJ Securities (USA), Inc., 0.253%, 1/22/2014 | 2,000,000 | |
7,000,000 | Mizuho Securities USA, Inc., 0.456%—1.166%, 1/3/2014 - 3/18/2014 | 7,000,000 | |
2,000,000 | RBC Capital Markets, LLC, 0.243%, 1/13/2014 | 2,000,000 | |
4,000,000 | Wells Fargo Securities, LLC, 0.355%, 1/21/2014 | 4,000,000 | |
TOTAL COLLATERALIZED LOAN AGREEMENTS | 23,000,000 | ||
COMMERCIAL PAPER—34.1%4 | |||
Aerospace/Auto—0.5% | |||
780,000 | 1,2 | Nissan Motor Acceptance Corp., (Nissan Motor Co., Ltd. SA), 0.280%, 1/17/2014 | 779,903 |
Containers & Packaging—0.3% | |||
390,000 | 1,2 | Bemis Co., Inc., 0.250%, 1/9/2014 | 389,978 |
Electric Power—0.5% | |||
780,000 | Virginia Electric & Power Co., 0.250%, 1/24/2014 | 779,876 | |
Finance - Banking—18.9% | |||
1,000,000 | Barclays US Funding Corp., 0.210%, 3/19/2014 | 999,551 | |
7,000,000 | ING (U.S.) Funding LLC, 0.210%, 3/14/2014 | 6,997,060 | |
800,000 | 1,2 | JPMorgan Securities LLC, 0.300%, 4/23/2014 | 799,253 |
1,000,000 | 1,2 | LMA-Americas LLC, 0.230%, 1/7/2014 | 999,962 |
6,500,000 | 1,2 | Nationwide Building Society, 0.100%—0.210%, 1/2/2014 - 3/12/2014 | 6,499,387 |
2,000,000 | 1,2 | Northern Pines Funding LLC, 0.210%, 3/27/2014 | 1,999,008 |
3,000,000 | Standard Chartered Bank PLC, 0.200%, 1/14/2014 | 2,999,783 | |
3,000,000 | 1,2 | Sumitomo Mitsui Banking Corp., 0.220%, 4/1/2014 | 2,998,350 |
Principal Amount | Value | ||
COMMERCIAL PAPER—continued4 | |||
Finance - Banking—continued | |||
$5,000,000 | 1,2 | Westpac Banking Corp. Ltd., Sydney, 0.288%, 1/24/2014 | $5,000,205 |
TOTAL | 29,292,559 | ||
Finance - Commercial—6.6% | |||
4,000,000 | 1,2 | Alpine Securitization Corp., 0.180%, 1/24/2014 | 3,999,540 |
1,000,000 | 1,2 | Alpine Securitization Corp., 0.190%, 2/13/2014 | 1,000,000 |
4,500,000 | 1,2 | Atlantic Asset Securitization LLC, 0.010%—0.250%, 1/10/2014 - 1/15/2014 | 4,499,701 |
800,000 | 1,2 | Versailles Commercial Paper LLC, 0.230%, 3/14/2014 | 799,632 |
TOTAL | 10,298,873 | ||
Finance - Retail—5.5% | |||
2,000,000 | 1,2 | Chariot Funding LLC, 0.301%, 4/3/2014 | 1,998,467 |
3,000,000 | 1,2 | Jupiter Securitization Co. LLC, 0.301%—1.000%, 4/11/2014 - 9/12/2014 | 2,994,933 |
3,500,000 | 1,2 | Sheffield Receivables Corp., 0.210%—0.220%, 1/13/2014 - 1/16/2014 | 3,499,723 |
TOTAL | 8,493,123 | ||
Oil & Oil Finance—0.5% | |||
800,000 | 1,2,3 | Devon Energy Corp., 0.315%, 1/27/2014 | 800,000 |
Sovereign—1.3% | |||
2,000,000 | 1,2 | Caisse des Depots et Consignations (CDC), 0.235%, 6/20/2014 | 1,997,781 |
TOTAL COMMERCIAL PAPER | 52,832,093 | ||
CORPORATE BONDS—4.0% | |||
Finance - Banking—0.2% | |||
340,000 | 1,2,3 | ABN Amro Bank NV, 2.006%, 1/30/2014 | 340,490 |
Finance - Commercial—3.1% | |||
1,000,000 | 3 | General Electric Capital Corp., 1.093%, 1/7/2014 | 1,000,143 |
3,789,000 | General Electric Capital Corp., 5.900%, 5/13/2014 | 3,865,783 | |
TOTAL | 4,865,926 | ||
Insurance—0.7% | |||
1,000,000 | 1,2 | Metropolitan Life Global Funding I, 2.000%, 1/9/2015 | 1,016,838 |
TOTAL CORPORATE BONDS | 6,223,254 | ||
NOTES - VARIABLE—5.7%3 | |||
Finance - Automotive—2.6% | |||
2,000,000 | Toyota Motor Credit Corp., (Toyota Motor Corp. SA), 0.243%, 1/8/2014 | 2,000,000 | |
2,000,000 | Toyota Motor Credit Corp., (Toyota Motor Corp. SA), 0.244%, 1/14/2014 | 2,000,000 | |
TOTAL | 4,000,000 | ||
Finance - Banking—2.3% | |||
3,300,000 | Connecticut HEFA, Series D Griffin Hospital, (Wells Fargo Bank, N.A. LOC), 0.170%, 1/2/2014 | 3,300,000 | |
225,000 | Lancaster, PA IDA, Snavely's Mill, Inc., Series 2003—B, (Fulton Bank, N.A. LOC), 1.400%, 1/2/2014 | 225,000 | |
TOTAL | 3,525,000 | ||
Government Agency—0.3% | |||
500,000 | Hertford County, NC Industrial Facilities & PCFA, (Series 2000A), 0.400%, 1/2/2014 | 500,000 | |
Metals—0.5% | |||
750,000 | St. James Parish, LA, (Series 2010A-1), (GTD by Nucor Corp.), 0.350%, 1/2/2014 | 750,000 | |
TOTAL NOTES - VARIABLE | 8,775,000 |
Principal Amount | Value | ||
REPURCHASE AGREEMENT—10.0% | |||
$15,541,000 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845. (AT COST) | $15,541,000 | |
TOTAL INVESTMENTS—100.0% (AT AMORTIZED COST)5 | 154,932,860 | ||
OTHER ASSETS AND LIABILITIES - NET—0.0%6 | 40,600 | ||
TOTAL NET ASSETS—100% | $154,973,460 |
1 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2013, these restricted securities amounted to $43,475,152, which represented 28.1% of total net assets. |
2 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees (the “Trustees”). At December 31, 2013, these liquid restricted securities amounted to $43,475,152, which represented 28.1% of total net assets. |
3 | Denotes a variable rate security with current rate and next reset date shown. |
4 | Discount rate at time of purchase. |
5 | Also represents cost for federal tax purposes. |
6 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
GTD | —Guaranteed |
HEFA | —Health and Education Facilities Authority |
IDA | —Industrial Development Authority |
LOC | —Letter of Credit |
PCFA | —Pollution Control Finance Authority |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
Income From Investment Operations: | |||||
Net investment income | — | — | — | 0.0001 | 0.005 |
Net realized gain (loss) on investments | 0.0001 | 0.0001 | (0.000)1 | (0.000)1 | 0.0001 |
TOTAL FROM INVESTMENT OPERATIONS | 0.0001 | 0.0001 | (0.000)1 | (0.000)1 | 0.005 |
Less Distributions: | |||||
Distributions from net investment income | — | — | — | (0.000)1 | (0.005) |
Distributions from net realized gain on investments | — | — | — | (0.000)1 | (0.000)1 |
TOTAL DISTRIBUTIONS | — | — | — | (0.000)1 | (0.005) |
Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
Total Return2 | 0.00% | 0.00% | 0.00% | 0.00%3 | 0.45% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.27% | 0.40% | 0.36% | 0.41% | 0.65% |
Net investment income | 0.00% | 0.00% | 0.00% | 0.00%3 | 0.48% |
Expense waiver/reimbursement4 | 0.41% | 0.26% | 0.32% | 0.24% | 0.17% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $154,973 | $174,541 | $204,124 | $213,825 | $80,265 |
1 | Represents less than $0.001. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
3 | Represents less than 0.01%. |
4 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
December 31, 2013
Assets: | ||
Investment in repurchase agreements | $15,541,000 | |
Investment in securities | 139,391,860 | |
Total investment in securities, at amortized cost and fair value | $154,932,860 | |
Cash | 1,489 | |
Income receivable | 73,223 | |
Receivable for shares sold | 320,080 | |
TOTAL ASSETS | 155,327,652 | |
Liabilities: | ||
Payable for shares redeemed | 334,121 | |
Payable to adviser (Note 5) | 5,932 | |
Payable for Directors'/Trustees' fees (Note 5) | 311 | |
Accrued expenses (Note 5) | 13,828 | |
TOTAL LIABILITIES | 354,192 | |
Net assets for 154,974,376 shares outstanding | $154,973,460 | |
Net Assets Consist of: | ||
Paid-in capital | $154,973,925 | |
Accumulated net realized loss on investments | (465) | |
TOTAL NET ASSETS | $154,973,460 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | ||
$154,973,460 ÷ 154,974,376 shares outstanding, no par value, unlimited shares authorized | $1.00 |
Year Ended December 31, 2013
Investment Income: | ||
Interest | $435,851 | |
Expenses: | ||
Investment adviser fee (Note 5) | $800,500 | |
Administrative fee (Note 5) | 124,945 | |
Custodian fees | 13,047 | |
Transfer agent fee | 4,246 | |
Directors'/Trustees' fees (Note 5) | 1,648 | |
Auditing fees | 21,500 | |
Legal fees | 8,664 | |
Portfolio accounting fees | 45,488 | |
Printing and postage | 67,728 | |
Insurance premiums (Note 5) | 4,294 | |
Miscellaneous (Note 5) | 1,570 | |
TOTAL EXPENSES | 1,093,630 | |
Waiver of investment adviser fee (Note 5) | (657,779) | |
Net expenses | 435,851 | |
Net investment income | — | |
Net realized gain on investments | 482 | |
Change in net assets resulting from operations | $482 |
Year Ended December 31 | 2013 | 2012 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $— | $— |
Net realized gain on investments | 482 | 4 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 482 | 4 |
Share Transactions: | ||
Proceeds from sale of shares | 111,170,875 | 88,477,823 |
Cost of shares redeemed | (130,738,603) | (118,060,810) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (19,567,728) | (29,582,987) |
Change in net assets | (19,567,246) | (29,582,983) |
Net Assets: | ||
Beginning of period | 174,540,706 | 204,123,689 |
End of period | $154,973,460 | $174,540,706 |
Year Ended December 31 | 2013 | 2012 |
Shares sold | 111,170,875 | 88,477,823 |
Shares redeemed | (130,738,603) | (118,060,810) |
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | (19,567,728) | (29,582,987) |
Capital loss carryforwards | $(465) |
Expiration Year | Short-Term | Long-Term | Total |
2018 | $465 | NA | $465 |
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 |
February 14, 2013
Beginning Account Value 7/1/2013 | Ending Account Value 12/31/2013 | Expenses Paid During Period1,2 | |
Actual | $1,000 | $1,000.00 | $1.31 |
Hypothetical (assuming a 5% return before expenses) | $1,000 | $1,023.89 | $1.33 |
1 | Expenses are equal to the Fund's annualized net expense ratio of 0.26%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The expenses shown in the table do not include the charges and expenses imposed by the insurance company under the variable insurance product contract. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
2 | Actual and Hypothetical expenses paid during the period, utilizing the Fund's current Fee Limit of 0.67% (as reflected in the Notes to Financial Statements, Note 5 under Expense Limitation), multiplied by the average account value over the period, multiplied by 184/365 (to reflect expenses paid as if they had been in effect throughout the most recent one-half-year period) would be $3.38 and $3.41, respectively. |
Name | For | Withheld |
John T. Collins | 300,523,736.140 | 11,005,188.385 |
Maureen Lally-Green | 300,308,651.177 | 11,220,273.348 |
Thomas M. O'Neill | 300,886,250.634 | 10,642,673.891 |
P. Jerome Richey | 300,662,760.971 | 10,866,163.554 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: October 1993 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
J. Christopher Donahue* Birth Date: April 11, 1949 Trustee Began serving: October 1993 | 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, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); 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. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust 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 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: October 1993 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: November 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: 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); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee 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. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: September 1993 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
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 Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; 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 PRESIDENT Officer since: September 1993 | 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. |
John B. Fisher Birth Date: May 16, 1956 PRESIDENT Officer since: November 2004 | Principal Occupations: 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 and CEO of Passport Research, Ltd.; President of some of the Funds in the Federated Fund Family; 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; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc.; President, Technology, Federated Services Company. |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | 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. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Stephen F. Auth Birth Date: September 3, 1956 450 Lexington Avenue Suite 3700 New York, NY 10017-3943 CHIEF INVESTMENT OFFICER Officer since: November 2002 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
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. |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
2014 ©Federated Investors, Inc.
Share Class |
Primary |
Service |
1 | 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 BICI. |
2 | Duration measures the price sensitivity of a fixed-income security to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations. |
3 | 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. |
4 | The value of some mortgage-backed securities may be particularly sensitive to changes in the 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. |
5 | Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. |
Share Class | 1 Year | 5 Years | 10 Years |
Primary Shares | 1.04% | 8.18% | 4.70% |
Service Shares | 0.75% | 7.91% | 4.43% |
Federated Quality Bond Fund II - | Primary Shares | BICI |
12/31/2003 | 10,000 | 10,000 |
12/31/2004 | 10,362 | 10,530 |
12/31/2005 | 10,496 | 10,736 |
12/31/2006 | 10,932 | 11,261 |
12/31/2007 | 11,521 | 11,775 |
12/31/2008 | 10,681 | 10,665 |
12/31/2009 | 12,864 | 13,019 |
12/31/2010 | 13,958 | 14,276 |
12/31/2011 | 14,275 | 15,082 |
12/31/2012 | 15,663 | 16,708 |
12/31/2013 | 15,825 | 16,089 |
Federated Quality Bond Fund II - | Service Shares | BICI |
12/31/2003 | 10,000 | 10,000 |
12/31/2004 | 10,332 | 10,530 |
12/31/2005 | 10,434 | 10,736 |
12/31/2006 | 10,843 | 11,261 |
12/31/2007 | 11,400 | 11,775 |
12/31/2008 | 10,539 | 10,665 |
12/31/2009 | 12,663 | 13,019 |
12/31/2010 | 13,712 | 14,276 |
12/31/2011 | 13,985 | 15,082 |
12/31/2012 | 15,306 | 16,708 |
12/31/2013 | 15,421 | 16,089 |
1 | The Fund's performance assumes the reinvestment of all dividends and distributions. The BICI has been adjusted to reflect reinvestment of dividends on securities in the index. |
2 | The Barclays U.S. Intermediate Credit Bond Index is an unmanaged index that consists of dollar-denominated, investment-grade, publicly issued securities with a maturity of between one and ten years, a minimum amount outstanding of $250 million and that are issued by both corporate issuers and non-corporate issuers (supranationals, sovereigns, foreign agencies and foreign local governments). The index is not adjusted to reflect sales loads, expenses or other fees that the Securities and Exchange Commission 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. |
Security Type | Percentage of Total Net Assets |
Corporate Debt Securities | 95.4% |
Foreign Government Debt Securities | 0.7% |
Collateralized Mortgage Obligations | 0.6% |
U.S. Treasury and Agency Securities2 | 0.2% |
Mortgage-Backed Securities3 | 0.1% |
Municipal Bond | 0.1% |
Derivative Contracts4 | 0.0% |
Cash Equivalents5 | 1.4% |
Other Assets and Liabilities—Net6 | 1.5% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus and Statement of Additional Information for a description of these security types. |
2 | For purposes of this table, U.S. Treasury and Agency Securities do not include mortgage-backed securities guaranteed by Government Sponsored Entities (GSEs). |
3 | For purposes of this table, Mortgage-Backed Securities include mortgage-backed securities guaranteed by GSEs. |
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 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. |
6 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
Principal Amount | Value | ||
CORPORATE BONDS—95.4% | |||
Basic Industry - Chemicals—1.8% | |||
$300,000 | Eastman Chemical Co., Sr. Unsecd. Note, 5.50%, 11/15/2019 | $330,678 | |
640,000 | FMC Corp., Sr. Unsecd. Note, 3.95%, 2/1/2022 | 639,927 | |
410,000 | 1,2 | Incitec Pivot Finance LLC, Company Guarantee, Series 144A, 4.00%, 12/7/2015 | 426,544 |
800,000 | 1,2 | Incitec Pivot Finance LLC, Company Guarantee, Series 144A, 6.00%, 12/10/2019 | 876,140 |
1,290,000 | RPM International, Inc., 6.50%, 2/15/2018 | 1,462,359 | |
900,000 | RPM International, Inc., Sr. Unsecd. Note, 6.125%, 10/15/2019 | 1,010,014 | |
114,000 | Rohm & Haas Co., 6.00%, 9/15/2017 | 129,384 | |
TOTAL | 4,875,046 | ||
Basic Industry - Metals & Mining—6.5% | |||
1,000,000 | Alcoa, Inc., 5.87%, 2/23/2022 | 1,032,455 | |
750,000 | Allegheny Technologies, Inc., Sr. Note, 9.375%, 6/1/2019 | 916,855 | |
750,000 | 1,2 | Anglo American Capital PLC, Company Guarantee, Series 144A, 2.625%, 4/3/2017 | 756,106 |
100,000 | 1,2 | Anglo American Capital PLC, Company Guarantee, Series 144A, 4.45%, 9/27/2020 | 100,293 |
630,000 | Anglogold Ashanti Holdings PLC, Sr. Note, 6.50%, 4/15/2040 | 491,483 | |
1,000,000 | Anglogold Ashanti Holdings PLC, Sr. Unsecd. Note, 5.125%, 8/1/2022 | 862,757 | |
750,000 | Anglogold Ashanti Holdings PLC, Sr. Unsecd. Note, 8.50%, 7/30/2020 | 778,200 | |
660,000 | ArcelorMittal, Sr. Unsecd. Note, 5.00%, 2/25/2017 | 711,150 | |
300,000 | ArcelorMittal, Sr. Unsecd. Note, 5.75%, 8/5/2020 | 319,500 | |
80,000 | ArcelorMittal, Sr. Unsecd. Note, 7.25%, 3/1/2041 | 76,800 | |
770,000 | Barrick Gold Corp., Sr. Unsecd. Note, 6.95%, 4/1/2019 | 889,328 | |
230,000 | Carpenter Technology Corp., Sr. Unsecd. Note, 4.45%, 3/1/2023 | 220,758 | |
850,000 | Carpenter Technology Corp., Sr. Unsecd. Note, 5.20%, 7/15/2021 | 870,653 | |
1,020,000 | 1,2 | Gerdau S.A., Company Guarantee, Series 144A, 5.75%, 1/30/2021 | 1,045,500 |
700,000 | 1,2 | Gold Fields Orogen Holding BVI Ltd., Company Guarantee, Series 144A, 4.875%, 10/7/2020 | 568,932 |
2,820,000 | Goldcorp, Inc., Sr. Unsecd. Note, 3.70%, 3/15/2023 | 2,522,944 | |
280,000 | 1,2 | Hyundai Steel Co., Sr. Unsecd. Note, Series 144A, 4.625%, 4/21/2016 | 295,556 |
470,000 | 1,2 | Newcrest Finance Property Ltd., Sr. Unsecd. Note, Series 144A, 4.20%, 10/1/2022 | 375,645 |
1,200,000 | Reliance Steel & Aluminum Co., Sr. Unsecd. Note, 4.50%, 4/15/2023 | 1,177,498 | |
435,000 | Rio Tinto Finance USA Ltd., Company Guarantee, 6.50%, 7/15/2018 | 513,783 | |
1,570,000 | Southern Copper Corp., Sr. Unsecd. Note, 3.50%, 11/8/2022 | 1,454,895 | |
1,430,000 | Worthington Industries, Inc., Sr. Unsecd. Note, 6.50%, 4/15/2020 | 1,528,317 | |
TOTAL | 17,509,408 | ||
Basic Industry - Paper—0.8% | |||
440,000 | Plum Creek Timberlands LP, Sr. Unsecd. Note, 3.25%, 3/15/2023 | 395,790 | |
460,000 | Plum Creek Timberlands LP, Sr. Unsecd. Note, 4.70%, 3/15/2021 | 476,994 | |
250,000 | Westvaco Corp., 7.65%, 3/15/2027 | 263,026 | |
900,000 | Westvaco Corp., Sr. Deb., 7.50%, 6/15/2027 | 940,971 | |
TOTAL | 2,076,781 | ||
Capital Goods - Aerospace & Defense—0.7% | |||
1,619,000 | 1,2 | Embraer Overseas Ltd., Sr. Unsecd. Note, Series 144A, 5.696%, 9/16/2023 | 1,627,095 |
320,000 | Rockwell Collins, Inc., Sr. Unsecd. Note, 3.10%, 11/15/2021 | 312,305 | |
TOTAL | 1,939,400 | ||
Capital Goods - Building Materials—0.7% | |||
620,000 | Masco Corp., Sr. Unsecd. Note, 7.125%, 3/15/2020 | 710,835 | |
1,020,000 | Valmont Industries, Inc., Sr. Unsecd. Note, 6.625%, 4/20/2020 | 1,144,675 | |
TOTAL | 1,855,510 |
Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Capital Goods - Construction Machinery—0.4% | |||
$1,010,000 | AGCO Corp., Sr. Unsecd. Note, 5.875%, 12/1/2021 | $1,078,843 | |
Capital Goods - Diversified Manufacturing—1.5% | |||
450,000 | ABB Finance USA, Inc., Sr. Unsecd. Note, 2.875%, 5/8/2022 | 425,358 | |
360,000 | Avery Dennison Corp., Sr. Unsecd. Note, 5.375%, 4/15/2020 | 367,149 | |
1,045,000 | Harsco Corp., 5.75%, 5/15/2018 | 1,097,353 | |
1,190,000 | Pentair, Ltd., Company Guarantee, 5.00%, 5/15/2021 | 1,244,219 | |
910,000 | 1,2 | Textron Financial Corp., Jr. Sub. Note, Series 144A, 6.00%, 2/15/2067 | 819,000 |
TOTAL | 3,953,079 | ||
Capital Goods - Packaging—0.8% | |||
470,000 | Packaging Corp. of America, Sr. Unsecd. Note, 3.90%, 6/15/2022 | 456,747 | |
640,000 | Rock-Tenn Co., Sr. Unsecd. Note, 4.00%, 3/1/2023 | 611,464 | |
300,000 | Rock-Tenn Co., Sr. Unsecd. Note, 4.45%, 3/1/2019 | 316,636 | |
650,000 | Sonoco Products Co., Sr. Unsecd. Note, 5.75%, 11/1/2040 | 688,355 | |
TOTAL | 2,073,202 | ||
Communications - Media & Cable—0.5% | |||
270,000 | 1,2 | Cox Communications, Inc., Series 144A, 3.25%, 12/15/2022 | 244,402 |
1,090,000 | DIRECTV Holdings LLC, Company Guarantee, 5.00%, 3/1/2021 | 1,145,363 | |
100,000 | Time Warner Cable, Inc., Company Guarantee, 5.50%, 9/1/2041 | 82,878 | |
TOTAL | 1,472,643 | ||
Communications - Media Noncable—2.0% | |||
1,250,000 | Discovery Communications LLC, Company Guarantee, 5.05%, 6/1/2020 | 1,364,770 | |
1,679,000 | Interpublic Group of Cos., Inc., Sr. Unsecd. Note, 2.25%, 11/15/2017 | 1,656,110 | |
530,000 | Moody's Corp., Sr. Unsecd. Note, 5.50%, 9/1/2020 | 561,702 | |
200,000 | 1,2 | News America, Inc., Sr. Unsecd. Note, Series 144A, 4.00%, 10/1/2023 | 197,743 |
595,000 | Omnicom Group, Inc., Sr. Unsecd. Note, 3.625%, 5/1/2022 | 576,379 | |
390,000 | 1,2 | Pearson Funding Five PLC, Sr. Unsecd. Note, Series 144A, 3.25%, 5/8/2023 | 351,695 |
900,000 | WPP Finance 2010, Sr. Unsecd. Note, 5.125%, 9/7/2042 | 819,787 | |
TOTAL | 5,528,186 | ||
Communications - Telecom Wireless—3.5% | |||
780,000 | America Movil S.A.B. de C.V., 3.125%, 7/16/2022 | 720,919 | |
600,000 | American Tower Corp., Sr. Unsecd. Note, 3.40%, 2/15/2019 | 611,216 | |
1,000,000 | American Tower Corp., Sr. Unsecd. Note, 4.50%, 1/15/2018 | 1,071,795 | |
4,300,000 | 1,2 | Crown Castle Towers LLC, Sr. Secd. Note, Series 144A, 5.495%, 1/15/2017 | 4,659,747 |
720,000 | 1,2 | SBA Tower Trust, Series 144A, 5.101%, 4/17/2017 | 777,645 |
1,620,000 | Telefonaktiebolaget LM Ericsson, Sr. Unsecd. Note, 4.125%, 5/15/2022 | 1,575,082 | |
TOTAL | 9,416,404 | ||
Communications - Telecom Wirelines—1.9% | |||
1,000,000 | CenturyLink, Inc., Sr. Note, Series Q, 6.15%, 9/15/2019 | 1,060,000 | |
1,000,000 | Rogers Communications, Inc., Company Guarantee, 6.80%, 8/15/2018 | 1,192,483 | |
730,000 | Telefonica Emisiones SAU, Sr. Unsecd. Note, 3.192%, 4/27/2018 | 743,846 | |
250,000 | Telefonica SA, Company Guarantee, 7.045%, 6/20/2036 | 276,078 | |
1,735,000 | Verizon Communications, Inc., Sr. Unsecd. Note, 5.15%, 9/15/2023 | 1,863,494 | |
TOTAL | 5,135,901 | ||
Consumer Cyclical - Automotive—5.3% | |||
1,300,000 | 1,2 | Daimler Finance NA LLC, Company Guarantee, 2.95%, 1/11/2017 | 1,342,900 |
700,000 | 1,2 | Daimler Finance NA LLC, Company Guarantee, Series 144A, 1.875%, 1/11/2018 | 689,886 |
575,000 | 1,2 | Daimler Finance NA LLC, Sr. Unsecd. Note, 2.625%, 9/15/2016 | 594,955 |
1,300,000 | Ford Motor Co., Sr. Unsecd. Note, 4.75%, 1/15/2043 | 1,172,709 | |
1,650,000 | Ford Motor Credit Co., Sr. Unsecd. Note, 2.375%, 1/16/2018 | 1,667,294 | |
850,000 | Ford Motor Credit Co., Sr. Unsecd. Note, 3.00%, 6/12/2017 | 883,809 |
Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Consumer Cyclical - Automotive—continued | |||
$950,000 | Ford Motor Credit Co., Sr. Unsecd. Note, 4.25%, 9/20/2022 | $954,675 | |
420,000 | 1,2 | Harley-Davidson Financial Services, Inc., Company Guarantee, Series 144A, 3.875%, 3/15/2016 | 443,166 |
460,000 | 1,2 | Harley-Davidson Financial Services, Inc., Sr. Unsecd. Note, Series 144A, 2.70%, 3/15/2017 | 471,760 |
900,000 | 1,2 | Hyundai Capital America, Sr. Unsecd. Note, Series 144A, 2.875%, 8/9/2018 | 903,938 |
990,000 | 1,2 | Hyundai Capital Services, Inc., Note, 6.00%, 5/5/2015 | 1,053,200 |
480,000 | Johnson Controls, Inc., Sr. Unsecd. Note, 5.00%, 3/30/2020 | 524,497 | |
1,600,000 | 1,2 | RCI Banque SA, Sr. Unsecd. Note, 3.50%, 4/3/2018 | 1,631,475 |
740,000 | 1,2 | RCI Banque SA, Sr. Unsecd. Note, Series 144A, 4.60%, 4/12/2016 | 784,654 |
1,000,000 | 1,2 | Volkswagen International Finance NV, Company Guarantee, Series 144A, 2.375%, 3/22/2017 | 1,027,892 |
TOTAL | 14,146,810 | ||
Consumer Cyclical - Entertainment—1.6% | |||
1,000,000 | 1 | Football Trust V, Pass Thru Cert., Series 144A, 5.35%, 10/5/2020 | 1,080,610 |
1,890,000 | NBC Universal, Inc., Sr. Unsecd. Note, 5.15%, 4/30/2020 | 2,113,056 | |
800,000 | Time Warner, Inc., Deb., 8.375%, 3/15/2023 | 920,415 | |
250,000 | Viacom, Inc., 2.50%, 9/1/2018 | 252,164 | |
TOTAL | 4,366,245 | ||
Consumer Cyclical - Lodging—0.7% | |||
450,000 | Choice Hotels International, Inc., Company Guarantee, 5.70%, 8/28/2020 | 475,875 | |
275,000 | Hyatt Hotels Corp., Sr. Unsecd. Note, 3.375%, 7/15/2023 | 252,204 | |
1,250,000 | Marriott International, Inc., Sr. Unsecd. Note, 3.00%, 3/1/2019 | 1,259,526 | |
TOTAL | 1,987,605 | ||
Consumer Cyclical - Retailers—0.4% | |||
800,000 | Advance Auto Parts, Inc., 4.50%, 12/1/2023 | 799,893 | |
370,000 | O'Reilly Automotive, Inc., Company Guarantee, 4.875%, 1/14/2021 | 387,924 | |
TOTAL | 1,187,817 | ||
Consumer Cyclical - Services—0.4% | |||
250,000 | Boston University, Series MTNA, 7.625%, 7/15/2097 | 295,752 | |
350,000 | Expedia, Inc., Company Guarantee, 5.95%, 8/15/2020 | 378,925 | |
370,000 | University of Southern California, Sr. Unsecd. Note, 5.25%, 10/1/2111 | 390,385 | |
TOTAL | 1,065,062 | ||
Consumer Non-Cyclical - Food/Beverage—2.9% | |||
900,000 | Coca-Cola Femsa S.A.B de C.V., Sr. Unsecd. Note, 4.625%, 2/15/2020 | 954,000 | |
1,410,000 | ConAgra Foods, Inc., Sr. Unsecd. Note, 3.20%, 1/25/2023 | 1,309,535 | |
660,000 | 1,2 | Grupo Bimbo SAB de CV, Sr. Unsecd. Note, Series 144A, 4.50%, 1/25/2022 | 655,201 |
2,050,000 | 1,2 | Kerry Group Financial Services, Sr. Unsecd. Note, Series 144A, 3.20%, 4/9/2023 | 1,856,861 |
1,610,000 | 1,2 | Pernod-Ricard SA, Sr. Unsecd. Note, 4.25%, 7/15/2022 | 1,606,408 |
800,000 | 1,2 | SABMiller Holdings, Inc., Company Guarantee, Series 144A, 2.45%, 1/15/2017 | 819,511 |
475,000 | Tyson Foods, Inc., Sr. Unsecd. Note, 4.50%, 6/15/2022 | 483,776 | |
TOTAL | 7,685,292 | ||
Consumer Non-Cyclical - Health Care—0.3% | |||
270,000 | Laboratory Corp. of America Holdings, Sr. Unsecd. Note, 3.75%, 8/23/2022 | 261,619 | |
650,000 | Stryker Corp., Sr. Unsecd. Note, 1.30%, 4/1/2018 | 631,757 | |
TOTAL | 893,376 | ||
Consumer Non-Cyclical - Pharmaceuticals—0.1% | |||
300,000 | Dentsply International, Inc., Sr. Unsecd. Note, 2.75%, 8/15/2016 | 308,865 | |
Consumer Non-Cyclical - Supermarkets—0.3% | |||
610,000 | Kroger Co., Bond, 6.90%, 4/15/2038 | 710,601 | |
Consumer Non-Cyclical - Tobacco—0.3% | |||
400,000 | Altria Group, Inc., Sr. Unsecd. Note, 4.00%, 1/31/2024 | 391,109 |
Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Consumer Non-Cyclical - Tobacco—continued | |||
$360,000 | Lorillard Tobacco Co., Sr. Unsecd. Note, 7.00%, 8/4/2041 | $391,580 | |
TOTAL | 782,689 | ||
Energy - Independent—0.9% | |||
232,000 | Apache Corp., Sr. Unsecd. Note, 3.25%, 4/15/2022 | 228,652 | |
1,000,000 | Petroleos Mexicanos, 6.50%, 6/2/2041 | 1,050,000 | |
800,000 | Petroleos Mexicanos, Company Guarantee, 5.50%, 1/21/2021 | 864,000 | |
20,000 | Petroleos Mexicanos, Company Guarantee, Series WI, 4.875%, 3/15/2015 | 21,040 | |
140,764 | 1,2 | Tengizchevroil LLP, Series 144A, 6.124%, 11/15/2014 | 143,869 |
TOTAL | 2,307,561 | ||
Energy - Integrated—2.5% | |||
1,000,000 | BP Capital Markets PLC, Sr. Unsecd. Note, 3.994%, 9/26/2023 | 1,010,633 | |
530,000 | 1,2 | CNPC Hong Kong Overseas Capital Ltd., Company Guarantee, Series 144A, 5.95%, 4/28/2041 | 563,986 |
750,000 | Husky Energy, Inc., Sr. Unsecd. Note, 3.95%, 4/15/2022 | 740,507 | |
1,250,000 | Husky Oil Ltd., Deb., 7.55%, 11/15/2016 | 1,446,391 | |
975,000 | Petrobras Global Finance BV, Sr. Unsecd. Note, 4.375%, 5/20/2023 | 877,041 | |
1,000,000 | Petrobras International Finance Co., Sr. Unsecd. Note, 5.375%, 1/27/2021 | 996,205 | |
965,000 | Phillips 66, Sr. Unsecd. Note, 4.30%, 4/1/2022 | 980,950 | |
TOTAL | 6,615,713 | ||
Energy - Oil Field Services—1.1% | |||
280,000 | Nabors Industries, Inc., Company Guarantee, 5.00%, 9/15/2020 | 291,431 | |
1,100,000 | 1,2 | Nabors Industries, Inc., Sr. Unsecd. Note, Series 144A, 5.10%, 9/15/2023 | 1,091,505 |
450,000 | Noble Holding International Ltd., Company Guarantee, 4.90%, 8/1/2020 | 475,037 | |
1,000,000 | Weatherford International Ltd., 6.00%, 3/15/2018 | 1,122,853 | |
TOTAL | 2,980,826 | ||
Energy - Refining—0.5% | |||
215,000 | Valero Energy Corp., 7.50%, 4/15/2032 | 261,532 | |
240,000 | Valero Energy Corp., 9.375%, 3/15/2019 | 309,487 | |
635,000 | Valero Energy Corp., Sr. Unsecd. Note, 6.625%, 6/15/2037 | 724,508 | |
TOTAL | 1,295,527 | ||
Financial Institution - Banking—19.1% | |||
1,180,000 | Associated Banc-Corp., Sr. Unsecd. Note, 5.125%, 3/28/2016 | 1,261,896 | |
1,500,000 | Bank of America Corp., Sr. Unsecd. Note, 5.00%, 5/13/2021 | 1,639,614 | |
825,000 | Bank of America Corp., Sr. Unsecd. Note, 5.75%, 12/1/2017 | 939,391 | |
1,000,000 | Bank of America Corp., Sr. Unsecd. Note, Series MTN, 2.00%, 1/11/2018 | 998,742 | |
600,000 | Bank of Montreal, Sr. Unsecd. Note, Series MTN, 1.45%, 4/9/2018 | 584,573 | |
3,000,000 | 1,2 | Barclays Bank PLC, Jr. Sub. Note, Series 144A, 5.926%, 9/29/2049 | 3,180,000 |
620,000 | Capital One Bank, Sr. Unsecd. Note, Series BKNT, 2.15%, 11/21/2018 | 617,064 | |
2,500,000 | Citigroup, Inc., Sr. Note, 5.375%, 8/9/2020 | 2,844,820 | |
640,000 | Citigroup, Inc., Sr. Unsecd. Note, 4.45%, 1/10/2017 | 693,896 | |
150,000 | Citigroup, Inc., Sr. Unsecd. Note, 4.50%, 1/14/2022 | 159,005 | |
735,000 | Citigroup, Inc., Sr. Unsecd. Note, 6.875%, 3/5/2038 | 904,010 | |
480,000 | City National Corp., Sr. Unsecd. Note, 5.25%, 9/15/2020 | 515,622 | |
1,000,000 | Comerica Bank, Sub. Note, 5.20%, 8/22/2017 | 1,101,579 | |
610,000 | Fifth Third Bancorp, Sr. Unsecd. Note, 3.625%, 1/25/2016 | 641,145 | |
1,000,000 | Fifth Third Bancorp, Sub., 5.45%, 1/15/2017 | 1,099,407 | |
900,000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 5.125%, 1/15/2015 | 940,368 | |
2,900,000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 6.25%, 2/1/2041 | 3,342,685 | |
1,840,000 | HSBC USA, Inc., Sr. Unsecd. Note, 1.625%, 1/16/2018 | 1,815,292 | |
2,000,000 | JP Morgan Chase & Co., Sub. Note, 3.375%, 5/1/2023 | 1,864,654 | |
1,000,000 | JP Morgan Chase & Co., Sr. Unsecd. Note, 4.50%, 1/24/2022 | 1,058,051 |
Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Financial Institution - Banking—continued | |||
$2,440,000 | Manufacturers & Traders Trust Co., Sub. Note, Series BKNT, 5.629%, 12/1/2021 | $2,531,500 | |
1,100,000 | Morgan Stanley, Sr. Unsecd. Note, 3.45%, 11/2/2015 | 1,145,507 | |
3,900,000 | Morgan Stanley, Sr. Unsecd. Note, 3.80%, 4/29/2016 | 4,127,596 | |
600,000 | Morgan Stanley, Sr. Unsecd. Note, 4.75%, 3/22/2017 | 655,055 | |
500,000 | Morgan Stanley, Sr. Unsecd. Note, 5.50%, 7/24/2020 | 559,340 | |
970,000 | Morgan Stanley, Sr. Unsecd. Note, 5.75%, 1/25/2021 | 1,097,614 | |
2,010,000 | Morgan Stanley, Sr. Unsecd. Note, Series GMTN, 6.625%, 4/1/2018 | 2,353,081 | |
1,000,000 | Morgan Stanley, Sub. Note, 4.10%, 5/22/2023 | 968,083 | |
2,110,000 | Murray Street Investment Trust I, Sr. Unsecd. Note, 4.647%, 3/9/2017 | 2,273,139 | |
400,000 | PNC Funding Corp., Sub. Note, 5.625%, 2/1/2017 | 444,172 | |
1,500,000 | 1,2 | PNC Preferred Funding LLC, Jr. Sub. Note, Series 144A, 1.893%, 3/29/2049 | 1,395,000 |
910,000 | 1,2 | RBS Citizens Financial Group, Inc., Sub. Note, Series 144A, 4.15%, 9/28/2022 | 880,676 |
1,400,000 | 1,2 | Santander US Debt SA Unipersonal, Bank Guarantee, Series 144A, 3.781%, 10/7/2015 | 1,443,240 |
250,000 | Union Bank, N.A., Sr. Unsecd. Note, 2.625%, 9/26/2018 | 254,637 | |
1,320,000 | Wachovia Corp., Sr. Unsecd. Note, 5.75%, 2/1/2018 | 1,522,818 | |
1,175,000 | Westpac Banking Corp., Sr. Unsecd. Note, 4.875%, 11/19/2019 | 1,304,731 | |
1,900,000 | Wilmington Trust Corp., Sub. Note, 8.50%, 4/2/2018 | 2,248,454 | |
TOTAL | 51,406,457 | ||
Financial Institution - Brokerage—2.8% | |||
500,000 | 1,2 | CME Group Index Services LLC, Company Guarantee, Series 144A, 4.40%, 3/15/2018 | 539,863 |
170,000 | 1,2 | Cantor Fitzgerald LP, Bond, Series 144A, 7.875%, 10/15/2019 | 179,350 |
370,000 | Eaton Vance Corp., Sr. Unsecd. Note, 3.625%, 6/15/2023 | 354,620 | |
96,000 | Eaton Vance Corp., Sr. Unsecd. Note, 6.50%, 10/2/2017 | 109,014 | |
350,000 | Franklin Resources, Inc., Sr. Unsecd. Note, 4.625%, 5/20/2020 | 378,540 | |
800,000 | Janus Capital Group, Inc., Sr. Note, 6.70%, 6/15/2017 | 891,234 | |
400,000 | Jefferies Group LLC, Sr. Unsecd. Note, 6.50%, 1/20/2043 | 396,714 | |
2,835,000 | Jefferies Group LLC, Sr. Unsecd. Note, 6.875%, 4/15/2021 | 3,243,325 | |
240,000 | NASDAQ OMX Group, Inc., Sr. Unsecd. Note, 5.55%, 1/15/2020 | 260,415 | |
690,000 | Nuveen Investments, Inc., Sr. Unsecd. Note, 5.50%, 9/15/2015 | 696,900 | |
90,000 | Raymond James Financial, Inc., Sr. Unsecd. Note, 4.25%, 4/15/2016 | 95,251 | |
193,000 | Raymond James Financial, Inc., Sr. Unsecd. Note, 5.625%, 4/1/2024 | 202,542 | |
240,000 | Raymond James Financial, Inc., Sr. Unsecd. Note, 8.60%, 8/15/2019 | 302,010 | |
TOTAL | 7,649,778 | ||
Financial Institution - Finance Noncaptive—6.2% | |||
1,560,000 | Discover Bank, Sr. Unsecd. Note, 2.00%, 2/21/2018 | 1,532,987 | |
463,000 | Discover Bank, Sub., Series BKNT, 8.70%, 11/18/2019 | 579,406 | |
1,487,000 | Discover Financial Services, Sr. Unsecd. Note, 3.85%, 11/21/2022 | 1,410,396 | |
1,050,000 | General Electric Capital Corp., Sr. Unsecd. Note, 2.90%, 1/9/2017 | 1,096,595 | |
1,500,000 | General Electric Capital Corp., Sr. Unsecd. Note, 4.625%, 1/7/2021 | 1,636,111 | |
1,500,000 | General Electric Capital Corp., Sr. Unsecd. Note, 4.65%, 10/17/2021 | 1,634,654 | |
3,900,000 | General Electric Capital Corp., Sr. Unsecd. Note, Series MTN, 3.10%, 1/9/2023 | 3,701,439 | |
400,000 | HSBC Finance Capital Trust IX, Note, 5.911%, 11/30/2035 | 414,000 | |
1,300,000 | HSBC Finance Corp., Sr. Sub. Note, 6.676%, 1/15/2021 | 1,494,129 | |
1,100,000 | 1,2 | ILFC E-Capital Trust I, Floating Rate Note—Sr. Sub Note, Series 144A, 5.46%, 12/21/2065 | 1,017,500 |
1,000,000 | 1,2 | Lukoil International Finance BV, Series 144A, 6.356%, 6/7/2017 | 1,122,500 |
960,000 | 1,2 | Macquarie Group Ltd., Sr. Unsecd. Note, Series 144A, 6.00%, 1/14/2020 | 1,060,600 |
TOTAL | 16,700,317 | ||
Financial Institution - Insurance - Life—5.8% | |||
910,000 | 1,2 | AXA Equitable Life Insurance Co., Sub., Series 144A, 7.70%, 12/1/2015 | 1,006,967 |
580,000 | Aflac, Inc., Sr. Unsecd. Note, 6.90%, 12/17/2039 | 713,508 |
Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Financial Institution - Insurance - Life—continued | |||
$1,790,000 | Aflac, Inc., Sr. Unsecd. Note, 8.50%, 5/15/2019 | $2,287,566 | |
800,000 | American International Group, Inc., Sr. Unsecd. Note, 4.125%, 2/15/2024 | 795,654 | |
230,000 | American International Group, Inc., Sr. Unsecd. Note, 4.25%, 9/15/2014 | 235,831 | |
1,000,000 | American International Group, Inc., Sr. Unsecd. Note, 6.40%, 12/15/2020 | 1,182,164 | |
500,000 | Lincoln National Corp., Sr. Secd. Note, 8.75%, 7/1/2019 | 643,972 | |
290,000 | Lincoln National Corp., Sr. Unsecd. Note, 4.20%, 3/15/2022 | 295,607 | |
1,270,000 | 1,2 | Massachusetts Mutual Life Insurance Co., Sub. Note, Series 144A, 8.875%, 6/1/2039 | 1,820,339 |
2,300,000 | MetLife, Inc., Sr. Unsecd. Note, 4.75%, 2/8/2021 | 2,486,539 | |
350,000 | 1,2 | Penn Mutual Life Insurance Co., Sr. Note, Series 144A, 7.625%, 6/15/2040 | 439,008 |
1,270,000 | Principal Financial Group, Inc., Sr. Unsecd. Note, 3.125%, 5/15/2023 | 1,179,022 | |
310,000 | Principal Financial Group, Inc., Sr. Unsecd. Note, 3.30%, 9/15/2022 | 295,245 | |
1,000,000 | Prudential Financial, Inc., Sr. Unsecd. Note, Series MTN, 6.10%, 6/15/2017 | 1,138,784 | |
700,000 | SunAmerica, Inc., Deb., 8.125%, 4/28/2023 | 864,556 | |
250,000 | 1 | Union Central Life Insurance Co., Note, Series 144A, 8.20%, 11/1/2026 | 273,945 |
TOTAL | 15,658,707 | ||
Financial Institution - Insurance - P&C—2.1% | |||
330,000 | CNA Financial Corp., 6.50%, 8/15/2016 | 371,340 | |
660,000 | CNA Financial Corp., Sr. Unsecd. Note, 5.75%, 8/15/2021 | 739,700 | |
680,000 | CNA Financial Corp., Sr. Unsecd. Note, 5.875%, 8/15/2020 | 775,801 | |
1,180,000 | Horace Mann Educators Corp., Sr. Note, 6.85%, 4/15/2016 | 1,283,225 | |
1,000,000 | 1,2 | Nationwide Mutual Insurance Co., Sub. Note, Series 144A, 9.375%, 8/15/2039 | 1,415,111 |
1,050,000 | 1,2 | ZFS Finance USA Trust II, Jr. Sub. Note, Series 144A, 6.45%, 12/15/2065 | 1,128,750 |
TOTAL | 5,713,927 | ||
Financial Institution - REITs—4.8% | |||
450,000 | Alexandria Real Estate Equities, Inc., Sr. Unsecd. Note, 4.60%, 4/1/2022 | 452,946 | |
680,000 | Boston Properties LP, Sr. Unsecd. Note, 3.80%, 2/1/2024 | 652,334 | |
1,200,000 | Boston Properties LP, Sr. Unsecd. Note, 5.875%, 10/15/2019 | 1,378,932 | |
890,000 | Equity One, Inc., Bond, 6.00%, 9/15/2017 | 996,961 | |
1,700,000 | HRPT Properties Trust, Sr. Unsecd. Note, 6.25%, 6/15/2017 | 1,824,411 | |
960,000 | Health Care REIT, Inc., Sr. Unsecd. Note, 6.125%, 4/15/2020 | 1,080,724 | |
500,000 | Healthcare Trust of America, 3.70%, 4/15/2023 | 460,883 | |
810,000 | Liberty Property LP, 6.625%, 10/1/2017 | 927,977 | |
550,000 | Post Apartment Homes LP, Sr. Unsecd. Note, 3.375%, 12/1/2022 | 506,830 | |
163,000 | ProLogis Inc., Sr. Unsecd. Note, 6.875%, 3/15/2020 | 192,112 | |
750,000 | ProLogis LP, Sr. Unsecd. Note, 3.35%, 2/1/2021 | 728,545 | |
1,500,000 | Realty Income Corp., Sr. Unsecd. Note, 6.75%, 8/15/2019 | 1,757,172 | |
470,000 | Regency Centers LP, Company Guarantee, 4.80%, 4/15/2021 | 491,976 | |
340,000 | Tanger Properties LP, Sr. Unsecd. Note, 3.875%, 12/1/2023 | 327,858 | |
700,000 | Tanger Properties LP, Sr. Unsecd. Note, 6.125%, 6/1/2020 | 802,462 | |
300,000 | UDR, Inc., Company Guarantee, 4.625%, 1/10/2022 | 308,363 | |
TOTAL | 12,890,486 | ||
Municipal Services—1.0% | |||
895,000 | 1,2 | Army Hawaii Family Housing, Series 144A, 5.524%, 6/15/2050 | 859,853 |
1,815,000 | 1,2 | Camp Pendleton & Quantico Housing LLC, Series 144A, 5.572%, 10/1/2050 | 1,761,585 |
TOTAL | 2,621,438 | ||
Sovereign—0.6% | |||
560,000 | Corp Andina De Fomento, Sr. Unsecd. Note, 3.75%, 1/15/2016 | 585,031 | |
320,000 | Corp Andina De Fomento, Sr. Unsecd. Note, 4.375%, 6/15/2022 | 318,003 | |
510,000 | Inter-American Development Bank, Series MTN, 6.75%, 7/15/2027 | 660,612 | |
TOTAL | 1,563,646 |
Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Technology—4.0% | |||
$420,000 | Agilent Technologies, Inc., Sr. Unsecd. Note, 3.20%, 10/1/2022 | $384,548 | |
940,000 | Agilent Technologies, Inc., Sr. Unsecd. Note, 3.875%, 7/15/2023 | 891,256 | |
400,000 | Apple, Inc., Sr. Unsecd. Note, 1.00%, 5/3/2018 | 386,998 | |
250,000 | Apple, Inc., Sr. Unsecd. Note, 2.40%, 5/3/2023 | 224,885 | |
1,200,000 | BMC Software, Inc., 7.25%, 6/1/2018 | 1,218,000 | |
430,000 | Corning, Inc., Unsecd. Note, 4.75%, 3/15/2042 | 414,231 | |
915,000 | Fidelity National Information Services, Inc., Sr. Unsecd. Note, 3.50%, 4/15/2023 | 834,324 | |
1,370,000 | Fiserv, Inc., Sr. Note, 6.80%, 11/20/2017 | 1,579,247 | |
2,000,000 | Hewlett-Packard Co., Sr. Unsecd. Note, 3.30%, 12/9/2016 | 2,094,560 | |
670,000 | Ingram Micro, Inc., Sr. Unsecd. Note, 5.00%, 8/10/2022 | 667,592 | |
180,000 | Juniper Networks, Inc., Sr. Unsecd. Note, 5.95%, 3/15/2041 | 177,752 | |
285,000 | SAIC, Inc., Company Guarantee, 5.95%, 12/1/2040 | 273,257 | |
195,000 | Verisk Analytics, Inc., Sr. Unsecd. Note, 4.125%, 9/12/2022 | 188,804 | |
670,000 | Verisk Analytics, Inc., Sr. Unsecd. Note, 4.875%, 1/15/2019 | 709,863 | |
500,000 | Xerox Corp., Sr. Unsecd. Note, 2.95%, 3/15/2017 | 513,505 | |
325,000 | Xerox Corp., Sr. Unsecd. Note, 4.50%, 5/15/2021 | 334,612 | |
TOTAL | 10,893,434 | ||
Transportation - Airlines—1.0% | |||
191,552 | Continental Airlines, Inc., Equip. Trust, Series 991A, 6.545%, 2/2/2019 | 209,040 | |
2,310,000 | Southwest Airlines Co., Sr. Unsecd. Note, 5.125%, 3/1/2017 | 2,509,808 | |
TOTAL | 2,718,848 | ||
Transportation - Railroads—0.1% | |||
117,702 | Burlington Northern Santa Fe Corp., Pass Thru Cert., Series 99-2, 7.57%, 1/2/2021 | 137,617 | |
300,000 | Kansas City Southern de Mexico SA de CV, Sr. Unsecd. Note, 3.00%, 5/15/2023 | 272,757 | |
TOTAL | 410,374 | ||
Transportation - Services—1.8% | |||
1,695,000 | 1,2 | Enterprise Rent-A-Car USA Finance Co., Series 144A, 6.375%, 10/15/2017 | 1,962,325 |
530,000 | 1,2 | Enterprise Rent-A-Car USA Finance Co., Sr. Unsecd. Note, Series 144A, 5.625%, 3/15/2042 | 541,436 |
1,120,000 | 1,2 | Penske Truck Leasing Co. LP & PTL Finance Corp., Series 144A, 3.75%, 5/11/2017 | 1,178,708 |
625,000 | Ryder System, Inc., Sr. Unsecd. Note, 3.50%, 6/1/2017 | 654,225 | |
425,000 | Ryder System, Inc., Sr. Unsecd. Note, Series MTN, 2.45%, 11/15/2018 | 420,700 | |
TOTAL | 4,757,394 | ||
Utility - Electric—5.0% | |||
880,000 | American Electric Power Co., Inc., Sr. Unsecd. Note, Series F, 2.95%, 12/15/2022 | 814,104 | |
1,306,307 | Bruce Mansfield Unit 1 2, Pass Thru Cert., 6.85%, 6/1/2034 | 1,378,826 | |
600,000 | 1,2 | Enel Finance International SA, Company Guarantee, Series 144A, 3.875%, 10/7/2014 | 613,112 |
1,975,000 | Entergy Louisiana LLC, 1st Mtg. Bond, 5.40%, 11/1/2024 | 2,197,332 | |
550,000 | Exelon Generation Co. LLC, Sr. Unsecd. Note, 4.25%, 6/15/2022 | 527,283 | |
500,000 | Exelon Generation Co. LLC, Sr. Unsecd. Note, 5.75%, 10/1/2041 | 479,035 | |
220,000 | FirstEnergy Solutions Corp., Company Guarantee, 6.05%, 8/15/2021 | 235,169 | |
235,000 | Great Plains Energy, Inc., Note, 4.85%, 6/1/2021 | 247,674 | |
896,332 | 1,2 | Great River Energy, 1st Mtg. Note, Series 144A, 5.829%, 7/1/2017 | 951,824 |
2,650,000 | MidAmerican Energy Holdings Co., Sr. Unsecd. Note, 5.95%, 5/15/2037 | 2,900,393 | |
190,000 | PPL Capital Funding, Inc., Sr. Unsecd. Note, 4.20%, 6/15/2022 | 189,711 | |
1,110,000 | PPL Energy Supply LLC, Sr. Unsecd. Note, 6.00%, 12/15/2036 | 1,051,399 | |
235,000 | PSEG Power LLC, Sr. Unsecd. Note, 2.45%, 11/15/2018 | 232,093 | |
425,000 | PSEG Power LLC, Sr. Unsecd. Note, 4.15%, 9/15/2021 | 431,386 | |
230,000 | TECO Finance, Inc., Company Guarantee, 5.15%, 3/15/2020 | 252,301 | |
800,000 | UIL Holdings Corp., Sr. Unsecd. Note, 4.625%, 10/1/2020 | 814,973 |
Principal Amount | Value | ||
CORPORATE BONDS—continued | |||
Utility - Electric—continued | |||
$96,991 | Waterford 3 Funding Corp., 8.09%, 1/2/2017 | $96,712 | |
TOTAL | 13,413,327 | ||
Utility - Natural Gas Distributor—0.7% | |||
280,000 | 1,2 | Florida Gas Transmission Co. LLC, Sr. Unsecd. Note, Series 144A, 5.45%, 7/15/2020 | 303,115 |
1,600,000 | National Fuel Gas Co., Sr. Unsecd. Note, 3.75%, 3/1/2023 | 1,510,496 | |
TOTAL | 1,813,611 | ||
Utility - Natural Gas Pipelines—2.0% | |||
1,000,000 | Enbridge Energy Partners LP, Sr. Unsecd. Note, 4.20%, 9/15/2021 | 1,006,410 | |
565,000 | Energy Transfer Partners LP, Sr. Unsecd. Note, 4.90%, 2/1/2024 | 573,773 | |
1,600,000 | Kinder Morgan Energy Partners LP, Sr. Unsecd. Note, 5.30%, 9/15/2020 | 1,765,440 | |
540,000 | 1,2 | Texas Eastern Transmission LP, Sr. Unsecd. Note, Series 144A, 2.80%, 10/15/2022 | 483,034 |
1,110,000 | Williams Partners LP, 5.25%, 3/15/2020 | 1,214,045 | |
380,000 | Williams Partners LP, Sr. Unsecd. Note, 4.125%, 11/15/2020 | 389,670 | |
TOTAL | 5,432,372 | ||
TOTAL CORPORATE BONDS (IDENTIFIED COST $248,539,947) | 256,892,508 | ||
MORTGAGE-BACKED SECURITIES—0.1% | |||
Federal Home Loan Mortgage Corporation—0.0% | |||
2,054 | Federal Home Loan Mortgage Corp., Pool C01051, 8.00%, 9/1/2030 | 2,387 | |
Federal National Mortgage Association—0.0% | |||
291 | Federal National Mortgage Association, Pool 50276, 9.50%, 2/1/2020 | 340 | |
Government National Mortgage Association—0.1% | |||
5,002 | Government National Mortgage Association, Pool 1512, 7.50%, 12/20/2023 | 5,811 | |
6,476 | Government National Mortgage Association, Pool 2630, 6.50%, 8/20/2028 | 7,399 | |
8,257 | Government National Mortgage Association, Pool 2631, 7.00%, 8/20/2028 | 9,627 | |
12,475 | Government National Mortgage Association, Pool 2658, 6.50%, 10/20/2028 | 14,255 | |
17,416 | Government National Mortgage Association, Pool 2701, 6.50%, 1/20/2029 | 19,907 | |
1,506 | Government National Mortgage Association, Pool 276337, 10.00%, 8/15/2019 | 1,757 | |
12,350 | Government National Mortgage Association, Pool 2796, 7.00%, 8/20/2029 | 14,428 | |
3,866 | Government National Mortgage Association, Pool 3039, 6.50%, 2/20/2031 | 4,433 | |
8,162 | Government National Mortgage Association, Pool 3040, 7.00%, 2/20/2031 | 9,563 | |
25,374 | Government National Mortgage Association, Pool 3188, 6.50%, 1/20/2032 | 29,064 | |
22,136 | Government National Mortgage Association, Pool 3239, 6.50%, 5/20/2032 | 25,310 | |
45,741 | Government National Mortgage Association, Pool 3261, 6.50%, 7/20/2032 | 52,313 | |
1,819 | Government National Mortgage Association, Pool 493514, 8.00%, 9/15/2030 | 2,155 | |
6,065 | Government National Mortgage Association, Pool 516688, 8.00%, 8/15/2029 | 7,318 | |
TOTAL | 203,340 | ||
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $179,180) | 206,067 | ||
MUNICIPAL BOND—0.1% | |||
Municipal Services—0.1% | |||
410,000 | Chicago, IL, Taxable Project and Refunding Series 2012B GO Bonds, 5.432% Bonds, 1/1/2042 (IDENTIFIED COST $410,000) | 345,819 | |
COLLATERALIZED MORTGAGE OBLIGATION—0.6% | |||
Commercial Mortgage—0.6% | |||
1,500,000 | TIAA Seasoned Commercial Mortgage Trust 2007-C4, Class AJ, 5.564%, 8/15/2039 (IDENTIFIED COST $1,488,320) | 1,596,111 | |
FOREIGN GOVERNMENTS/AGENCIES—0.7% | |||
Sovereign—0.7% | |||
225,000 | Colombia, Government of, Sr. Unsecd. Note, 4.375%, 7/12/2021 | 232,312 | |
900,000 | 1,2 | Qatar, State of, Series 144A, 5.25%, 1/20/2020 | 1,005,750 |
Principal Amount | Value | ||
FOREIGN GOVERNMENTS/AGENCIES—continued | |||
Sovereign—continued | |||
$500,000 | Sweden, Government of, 10.25%, 11/1/2015 | $515,165 | |
TOTAL FOREIGN GOVERNMENTS/AGENCIES (IDENTIFIED COST $1,622,852) | 1,753,227 | ||
U.S. TREASURY—0.2% | |||
U.S. Treasury Note—0.2% | |||
600,000 | United States Treasury Note, 1.50%, 8/31/2018 (IDENTIFIED COST $601,691) | 596,631 | |
REPURCHASE AGREEMENT—1.4% | |||
3,852,000 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845. (AT COST) | 3,852,000 | |
TOTAL INVESTMENTS—98.5% (IDENTIFIED COST $256,693,990)3 | 265,242,363 | ||
OTHER ASSETS AND LIABILITIES - NET—1.5%4 | 3,940,936 | ||
TOTAL NET ASSETS—100% | $269,183,299 |
Description | Number of Contracts | Notional Value | Expiration Date | Unrealized Appreciation (Depreciation) |
5U.S. Treasury Note 5-Year Long Futures | 528 | $62,997,000 | March 2014 | $(826,188) |
5U.S. Treasury Long Bond Short Futures | 275 | $35,285,938 | March 2014 | $605,241 |
5U.S. Treasury Ultra Bond Short Futures | 157 | $21,391,250 | March 2014 | $251,842 |
5U.S. Treasury Note 2-Year Short Futures | 100 | $21,981,250 | March 2014 | $38,837 |
NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS | $69,732 |
1 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2013, these restricted securities amounted to $56,447,411, which represented 21.0% of total net assets. |
2 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees (the “Trustees”). At December 31, 2013, these liquid restricted securities amounted to $55,092,856, which represented 20.5% of total net assets. |
3 | The cost of investments for federal tax purposes amounts to $256,694,218. |
4 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
5 | Non-income-producing security. |
Valuation Inputs | ||||
Level 1— Quoted Prices and Investments in Investment Companies | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Debt Securities: | ||||
Corporate Bonds | $— | $256,892,508 | $— | $256,892,508 |
Mortgage-Backed Securities | — | 206,067 | — | 206,067 |
Municipal Bond | — | 345,819 | — | 345,819 |
Collateralized Mortgage Obligations | — | 1,596,111 | — | 1,596,111 |
Foreign Governments/Agencies | — | 1,753,227 | — | 1,753,227 |
U.S. Treasury | — | 596,631 | — | 596,631 |
Repurchase Agreement | — | 3,852,000 | — | 3,852,000 |
TOTAL SECURITIES | $— | $265,242,363 | $— | $265,242,363 |
OTHER FINANCIAL INSTRUMENTS* | $69,732 | $— | $— | $69,732 |
* | Other financial instruments include futures contracts. |
GO | —General Obligation |
MTN | —Medium Term Note |
REIT | —Real Estate Investment Trust |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $11.80 | $11.21 | $11.55 | $11.20 | $10.00 |
Income From Investment Operations: | |||||
Net investment income1 | 0.41 | 0.44 | 0.50 | 0.52 | 0.53 |
Net realized and unrealized gain (loss) on investments and futures contracts | (0.29) | 0.62 | (0.24) | 0.40 | 1.37 |
TOTAL FROM INVESTMENT OPERATIONS | 0.12 | 1.06 | 0.26 | 0.92 | 1.90 |
Less Distributions: | |||||
Distributions from net investment income | (0.49) | (0.47) | (0.60) | (0.57) | (0.70) |
Net Asset Value, End of Period | $11.43 | $11.80 | $11.21 | $11.55 | $11.20 |
Total Return2 | 1.04% | 9.72% | 2.27% | 8.50% | 20.43% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.73% | 0.73% | 0.70% | 0.70% | 0.70% |
Net investment income | 3.55% | 3.86% | 4.44% | 4.61% | 5.12% |
Expense waiver/reimbursement3 | 0.06% | 0.03% | 0.06% | 0.05% | 0.08% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $230,647 | $255,527 | $265,952 | $214,644 | $230,850 |
Portfolio turnover | 23% | 37% | 35% | 26% | 32% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $11.75 | $11.16 | $11.50 | $11.15 | $9.95 |
Income From Investment Operations: | |||||
Net investment income1 | 0.38 | 0.41 | 0.48 | 0.49 | 0.50 |
Net realized and unrealized gain (loss) on investments and futures contracts | (0.29) | 0.62 | (0.25) | 0.40 | 1.37 |
TOTAL FROM INVESTMENT OPERATIONS | 0.09 | 1.03 | 0.23 | 0.89 | 1.87 |
Less Distributions: | |||||
Distributions from net investment income | (0.46) | (0.44) | (0.57) | (0.54) | (0.67) |
Net Asset Value, End of Period | $11.38 | $11.75 | $11.16 | $11.50 | $11.15 |
Total Return2 | 0.75% | 9.45% | 1.99% | 8.28% | 20.15% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.98% | 0.98% | 0.95% | 0.95% | 0.95% |
Net investment income | 3.29% | 3.62% | 4.21% | 4.36% | 4.86% |
Expense waiver/reimbursement3 | 0.06% | 0.03% | 0.06% | 0.05% | 0.08% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $38,536 | $47,074 | $52,191 | $63,962 | $69,338 |
Portfolio turnover | 23% | 37% | 35% | 26% | 32% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
December 31, 2013
Assets: | ||
Total investment in securities, at value (identified cost $256,693,990) | $265,242,363 | |
Cash | 426 | |
Restricted cash (Note 2) | 1,162,555 | |
Income receivable | 3,025,831 | |
Receivable for shares sold | 92,201 | |
Receivable for daily variation margin | 206,969 | |
TOTAL ASSETS | 269,730,345 | |
Liabilities: | ||
Payable for shares redeemed | $481,303 | |
Payable for Directors'/Trustees' fees (Note 5) | 434 | |
Payable for auditing fees | 22,500 | |
Payable for portfolio accounting fees | 18,726 | |
Payable for distribution services fee (Note 5) | 8,165 | |
Accrued expenses (Note 5) | 15,918 | |
TOTAL LIABILITIES | 547,046 | |
Net assets for 23,566,870 shares outstanding | $269,183,299 | |
Net Assets Consist of: | ||
Paid-in capital | $252,242,916 | |
Net unrealized appreciation of investments and futures contracts | 8,618,105 | |
Accumulated net realized loss on investments and futures contracts | (1,628,564) | |
Undistributed net investment income | 9,950,842 | |
TOTAL NET ASSETS | $269,183,299 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||
Primary Shares: | ||
$230,647,226 ÷ 20,181,326 shares outstanding, no par value, unlimited shares authorized | $11.43 | |
Service Shares: | ||
$38,536,073 ÷ 3,385,544 shares outstanding, no par value, unlimited shares authorized | $11.38 |
Year Ended December 31, 2013
Investment Income: | |||
Interest (including income on securities loaned of $545) | $12,142,296 | ||
Expenses: | |||
Investment adviser fee (Note 5) | $1,701,642 | ||
Administrative fee (Note 5) | 221,327 | ||
Custodian fees | 14,460 | ||
Transfer agent fee | 28,441 | ||
Directors'/Trustees' fees (Note 5) | 2,828 | ||
Auditing fees | 24,000 | ||
Legal fees | 8,664 | ||
Portfolio accounting fees | 111,429 | ||
Distribution services fee (Note 5) | 105,713 | ||
Printing and postage | 143,202 | ||
Insurance premiums (Note 5) | 4,545 | ||
Miscellaneous (Note 5) | 4,691 | ||
TOTAL EXPENSES | 2,370,942 | ||
Waiver of investment adviser fee (Note 5) | (181,002) | ||
Net expenses | 2,189,940 | ||
Net investment income | 9,952,356 | ||
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts: | |||
Net realized gain on investments | 2,072,337 | ||
Net realized gain on futures contracts | 4,715,954 | ||
Net change in unrealized appreciation of investments | (13,871,329) | ||
Net change in unrealized appreciation of futures contracts | (290,519) | ||
Net realized and unrealized loss on investments and futures contracts | (7,373,557) | ||
Change in net assets resulting from operations | $2,578,799 |
Year Ended December 31 | 2013 | 2012 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $9,952,356 | $12,017,902 |
Net realized gain on investments and futures contracts | 6,788,291 | 6,016,556 |
Net change in unrealized appreciation/depreciation of investments and futures contracts | (14,161,848) | 11,262,978 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 2,578,799 | 29,297,436 |
Distributions to Shareholders: | ||
Distributions from net investment income | ||
Primary Shares | (10,282,335) | (11,009,010) |
Service Shares | (1,734,793) | (1,973,651) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (12,017,128) | (12,982,661) |
Share Transactions: | ||
Proceeds from sale of shares | 18,658,426 | 25,374,669 |
Net asset value of shares issued to shareholders in payment of distributions declared | 12,017,128 | 12,982,661 |
Cost of shares redeemed | (54,655,532) | (70,213,747) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (23,979,978) | (31,856,417) |
Change in net assets | (33,418,307) | (15,541,642) |
Net Assets: | ||
Beginning of period | 302,601,606 | 318,143,248 |
End of period (including undistributed net investment income of $9,950,842 and $12,015,614, respectively) | $269,183,299 | $302,601,606 |
■ | Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Fixed-income securities and repurchase agreements acquired with remaining maturities of 60 days or less are valued at their amortized cost (adjusted for the accretion of any discount or amortization of any premium), unless the issuer's creditworthiness is impaired or other factors indicate that amortized cost is not an accurate estimate of the investment's fair value, in which case it would be valued in the same manner as a longer-term security. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, 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 and public trading in similar securities of the issuer or comparable issuers. |
■ | With respect to securities traded 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; and |
■ | Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
Security | Acquisition Date | Cost | Market Value |
Football Trust V, Pass Thru Cert., Series 144A, 5.35%, 10/5/2020 | 3/24/2010 | $1,000,000 | $1,080,610 |
Union Central Life Insurance Co., Note, Series 144A, 8.20%, 11/1/2026 | 5/14/1999 – 9/29/1999 | $248,411 | $273,945 |
Fair Value of Derivative Instruments | ||
Asset | ||
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 | $69,732* |
* | 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 | |
Futures | |
Interest rate contracts | $4,715,954 |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |
Futures | |
Interest rate contracts | $(290,519) |
Year Ended December 31 | 2013 | 2012 | ||
Primary Shares: | Shares | Amount | Shares | Amount |
Shares sold | 1,534,716 | $17,581,313 | 2,062,356 | $23,548,552 |
Shares issued to shareholders in payment of distributions declared | 900,380 | 10,282,335 | 983,826 | 11,009,010 |
Shares redeemed | (3,902,619) | (44,745,518) | (5,125,697) | (58,695,488) |
NET CHANGE RESULTING FROM PRIMARY SHARE TRANSACTIONS | (1,467,523) | $(16,881,870) | (2,079,515) | $(24,137,926) |
Year Ended December 31 | 2013 | 2012 | ||
Service Shares: | Shares | Amount | Shares | Amount |
Shares sold | 95,171 | $1,077,113 | 160,446 | $1,826,117 |
Shares issued to shareholders in payment of distributions declared | 152,308 | 1,734,793 | 176,692 | 1,973,651 |
Shares redeemed | (867,085) | (9,910,014) | (1,009,278) | (11,518,259) |
NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | (619,606) | $(7,098,108) | (672,140) | $(7,718,491) |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | (2,087,129) | $(23,979,978) | (2,751,655) | $(31,856,417) |
2013 | 2012 | |
Ordinary income | $12,017,128 | $12,982,661 |
Undistributed ordinary income | $9,950,842 |
Net unrealized appreciation | $8,548,145 |
Capital loss carryforwards | $(1,558,604) |
Expiration Year | Short-Term | Long-Term | Total |
2017 | $1,558,604 | NA | $1,558,604 |
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 |
Primary Shares | 0.25% |
Service Shares | 0.25% |
Distribution Services Fees Incurred | |
Service Shares | $105,713 |
Purchases | $ 63,977,161 |
Sales | $ 38,854,032 |
Federated Quality bond fund II:
February 14, 2014
Beginning Account Value 7/1/2013 | Ending Account Value 12/31/2013 | Expenses Paid During Period1 | |
Actual: | |||
Primary Shares | $1,000 | $1,028.80 | $3.73 |
Service Shares | $1,000 | $1,027.10 | $5.01 |
Hypothetical (assuming a 5% return before expenses): | |||
Primary Shares | $1,000 | $1,021.53 | $3.72 |
Service Shares | $1,000 | $1,020.27 | $4.99 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The expenses shown in the table do not include the charges and expenses imposed by the insurance company under the variable insurance product contract. Please refer to the variable insurance product prospectus for a complete listing of these expenses. The annualized net expense ratios are as follows: |
Primary Shares | 0.73% |
Service Shares | 0.98% |
Name | For | Withheld |
John T. Collins | 300,523,736.140 | 11,005,188.385 |
Maureen Lally-Green | 300,308,651.177 | 11,220,273.348 |
Thomas M. O'Neill | 300,886,250.634 | 10,642,673.891 |
P. Jerome Richey | 300,662,760.971 | 10,866,163.554 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: October 1993 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
J. Christopher Donahue* Birth Date: April 11, 1949 Trustee Began serving: October 1993 | 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, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); 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. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust 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 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: October 1993 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: November 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: 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); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee 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. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: September 1993 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
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 Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; 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 PRESIDENT Officer since: September 1993 | 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. |
John B. Fisher Birth Date: May 16, 1956 PRESIDENT Officer since: November 2004 | Principal Occupations: 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 and CEO of Passport Research, Ltd.; President of some of the Funds in the Federated Fund Family; 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; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc.; President, Technology, Federated Services Company. |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | 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. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Stephen F. Auth Birth Date: September 3, 1956 450 Lexington Avenue Suite 3700 New York, NY 10017-3943 CHIEF INVESTMENT OFFICER Officer since: November 2002 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
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. |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 313916785
2014 ©Federated Investors, Inc.
1 | The Barclays Mortgage-Backed Securities Index and Barclays Government Index returned -1.41% and -2.60%, respectively. 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. Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Blended Index. |
2 | Duration measures the price sensitivity of a fixed-income security to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations. |
3 | Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. |
4 | 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. |
5 | 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. |
Average Annual Total Returns for the Period Ended 12/31/2013 | |
1 Year | -2.05% |
5 Years | 3.37% |
10 Years | 3.72% |
Federated Fund for U.S. Government Securities II | BMBS | BGI | Blended Index | |
12/31/2003 | 10,000 | 10,000 | 10,000 | 10,000 |
12/31/2004 | 10,361 | 10,470 | 10,348 | 10,430 |
12/31/2005 | 10,571 | 10,744 | 10,622 | 10,704 |
12/31/2006 | 11,009 | 11,305 | 10,992 | 11,201 |
12/31/2007 | 11,700 | 12,085 | 11,944 | 12,039 |
12/31/2008 | 12,201 | 13,093 | 13,424 | 13,203 |
12/31/2009 | 12,837 | 13,864 | 13,128 | 13,620 |
12/31/2010 | 13,500 | 14,609 | 13,853 | 14,360 |
12/31/2011 | 14,280 | 15,519 | 15,103 | 15,386 |
12/31/2012 | 14,705 | 15,921 | 15,408 | 15,757 |
12/31/2013 | 14,403 | 15,696 | 15,007 | 15,472 |
1 | The Fund's performance assumes the reinvestment of all dividends and distributions. The BMBS, BGI and Blended Index have been adjusted to reflect reinvestment of dividends on securities in the indexes. |
2 | The BMBS covers agency mortgage-backed pass-through securities (both fixed-rate and hybrid ARM) issued by Ginnie Mae (GNMA), Fannie Mae (FNMA) and Freddie Mac (FHLMC). 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 BGI is a market value weighted index of U.S. government and government agency securities (other than mortgage securities) with maturities of one year or more. The index is not adjusted to reflect sales loads, expenses or other fees that the 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. |
Type of Investments | Percentage of Total Net Assets |
U.S. Government Agency Mortgage-Backed Securities | 52.1% |
U.S. Government Agency Commercial Mortgage-Backed Securities | 17.6% |
U.S. Treasury Securities | 10.9% |
Non-Agency Commercial Mortgage-Backed Securities | 8.6% |
Non-Agency Mortgage-Backed Securities | 5.0% |
U.S. Government Agency Securities | 3.1% |
Repurchase Agreements—Collateral2 | 10.8% |
Repurchase Agreements | 1.9% |
Other Assets and Liabilities—Net3 | (10.0)% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus and Statement of Additional Information for a description of the types of securities in which the Fund invests. |
2 | Includes repurchase agreements purchased with cash collateral or proceeds received in securities lending and/or dollar-roll transactions, as well as cash held to cover payments on when-issued and delayed delivery transactions. |
3 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
Principal Amount | Value | ||
U.S. TREASURY—10.9% | |||
U.S. Treasury Bonds—1.2% | |||
$2,000,000 | 3.750%, 8/15/2041 | $1,941,836 | |
370,000 | 7.500%, 11/15/2024 | 521,758 | |
TOTAL | 2,463,594 | ||
U.S. Treasury Notes—9.7% | |||
5,000,000 | 1 | 0.250%, 1/31/2015 | 5,003,906 |
2,000,000 | 1.500%, 8/31/2018 | 1,988,770 | |
3,500,000 | 2.000%, 2/15/2023 | 3,240,815 | |
3,000,000 | 2.625%, 6/30/2014 | 3,037,222 | |
5,500,000 | 1 | 3.125%, 5/15/2021 | 5,725,586 |
529,075 | U.S. Treasury Inflation-Protected Note, 0.125%, 4/15/2016 | 543,258 | |
TOTAL | 19,539,557 | ||
TOTAL U.S. TREASURY (IDENTIFIED COST $22,092,452) | 22,003,151 | ||
GOVERNMENT AGENCIES—3.1% | |||
Federal Farm Credit System—0.6% | |||
1,000,000 | 5.750%, 12/7/2028 | 1,190,106 | |
Federal Home Loan Bank System—0.7% | |||
1,100,000 | 7.125%, 2/15/2030 | 1,439,772 | |
Federal Home Loan Mortgage Corporation—0.8% | |||
1,500,000 | 5.625%, 11/23/2035 | 1,575,850 | |
72,000 | 6.750%, 9/15/2029 | 94,776 | |
TOTAL | 1,670,626 | ||
Tennessee Valley Authority Bonds—1.0% | |||
2,000,000 | Tennessee Valley Authority, 4.650%, 6/15/2035 | 2,001,677 | |
TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $5,626,098) | 6,302,181 | ||
MORTGAGE-BACKED SECURITIES—52.1% | |||
Federal Home Loan Mortgage Corporation—20.5% | |||
2,960,027 | 3.000%, 8/1/2043 | 2,805,781 | |
6,485,764 | 3.500%, 4/1/2042 - 9/1/2043 | 6,436,192 | |
6,752,179 | 4.000%, 12/1/2041 - 1/1/2042 | 6,939,427 | |
8,787,126 | 4.500%, 6/1/2019 - 4/1/2041 | 9,302,787 | |
5,106,990 | 5.000%, 7/1/2019 - 6/1/2040 | 5,497,865 | |
6,094,438 | 5.500%, 12/1/2020 - 3/1/2040 | 6,671,284 | |
1,951,942 | 6.000%, 1/1/2014 - 7/1/2037 | 2,150,497 | |
281,308 | 6.500%, 6/1/2022 - 5/1/2031 | 314,561 | |
789,727 | 7.000%, 12/1/2029 - 4/1/2032 | 915,123 | |
88,691 | 7.500%, 9/1/2030 - 1/1/2031 | 104,344 | |
10,971 | 8.500%, 5/1/2030 | 13,382 | |
5,372 | 9.000%, 2/1/2025 - 5/1/2025 | 6,530 | |
TOTAL | 41,157,773 | ||
Federal National Mortgage Association—18.9% | |||
11,193,373 | 2 | 4.000%, 2/1/2041 - 1/1/2044 | 11,532,211 |
9,781,198 | 4.500%, 12/1/2019 - 2/1/2042 | 10,378,114 | |
8,449,625 | 2 | 5.000%, 7/1/2034 - 1/1/2044 | 9,177,871 |
2,010,694 | 5.500%, 11/1/2021 - 4/1/2036 | 2,209,595 | |
3,622,182 | 6.000%, 5/1/2014 - 3/1/2038 | 3,987,805 |
Principal Amount | Value | ||
MORTGAGE-BACKED SECURITIES—continued | |||
Federal National Mortgage Association—continued | |||
$284,030 | 6.500%, 6/1/2029 - 11/1/2035 | $318,938 | |
318,066 | 7.000%, 3/1/2015 - 4/1/2032 | 365,878 | |
14,719 | 7.500%, 8/1/2028 - 2/1/2030 | 17,199 | |
14,578 | 8.000%, 7/1/2030 | 17,532 | |
TOTAL | 38,005,143 | ||
Government Agency—1.4% | |||
2,901,021 | 3,4 | FDIC Trust 2013-R2, Class A, 1.250%, 3/25/2033 | 2,828,014 |
Government National Mortgage Association—11.3% | |||
8,456,345 | 3.500%, 6/15/2042 | 8,532,651 | |
7,183,935 | 4.500%, 6/20/2039 - 8/20/2040 | 7,685,006 | |
1,078,633 | 5.000%, 7/15/2034 | 1,177,780 | |
858,688 | 5.500%, 5/20/2035 | 949,454 | |
3,143,023 | 6.000%, 4/15/2032 - 7/20/2038 | 3,509,775 | |
740,952 | 6.500%, 12/15/2023 - 5/15/2032 | 849,498 | |
30,947 | 7.500%, 10/15/2029 - 3/20/2030 | 36,722 | |
3,076 | 8.000%, 4/15/2030 | 3,721 | |
5,732 | 9.500%, 11/15/2016 | 6,020 | |
TOTAL | 22,750,627 | ||
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $101,715,719) | 104,741,557 | ||
COLLATERALIZED MORTGAGE OBLIGATIONS—5.0% | |||
Non-Agency Mortgage-Backed Securities—5.0% | |||
1,204,843 | Countrywide Alternative Loan Trust 2003-J3, Class 1A3, 5.250%, 11/25/2033 | 1,210,557 | |
1,199,565 | Countrywide Home Loans 2007-14, Class A18, 6.000%, 9/25/2037 | 1,111,260 | |
466,607 | Credit Suisse Mortgage Trust 2007-4, Class 4A2, 5.500%, 6/25/2037 | 406,826 | |
1,249,697 | 3,4 | Credit Suisse Mortgage Trust 2012-CIM2, Class A1, 3.000%, 6/25/2042 | 1,231,952 |
2,461,531 | 3,4 | Credit Suisse Mortgage Trust 2013-IVR3, Class A2, 3.000%, 5/25/2043 | 2,241,224 |
412,582 | First Horizon Alternative Mortgage Securities 2005-FA7, Class 2A1, 5.000%, 9/25/2020 | 407,587 | |
86,492 | Sequoia Mortgage Trust 2010-H1, Class A1, 3.750%, 2/25/2040 | 85,039 | |
252,848 | Sequoia Mortgage Trust 2011-1, Class A1, 4.125%, 2/25/2041 | 255,857 | |
675,715 | Sequoia Mortgage Trust 2011-2, Class A1, 3.900%, 9/25/2041 | 682,269 | |
843,120 | Sequoia Mortgage Trust 2012-1, Class 2A1, 3.474%, 1/25/2042 | 842,699 | |
1,695,033 | Structured Asset Securities Corp. 2005-17, Class 5A1, 5.500%, 10/25/2035 | 1,528,485 | |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $10,522,532) | 10,003,755 | ||
COMMERCIAL MORTGAGE-BACKED SECURITIES—26.2% | |||
Agency Commercial Mortgage-Backed Securities—17.6% | |||
3,450,000 | FHLMC REMIC K704 A2, 2.412%, 8/25/2018 | 3,520,731 | |
4,000,000 | FHLMC REMIC K703 A2, 2.699%, 5/25/2018 | 4,134,980 | |
2,785,003 | FHLMC REMIC K010 A1, 3.320%, 7/25/2020 | 2,955,829 | |
3,941,109 | FNMA REMIC 2013-M1 ASQ2, 1.074%, 11/25/2016 | 3,934,469 | |
2,842,131 | FNMA REMIC 2011-M7 A1, 2.049%, 9/25/2018 | 2,906,914 | |
6,000,000 | FNMA REMIC 2011-M7 A2, 2.578%, 9/25/2018 | 6,155,134 | |
2,500,000 | 3,4 | FREMF Mortgage Trust 2013-K25, 3.617%, 11/25/2045 | 2,294,069 |
2,750,000 | 3,4 | FREMF Mortgage Trust 2013-K502, 2.842%, 3/25/2045 | 2,680,699 |
4,000,000 | 3,4 | FREMF Mortgage Trust 2013-K713, 3.165%, 4/25/2046 | 3,737,098 |
3,134,894 | NCUA Guaranteed Notes 2010-C1, 1.600%, 10/29/2020 | 3,146,160 | |
TOTAL | 35,466,083 | ||
Non-Agency Commercial Mortgage-Backed Securities—8.6% | |||
2,518,054 | 3,4 | Commercial Mortgage Pass-Through Certificates 2010-C1, Class A1, 3.156%, 7/10/2046 | 2,596,102 |
3,380,000 | Commercial Mortgage Pass-Through Certificates 2012-LC4, Class A2, 2.256%, 12/10/2044 | 3,449,290 |
Principal Amount | Value | ||
COMMERCIAL MORTGAGE-BACKED SECURITIES—continued | |||
Non-Agency Commercial Mortgage-Backed Securities—continued | |||
$2,650,000 | 3,4 | DBUBS Mortgage Trust 2011-LC2A, Class A2, 3.386%, 7/10/2044 | $2,767,979 |
2,305,940 | 3,4 | GS Mortgage Securities Corp. 2010-C2, Class A1, 3.849%, 12/10/2043 | 2,430,325 |
2,168,080 | 3,4 | JPMorgan Chase Commercial Mortgage Securities 2010-C2, Class A1, 2.749%, 11/15/2043 | 2,220,526 |
2,100,000 | 3,4 | JPMorgan Chase Commercial Mortgage Securities, 2011-C4, Class A2, 3.341%, 7/15/2046 | 2,190,344 |
1,500,000 | 3,4 | WF-RBS Commercial Mortgage Trust 2011-C3, Class A2, 3.240%, 3/15/2044 | 1,562,958 |
TOTAL | 17,217,524 | ||
TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $52,393,343) | 52,683,607 | ||
REPURCHASE AGREEMENTS—12.7% | |||
3,917,000 | 5 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845. | 3,917,000 |
10,997,000 | Interest in $2,925,000,000 joint repurchase agreement 0.01%, dated 12/31/2013 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,925,001,625 on 1/2/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,984,875,845 (purchased with proceeds from securities lending collateral). | 10,997,000 | |
10,658,000 | 5,6 | Interest in $160,000,000 joint repurchase agreement 0.07%, dated 12/11/2013 under which RBC Capital Markets, LLC will repurchase securities provided as collateral for $160,010,267 on 1/13/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 11/1/2042 and the market value of those underlying securities was $163,206,982. | 10,658,000 |
TOTAL REPURCHASE AGREEMENTS (AT COST) | 25,572,000 | ||
TOTAL INVESTMENTS—110.0% (IDENTIFIED COST $217,922,144)7 | 221,306,251 | ||
OTHER ASSETS AND LIABILITIES - NET—(10.0)%8 | (20,189,569) | ||
TOTAL NET ASSETS—100% | $201,116,682 |
1 | All or a portion of these securities are temporarily on loan to unaffiliated broker/dealers. |
2 | All or a portion of these To Be Announced Securities (TBAs) are subject to dollar-roll transactions. |
3 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2013, these restricted securities amounted to $28,781,290, which represented 14.3% of total net assets. |
4 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees (the “Trustees”). At December 31, 2013, these liquid restricted securities amounted to $28,781,290, which represented 14.3% of total net assets. |
5 | All or a portion of these securities are segregated pending settlement of dollar-roll transactions. |
6 | Although the repurchase date is more than seven days after the date of purchase, the Fund has the right to terminate the repurchase agreement at any time with seven days' notice. |
7 | The cost of investments for federal tax purposes amounts to $217,459,607. |
8 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. A significant portion of this balance is the result of dollar-roll transactions and loans to unaffiliated qualified brokers for securities lending. The Fund receives cash from the broker as collateral for the loaned securities and reinvests the collateral in certain short-term securities such as repurchase agreements or money market mutual funds. |
FDIC | —Federal Deposit Insurance Corporation |
FHLMC | —Federal Home Loan Mortgage Corporation |
FNMA | —Federal National Mortgage Association |
REMIC | —Real Estate Mortgage Investment Conduit |
Year Ended December 31 | 2013 | 2012 | 2011 | 2010 | 2009 |
Net Asset Value, Beginning of Period | $11.55 | $11.66 | $11.50 | $11.45 | $11.45 |
Income From Investment Operations: | |||||
Net investment income | 0.261 | 0.301 | 0.351 | 0.371 | 0.54 |
Net realized and unrealized gain (loss) on investments and futures contracts | (0.49) | 0.03 | 0.29 | 0.20 | 0.03 |
TOTAL FROM INVESTMENT OPERATIONS | (0.23) | 0.33 | 0.64 | 0.57 | 0.57 |
Less Distributions: | |||||
Distributions from net investment income | (0.37) | (0.44) | (0.48) | (0.52) | (0.57) |
Net Asset Value, End of Period | $10.95 | $11.55 | $11.66 | $11.50 | $11.45 |
Total Return2 | (2.05)% | 2.98% | 5.78% | 5.17% | 5.21% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.76% | 0.76% | 0.74% | 0.74% | 0.74% |
Net investment income | 2.34% | 2.60% | 3.10% | 3.25% | 3.64% |
Expense waiver/reimbursement3 | 0.03% | 0.01% | 0.02% | 0.01% | 0.01% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $201,117 | $246,569 | $281,306 | $306,894 | $342,705 |
Portfolio turnover | 94% | 127% | 157% | 138% | 165% |
Portfolio turnover (excluding purchases and sales from dollar-roll transactions) | 38% | 31% | 51% | 41% | 39% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. Total returns do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
December 31, 2013
Assets: | ||
Investment in repurchase agreements | $25,572,000 | |
Investment in securities | 195,734,251 | |
Total investment in securities, at value including $10,729,492 of securities loaned (identified cost $217,922,144) | $221,306,251 | |
Cash | 452 | |
Income receivable | 643,248 | |
Receivable for shares sold | 866,552 | |
TOTAL ASSETS | 222,816,503 | |
Liabilities: | ||
Payable for investments purchased | 10,658,458 | |
Payable for shares redeemed | 20,518 | |
Payable for collateral due to broker for securities lending | 10,997,000 | |
Payable for Directors'/Trustees' fees (Note 5) | 432 | |
Accrued expenses (Note 5) | 23,413 | |
TOTAL LIABILITIES | 21,699,821 | |
Net assets for 18,372,016 shares outstanding | $201,116,682 | |
Net Assets Consist of: | ||
Paid-in capital | $193,042,095 | |
Net unrealized appreciation of investments | 3,384,107 | |
Accumulated net realized loss on investments and futures contracts | (1,070,179) | |
Undistributed net investment income | 5,760,659 | |
TOTAL NET ASSETS | $201,116,682 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | ||
$201,116,682 ÷ 18,372,016 shares outstanding, no par value, unlimited shares authorized | $10.95 |
Year Ended December 31, 2013
Investment Income: | ||
Interest (including income on securities loaned of $759) | $6,920,432 | |
Expenses: | ||
Investment adviser fee (Note 5) | $1,335,751 | |
Administrative fee (Note 5) | 173,733 | |
Custodian fees | 20,760 | |
Transfer agent fee | 21,646 | |
Directors'/Trustees' fees (Note 5) | 1,976 | |
Auditing fees | 21,500 | |
Legal fees | 8,664 | |
Portfolio accounting fees | 106,614 | |
Printing and postage | 69,190 | |
Insurance premiums (Note 5) | 4,434 | |
Miscellaneous (Note 5) | 1,738 | |
TOTAL EXPENSES | 1,766,006 | |
Waiver of investment adviser fee (Note 5) | (63,144) | |
Net expenses | 1,702,862 | |
Net investment income | 5,217,570 | |
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts: | ||
Net realized loss on investments | (880,922) | |
Net realized gain on futures contracts | 286,270 | |
Net change in unrealized appreciation of investments | (9,410,289) | |
Net change in unrealized appreciation of futures contracts | (13,559) | |
Net realized and unrealized loss on investments and futures contracts | (10,018,500) | |
Change in net assets resulting from operations | $(4,800,930) |
Year Ended December 31 | 2013 | 2012 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $5,217,570 | $6,801,030 |
Net realized gain (loss) on investments and futures contracts | (594,652) | 137,914 |
Net change in unrealized appreciation/depreciation of investments and futures contracts | (9,423,848) | 790,820 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | (4,800,930) | 7,729,764 |
Distributions to Shareholders: | ||
Distributions from net investment income | (7,602,159) | (10,250,353) |
Share Transactions: | ||
Proceeds from sale of shares | 11,793,872 | 20,715,587 |
Net asset value of shares issued to shareholders in payment of distributions declared | 7,602,159 | 10,250,353 |
Cost of shares redeemed | (52,445,510) | (63,181,632) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (33,049,479) | (32,215,692) |
Change in net assets | (45,452,568) | (34,736,281) |
Net Assets: | ||
Beginning of period | 246,569,250 | 281,305,531 |
End of period (including undistributed net investment income of $5,760,659 and $7,601,577, respectively) | $201,116,682 | $246,569,250 |
■ | Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Fixed-income securities and repurchase agreements acquired with remaining maturities of 60 days or less are valued at their amortized cost (adjusted for the accretion of any discount or amortization of any premium), unless the issuer's creditworthiness is impaired or other factors indicate that amortized cost is not an accurate estimate of the investment's fair value, in which case it would be valued in the same manner as a longer-term security. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Shares of other mutual funds or nonexchange-traded investment companies are valued based upon their reported NAVs. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, 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 and public trading in similar securities of the issuer or comparable issuers. |
Market Value of Securities Loaned | Market Value of Collateral |
$10,729,492 | $10,997,000 |
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | |
Futures | |
Interest rate contracts | $286,270 |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |
Futures | |
Interest rate contracts | $(13,559) |
Year Ended December 31 | 2013 | 2012 |
Shares sold | 1,058,608 | 1,800,415 |
Shares issued to shareholders in payment of distributions declared | 681,197 | 911,953 |
Shares redeemed | (4,718,128) | (5,488,209) |
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | (2,978,323) | (2,775,841) |
Increase (Decrease) | |
Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$543,671 | $(543,671) |
2013 | 2012 | |
Ordinary income | $7,602,159 | $10,250,353 |
Undistributed ordinary income | $5,760,659 |
Net unrealized appreciation | $3,846,646 |
Capital loss carryforwards and deferrals | $(1,532,718) |
Expiration Year | Short-Term | Long-Term | Total |
No Expiration | $1,174,731 | $195,036 | $1,369,767 |
2017 | $98,280 | NA | $98,280 |
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 |
Purchases | $19,155,147 |
Sales | $18,414,691 |
February 14, 2014
Beginning Account Value 7/1/2013 | Ending Account Value 12/31/2013 | Expenses Paid During Period1 | |
Actual | $1,000 | $1,003.70 | $3.84 |
Hypothetical (assuming a 5% return before expenses) | $1,000 | $1,021.37 | $3.87 |
1 | Expenses are equal to the Fund's annualized net expense ratio of 0.76%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The expenses shown in the table do not include the charges and expenses imposed by the insurance company under the variable insurance product contract. Please refer to the variable insurance product prospectus for a complete listing of these expenses. |
Name | For | Withheld |
John T. Collins | 300,523,736.140 | 11,005,188.385 |
Maureen Lally-Green | 300,308,651.177 | 11,220,273.348 |
Thomas M. O'Neill | 300,886,250.634 | 10,642,673.891 |
P. Jerome Richey | 300,662,760.971 | 10,866,163.554 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: October 1993 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
J. Christopher Donahue* Birth Date: April 11, 1949 Trustee Began serving: October 1993 | 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, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); 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. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust 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 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: October 1993 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: November 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: 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); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee 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. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: September 1993 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
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 Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; 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 PRESIDENT Officer since: September 1993 | 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. |
John B. Fisher Birth Date: May 16, 1956 PRESIDENT Officer since: November 2004 | Principal Occupations: 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 and CEO of Passport Research, Ltd.; President of some of the Funds in the Federated Fund Family; 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; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc.; President, Technology, Federated Services Company. |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | 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. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Stephen F. Auth Birth Date: September 3, 1956 450 Lexington Avenue Suite 3700 New York, NY 10017-3943 CHIEF INVESTMENT OFFICER Officer since: November 2002 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
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. |
Deborah A. Cunningham Birth Date: September 15, 1959 Chief Investment Officer Officer since: June 2012 | Principal Occupations: Deborah A. Cunningham was named Chief Investment Officer of Federated's money market products in 2004. She joined Federated in 1981 and has been a Senior Portfolio Manager since 1997 and an Executive Vice President of the Fund's Adviser since 2009. Ms. Cunningham has received the Chartered Financial Analyst designation and holds an M.S.B.A. in Finance from Robert Morris College. |
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
2014 ©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) Not Applicable
(d) Not Applicable
(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: Charles F. Mansfield, Jr., Thomas M. O'Neill and John S. Walsh.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2013 - $178,500
Fiscal year ended 2012 - $175,500
(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2013 - $0
Fiscal year ended 2012 - $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.
(c) Tax Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2013 - $0
Fiscal year ended 2012 - $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 2013 - $0
Fiscal year ended 2012 - $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.
(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 2013 – 0%
Fiscal year ended 2012 - 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 2013 – 0%
Fiscal year ended 2012 – 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 2013 – 0%
Fiscal year ended 2012 – 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 2013 - $10,400
Fiscal year ended 2012 - $18,075
(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.
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. 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 Insurance Series
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date February 12, 2014
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/ John B. Fisher
John B. Fisher, Principal Executive Officer
Date February 12, 2014
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date February 12, 2014