United States Securities and Exchange Commission Washington, D.C. 20549 Form N-CSR Certified Shareholder Report of Registered Management Investment Companies 811-1 (Investment Company Act File Number) Federated Stock and Bond Fund, Inc. _______________________________________________________________ (Exact Name of Registrant as Specified in Charter) Federated Investors Funds 5800 Corporate Drive Pittsburgh, Pennsylvania 15237-7000 (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: 11/30/04 Date of Reporting Period: Six months ended 5/31/04 Item 1. Reports to Stockholders
Federated Investors
World-Class Investment Manager
Federated Stock and Bond Fund, Inc.
Established 1934
SEMI-ANNUAL SHAREHOLDER REPORT
May 31, 2004
Class A Shares
Class B Shares
Class C Shares
Class K Shares
FINANCIAL HIGHLIGHTS
FINANCIAL STATEMENTS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
Financial Highlights--Class A Shares
(For a Share Outstanding Throughout Each Period)
|
| Six Months |
|
| Period |
|
|
| 5/31/2004 |
|
| 11/30/2003 | 1 |
Net Asset Value, Beginning of Period |
| $17.38 |
|
| $17.32 |
|
Income From Investment Operations: |
|
|
|
|
|
|
Net investment income |
| 0.13 |
|
| 0.02 |
|
Net realized and unrealized gain (loss) on investments, foreign currency transactions and futures contracts |
| 0.52 |
|
| 0.11 |
|
TOTAL FROM INVESTMENT OPERATIONS |
| 0.65 |
|
| 0.13 |
|
Less Distributions: |
|
|
|
|
|
|
Distributions from net investment income |
| (0.13 | ) |
| (0.07 | ) |
Distributions from net realized gain on investments, foreign currency transactions and futures contracts |
| -- |
|
| -- |
|
TOTAL DISTRIBUTIONS |
| (0.13 | ) |
| (0.07 | ) |
Net Asset Value, End of Period |
| $17.90 |
|
| $17.38 |
|
Total Return2 |
| 3.73 | % |
| 0.75 | % |
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
Expenses |
| 1.25 | %3,4 |
| 1.26 | %3,4 |
Net investment income |
| 1.47 | %3 |
| 1.64 | %3 |
Expense waiver/reimbursement5 |
| 0.00 | %3,6 |
| 0.01 | %3 |
Supplemental Data: |
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
| $228,699 |
|
| $226,701 |
|
Portfolio turnover |
| 29 | % |
| 1 | % |
1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 The expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
6 Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
| |||||||||||||
2003 |
|
| 2002 |
|
| 2001 |
|
| 2000 |
|
| 1999 |
|
$15.61 |
|
| $17.22 |
|
| $18.78 |
|
| $18.71 |
|
| $19.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.31 |
|
| 0.39 |
|
| 0.48 |
|
| 0.55 |
|
| 0.55 |
|
1.71 |
|
|
| ) |
|
| ) |
|
|
|
| 0.45 |
|
2.02 |
|
| (1.23 | ) |
| (0.56 | ) |
| 1.03 |
|
| 1.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.31 | ) |
| (0.38 | ) |
| (0.53 | ) |
| (0.54 | ) |
| (0.53 | ) |
-- |
|
| -- |
|
| (0.47 | ) |
| (0.42 | ) |
| (0.90 | ) |
(0.31 | ) |
| (0.38 | ) |
| (1.00 | ) |
| (0.96 | ) |
| (1.43 | ) |
$17.32 |
|
| $15.61 |
|
| $17.22 |
|
| $18.78 |
|
| $18.71 |
|
13.08 | % |
| (7.32 | )% |
| (3.12 | )% |
| 5.79 | % |
| 5.35 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.31 | %4 |
| 1.26 | %4 |
| 1.31 | % |
| 1.29 | % |
| 1.25 | % |
1.89 | % |
| 2.32 | % |
| 2.64 | % |
| 2.98 | % |
| 2.85 | % |
0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$224,461 |
|
| $184,294 |
|
| $175,854 |
|
| $177,236 |
|
| $209,985 |
|
74 | % |
| 54 | % |
| 28 | % |
| 26 | % |
| 46 | % |
Financial Highlights--Class B Shares
(For a Share Outstanding Throughout Each Period)
|
| Six Months |
|
| Period |
|
|
| 5/31/2004 |
|
| 11/30/2003 | 1 |
Net Asset Value, Beginning of Period |
| $17.36 |
|
| $17.28 |
|
Income From Investment Operations: |
|
|
|
|
|
|
Net investment income |
| 0.06 |
|
| 0.01 |
|
Net realized and unrealized gain (loss) on investments, foreign currency transactions and futures contracts |
| 0.52 |
|
| 0.11 |
|
TOTAL FROM INVESTMENT OPERATIONS |
| 0.58 |
|
| 0.12 |
|
Less Distributions: |
|
|
|
|
|
|
Distributions from net investment income |
| (0.06 | ) |
| (0.04 | ) |
Distributions from net realized gain on investments, foreign currency transactions and futures contracts |
| -- |
|
| -- |
|
TOTAL DISTRIBUTIONS |
| (0.06 | ) |
| (0.04 | ) |
Net Asset Value, End of Period |
| $17.88 |
|
| $17.36 |
|
Total Return2 |
| 3.33 | % |
| 0.68 | % |
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
Expenses |
| 2.00 | %3,4 |
| 2.01 | %3,4 |
Net investment income |
| 0.72 | %3 |
| 0.89 | %3 |
Expense waiver/reimbursement5 |
| 0.00 | %3,6 |
| 0.01 | %3 |
Supplemental Data: |
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
| $74,985 |
|
| $72,412 |
|
Portfolio turnover |
| 29 | % |
| 1 | % |
1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 The expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
6 Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Year Ended October 31, | |||||||||||||
2003 |
|
| 2002 |
|
| 2001 |
|
| 2000 |
|
| 1999 |
|
$15.58 |
|
| $17.19 |
|
| $18.75 |
|
| $18.68 |
|
| $19.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.19 |
|
| 0.26 |
|
| 0.35 |
|
| 0.41 |
|
| 0.42 |
|
1.70 |
|
|
| ) |
|
| ) |
|
|
|
| 0.45 |
|
1.89 |
|
| (1.36 | ) |
| (0.70 | ) |
| 0.90 |
|
| 0.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.19 | ) |
| (0.25 | ) |
| (0.39 | ) |
| (0.41 | ) |
| (0.39 | ) |
-- |
|
| -- |
|
| (0.47 | ) |
| (0.42 | ) |
| (0.90 | ) |
(0.19 | ) |
| (0.25 | ) |
| (0.86 | ) |
| (0.83 | ) |
| (1.29 | ) |
$17.28 |
|
| $15.58 |
|
| $17.19 |
|
| $18.75 |
|
| $18.68 |
|
12.22 | % |
| (8.02 | )% |
| (3.85 | )% |
| 5.02 | % |
| 4.63 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.06 | %4 |
| 2.01 | %4 |
| 2.06 | % |
| 2.04 | % |
| 2.00 | % |
1.14 | % |
| 1.57 | % |
| 1.89 | % |
| 2.26 | % |
| 2.10 | % |
0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$71,836 |
|
| $59,165 |
|
| $60,058 |
|
| $48,898 |
|
| $53,154 |
|
74 | % |
| 54 | % |
| 28 | % |
| 26 | % |
| 46 | % |
Financial Highlights--Class C Shares
(For a Share Outstanding Throughout Each Period)
|
| Six Months |
|
| Period |
|
|
| 5/31/2004 |
|
| 11/30/2003 | 1 |
Net Asset Value, Beginning of Period |
| $17.32 |
|
| $17.24 |
|
Income From Investment Operations: |
|
|
|
|
|
|
Net investment income |
| 0.06 |
|
| 0.01 |
|
Net realized and unrealized gain (loss) on investments, foreign currency transactions and futures contracts |
| 0.52 |
|
| 0.11 |
|
TOTAL FROM INVESTMENT OPERATIONS |
| 0.58 |
|
| 0.12 |
|
Less Distributions: |
|
|
|
|
|
|
Distributions from net investment income |
| (0.06 | ) |
| (0.04 | ) |
Distributions from net realized gain on investments, foreign currency transactions and futures contracts |
| -- |
|
| -- |
|
TOTAL DISTRIBUTIONS |
| (0.06 | ) |
| (0.04 | ) |
Net Asset Value, End of Period |
| $17.84 |
|
| $17.32 |
|
Total Return2 |
| 3.36 | % |
| 0.68 | % |
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
Expenses |
| 1.99 | %3,4 |
| 2.01 | %3,4 |
Net investment income |
| 0.73 | %3 |
| 0.89 | %3 |
Expense waiver/reimbursement5 |
| 0.00 | %3,6 |
| 0.01 | %3 |
Supplemental Data: |
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
| $24,560 |
|
| $27,853 |
|
Portfolio turnover |
| 29 | % |
| 1 | % |
1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.
2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
3 Computed on an annualized basis.
4 The expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements.
5 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
6 Represents less than 0.01%.
See Notes which are an integral part of the Financial Statements
Year Ended October 31, | ||||||||||||||
| 2003 |
|
| 2002 |
|
| 2001 |
|
| 2000 |
|
| 1999 |
|
| $15.54 |
|
| $17.15 |
|
| $18.70 |
|
| $18.63 |
|
| $19.07 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 0.19 |
|
| 0.26 |
|
| 0.35 |
|
| 0.41 |
|
| 0.42 |
|
| 1.70 |
|
|
| ) |
|
| ) |
|
|
|
| 0.43 |
|
| 1.89 |
|
| (1.36 | ) |
| (0.69 | ) |
| 0.90 |
|
| 0.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (0.19 | ) |
| (0.25 | ) |
| (0.39 | ) |
| (0.41 | ) |
| (0.39 | ) |
| -- |
|
| -- |
|
| (0.47 | ) |
| (0.42 | ) |
| (0.90 | ) |
| (0.19 | ) |
| (0.25 | ) |
| (0.86 | ) |
| (0.83 | ) |
| (1.29 | ) |
| $17.24 |
|
| $15.54 |
|
| $17.15 |
|
| $18.70 |
|
| $18.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 12.25 | % |
| (8.03 | )% |
| (3.81 | )% |
| 5.04 | % |
| 4.52 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 2.04 | %4 |
| 2.01 | %4 |
| 2.06 | % |
| 2.04 | % |
| 2.00 | % |
| 1.16 | % |
| 1.57 | % |
| 1.89 | % |
| 2.26 | % |
| 2.10 | % |
| 0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
| 0.00 | %6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| $27,731 |
|
| $22,567 |
|
| $24,032 |
|
| $21,909 |
|
| $20,385 |
|
| 74 | % |
| 54 | % |
| 28 | % |
| 26 | % |
| 46 | % |
Financial Highlights--Class K Shares
(For a Share Outstanding Throughout Each Period)
|
| Six Months |
| Period | 1 |
| Period | 2 |
Net Asset Value, Beginning of Period |
| $17.38 |
| $17.32 |
|
| $15.61 |
|
Income From Investment Operations: |
|
|
|
|
|
|
|
|
Net investment income |
| 0.09 |
| 0.01 |
|
| 0.10 |
|
Net realized and unrealized gain on investments, foreign currency transactions and futures contracts |
| 0.54 |
| 0.10 |
|
| 1.71 |
|
TOTAL FROM INVESTMENT OPERATIONS |
| 0.63 |
| 0.11 |
|
| 1.81 |
|
Less Distributions: |
|
|
|
|
|
|
|
|
Distributions from net investment income |
| (0.09 | ) | (0.05 | ) |
| (0.10) |
|
Net Asset Value, End of Period |
| $17.92 |
| $17.38 |
|
| $17.32 |
|
Total Return3 |
| 3.64 | % | 0.64 | % |
| 11.64 | % |
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets: |
|
|
|
|
|
|
|
|
Expenses |
| 1.72 | %4,5 | 1.78 | %4,5 |
| 1.81 | %4,5 |
Net investment income |
| 1.00 | %4 | 1.14 | %4 |
| 1.39 | %4 |
Expense waiver/reimbursement6 |
| 0.00 | %4,7 | 0.01 | %4 |
| 0.00 | %4,7 |
Supplemental Data: |
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
| $2 |
| $0 | 8 |
| $0 | 8 |
Portfolio turnover |
| 29 | % | 1 | % |
| 74 | % |
1 The Fund changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.
2 Reflects operations for the period from April 8, 2003 (start of performance) to October 31, 2003.
3 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable.
4 Computed on an annualized basis.
5 The expense ratio is calculated without the reduction for fees paid indirectly for directed brokerage arrangements.
6 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
7 Represents less than 0.01%.
8 Represents less than $1,000.
See Notes which are an integral part of the Financial Statements
Portfolio of Investments
May 31, 2004 (unaudited)
Shares |
|
| Value | |||
|
|
| STOCKS--72.1% |
|
|
|
|
|
| COMMON STOCKS--69.1% |
|
|
|
|
|
| Consumer Discretionary--6.4% |
|
|
|
| 37,600 |
| Clear Channel Communications, Inc. |
| $ | 1,492,720 |
| 85,300 |
| Home Depot, Inc. |
|
| 3,063,976 |
| 34,500 |
| Johnson Controls, Inc. |
|
| 1,860,240 |
| 86,300 |
| McDonald's Corp. |
|
| 2,278,320 |
| 25,800 |
| Nike, Inc., Class B |
|
| 1,835,670 |
| 21,400 |
| Omnicom Group, Inc. |
|
| 1,709,218 |
| 55,200 |
| Target Corp. |
|
| 2,467,440 |
| 80,500 |
| Viacom, Inc., Class B |
|
| 2,969,645 |
| 140,000 |
| Walt Disney Co. |
|
| 3,285,800 |
|
|
| TOTAL |
|
| 20,963,029 |
|
|
| Consumer Staples--7.7% |
|
|
|
| 83,700 |
| Altria Group, Inc. |
|
| 4,015,089 |
| 65,100 |
| Coca-Cola Co. |
|
| 3,342,885 |
| 63,850 |
| Gillette Co. |
|
| 2,751,296 |
| 109,600 | 1 | Kroger Co. |
|
| 1,829,224 |
| 52,900 |
| PepsiCo, Inc. |
|
| 2,823,273 |
| 17,600 |
| Procter & Gamble Co. |
|
| 1,897,632 |
| 82,200 |
| Sara Lee Corp. |
|
| 1,882,380 |
| 120,200 |
| Wal-Mart Stores, Inc. |
|
| 6,698,746 |
|
|
| TOTAL |
|
| 25,240,525 |
|
|
| Energy--4.6% |
|
|
|
| 22,700 |
| ChevronTexaco Corp. |
|
| 2,052,080 |
| 23,500 |
| ConocoPhillips |
|
| 1,723,255 |
| 178,600 |
| Exxon Mobil Corp. |
|
| 7,724,450 |
| 72,900 |
| Halliburton Co. |
|
| 2,117,016 |
| 59,200 | 1 | Transocean Sedco Forex, Inc. |
|
| 1,582,416 |
|
|
| TOTAL |
|
| 15,199,217 |
Shares |
|
| Value | |||
|
|
| STOCKS--continued |
|
|
|
|
|
| COMMON STOCKS--continued |
|
|
|
|
|
| Financials--11.5% |
|
|
|
| 54,300 |
| Allstate Corp. |
| $ | 2,388,114 |
| 89,000 |
| American International Group, Inc. |
|
| 6,523,700 |
| 36,100 |
| Bank of America Corp. |
|
| 3,000,993 |
| 65,300 |
| Bank of New York Co., Inc. |
|
| 1,963,571 |
| 109,000 |
| Citigroup, Inc. |
|
| 5,060,870 |
| 32,600 |
| Federal National Mortgage Association |
|
| 2,207,020 |
| 116,000 |
| J.P. Morgan Chase & Co. |
|
| 4,273,440 |
| 23,200 |
| Lehman Brothers Holdings, Inc. |
|
| 1,755,080 |
| 69,300 |
| MBNA Corp. |
|
| 1,760,220 |
| 30,200 |
| Merrill Lynch & Co., Inc. |
|
| 1,715,360 |
| 60,900 |
| Morgan Stanley |
|
| 3,258,759 |
| 37,500 |
| Wachovia Corp. |
|
| 1,770,375 |
| 35,000 |
| Wells Fargo & Co. |
|
| 2,058,000 |
|
|
| TOTAL |
|
| 37,735,502 |
|
|
| Healthcare--10.1% |
|
|
|
| 41,300 |
| Abbott Laboratories |
|
| 1,701,973 |
| 55,000 |
| Baxter International, Inc. |
|
| 1,729,200 |
| 31,350 | 1 | Biogen Idec, Inc. |
|
| 1,948,402 |
| 47,900 | 1 | Boston Scientific Corp. |
|
| 2,121,970 |
| 59,700 |
| Bristol-Myers Squibb Co. |
|
| 1,508,619 |
| 35,200 | 1 | Forest Laboratories, Inc., Class A |
|
| 2,231,328 |
| 4,130 | 1 | Hospira, Inc. |
|
| 105,893 |
| 52,825 |
| Johnson & Johnson |
|
| 2,942,880 |
| 24,500 |
| Lilly (Eli) & Co. |
|
| 1,804,915 |
| 54,700 |
| McKesson HBOC, Inc. |
|
| 1,881,680 |
| 74,100 | 1 | Medimmune, Inc. |
|
| 1,783,587 |
| 36,700 |
| Medtronic, Inc. |
|
| 1,757,930 |
| 56,900 |
| Merck & Co., Inc. |
|
| 2,691,370 |
| 169,400 |
| Pfizer, Inc. |
|
| 5,986,596 |
| 96,900 |
| Schering Plough Corp. |
|
| 1,637,610 |
| 35,500 |
| Wyeth |
|
| 1,278,000 |
|
|
| TOTAL |
|
| 33,111,953 |
Shares |
|
| Value | |||
|
|
| STOCKS--continued |
|
|
|
|
|
| COMMON STOCKS--continued |
|
|
|
|
|
| Industrials--9.1% |
|
|
|
| 19,700 |
| Caterpillar, Inc. |
| $ | 1,484,395 |
| 77,900 |
| Cendant Corp. |
|
| 1,787,026 |
| 47,800 |
| Danaher Corp. |
|
| 2,248,034 |
| 19,300 |
| Deere & Co. |
|
| 1,268,010 |
| 22,700 |
| FedEx Corp. |
|
| 1,670,266 |
| 278,000 |
| General Electric Co. |
|
| 8,651,360 |
| 38,300 |
| Ingersoll-Rand Co., Class A |
|
| 2,500,990 |
| 60,400 |
| Masco Corp. |
|
| 1,748,580 |
| 52,400 |
| Raytheon Co. |
|
| 1,742,300 |
| 38,500 |
| Textron, Inc. |
|
| 2,104,025 |
| 84,500 |
| Tyco International Ltd. |
|
| 2,601,755 |
| 69,400 |
| Waste Management, Inc. |
|
| 1,995,944 |
|
|
| TOTAL |
|
| 29,802,685 |
|
|
| Information Technology--13.8% |
|
|
|
| 74,400 | 1 | Advanced Micro Devices, Inc. |
|
| 1,156,920 |
| 242,500 | 1 | Applied Materials, Inc. |
|
| 4,840,300 |
| 162,800 | 1 | Cisco Systems, Inc. |
|
| 3,606,020 |
| 62,900 | 1 | Dell, Inc. |
|
| 2,212,822 |
| 59,300 |
| First Data Corp. |
|
| 2,567,097 |
| 257,100 |
| Hewlett-Packard Co. |
|
| 5,460,804 |
| 192,800 |
| Intel Corp. |
|
| 5,504,440 |
| 33,600 |
| International Business Machines Corp. |
|
| 2,976,624 |
| 48,800 | 1 | KLA-Tencor Corp. |
|
| 2,351,184 |
| 50,900 | 1 | Lam Research Corp. |
|
| 1,279,117 |
| 27,100 | 1 | Lexmark International Group, Class A |
|
| 2,556,072 |
| 34,200 |
| Maxim Integrated Products, Inc. |
|
| 1,738,386 |
| 286,300 |
| Microsoft Corp. |
|
| 7,544,005 |
| 135,800 | 1 | Oracle Corp. |
|
| 1,537,256 |
|
|
| TOTAL |
|
| 45,331,047 |
|
|
| Materials--2.0% |
|
|
|
| 71,100 |
| Alcoa, Inc. |
|
| 2,225,430 |
| 50,700 |
| Du Pont (E.I.) de Nemours & Co. |
|
| 2,190,240 |
| 55,900 |
| International Paper Co. |
|
| 2,343,887 |
|
|
| TOTAL |
|
| 6,759,557 |
Shares or |
|
| Value | |||
|
|
| STOCKS--continued |
|
|
|
|
|
| COMMON STOCKS--continued |
|
|
|
|
|
| Telecommunication Services--3.3% |
|
|
|
| 96,500 |
| AT&T Corp. |
| $ | 1,599,970 |
| 103,600 |
| BellSouth Corp. |
|
| 2,585,856 |
| 129,400 |
| SBC Communications, Inc. |
|
| 3,066,780 |
| 101,100 |
| Verizon Communications |
|
| 3,496,038 |
|
|
| TOTAL |
|
| 10,748,644 |
|
|
| Undefined--0.0% |
|
|
|
| 1,000 |
| Arcadia Financial Ltd. - Warrants |
|
| 0 |
| 440 | 1 | NRG Energy, Inc. |
|
| 9,302 |
|
|
| TOTAL |
|
| 9,302 |
|
|
| Utilities--0.6% |
|
|
|
| 65,700 | 1 | P G & E Corp. |
|
| 1,872,450 |
|
|
| TOTAL COMMON STOCKS (IDENTIFIED COST $202,598,238) |
|
| 226,773,911 |
|
|
| FUTURES CONTRACTS COLLATERAL--3.0%2 |
|
|
|
$ | 2,000,000 |
| United States Treasury Bill, 7/1/2004 |
|
| 1,998,520 |
| 3,700,000 |
| United States Treasury Bill, 7/29/2004 |
|
| 3,693,969 |
| 4,000,000 |
| United States Treasury Bill, 8/26/2004 |
|
| 3,990,040 |
|
|
| TOTAL FUTURES CONTRACTS COLLATERAL (IDENTIFIED COST $9,682,717) |
|
| 9,682,529 |
|
|
| TOTAL STOCKS (IDENTIFIED COST $212,280,955) |
|
| 236,456,440 |
|
|
| ASSET-BACKED SECURITIES--0.2% |
|
|
|
| 337,591 | 3 | 125 Home Loan Owner Trust 1998-1A B1, 9.26%, 02/15/2029 |
|
| 342,497 |
| 459,562 |
| Residential Asset Mortgage Pro 2003RS11 AIIB, 1.43%, 12/25/2033 |
|
| 461,497 |
|
|
| TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $796,996) |
|
| 803,994 |
|
|
| COLLATERALIZED MORTGAGE OBLIGATIONS--0.8% |
|
|
|
| 1,388,136 |
| Federal National Mortgage Association, 1.600%, 9/25/2032 |
|
| 1,395,160 |
| 870,000 |
| Morgan Stanley Capital, Inc. 2004-T13 A1, 2.85%, 9/13/2045 |
|
| 851,860 |
| 41,354 | 3 | SMFC Trust Asset-Backed Certificates, Series 1997-A 4, 3.583%, 1/28/2025 |
|
| 31,700 |
| 457,584 |
| Wells Fargo Mortgage Backed Se 2003-18 Series 2003-18, Class A1, 5.5%, 12/25/2033 |
|
| 457,044 |
|
|
| TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $2,759,234) |
|
| 2,735,764 |
Principal |
|
| Value | |||
|
|
| CORPORATE BONDS--8.6% |
|
|
|
|
|
| Basic Industry - Metals & Mining--0.1% |
|
|
|
$ | 150,000 |
| BHP Finance (USA), Inc., 4.8%, 4/15/2013 |
| $ | 146,993 |
| 100,000 |
| Inco Ltd., 5.7%, 10/15/2015 |
|
| 99,128 |
| 100,000 |
| Thiokol Corp., Sr. Note, 6.625%, 3/01/2008 |
|
| 108,849 |
|
|
| TOTAL |
|
| 354,970 |
|
|
| Basic Industry - Paper--0.2% |
|
|
|
| 70,000 |
| International Paper Co., 5.5%, 1/15/2014 |
|
| 68,633 |
| 200,000 |
| Louisiana-Pacific Corp., 8.875%, 8/15/2010 |
|
| 234,500 |
| 150,000 |
| Pope & Talbot, Inc., 8.375%, 6/1/2013 |
|
| 153,750 |
| 275,000 |
| Weyerhaeuser Co., Deb., 7.375%, 3/15/2032 |
|
| 298,680 |
|
|
| TOTAL |
|
| 755,563 |
|
|
| Capital Goods - Aerospace & Defense--0.0% |
|
|
|
| 50,000 |
| Lockheed Martin Corp., Note, 8.2%, 12/01/2009 |
|
| 58,695 |
|
|
| Capital Goods -- Diversified Manufacturing--0.3% |
|
|
|
| 500,000 |
| Kennametal, Inc., 7.2%, 6/15/2012 |
|
| 529,560 |
| 250,000 |
| Tyco International Group, Note, 5.8%, 8/01/2006 |
|
| 261,580 |
|
|
| TOTAL |
|
| 791,140 |
|
|
| Capital Goods - Environmental--0.3% |
|
|
|
| 1,000,000 |
| Waste Management, Inc., Deb., 8.75%, 5/01/2018 |
|
| 1,117,860 |
|
|
| Communications - Media & Cable--0.4% |
|
|
|
| 500,000 |
| British Sky Broadcasting Group PLC, Note, 6.875%, 2/23/2009 |
|
| 548,495 |
| 750,000 |
| Cox Communications, Inc., 7.75%, 8/15/2006 |
|
| 817,305 |
|
|
| TOTAL |
|
| 1,365,800 |
|
|
| Communications - Media Noncable--0.2% |
|
|
|
| 250,000 |
| Clear Channel Communications, 3.125%, 2/01/2007 |
|
| 246,913 |
| 300,000 |
| Univision Communications,, Sr. Note, 3.5%, 10/15/2007 |
|
| 296,421 |
|
|
| TOTAL |
|
| 543,334 |
|
|
| Communications - Telecom Internet--0.0% |
|
|
|
| 50,000 |
| Insight Midwest LP, Sr. Note, 9.75%, 10/01/2009 |
|
| 52,875 |
|
|
| Communications - Telecom Wireless--0.2% |
|
|
|
| 250,000 |
| AT&T Wireless Services,, Sr. Note, 7.35%, 3/01/2006 |
|
| 269,008 |
| 260,000 |
| Tritel xS, Inc., Sr. Sub. Note, 10.375%, 1/15/2011 |
|
| 304,850 |
|
|
| TOTAL |
|
| 573,858 |
Principal |
|
| Value | |||
|
|
| CORPORATE BONDS--continued |
|
|
|
|
|
| Communications - Telecom Wirelines--0.6% |
|
|
|
$ | 200,000 |
| CenturyTel, Inc., 8.375%, 10/15/2010 |
| $ | 228,908 |
| 250,000 |
| Citizens Communications, Unsecd. Note, 9.25%, 5/15/2011 |
|
| 258,308 |
| 100,000 |
| Deutsche Telekom Interna, 5.25%, 7/22/2013 |
|
| 97,552 |
| 500,000 |
| Sprint Capital Corp., 7.125%, 1/30/2006 |
|
| 532,815 |
| 200,000 |
| Telefonos de Mexico, Note, 4.5%, 11/19/2008 |
|
| 194,624 |
| 675,000 |
| Verizon Global Funding, 7.75%, 6/15/2032 |
|
| 761,515 |
|
|
| TOTAL |
|
| 2,073,722 |
|
|
| Consumer Cyclical - Automotive--0.6% |
|
|
|
| 250,000 |
| DaimlerChrysler N.A., 6.5%, 11/15/2013 |
|
| 253,255 |
| 250,000 |
| Ford Motor Co., Unsecd. Note, 7.45%, 7/16/2031 |
|
| 238,523 |
| 100,000 |
| Ford Motor Credit Co., 7%, 10/01/2013 |
|
| 100,644 |
| 250,000 |
| Ford Motor Credit Co., Note, 7.375%, 10/28/2009 |
|
| 265,158 |
| 100,000 |
| General Motors Acceptance, 4.5%, 7/15/2006 |
|
| 101,657 |
| 500,000 |
| General Motors Acceptance, 7.5%, 7/15/2005 |
|
| 525,915 |
| 500,000 |
| General Motors Corp., Note, 7.2%, 1/15/2011 |
|
| 519,485 |
|
|
| TOTAL |
|
| 2,004,637 |
|
|
| Consumer Cyclical - Entertainment--0.2% |
|
|
|
| 300,000 |
| AOL Time Warner, Inc., Bond, 7.7%, 5/01/2032 |
|
| 327,261 |
| 300,000 |
| Carnival Corp., 3.75%, 11/15/2007 |
|
| 295,977 |
| 20,000 | 3 | International Speedway C, 4.2%, 4/15/2009 |
|
| 19,641 |
| 80,000 | 3 | International Speedway C, 5.4%, 4/15/2014 |
|
| 78,458 |
|
|
| TOTAL |
|
| 721,337 |
|
|
| Consumer Cyclical - Retailers--0.4% |
|
|
|
| 500,000 |
| CVS Corp., 5.625%, 3/15/2006 |
|
| 524,085 |
| 500,000 |
| Federated Department Stores, Inc., 6.625%, 9/01/2008 |
|
| 544,550 |
| 90,000 |
| Neiman-Marcus Group, Inc., Sr. Deb., 7.125%, 6/01/2028 |
|
| 96,377 |
| 250,000 |
| Wal-Mart Stores, Inc., Unsecd. Note, 3.375%, 10/01/2008 |
|
| 243,132 |
|
|
| TOTAL |
|
| 1,408,144 |
|
|
| Consumer Non-Cyclical - Consumer Products--0.1% |
|
|
|
| 300,000 |
| Alberto-Culver Co., Unsecd. Note, 8.25%, 11/01/2005 |
|
| 323,022 |
|
|
| Consumer Non-Cyclical - Food/Beverage--0.3% |
|
|
|
| 75,000 |
| Diageo Finance BV, Unsecd. Note, 3%, 12/15/2006 |
|
| 74,588 |
| 250,000 |
| General Mills, Inc., 6%, 2/15/2012 |
|
| 261,055 |
| 500,000 |
| Kraft Foods, Inc., Note, 4.625%, 11/01/2006 |
|
| 513,270 |
|
|
| TOTAL |
|
| 848,913 |
Principal |
|
| Value | |||
|
|
| CORPORATE BONDS--continued |
|
|
|
|
|
| Consumer Non-Cyclical - Pharmaceuticals--0.0% |
|
|
|
$ | 120,000 |
| Wyeth, 6.5%, 2/01/2034 |
| $ | 114,167 |
|
|
| Consumer Non-Cyclical - Supermarkets--0.1% |
|
|
|
| 250,000 |
| Kroger Co., 7.5%, 4/01/2031 |
|
| 275,137 |
|
|
| Consumer Non-Cyclical - Tobacco--0.1% |
|
|
|
| 65,000 |
| Altria Group, Inc., 5.625%, 11/04/2008 |
|
| 63,911 |
| 70,000 |
| Philip Morris, Note, 6.375%, 2/1/2006 |
|
| 71,745 |
|
|
| TOTAL |
|
| 135,656 |
|
|
| Energy - Independent--0.2% |
|
|
|
| 75,000 |
| Calpine Corp., Note, 7.75%, 4/15/2009 |
|
| 42,750 |
| 250,000 |
| Pemex Project Funding Master, Company Guarantee, 9.125%, 10/13/2010 |
|
| 288,750 |
| 190,000 | 3 | Ras Laffan Liquified Nat, 3.437%, 9/15/2009 |
|
| 184,503 |
|
|
| TOTAL |
|
| 516,003 |
|
|
| Energy - Integrated--0.3% |
|
|
|
| 250,000 |
| Conoco, Inc., 5.45%, 10/15/2006 |
|
| 263,043 |
| 500,000 |
| Husky Oil Ltd., Company Guarantee, 8.9%, 8/15/2028 |
|
| 578,670 |
| 35,000 |
| Petro-Canada, Inc., Deb., 7%, 11/15/2028 |
|
| 37,727 |
| 100,000 | 3 | Statoil ASA, 5.125%, 4/30/2014 |
|
| 98,614 |
|
|
| TOTAL |
|
| 978,054 |
|
|
| Energy - Oil Field Services--0.0% |
|
|
|
| 50,000 |
| Noble Drilling Corp., Sr. Note, 7.5%, 3/15/2019 |
|
| 56,203 |
|
|
| Energy - Refining--0.1% |
|
|
|
| 300,000 |
| Valero Energy Corp., 7.5%, 4/15/2032 |
|
| 331,785 |
|
|
| Financial Institution - Banking--0.6% |
|
|
|
| 300,000 |
| Corp Andina De Fomento, Bond, 7.375%, 1/18/2011 |
|
| 330,990 |
| 750,000 |
| FirstBank Puerto Rico, Sub. Note, 7.625%, 12/20/2005 |
|
| 784,538 |
| 60,000 |
| HSBC USA, Inc., Sub. Note, 6.625%, 3/01/2009 |
|
| 65,815 |
| 483,010 | 3 | Regional Diversified Funding, 9.25%, 3/15/2030 |
|
| 542,937 |
| 100,000 |
| US BANK N.A., 6.3%, 2/04/2014 |
|
| 106,743 |
| 120,000 |
| Union Planters Corp., 4.375%, 12/01/2010 |
|
| 117,043 |
|
|
| TOTAL |
|
| 1,948,066 |
Principal |
|
| Value | |||
|
|
| CORPORATE BONDS--continued |
|
|
|
|
|
| Financial Institution - Brokerage--0.5% |
|
|
|
$ | 200,000 |
| Amvescap PLC, Sr. Note, 6.6%, 5/15/2005 |
| $ | 207,738 |
| 500,000 | 3 | FMR Corp., 4.75%, 3/01/2013 |
|
| 480,835 |
| 250,000 |
| Goldman Sachs Group, Inc., 6.125%, 2/15/2033 |
|
| 235,983 |
| 250,000 |
| Lehman Brothers Holdings, 7.875%, 8/15/2010 |
|
| 290,155 |
| 250,000 |
| Morgan Stanley Group, Inc, 5.3%, 3/01/2013 |
|
| 245,822 |
|
|
| TOTAL |
|
| 1,460,533 |
|
|
| Financial Institution - Finance Noncaptive--0.2% |
|
|
|
| 250,000 |
| Capital One Financial, Note, 7.125%, 8/01/2008 |
|
| 268,528 |
| 250,000 |
| General Electric Co., Note, 5%, 2/01/2013 |
|
| 245,480 |
| 30,000 |
| Heller Financial, Inc., Note, 7.375%, 11/01/2009 |
|
| 34,026 |
| 55,000 |
| Newcourt Credit Group, Inc, Company Guarantee, 6.875%, 2/16/2005 |
|
| 56,906 |
|
|
| TOTAL |
|
| 604,940 |
|
|
| Financial Institution - Insurance - Life--1.1% |
|
|
|
| 400,000 |
| AXA-UAP, Sub. Note, 8.6%, 12/15/2030 |
|
| 488,584 |
| 1,250,000 |
| Delphi Funding, 9.31%, 3/25/2027 |
|
| 969,225 |
| 750,000 | 3 | Life Re Capital Trust I, Company Guarantee, 8.72%, 6/15/2027 |
|
| 781,155 |
| 300,000 | 3 | Pacific LifeCorp., Bond, 6.6%, 9/15/2033 |
|
| 308,376 |
| 100,000 |
| Principal Financial Group, 6.125%, 10/15/2033 |
|
| 96,741 |
| 150,000 |
| Prudential Financial, 5.75%, 7/15/2033 |
|
| 137,826 |
| 750,000 | 3 | Union Central Life Ins Co., Note, 8.2%, 11/1/2026 |
|
| 767,010 |
|
|
| TOTAL |
|
| 3,548,917 |
|
|
| Financial Institution - Insurance - P&C--0.3% |
|
|
|
| 100,000 | 3 | Liberty Mutual Group, Unsecd. Note, 7%, 3/15/2034 |
|
| 96,673 |
| 500,000 | 3 | MBIA Global Funding LLC, 2.875%, 11/30/2006 |
|
| 494,330 |
| 100,000 |
| Marsh & McLennan Cos., Sr. Note, 7.125%, 6/15/2009 |
|
| 111,936 |
| 100,000 | 3 | Oil Insurance Ltd., Sub. Deb., 5.15%, 8/15/2033 |
|
| 100,206 |
| 250,000 |
| Travelers Property Casualty, Sr. Note, 5%, 3/15/2013 |
|
| 241,832 |
|
|
| TOTAL |
|
| 1,044,977 |
|
|
| Financial Institution - REITs--0.2% |
|
|
|
| 450,000 |
| EOP Operating LP, 8.375%, 3/15/2006 |
|
| 491,009 |
| 45,000 |
| Mack-Cali Realty Corp., Note, 7.25%, 3/15/2009 |
|
| 49,745 |
| 250,000 |
| Simon Property Group, Inc, 6.35%, 8/28/2012 |
|
| 261,983 |
|
|
| TOTAL |
|
| 802,737 |
Principal |
|
| Value | |||
|
|
| CORPORATE BONDS--continued |
|
|
|
|
|
| Foreign-Local-Govt--0.1% |
|
|
|
$ | 250,000 |
| Quebec, Province of, Deb., 7.5%, 9/15/2029 |
| $ | 302,965 |
|
|
| Sovereign--0.1% |
|
|
|
| 300,000 |
| KFW-Kredit Wiederaufbau, 2.7%, 3/01/2007 |
|
| 294,984 |
| 175,000 |
| United Mexican States, 6.625%, 3/03/2015 |
|
| 175,875 |
|
|
| TOTAL |
|
| 470,859 |
|
|
| State/Provincial--0.1% |
|
|
|
| 650,000 |
| New South Wales, State of, Local Gov't. Guarantee, 6.5%, 5/01/2006 |
|
| 473,046 |
|
|
| Technology--0.1% |
|
|
|
| 200,000 |
| First Data Corp., 4.7%, 8/01/2013 |
|
| 192,994 |
|
|
| Transportation - Airlines--0.1% |
|
|
|
| 51,960 |
| Northwest Airlines Pass, Pass Thru Cert., 7.575%, 3/01/2019 |
|
| 51,830 |
| 255,000 |
| Southwest Airlines Co., Deb., 7.375%, 3/1/2027 |
|
| 268,025 |
|
|
| TOTAL |
|
| 319,855 |
|
|
| Transportation - Railroads--0.1% |
|
|
|
| 200,000 |
| Canadian Pacific RR, 6.25%, 10/15/2011 |
|
| 215,468 |
|
|
| Transportation - Services--0.1% |
|
|
|
| 200,000 | 3 | FedEx Corp., Unsecd. Note, 2.65%, 4/01/2007 |
|
| 194,846 |
|
|
| Utility - Electric--0.4% |
|
|
|
| 200,000 |
| Alabama Power Co., 2.8%, 12/01/2006 |
|
| 197,906 |
| 500,000 |
| American Electric Power C, Note, 6.125%, 5/15/2006 |
|
| 528,145 |
| 99,945 |
| Homer City Funding, Sr. Secd. Note, 8.734%, 10/01/2026 |
|
| 106,441 |
| 250,000 |
| MidAmerican Energy Co., Unsecd. Note, 6.75%, 12/30/2031 |
|
| 268,818 |
| 130,000 |
| Pacific Gas & Electric C, 6.05%, 3/01/2034 |
|
| 121,924 |
|
|
| TOTAL |
|
| 1,223,234 |
|
|
| TOTAL CORPORATE BONDS (IDENTIFIED COST $30,038,959) |
|
| 28,204,312 |
|
|
| GOVERNMENT AGENCIES--1.2% |
|
|
|
| 2,000,000 |
| Federal Home Loan Mortgage Corp., 4.050%, 6/21/2005 |
|
| 2,003,640 |
| 1,000,000 |
| Federal Home Loan Mortgage Corp., 5.750%, 4/15/2008 |
|
| 1,069,740 |
| 375,000 |
| Federal Home Loan Mortgage Corp., 6.250%, 7/15/2032 |
|
| 391,991 |
| 500,000 |
| Federal National Mortgage Association, 4.375%, 10/15/2006 |
|
| 515,070 |
|
|
| TOTAL GOVERNMENT AGENCIES (IDENTIFIED COST $2,107,377) |
|
| 3,980,441 |
Principal |
|
| Value | |||
|
|
| GOVERNMENTS/AGENCIES--1.1% |
|
|
|
$ | 700,000 |
| Austria, Government of, Bond, Series 981, 5%, 1/15/2008 |
| $ | 906,157 |
| 550,000 |
| Canada, Goverment of, Series WU42, 5%, 9/01/2004 |
|
| 407,702 |
| 750,000 |
| Germany, Government of, Bond, 3.75%, 1/04/2009 |
|
| 928,470 |
| 700,000 |
| Germany, Government of, Bond, 5.25%, 1/04/2011 |
|
| 922,828 |
| 460,000 |
| Germany, Government of, Bond, Series 139, 4%, 2/16/2007 |
|
| 578,226 |
|
|
| TOTAL GOVERNMENTS/AGENCIES (IDENTIFIED COST $2,684,673) |
|
| 3,743,383 |
|
|
| MORTGAGE-BACKED SECURITIES--0.1% |
|
|
|
| 25,006 |
| Federal Home Loan Mortgage Corp. Pool C25621, 6.500%, 5/1/2029 |
|
| 25,959 |
| 9,755 |
| Federal Home Loan Mortgage Corp. Pool E77591, 6.500%, 7/1/2014 |
|
| 10,306 |
| 13,049 |
| Federal National Mortgage Association Pool 303168, 9.500%, 30 Year, 2/1/2025 |
|
| 14,484 |
| 8,392 |
| Federal National Mortgage Association Pool 323159, 7.500%, 4/1/2028 |
|
| 8,975 |
| 4,187 |
| Federal National Mortgage Association Pool 323970, 7.000%, 15 Year, 10/1/2014 |
|
| 4,474 |
| 12,970 |
| Federal National Mortgage Association Pool 443215, 6.000%, 10/1/2028 |
|
| 13,246 |
| 12,644 |
| Federal National Mortgage Association Pool 511365, 7.000%, 8/1/2029 |
|
| 13,312 |
| 1,772 |
| Federal National Mortgage Association Pool 514184, 7.500%, 9/1/2029 |
|
| 1,891 |
| 5,194 |
| Government National Mortgage Association Pool 352214, 7.000%, 4/15/2023 |
|
| 5,534 |
| 3,299 |
| Government National Mortgage Association Pool 462739, 7.500%, 5/15/2028 |
|
| 3,536 |
| 4,437 |
| Government National Mortgage Association Pool 464835, 6.500%, 9/15/2028 |
|
| 4,623 |
| 9,021 |
| Government National Mortgage Association Pool 780339, 8.000%, 30 Year, 12/15/2023 |
|
| 9,901 |
|
|
| TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $110,100) |
|
| 116,241 |
|
|
| U.S. TREASURY--2.4% |
|
|
|
| 1,650,000 |
| United States Treasury Bond, 12.750%, 11/15/2010 |
|
| 1,896,213 |
| 1,500,000 |
| United States Treasury Bond, 6.250%, 8/15/2023 |
|
| 1,652,340 |
| 730,000 |
| United States Treasury Note, 3.250%, 8/15/2007 |
|
| 732,394 |
| 35,000 |
| United States Treasury Note, 4.375%, 8/15/2012 |
|
| 34,754 |
| 2,300,000 |
| United States Treasury Note, 4.750%, 5/15/2014 |
|
| 2,318,331 |
| 35,000 |
| United States Treasury Note, 4.875%, 2/15/2012 |
|
| 36,050 |
| 40,000 |
| United States Treasury Note, 5.000%, 2/15/2011 |
|
| 41,825 |
| 500,000 |
| United States Treasury Note, 5.750%, 8/15/2010 |
|
| 544,765 |
| 700,000 |
| United States Treasury Note, 7.875%, 11/15/2004 |
|
| 720,587 |
|
|
| TOTAL U.S. TREASURY (IDENTIFIED COST $8,023,653) |
|
| 7,977,259 |
Shares |
|
| Value | |||
|
|
| MUTUAL FUNDS--13.1%4 |
|
|
|
| 134,771 |
| Emerging Markets Fixed Income Core Fund |
| $ | 1,892,981 |
| 2,741,795 |
| Federated Mortgage Core Portfolio |
|
| 27,363,113 |
| 1,205,509 |
| High Yield Bond Portfolio |
|
| 8,149,241 |
| 5,554,371 |
| Prime Value Obligations Fund, IS Shares |
|
| 5,554,371 |
|
|
| TOTAL MUTUAL FUNDS |
|
| 42,959,706 |
|
|
| TOTAL INVESTMENTS--99.6% |
|
| 326,977,540 |
|
|
| OTHER ASSETS AND LIABILITIES - NET--0.4% |
|
| 1,267,606 |
|
|
| TOTAL NET ASSETS--100% |
| $ | 328,245,146 |
1 Non-income producing security.
2 Treasury bills held as collateral for S&P 500 futures contracts.
3 Denotes a restricted security which is subject to restrictions on resale under federal securities laws. These securities have been deemed liquid based upon criteria approved by the Fund's Board of Directors. At May 31, 2004, these securities amounted to $4,521,781 which represents 1.4% of net assets.
4 Affiliated companies.
5 The cost of investments for federal tax purposes amounts to $300,749,263.
Note: The categories of investments are shown as a percentage of total net assets at May 31, 2004.
The following acronym is used throughout this portfolio:
REITs | - --Real Estate Investment Trust |
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
May 31, 2004 (unaudited)
Assets: |
|
|
|
|
|
|
|
|
Total investments in securities, at value including $42,959,706 of investments in affiliated issuers (Note 5) (identified cost $300,744,669) |
|
|
|
|
| $ | 326,977,540 |
|
Cash |
|
|
|
|
|
| 24,260 |
|
Cash denominated in foreign currencies (cost of $361,125) |
|
|
|
|
|
| 379,420 |
|
Income receivable |
|
|
|
|
|
| 950,668 |
|
Receivable for investments sold |
|
|
|
|
|
| 4,287,386 |
|
Receivable for shares sold |
|
|
|
|
|
| 502,079 |
|
TOTAL ASSETS |
|
|
|
|
|
| 333,121,353 |
|
Liabilities: |
|
|
|
|
|
|
|
|
Payable for investments purchased |
| $ | 2,431,993 |
|
|
|
|
|
Payable for shares redeemed |
|
| 2,162,710 |
|
|
|
|
|
Payable for daily variation margin |
|
| 19,800 |
|
|
|
|
|
Payable for transfer and dividend disbursing agent fees and expenses (Note 5) |
|
| 24,564 |
|
|
|
|
|
Payable for distribution services fee (Note 5) |
|
| 62,454 |
|
|
|
|
|
Payable for shareholder services fee (Note 5) |
|
| 69,224 |
|
|
|
|
|
Income distribution payable |
|
| 91,458 |
|
|
|
|
|
Accrued expenses |
|
| 14,004 |
|
|
|
|
|
TOTAL LIABILITIES |
|
|
|
|
|
| 4,876,207 |
|
Net assets for 18,344,402 shares outstanding |
|
|
|
|
| $ | 328,245,146 |
|
Net Assets Consist of: |
|
|
|
|
|
|
|
|
Paid in capital |
|
|
|
|
| $ | 310,138,219 |
|
Net unrealized appreciation of investments and translation of assets and |
|
|
|
|
|
|
| |
Accumulated net realized loss on investments and foreign currency transactions and futures contracts |
|
|
|
|
|
| (7,665,416 | ) |
Distributions in excess of net investment income |
|
|
|
|
|
| (290,781 | ) |
TOTAL NET ASSETS |
|
|
|
|
| $ | 328,245,146 |
|
.
Statement of Assets and Liabilities--continued
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
|
|
|
|
|
|
|
|
Class A Shares: |
|
|
|
|
|
|
|
|
Net asset value per share ($228,698,554 ÷ 12,774,739 shares outstanding) |
|
|
|
|
|
| $17.90 |
|
Offering price per share (100/94.50 of $17.90)1 |
|
|
|
|
|
| $18.94 |
|
Redemption proceeds per share |
|
|
|
|
|
| $17.90 |
|
Class B Shares: |
|
|
|
|
|
|
|
|
Net asset value per share ($74,984,760 ÷ 4,192,812 shares outstanding) |
|
|
|
|
|
| $17.88 |
|
Offering price per share |
|
|
|
|
|
| $17.88 |
|
Redemption proceeds per share (94.50/100 of $17.88)1 |
|
|
|
|
|
| $16.90 |
|
Class C Shares: |
|
|
|
|
|
|
|
|
Net asset value per share ($24,559,787 ÷ 1,376,737 shares outstanding) |
|
|
|
|
|
| $17.84 |
|
Offering price per share (100/99.00 of $17.84)1 |
|
|
|
|
|
| $18.02 |
|
Redemption proceeds per share (99.00/100 of $17.84)1 |
|
|
|
|
|
| $17.66 |
|
Class K Shares: |
|
|
|
|
|
|
|
|
Net asset value per share ($2,045 ÷ 114.093 shares outstanding) |
|
|
|
|
|
| $17.92 |
|
Offering price per share |
|
|
|
|
|
| $17.92 |
|
Redemption proceeds per share |
|
|
|
|
|
| $17.92 |
|
1 See "What Do Shares Cost?" in the Prospectus.
See Notes which are an integral part of the Financial Statements
Statement of Operations
Six Months Ended May 31, 2004 (unaudited)
|
|
|
|
|
|
|
|
|
|
| ||
Investment Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Dividends (including $1,253,020 received from affiliated issuers) (Note 5) |
|
|
|
|
|
|
| $ |
|
| 3,095,019 |
|
Interest |
|
|
|
|
|
|
|
|
|
| 1,425,915 |
|
Income allocated from partnership (Note 5) |
|
|
|
|
|
|
|
|
|
| 49,731 |
|
TOTAL INCOME |
|
|
|
|
|
|
|
|
|
| 4,570,665 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Investment adviser fee (Note 5) |
|
|
|
|
| $ | 1,133,800 |
|
|
|
|
|
Administrative personnel and services fee (Note 5) |
|
|
|
|
|
| 134,999 |
|
|
|
|
|
Custodian fees |
|
|
|
|
|
| 14,295 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses--Class A Shares (Note 5) |
|
|
|
|
|
| 155,226 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses--Class B Shares (Note 5) |
|
|
|
|
|
| 51,587 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses--Class C Shares (Note 5) |
|
|
|
|
|
| 17,957 |
|
|
|
|
|
Transfer and dividend disbursing agent fees and expenses--Class K Shares (Note 5) |
|
|
|
|
|
| 1 |
|
|
|
|
|
Directors'/Trustees' fees |
|
|
|
|
|
| 6,436 |
|
|
|
|
|
Auditing fees |
|
|
|
|
|
| 12,230 |
|
|
|
|
|
Legal fees |
|
|
|
|
|
| 3,342 |
|
|
|
|
|
Portfolio accounting fees (Note 5) |
|
|
|
|
|
| 61,613 |
|
|
|
|
|
Distribution services fee--Class B Shares (Note 5) |
|
|
|
|
|
| 281,241 |
|
|
|
|
|
Distribution services fee--Class C Shares (Note 5) |
|
|
|
|
|
| 104,193 |
|
|
|
|
|
Distribution services fee--Class K Shares (Note 5) |
|
|
|
|
|
| 2 |
|
|
|
|
|
Shareholder services fee--Class A Shares (Note 5) |
|
|
|
|
|
| 292,840 |
|
|
|
|
|
Shareholder services fee--Class B Shares (Note 5) |
|
|
|
|
|
| 93,747 |
|
|
|
|
|
Shareholder services fee--Class C Shares (Note 5) |
|
|
|
|
|
| 34,731 |
|
|
|
|
|
Share registration costs |
|
|
|
|
|
| 42,189 |
|
|
|
|
|
Printing and postage |
|
|
|
|
|
| 34,781 |
|
|
|
|
|
Insurance premiums |
|
|
|
|
|
| 2,803 |
|
|
|
|
|
Taxes |
|
|
|
|
|
| 13,205 |
|
|
|
|
|
Miscellaneous |
|
|
|
|
|
| 5,872 |
|
|
|
|
|
EXPENSES BEFORE ALLOCATION |
|
|
|
|
|
| 2,497,090 |
|
|
|
|
|
Expenses allocated from partnership (Note 5) |
|
|
|
|
|
| 352 |
|
|
|
|
|
TOTAL EXPENSES |
|
|
|
|
|
| 2,497,442 |
|
|
|
|
|
Statement of Operations--continued
Waiver, Reimbursement and Expense Reduction: |
|
|
|
|
|
|
|
|
|
|
|
|
Reimbursement of investment adviser fee (Note 5) |
| $ | (627 | ) |
|
|
|
|
|
|
|
|
Waiver of administrative personnel and services fee (Note 5) |
|
| (6,581 | ) |
|
|
|
|
|
|
|
|
Fees paid indirectly from directed broker arrangements |
|
| (5,892 | ) |
|
|
|
|
|
|
|
|
TOTAL WAIVER, REIMBURSEMENT AND EXPENSE REDUCTION |
|
|
|
|
| $ | (13,100 | ) |
|
|
|
|
Net expenses |
|
|
|
|
|
|
|
|
| $ | 2,484,342 |
|
Net investment income |
|
|
|
|
|
|
|
|
|
| 2,086,323 |
|
Realized and Unrealized Gain on Investments, Foreign Currency Transactions and Futures Contracts: |
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain on investments and foreign currency transactions (including realized gain of $66,013 on sales of investments in affiliated issuers) (Note 5) |
|
|
|
|
|
|
|
|
|
| 6,478,914 |
|
Net realized gain on futures contracts |
|
|
|
|
|
|
|
|
|
| 1,197,945 |
|
Net realized gain allocated from partnership |
|
|
|
|
|
|
|
|
|
| 5,569 |
|
Net change in unrealized appreciation of investments, translation of assets and liabilities in foreign currency and futures contracts |
|
|
|
|
|
|
|
|
|
| ||
Net realized and unrealized gain on investments, foreign currency and futures contracts |
|
|
|
|
|
|
|
|
|
| 9,823,752 |
|
Change in net assets resulting from operations |
|
|
|
|
|
|
|
|
| $ | 11,910,075 |
|
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
|
|
| Six Months |
|
|
|
| 1 |
|
|
|
|
Increase (Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
| $ | 2,086,323 |
|
| $ | 379,267 |
|
| $ | 4,809,586 |
|
Net realized gain (loss) on investments, foreign currency transactions and futures contracts |
|
| 7,682,428 |
|
|
| 46,905 |
|
|
| (1,809,331 | ) |
Net change in unrealized appreciation/depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts |
|
| 2,141,324 |
|
|
| 1,930,718 |
|
|
| 32,188,419 |
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS |
|
| 11,910,075 |
|
|
| 2,356,890 |
|
|
| 35,188,674 |
|
Distributions to Shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from net investment income |
|
|
|
|
|
|
|
|
|
|
|
|
Class A Shares |
|
| (1,677,403 | ) |
|
| (909,910 | ) |
|
| (3,754,143 | ) |
Class B Shares |
|
| (245,942 | ) |
|
| (158,160 | ) |
|
| (735,225 | ) |
Class C Shares |
|
| (94,635 | ) |
|
| (60,986 | ) |
|
| (280,854 | ) |
Class K Shares |
|
| (6 | ) |
|
| (1 | ) |
|
| (2 | ) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS |
|
| (2,017,986 | ) |
|
| (1,129,057 | ) |
|
| (4,770,224 | ) |
Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from sale of shares |
|
| 39,799,449 |
|
|
| 6,404,766 |
|
|
| 93,228,950 |
|
Proceeds from shares issued in connection with the tax-free transfer of assets from Founders Common Trust Fund |
|
| -- |
|
|
| -- |
|
|
| 328,268 |
|
Net asset value of shares issued to shareholders in payment of distributions declared |
|
| 1,843,431 |
|
|
| 1,031,022 |
|
|
| 4,313,149 |
|
Cost of shares redeemed |
|
| (50,255,800 | ) |
|
| (5,725,612 | ) |
|
| (70,287,307 | ) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS |
|
| (8,612,920 | ) |
|
| 1,710,176 |
|
|
| 27,583,060 |
|
Change in net assets |
|
| 1,279,169 |
|
|
| 2,938,009 |
|
|
| 58,001,510 |
|
Net Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period |
|
| 326,965,977 |
|
|
| 324,027,968 |
|
|
| 266,026,458 |
|
End of period (including undistributed (distributions in excess of) net investment income of $(290,781) and $(359,118), and $389,918 respectively) |
| $ | 328,245,146 |
|
| $ | 326,965,977 |
|
| $ | 324,027,968 |
|
1 The Fund has changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
May 31, 2004 (unaudited)
1. ORGANIZATION
Federated Stock and Bond Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "Act"), as a diversified, open-end management investment company. The Fund offers four classes of shares: Class A Shares, Class B Shares, Class C Shares and Class K Shares. Effective April 8, 2003, the Fund added Class K Shares. The investment objective of the Fund is to provide relative safety of capital with the possibility of long-term growth of capital and income. Consideration is also given to current income.
On July 18, 2003, the Fund received a tax-free transfer of assets from Founders Common Trust Fund, as follows:
| Class A |
| Founders |
| Unrealized | 1 |
| Net Assets |
| Net Assets |
| Net Assets | |
Founders Common Trust Fund |
| 19,540 |
| $328,268 |
| $445 |
|
| $302,884,781 |
| $328,268 |
| $303,213,049 |
1 Unrealized appreciation is included in the Founders Common Trust Fund Net Assets Received amount shown above.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.
Investment Valuation
Domestic and foreign equity securities are valued at the last sale price or official closing price reported in the market in which they are primarily traded (either a national securities exchange or the over-the-counter market), if available. If unavailable, the security is generally valued at the mean between the last closing bid and asked prices. With respect to valuation of foreign securities, trading in foreign cities may be completed at times which vary from the closing of the New York Stock Exchange (NYSE). Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded immediately prior to the closing of the NYSE. Foreign securities quoted in foreign currencies are translated into U.S. dollars at the foreign exchange rate in effect at 4:00 p.m., Eastern Time, on the day the value of the foreign security is determined. Fixed income, listed corporate bonds, unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available or whose values have been affected by a significant event occurring between the close of their primary markets and the closing of the NYSE are valued at fair value as determined in accordance with procedures established by and under general supervision of the Board of Directors (the "Directors").
Repurchase Agreements
It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of the collateral at least equals the repurchase price to be paid under the repurchase agreement.
The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Directors. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair value. The Fund offers multiple classes of shares, which differ in their respective transfer and dividend disbursing agent, distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Premium and Discount Amortization/Paydown Gains and Losses
All premiums and discounts are amortized/accreted for financial statement purposes. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income.
Federal Taxes
It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.
Withholding taxes on foreign interest, dividends and capital gains have been provided for in accordance with the applicable country's tax rules and rates.
Other Taxes
As an open-end management investment company incorporated in the state of Maryland but domiciled in Pennsylvania, the Fund is subject to the Pennsylvania Franchise Tax. This franchise tax is assessed annually on the value of the Fund, as represented by average net assets for the tax year.
When-Issued and Delayed Delivery Transactions
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Foreign Currency Translation
The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (FC) are translated into U.S. dollars based on the rate of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.
Futures Contracts
The Fund purchases stock index futures contracts to manage cashflows, enhance yield, and to potentially reduce transaction costs. Upon entering into a stock index futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss.
Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with the changes in the value of the underlying securities.
As of May 31, 2004, the Fund had the following open futures contract:
Expiration Date |
| Contracts |
| Position |
| Unrealized |
June 2004 |
| 33 S&P 500 Index Futures |
| Long |
| $(187,700) |
Securities Lending
The Fund participates in a securities lending program providing for the lending of corporate bonds, equity and government securities to qualified brokers. Collateral for securities loaned is invested in an affiliated money market fund. Collateral is maintained at a minimum level of 102% of the market value of investments loaned, plus interest, if applicable. Earnings on collateral are allocated between the securities lending agent, as a fee for its services under the program, and the Fund, according to agreed-upon rates.
As of May 31, 2004, the Fund had no securities on loan.
Restricted Securities
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Fund or in connection with another registered offering of the securities. Many restricted securities may be resold in the secondary market in transactions exempt from registration. Such restricted securities may be determined to be liquid under criteria established by the Directors. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined in good faith using methods approved by the Directors.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on a trade date basis.
3. SHARES OF BENEFICIAL INTEREST
At May 31, 2004 par value shares ($0.001 per share) authorized were as follows:
Share Class Name |
| Number of Par Value |
Class A | 750,000,000 | |
Class B |
| 500,000,000 |
Class C |
| 500,000,000 |
Class K |
| 250,000,000 |
TOTAL |
| 2,000,000,000 |
Transactions in capital stock were as follows:
| Six Months Ended | Period Ended | Year Ended | ||||||||||||||||||
Class A Shares: |
| Shares |
| Amount |
| Shares |
| Amount |
| Shares |
| Amount | |||||||||
Shares sold |
| 1,509,399 |
|
| $ | 27,333,882 |
|
| 286,263 |
|
| $ | 4,968,298 |
|
| 4,203,068 |
|
|
| $68,136,996 |
|
Shares issued in connection with the tax-free transfer of assets from Founders Common Trust Fund |
| -- |
|
|
| -- |
|
| -- |
|
|
| -- |
|
| 19,540 |
|
|
| 328,268 |
|
Shares issued to shareholders in payment of distributions declared | 84,884 |
|
| 1,540,972 |
|
| 48,145 |
|
| 836,767 |
|
| 212,982 |
|
|
| 3,426,313 |
| |||
Shares redeemed |
| (1,865,797 | ) |
|
| (33,724,438 | ) |
| (249,723 | ) |
|
| (4,329,801 | ) |
| (3,279,825 | ) |
|
| (52,856,420 | ) |
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS |
| (271,514 | ) |
| (4,849,584 | ) |
| 84,685 |
|
|
| 1,475,264 |
|
| 1,155,765 |
|
|
| $19,035,157 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended | Period Ended | Year Ended | ||||||||||||||||||
Class B Shares: |
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||
Shares sold |
| 492,397 |
|
| $ | 8,879,320 |
|
| 58,737 |
|
| $ | 1,015,032 |
|
| 1,173,127 |
|
| $ | $19,023,995 |
|
Shares issued to shareholders in payment of distributions declared | 12,093 |
|
|
| 218,985 |
|
| 8,062 |
| 139,962 |
|
| 39,930 |
|
|
| 640,472 |
| |||
Shares redeemed |
| (483,632 | ) |
|
| (8,698,896 | ) |
| (52,814 | ) |
|
| (914,345 | ) |
| (852,881 | ) |
|
| (13,693,047 | ) |
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS |
| 20,858 |
|
| $ | 399,409 |
|
| 13,985 |
|
| $ | 240,649 |
|
| 360,176 |
|
|
| $5,971,420 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended | Period Ended | Year Ended | ||||||||||||||||||
Class C Shares: |
| Shares |
| Amount | Shares | Amount | Shares | Amount | |||||||||||||
Shares sold |
| 198,275 |
|
| $ | 3,584,462 |
|
| 24,446 |
|
| $ | 421,436 |
|
| 372,531 |
|
| $ | 6,067,709 |
|
Shares issued to shareholders in payment of distributions declared | 4,608 |
|
| 83,469 |
|
| 3,135 |
|
| 54,293 |
|
| 15,402 |
|
|
| 246,364 |
| |||
Shares redeemed |
| (434,683 | ) |
|
| (7,832,462 | ) |
| (27,944 | ) |
|
| (481,464 | ) |
| (231,224 | ) |
|
| (3,737,829 | ) |
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS |
| (231,800 | ) |
| $ | (4,164,531 | ) |
| (363 | ) |
| $ | (5,735 | ) |
| 156,709 |
|
| $ | 2,576,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended | Period Ended | Year Ended | ||||||||||||||||||
Class K Shares: |
| Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||
Shares sold |
| 99 |
|
| $ | 1,785 |
|
| -- |
|
| $ | -- |
|
| 16 |
|
| $ | 250 |
|
Shares issued to shareholders in payment of distributions declared | 0 | 3 |
| 5 |
|
| -- |
| -- |
|
| -- |
|
|
| -- |
| ||||
Shares redeemed |
| 0 | 3 |
|
| (4 | ) |
| 0 | 3 |
|
| (2 | ) |
| (1 | ) |
|
| (11 | ) |
NET CHANGE RESULTING FROM CLASS K SHARE TRANSACTIONS |
| 99 |
|
| $ | 1,786 |
|
| 0 | 3 |
| $ | (2 | ) |
| 15 |
|
| $ | 239 |
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS |
| (482,357 | ) |
| $ | (8,612,920 | ) |
| 98,307 |
|
| $ | 1,710,176 |
|
| 1,672,665 |
|
| $ | 27,583,060 |
|
1 The Fund has changed its fiscal year end from October 31 to November 30. This period represents the one-month period from November 1, 2003 to November 30, 2003.
2 Reflects operations for the period from April 8, 2003 (start of performance) to October 31, 2003.
3 Represents less than one share.
4. FEDERAL TAX INFORMATION
At May 31, 2004, the cost of investments for federal tax purposes was $300,749,263. The net unrealized appreciation of investments for federal tax purposes was $26,228,277. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $32,402,104 and net unrealized depreciation from investments for those securities having an excess of cost over value of $6,173,827.
At November 30, 2003, and October 31, 2003, the Fund had a capital loss carryforward of $14,340,401 and $14,543,434, respectively, which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforwards will expire as follows:
November 30, 2003: |
|
|
Expiration Year |
| Expiration Amount |
2008 |
| $3,397,314 |
2009 |
| $9,387,088 |
2010 |
| $1,555,999 |
|
|
|
October 31, 2003: |
|
|
Expiration Year |
| Expiration Amount |
2009 |
| $3,600,347 |
2010 |
| $9,387,088 |
2011 |
| $1,555,999 |
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Federated Equity Management Company of Pennsylvania (FEMCOPA), the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to: (a) a maximum of 0.55% of the average daily net assets of the Fund; and (b) 4.50% of the gross income of the Fund, excluding capital gains or losses. Prior to January 1, 2004, the Fund's investment adviser was Federated Investment Management Company (FIMCO). The fee received by FIMCO was identical to that received by FEMCOPA. FEMCOPA and FIMCO may voluntarily choose to waive any portion of their fees. FEMCOPA and FIMCO can modify or terminate this voluntary waiver at any time at their sole discretion. For the six months ended May 31, 2004 the fees paid to FEMCOPA and FIMCO were $946,139 and $187,034, respectively, after voluntary waiver, if applicable.
Certain of the Fund's assets are managed by FIMCO (the "Sub-Adviser"). Under the terms of a sub-adviser agreement between the Adviser and the Sub-Adviser, the Sub-Adviser receives an allocable portion of the Fund's adviser fee. The fee is paid by the Adviser out of its resources and is not an incremental Fund expense.
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in other funds which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse certain investment adviser fees as a result of these transactions. Income distributions earned from investments in these funds are recorded as income in the accompanying financial statements and are listed below:
Federated Mortgage Core Portfolio |
| $ | 753,606 |
High-Yield Bond Portfolio |
| $ | 428,188 |
Prime Value Obligations Fund |
| $ | 71,226 |
Emerging Market Fixed Income Core Fund |
| $ | 49,731 |
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of all Federated funds as specified below:
Maximum Administrative Fee |
| Average Aggregate Daily Net Assets |
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 |
The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.
Distribution Services Fee
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Class B Shares, Class C Shares and Class K Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses according to the following schedule annually, to compensate FSC.
Share Class Name |
| Percentage of Average Daily |
Class B Shares |
| 0.75% |
Class C Shares |
| 0.75% |
Class K Shares |
| 0.50% |
FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Sales Charges
For the six months ended May 31, 2004, FSC retained $27,524 in sales charges from the sale of Class A Shares. FSC also retained $20 of contingent deferred sales charges relating to redemptions of Class C Shares. See "What Do Shares Cost?" in the Prospectus.
Shareholder Services Fee
Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company (FSSC), the Fund will pay FSSC up to 0.25% of the average daily net assets of the Fund's Class A Shares, Class B Shares and Class C Shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Transfer and Dividend Disbursing Agent Fees and Expenses
Federated Services Company (FServ), through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Portfolio Accounting Fees
Prior to January 1, 2004, FServ maintained the Fund's accounting records for which it received a fee. The fee was based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. The fee paid to FServ during the reporting period was $9,381, after voluntary waiver, if applicable.
Expense Reduction
The Fund directs portfolio trades to a broker that in turn pays a portion of the Fund's operating expenses. For the six months ended May 31, 2004, the Fund's expenses were reduced by $5,892 under these arrangements.
General
Certain of the Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.
6. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations (and in-kind contributions), for the six months ended May 31, 2004, were as follows:
Purchases |
| $ | 89,018,092 |
Sales |
| $ | 80,887,839 |
7. LEGAL PROCEEDINGS
In October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations have been filed, and others may be filed in the future. Although Federated does not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from related regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.
Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.
This report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's prospectus, which contains facts concerning its objective and policies, management fees, expenses, and other information.
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. This information is also available from the EDGAR database on the SEC's Internet site at http://www.sec.gov.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY
In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.
Federated Investors
World-Class Investment Manager
Federated Stock and Bond Fund, Inc.
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com
Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact
Federated Securities Corp., Distributor
Cusip 313911109
Cusip 313911208
Cusip 313911307
Cusip 313911406
Federated is a registered mark of Federated Investors, Inc. 2004 ©Federated Investors, Inc.
8080105 (7/04)
Item 2. Code of Ethics Not Applicable Item 3. Audit Committee Financial Expert Not Applicable Item 4. Principal Accountant Fees and Services Not Applicable Item 5. Audit Committee of Listed Registrants Not Applicable Item 6. Schedule of Investments Not Applicable Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies Not Applicable Item 8. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers Not Applicable Item 9. Submission of Matters to a Vote of Security Holders Not Applicable Item 10. 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 last fiscal half year (the registrant's second half year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 11. Exhibits 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 Stock and Bond Fund, Inc. By /S/ Richard J. Thomas, Principal Financial Officer Date July 22, 2004 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /S/ J. Christopher Donahue, Principal Executive Officer Date July 22, 2004 By /S/ Richard J. Thomas, Principal Financial Officer Date July 22, 2004