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Federated Stock and Bond Fund
Established 1934
SEMI-ANNUAL SHAREHOLDER REPORT
May 31, 2010
Class A Shares
Class B Shares
Class C Shares
Class K Shares
FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
PORTFOLIO OF INVESTMENTS SUMMARY TABLES
PORTFOLIO OF INVESTMENTS
STATEMENT OF ASSETS AND LIABILITIES
STATEMENT OF OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
NOTES TO FINANCIAL STATEMENTS
EVALUATION AND APPROVAL OF ADVISORY CONTRACT
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE
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Financial Highlights - Class A Shares
(For a Share Outstanding Throughout Each Period)
Six Months Ended (unaudited) 5/31/2010 | Year Ended November 30, | ||||
2009 | 2008 | 2007 | 20061 | 2005 | |
Net Asset Value, Beginning of Period | $15.65 | $13.11 | $19.99 | $20.55 | $18.95 | $18.38 |
Income From Investment Operations: | |||||
Net investment income | 0.102 | 0.29 | 0.40 | 0.41 | 0.38 | 0.31 |
Net realized and unrealized gain (loss) on investments, futures contracts, swap contracts and foreign currency transactions | (0.28) | 2.52 | (4.91) | 1.42 | 1.93 | 0.56 |
TOTAL FROM INVESTMENT OPERATIONS | (0.18) | 2.81 | (4.51) | 1.83 | 2.31 | 0.87 |
Less Distributions: | |||||
Distributions from net investment income | (0.02) | (0.27) | (0.42) | (0.40) | (0.38) | (0.30) |
Distributions from net realized gain on investments, futures contracts, swap contracts and foreign currency transactions | — | — | (1.95) | (1.99) | (0.33) | — |
TOTAL DISTRIBUTIONS | (0.02) | (0.27) | (2.37) | (2.39) | (0.71) | (0.30) |
Net Asset Value, End of Period | $15.45 | $15.65 | $13.11 | $19.99 | $20.55 | $18.95 |
Total Return3 | (1.18)% | 21.84% | (25.39)% | 9.88% | 12.55%4 | 4.75%4,5 |
Ratios to Average Net Assets: | |||||
Net expenses | 1.25%6,7 | 1.25%7 | 1.25%7 | 1.25%7 | 1.17%7 | 1.16%7 |
Net investment income | 1.25%6 | 2.00% | 2.48% | 2.07% | 1.90% | 1.63% |
Expense waiver/reimbursement8 | 0.20%6 | 0.26% | 0.19% | 0.10% | 0.12% | 0.08% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $136,152 | $149,696 | $125,373 | $195,687 | $198,289 | $234,204 |
Portfolio turnover | 89% | 254% | 190% | 135% | 106% | 50% |
1 | Beginning with the year ended November 30, 2006, the Fund was audited by KPMG LLP. The previous year was audited by another independent registered public accounting firm. |
2 | Per share number has been calculated using the average shares method. |
3 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized. |
4 | During the period, the Fund was reimbursed by an affiliated shareholder services provider, which had an impact of 0.01% and 0.02% on the total return for the years ended November 30, 2006 and 2005, respectively. |
5 | During the period, the Fund was reimbursed by the Adviser, which had an impact of less than 0.01% on the total return. |
6 | Computed on an annualized basis. |
7 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.23%, 1.24%, 1.25%, 1.24%, 1.16% and 1.16% for the six months ended May 31, 2010 and for the years ended November 30, 2009, 2008, 2007, 2006 and 2005, respectively, after taking into account these expense reductions. |
8 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportFinancial Highlights - Class B Shares
(For a Share Outstanding Throughout Each Period)
Six Months Ended (unaudited) 5/31/2010 | Year Ended November 30, | ||||
2009 | 2008 | 2007 | 20061 | 2005 | |
Net Asset Value, Beginning of Period | $15.61 | $13.09 | $19.96 | $20.52 | $18.93 | $18.36 |
Income From Investment Operations: | |||||
Net investment income | 0.042 | 0.15 | 0.26 | 0.25 | 0.20 | 0.14 |
Net realized and unrealized gain (loss) on investments, futures contracts, swap contracts and foreign currency transactions | (0.28) | 2.55 | (4.89) | 1.43 | 1.94 | 0.58 |
TOTAL FROM INVESTMENT OPERATIONS | (0.24) | 2.70 | (4.63) | 1.68 | 2.14 | 0.72 |
Less Distributions: | |||||
Distributions from net investment income | (0.02) | (0.18) | (0.29) | (0.25) | (0.22) | (0.15) |
Distributions from net realized gain on investments, futures contracts, swap contracts and foreign currency transactions | — | — | (1.95) | (1.99) | (0.33) | — |
TOTAL DISTRIBUTIONS | (0.02) | (0.18) | (2.24) | (2.24) | (0.55) | (0.15) |
Net Asset Value,End of Period | $15.35 | $15.61 | $13.09 | $19.96 | $20.52 | $18.93 |
Total Return3 | (1.56)% | 20.86% | (25.97)% | 9.05% | 11.59% | 3.95%4 |
Ratios to Average Net Assets: | |||||
Net expenses | 2.05%5,6 | 2.05%6 | 2.05%6 | 2.03%6 | 1.99%6 | 1.95%6 |
Net investment income | 0.46%5 | 1.23% | 1.72% | 1.31% | 1.07% | 0.84% |
Expense waiver/reimbursement7 | 0.21%5 | 0.26% | 0.17% | 0.10% | 0.11% | 0.06% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $16,596 | $20,151 | $21,637 | $41,365 | $50,182 | $63,151 |
Portfolio turnover | 89% | 254% | 190% | 135% | 106% | 50% |
1 | Beginning with the year ended November 30, 2006, the Fund was audited by KPMG LLP. The previous year was audited by another independent registered public accounting firm. |
2 | Per share number has been calculated using the average shares method. |
3 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized. |
4 | During the period, the Fund was reimbursed by the Adviser, which had an impact of less than 0.01% on the total return. |
5 | Computed on an annualized basis. |
6 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 2.03%, 2.04%, 2.05%, 2.03%, 1.98% and 1.95% for the six months ended May 31, 2010 and for the years ended November 30, 2009, 2008, 2007, 2006 and 2005, respectively, after taking into account these expense reductions. |
7 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportFinancial Highlights - Class C Shares
(For a Share Outstanding Throughout Each Period)
Six Months Ended (unaudited) 5/31/2010 | Year Ended November 30, | ||||
2009 | 2008 | 2007 | 20061 | 2005 | |
Net Asset Value, Beginning of Period | $15.55 | $13.04 | $19.90 | $20.47 | $18.88 | $18.31 |
Income From Investment Operations: | |||||
Net investment income | 0.042 | 0.18 | 0.26 | 0.26 | 0.22 | 0.17 |
Net realized and unrealized gain (loss) on investments, futures contracts, swap contracts and foreign currency transactions | (0.28) | 2.51 | (4.87) | 1.42 | 1.94 | 0.56 |
TOTAL FROM INVESTMENT OPERATIONS | (0.24) | 2.69 | (4.61) | 1.68 | 2.16 | 0.73 |
Less Distributions: | |||||
Distributions from net investment income | (0.02) | (0.18) | (0.30) | (0.26) | (0.24) | (0.16) |
Distributions from net realized gain on investments, futures contracts, swap contracts and foreign currency transactions | — | — | (1.95) | (1.99) | (0.33) | — |
TOTAL DISTRIBUTIONS | (0.02) | (0.18) | (2.25) | (2.25) | (0.57) | (0.16) |
Net Asset Value, End of Period | $15.29 | $15.55 | $13.04 | $19.90 | $20.47 | $18.88 |
Total Return3 | (1.57)% | 20.86% | (25.98)% | 9.05% | 11.69% | 3.98%4 |
Ratios to Average Net Assets: | |||||
Net expenses | 2.04%5,6 | 2.05%6 | 2.05%6 | 2.00%6 | 1.95%6 | 1.93%6 |
Net investment income | 0.45%5 | 1.18% | 1.66% | 1.30% | 1.11% | 0.88% |
Expense waiver/reimbursement7 | 0.15%5 | 0.21% | 0.16% | 0.10% | 0.11% | 0.06% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $31,961 | $28,278 | $20,603 | $26,572 | $27,033 | $28,922 |
Portfolio turnover | 89% | 254% | 190% | 135% | 106% | 50% |
1 | Beginning with the year ended November 30, 2006, the Fund was audited by KPMG LLP. The previous year was audited by another independent registered public accounting firm. |
2 | Per share number has been calculated using the average shares method. |
3 | Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized. |
4 | During the period, the Fund was reimbursed by the Adviser, which had an impact of less than 0.01% on the total return. |
5 | Computed on an annualized basis. |
6 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 2.02%, 2.04%, 2.05%, 2.00%, 1.95% and 1.93% for the six months ended May 31, 2010 and for the years ended November 30, 2009, 2008, 2007, 2006 and 2005, respectively, after taking into account these expense reductions. |
7 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportFinancial Highlights - Class K Shares
(For a Share Outstanding Throughout Each Period)
Six Months Ended (unaudited) 5/31/2010 | Year Ended November 30, | ||||
2009 | 2008 | 2007 | 20061 | 2005 | |
Net Asset Value, Beginning of Period | $15.68 | $13.13 | $20.02 | $20.57 | $18.98 | $18.40 |
Income From Investment Operations: | |||||
Net investment income | 0.062 | 0.26 | 0.30 | 0.33 | 0.28 | 0.25 |
Net realized and unrealized gain (loss) on investments, futures contracts, swap contracts and foreign currency transactions | (0.28) | 2.50 | (4.90) | 1.43 | 1.94 | 0.53 |
TOTAL FROM INVESTMENT OPERATIONS | (0.22) | 2.76 | (4.60) | 1.76 | 2.22 | 0.78 |
Less Distributions: | |||||
Distributions from net investment income | (0.02) | (0.21) | (0.34) | (0.32) | (0.30) | (0.20) |
Distributions from net realized gain on investments, futures contracts, swap contracts and foreign currency transactions | — | — | (1.95) | (1.99) | (0.33) | — |
TOTAL DISTRIBUTIONS | (0.02) | (0.21) | (2.29) | (2.31) | (0.63) | (0.20) |
Net Asset Value, End of Period | $15.44 | $15.68 | $13.13 | $20.02 | $20.57 | $18.98 |
Total Return3 | (1.43)% | 21.30% | (25.76)% | 9.44% | 11.98% | 4.27%4 |
Ratios to Average Net Assets: | |||||
Net expenses | 1.74%5,6 | 1.75%6 | 1.75%6 | 1.70%6 | 1.68%6 | 1.65%6 |
Net investment income | 0.76%5 | 1.41% | 1.93% | 1.55% | 1.42% | 1.31% |
Expense waiver/reimbursement7 | 0.13%5 | 0.18% | 0.14% | 0.10% | 0.11% | 0.05% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $48,107 | $47,254 | $18,947 | $16,070 | $10,234 | $1,048 |
Portfolio turnover | 89% | 254% | 190% | 135% | 106% | 50% |
1 | Beginning with the year ended November 30, 2006, the Fund was audited by KPMG LLP. The previous year was audited by another independent registered public accounting firm. |
2 | Per share number has been calculated using the average shares method. |
3 | Based on net asset value. Total returns for periods of less than one year are not annualized. |
4 | During the period, the Fund was reimbursed by the Adviser, which had an impact of 0.01% on the total return. |
5 | Computed on an annualized basis. |
6 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 1.72%, 1.74%, 1.75%, 1.70%, 1.67% and 1.65% for the six months ended May 31, 2010 and for the years ended November 30, 2009, 2008, 2007, 2006 and 2005, respectively, after taking into account these expense reductions. |
7 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportShareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase or redemption payments; and (2) ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or shareholder services fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from December 1, 2009 to May 31, 2010.
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Semi-Annual Shareholder ReportBeginning Account Value 12/1/2009 | Ending Account Value 5/31/2010 | Expenses Paid During Period1 |
Actual: |
Class A Shares | $1,000 | $988.20 | $6.20 |
Class B Shares | $1,000 | $984.40 | $10.14 |
Class C Shares | $1,000 | $984.30 | $10.09 |
Class K Shares | $1,000 | $985.70 | $8.61 |
Hypothetical (assuming a 5% return before expenses): |
Class A Shares | $1,000 | $1,018.70 | $6.29 |
Class B Shares | $1,000 | $1,014.71 | $10.30 |
Class C Shares | $1,000 | $1,014.76 | $10.25 |
Class K Shares | $1,000 | $1,016.26 | $8.75 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: |
Class A Shares | 1.25% |
Class B Shares | 2.05% |
Class C Shares | 2.04% |
Class K Shares | 1.74% |
Portfolio of Investments Summary Tables (unaudited)
At May 31, 2010, the Fund's portfolio composition1 was as follows:
Portfolio Composition | Percentage of Total Net Assets2 |
Domestic Equity Securities | 54.9% |
Corporate Debt Securities | 14.0% |
International Equity Securities | 5.6% |
Mortgage-Backed Securities3 | 4.8% |
U.S. Treasury and Agency Securities | 2.3% |
Foreign Debt Securities | 1.7% |
Asset-Backed Securities | 1.2% |
Municipal Security4 | 0.0% |
Derivative Contracts5 | (0.6)% |
Cash Equivalents6 | 16.3% |
Other Assets and Liabilities — Net7 | (0.2)% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus and Statement of Additional Information for a description of these security types. |
2 | As of the date specified above, the Fund owned shares of one or more affiliated investment companies. For purposes of this table, the affiliated investment company (other than an affiliated money market mutual fund) is not treated as a single portfolio security, but rather the Fund is treated as owning a pro rata portion of each security and each other asset and liability owned by the affiliated investment company. Accordingly, the percentages of total net assets shown in the table will differ from those presented on the Portfolio of Investments. |
3 | For purposes of this table, Mortgage-Backed Securities include mortgage-backed securities guaranteed by Government Sponsored Entities and adjustable rate mortgage-backed securities. |
4 | Represents less than 0.1%. |
5 | 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. |
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. |
Sector Composition of Equity Holdings | Percentage of Equity Securities |
Information Technology | 19.8% |
Consumer Discretionary | 14.6% |
Industrials | 13.9% |
Financials | 13.8% |
Health Care | 11.3% |
Consumer Staples | 9.9% |
Energy | 9.1% |
Materials | 2.9% |
Utilities | 2.6% |
Telecommunication Services | 2.1% |
TOTAL | 100.0% |
8 | 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. |
Portfolio of Investments
May 31, 2010 (unaudited)
Shares or Principal Amount | Value in U.S. Dollars |
COMMON STOCKS – 32.3% |
Consumer Discretionary – 4.7% |
2,000 | 1 | Amazon.com, Inc. | 250,920 |
1,500 | 1 | Bed Bath & Beyond, Inc. | 67,305 |
2,000 | Best Buy Co., Inc. | 84,500 |
16,800 | Comcast Corp., Class A | 303,912 |
73,800 | D. R. Horton, Inc. | 899,622 |
5,700 | 1 | DIRECTV — Class A | 214,833 |
47,800 | 1 | Ford Motor Co. | 560,694 |
2,000 | Gap (The), Inc. | 43,600 |
900 | Genuine Parts Co. | 36,549 |
10,000 | Home Depot, Inc. | 338,600 |
9,600 | Johnson Controls, Inc. | 273,888 |
19,200 | KB HOME | 278,016 |
11,500 | 1 | Kohl's Corp. | 583,625 |
11,400 | 1 | Las Vegas Sand Corp. | 267,672 |
47,300 | Lennar Corp., Class A | 818,290 |
500 | Limited Brands | 12,430 |
8,600 | Lowe's Cos., Inc. | 212,850 |
9,800 | M.D.C. Holdings, Inc. | 307,524 |
800 | Macy's, Inc. | 17,768 |
11,774 | McDonald's Corp. | 787,327 |
500 | 1 | NVR, Inc. | 342,640 |
13,300 | News Corp., Inc. — Class A | 175,560 |
300 | Nordstrom, Inc. | 11,910 |
14,300 | Omnicom Group, Inc. | 542,685 |
1,700 | Penney (J.C.) Co., Inc. | 46,733 |
300 | 1 | Priceline.com, Inc. | 57,348 |
79,400 | 1 | Pulte Group, Inc. | 884,516 |
200 | Ross Stores, Inc. | 10,480 |
14,700 | Ryland Group, Inc. | 273,420 |
600 | Sherwin-Williams Co. | 45,978 |
8,500 | Stanley Black & Decker, Inc. | 474,215 |
4,300 | Staples, Inc. | 92,536 |
2,500 | TJX Cos., Inc. | 113,650 |
4,500 | Target Corp. | 245,385 |
Shares or Principal Amount | Value in U.S. Dollars |
200 | Tiffany & Co. | 9,086 |
2,109 | Time Warner Cable, Inc. | 115,426 |
6,900 | Time Warner, Inc. | 213,831 |
41,700 | 1 | Toll Brothers, Inc. | 878,619 |
3,600 | 1 | Viacom, Inc., Class B — New | 120,996 |
11,700 | Walt Disney Co. | 391,014 |
TOTAL | 11,405,953 |
Consumer Staples – 3.2% |
16,820 | Altria Group, Inc. | 341,278 |
6,056 | Archer-Daniels-Midland Co. | 153,035 |
3,500 | CVS Corp. | 121,205 |
4,094 | ConAgra Foods, Inc. | 98,993 |
1,100 | Costco Wholesale Corp. | 64,075 |
3,038 | General Mills, Inc. | 216,397 |
17,749 | Heinz (H.J.) Co. | 784,151 |
14,119 | Kellogg Co. | 754,378 |
14,078 | Kraft Foods, Inc., Class A | 402,631 |
19,400 | Kroger Co. | 390,522 |
1,445 | Lorillard, Inc. | 103,303 |
4,000 | Mead Johnson Nutrition Co. | 197,280 |
20,617 | PepsiCo, Inc. | 1,296,603 |
15,212 | Philip Morris International, Inc. | 671,153 |
6,700 | Procter & Gamble Co. | 409,303 |
1,525 | Reynolds American, Inc. | 79,514 |
6,300 | Sara Lee Corp. | 89,271 |
1,500 | Sysco Corp. | 44,715 |
18,658 | The Coca-Cola Co. | 959,021 |
9,200 | Wal-Mart Stores, Inc. | 465,152 |
2,500 | Walgreen Co. | 80,100 |
TOTAL | 7,722,080 |
Energy – 3.0% |
2,729 | Anadarko Petroleum Corp. | 142,809 |
1,764 | Apache Corp. | 157,948 |
2,400 | Baker Hughes, Inc. | 91,536 |
3,150 | Chesapeake Energy Corp. | 70,371 |
22,579 | Chevron Corp. | 1,667,911 |
8,483 | ConocoPhillips | 439,928 |
Shares or Principal Amount | Value in U.S. Dollars |
2,716 | Devon Energy Corp. | 173,417 |
1,263 | EOG Resources, Inc. | 132,413 |
38,572 | Exxon Mobil Corp. | 2,332,063 |
4,529 | Halliburton Co. | 112,455 |
1,464 | Hess Corp. | 77,885 |
3,540 | Marathon Oil Corp. | 110,059 |
827 | 1 | NRG Energy, Inc. | 19,310 |
2,080 | National-Oilwell, Inc. | 79,310 |
1,100 | Noble Energy, Inc. | 65,439 |
6,117 | Occidental Petroleum Corp. | 504,714 |
13,200 | Schlumberger Ltd. | 741,180 |
1,692 | 1 | Southwestern Energy Co. | 63,636 |
3,407 | Spectra Energy Corp. | 68,174 |
2,923 | XTO Energy, Inc. | 124,929 |
TOTAL | 7,175,487 |
Financials – 4.4% |
800 | AON Corp. | 31,576 |
900 | Aflac, Inc. | 39,870 |
1,600 | Allstate Corp. | 49,008 |
7,612 | American Express Co. | 303,491 |
638 | Avalonbay Communities, Inc. | 62,562 |
2,800 | BB&T Corp. | 84,672 |
81,452 | Bank of America Corp. | 1,282,055 |
3,209 | 1 | Berkshire Hathaway, Inc. — Class B | 226,395 |
1,037 | Boston Properties, Inc. | 79,517 |
459 | CME Group, Inc. | 145,342 |
2,881 | Capital One Financial Corp. | 118,985 |
1,000 | Chubb Corp. | 50,240 |
224,549 | 1 | Citigroup, Inc. | 889,214 |
2,131 | Equity Residential Properties Trust | 96,172 |
3,300 | Fifth Third Bancorp | 42,867 |
986 | Franklin Resources, Inc. | 96,717 |
1,500 | 1 | Genworth Financial, Inc., Class A | 23,385 |
4,639 | Goldman Sachs Group, Inc. | 669,222 |
2,247 | HCP, Inc. | 71,589 |
1,200 | Hartford Financial Services Group, Inc. | 30,084 |
4,878 | Host Hotels & Resorts, Inc. | 69,560 |
Shares or Principal Amount | Value in U.S. Dollars |
35,888 | J.P. Morgan Chase & Co. | 1,420,447 |
1,900 | Kimco Realty Corp. | 27,170 |
1,100 | Loews Corp. | 35,761 |
300 | M & T Bank Corp. | 23,772 |
1,600 | Marsh & McLennan Cos., Inc. | 34,896 |
14,100 | MetLife, Inc. | 570,909 |
9,054 | Morgan Stanley | 245,454 |
10,700 | PNC Financial Services Group | 671,425 |
1,200 | Plum Creek Timber Co., Inc. | 42,024 |
2,000 | Progressive Corp. Ohio | 39,180 |
2,250 | Prologis Trust | 25,605 |
900 | Prudential Financial | 51,939 |
1,286 | Public Storage | 119,199 |
5,000 | Regions Financial Corp. | 38,150 |
6,499 | Schwab (Charles) Corp. | 106,194 |
2,165 | Simon Property Group, Inc. | 184,090 |
10,637 | State Street Corp. | 406,014 |
2,000 | SunTrust Banks, Inc. | 53,900 |
7,710 | The Bank of New York Mellon Corp. | 209,712 |
11,000 | The Travelers Cos, Inc. | 544,170 |
28,226 | U.S. Bancorp | 676,295 |
1,190 | Ventas, Inc. | 55,871 |
1,491 | Vornado Realty Trust | 115,821 |
21,300 | Wells Fargo & Co. | 611,097 |
TOTAL | 10,771,618 |
Health Care – 3.7% |
21,694 | Abbott Laboratories | 1,031,767 |
2,151 | Aetna, Inc. | 62,723 |
1,400 | AmerisourceBergen Corp. | 43,792 |
5,809 | 1 | Amgen, Inc. | 300,790 |
819 | Bard (C.R.), Inc. | 66,314 |
3,130 | Baxter International, Inc. | 132,180 |
1,202 | Becton, Dickinson & Co. | 85,703 |
13,647 | 1 | Boston Scientific Corp. | 82,564 |
21,753 | Bristol-Myers Squibb Co. | 504,887 |
2,392 | CIGNA Corp. | 80,060 |
1,793 | Cardinal Health, Inc. | 61,841 |
Shares or Principal Amount | Value in U.S. Dollars |
5,352 | 1 | Celgene Corp. | 282,372 |
6,826 | 1 | Express Scripts, Inc., Class A | 686,696 |
2,600 | 1 | Genzyme Corp. | 126,490 |
11,323 | 1 | Gilead Sciences, Inc. | 406,722 |
9,000 | 1 | Hospira, Inc. | 468,540 |
219 | 1 | Intuitive Surgical, Inc. | 70,687 |
22,678 | Johnson & Johnson | 1,322,127 |
6,022 | Lilly (Eli) & Co. | 197,461 |
1,408 | McKesson HBOC, Inc. | 98,560 |
2,403 | 1 | Medco Health Solutions, Inc. | 138,533 |
5,632 | Medtronic, Inc. | 220,662 |
28,631 | Merck & Co., Inc. | 964,578 |
47,382 | Pfizer, Inc. | 721,628 |
1,411 | Quest Diagnostics, Inc. | 74,430 |
1,686 | 1 | St. Jude Medical, Inc. | 62,955 |
1,441 | Stryker Corp. | 76,416 |
2,396 | 1 | Thermo Fisher Scientific, Inc. | 124,736 |
5,935 | UnitedHealth Group, Inc. | 172,531 |
2,344 | 1 | Wellpoint, Inc. | 120,247 |
1,109 | 1 | Zimmer Holdings, Inc. | 62,026 |
TOTAL | 8,851,018 |
Industrials – 4.5% |
9,530 | 3M Co. | 755,824 |
6,767 | Boeing Co. | 434,306 |
4,100 | CSX Corp. | 214,225 |
5,613 | Caterpillar, Inc. | 341,046 |
4,528 | Cummins, Inc. | 307,813 |
2,335 | Danaher Corp. | 185,352 |
3,848 | Deere & Co. | 221,953 |
26,000 | 1 | Delta Air Lines, Inc. | 353,080 |
6,500 | Donnelley (R.R.) & Sons Co. | 124,540 |
1,600 | Dun & Bradstreet Corp. | 116,784 |
1,443 | Eaton Corp. | 100,938 |
6,775 | Emerson Electric Co. | 314,631 |
4,000 | Equifax, Inc. | 121,000 |
5,000 | Fluor Corp. | 234,600 |
3,475 | General Dynamics Corp. | 235,953 |
Shares or Principal Amount | Value in U.S. Dollars |
122,521 | General Electric Co. | 2,003,218 |
6,897 | Honeywell International, Inc. | 294,985 |
1,504 | ITT Corp. | 72,613 |
3,072 | Illinois Tool Works, Inc. | 142,633 |
5,700 | Iron Mountain, Inc. | 139,764 |
3,800 | Joy Global, Inc. | 193,800 |
900 | L-3 Communications Holdings, Inc. | 74,367 |
2,874 | Lockheed Martin Corp. | 229,690 |
2,719 | Northrop Grumman Corp. | 164,472 |
2,911 | PACCAR, Inc. | 119,351 |
1,400 | Parker-Hannifin Corp. | 86,044 |
6,500 | Pitney Bowes, Inc. | 147,160 |
5,365 | Precision Castparts Corp. | 626,095 |
8,894 | Raytheon Co. | 466,135 |
10,100 | Republic Services, Inc. | 294,112 |
4,600 | Robert Half International, Inc. | 116,334 |
2,700 | 1 | Stericycle, Inc. | 158,274 |
12,235 | Tyco International Ltd. | 442,785 |
8,448 | United Technologies Corp. | 569,226 |
15,300 | Waste Management, Inc. | 497,403 |
TOTAL | 10,900,506 |
Information Technology – 6.4% |
4,155 | 1 | Adobe Systems, Inc. | 133,292 |
2,241 | Altera Corp. | 52,820 |
1,949 | Analog Devices, Inc. | 56,852 |
8,947 | 1 | Apple, Inc. | 2,300,811 |
10,230 | Applied Materials, Inc. | 132,069 |
3,698 | Automatic Data Processing, Inc. | 151,174 |
2,581 | Broadcom Corp. | 89,096 |
3,681 | CA, Inc. | 74,540 |
60,834 | 1 | Cisco Systems, Inc. | 1,408,916 |
2,216 | 1 | Cognizant Technology Solutions Corp. | 110,889 |
24,967 | Corning, Inc. | 435,175 |
11,905 | 1 | Dell, Inc. | 158,694 |
14,368 | 1 | EMC Corp. Mass | 267,532 |
8,352 | 1 | eBay, Inc. | 178,816 |
1,733 | 1 | Google, Inc. | 840,817 |
Shares or Principal Amount | Value in U.S. Dollars |
30,217 | Hewlett-Packard Co. | 1,390,284 |
63,832 | Intel Corp. | 1,367,281 |
9,392 | International Business Machines Corp. | 1,176,442 |
2,282 | 1 | Intuit, Inc. | 81,559 |
1,758 | Linear Technology Corp. | 49,154 |
709 | Mastercard, Inc. Class A | 143,055 |
5,445 | 1 | Micron Technology, Inc. | 49,495 |
84,104 | Microsoft Corp. | 2,169,883 |
16,058 | 1 | Motorola, Inc. | 109,997 |
3,768 | 1 | NVIDIA Corp. | 49,512 |
52,528 | Oracle Corp. | 1,185,557 |
3,064 | Paychex, Inc. | 87,447 |
12,586 | Qualcomm, Inc. | 447,558 |
5,934 | 1 | Symantec Corp. | 84,085 |
7,970 | Texas Instruments, Inc. | 194,627 |
3,200 | Visa, Inc.-Class A Shares | 231,872 |
5,044 | Western Union Co. | 80,502 |
2,102 | Xilinx, Inc. | 51,394 |
8,355 | 1 | Yahoo, Inc. | 128,166 |
TOTAL | 15,469,363 |
Materials – 0.9% |
4,200 | Agnico Eagle Mines, Ltd. | 246,036 |
1,109 | Air Products & Chemicals, Inc. | 76,588 |
400 | Airgas, Inc. | 24,988 |
2,882 | Alcoa, Inc. | 33,547 |
300 | CF Industries Holdings, Inc. | 20,577 |
648 | Cliffs Natural Resources, Inc. | 36,197 |
13,460 | Dow Chemical Co. | 362,209 |
2,449 | Du Pont (E.I.) de Nemours & Co. | 88,580 |
622 | Ecolab, Inc. | 29,377 |
7,725 | Freeport-McMoRan Copper & Gold, Inc. | 541,136 |
1,202 | International Paper Co. | 27,922 |
2,900 | Lubrizol Corp. | 256,853 |
1,485 | Monsanto Co. | 75,542 |
1,387 | Newmont Mining Corp. | 74,648 |
893 | Nucor Corp. | 38,444 |
466 | PPG Industries, Inc. | 29,857 |
Shares or Principal Amount | Value in U.S. Dollars |
839 | Praxair, Inc. | 65,106 |
591 | Sigma-Aldrich Corp. | 31,489 |
3,916 | Teck Cominco Ltd., Class B | 133,222 |
682 | United States Steel Corp. | 32,197 |
652 | Vulcan Materials Co. | 32,913 |
565 | Weyerhaeuser Co. | 24,058 |
TOTAL | 2,281,486 |
Telecommunication Services – 0.7% |
29,700 | AT&T, Inc. | 721,710 |
2,000 | 1 | American Tower Systems Corp. | 81,060 |
88,800 | Qwest Communications International, Inc. | 465,312 |
14,200 | Verizon Communications | 390,784 |
TOTAL | 1,658,866 |
Utilities – 0.8% |
1,181 | 1 | AES Corp. | 12,129 |
3,076 | Ameren Corp. | 75,854 |
2,782 | American Electric Power Co., Inc. | 88,913 |
454 | Consolidated Edison Co. | 19,336 |
2,514 | Constellation Energy Group | 88,945 |
287 | DTE Energy Co. | 13,061 |
3,537 | Dominion Resources, Inc. | 137,801 |
7,786 | Duke Energy Corp. | 124,265 |
1,631 | EQT Corp. | 63,919 |
592 | Edison International | 19,157 |
1,095 | Entergy Corp. | 82,202 |
3,930 | Exelon Corp. | 151,698 |
2,402 | FPL Group, Inc. | 119,932 |
503 | FirstEnergy Corp. | 17,711 |
2,181 | P G & E Corp. | 90,511 |
617 | PPL Corp. | 15,925 |
525 | Progress Energy, Inc. | 20,260 |
2,966 | Public Service Enterprises Group, Inc. | 90,849 |
311 | Questar Corp. | 13,951 |
418 | Sempra Energy | 19,228 |
22,959 | Southern Co. | 750,759 |
400 | Wisconsin Energy Corp. | 19,600 |
Shares or Principal Amount | Value in U.S. Dollars |
840 | Xcel Energy, Inc. | 17,212 |
TOTAL | 2,053,218 |
TOTAL COMMON STOCKS (IDENTIFIED COST $75,629,427) | 78,289,595 |
Asset-Backed Securities – 1.0% |
$8,670 | 2,3 | 125 Home Loan Owner Trust 1998-1A B1, 9.76%, 2/15/2029 | 7,196 |
250,000 | Banc of America Commercial Mortgage, Inc. 2007-4 A4, 5.744%, 2/10/2051 | 243,468 |
800,000 | Citigroup/Deutsche Bank Commercial Mortgage 2007-CD5, Series 2007-CD5, 5.886%, 11/15/2044 | 782,403 |
350,000 | LB-UBS Commercial Mortgage Trust 2008-C1 A2, 6.324%, 4/15/2041 | 354,044 |
100,000 | Merrill Lynch Mortgage Trust 2008-C1 AM, 6.461%, 2/12/2051 | 79,153 |
400,000 | Merrill Lynch/Countrywide Commercial Mortgage 2007-6, Series 2007-6, 5.485%, 03/12/2051 | 361,595 |
315,000 | Morgan Stanley Capital I 2006-IQ12 A4, 5.332%, 12/15/2043 | 311,797 |
250,000 | Morgan Stanley Capital, Inc. A4, 5.880%, 6/11/2049 | 245,200 |
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $2,431,187) | 2,384,856 |
Collateralized Mortgage Obligations – 0.5% |
800,000 | Citigroup/Deutsche Bank Commercial Mortgage 2007-CD4 A3, 5.293%, 12/11/2049 | 781,983 |
450,000 | JP Morgan Chase Commercial Mortgage Securities 2007-C1 A4, 5.716%, 2/15/2051 | 421,136 |
5,306 | 2,3 | SMFC Trust Asset-Backed Certificates, 1997-A B1-4, 7.719%, 1/28/2027 | 4,244 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $1,257,635) | 1,207,363 |
Corporate Bonds – 7.1% |
Basic Industry - Chemicals – 0.1% |
95,000 | Dow Chemical Co., Note, 8.550%, 05/15/2019 | 112,853 |
40,000 | Du Pont (E.I.) de Nemours & Co., 5.000%, 01/15/2013 | 43,424 |
100,000 | Praxair, Inc., 4.625%, 03/30/2015 | 109,013 |
35,000 | Rohm & Haas Co., 6.000%, 09/15/2017 | 37,064 |
TOTAL | 302,354 |
Basic Industry - Metals & Mining – 0.4% |
80,000 | Alcan, Inc., 5.000%, 06/01/2015 | 85,632 |
70,000 | Alcoa, Inc., Note, 5.550%, 02/01/2017 | 68,340 |
90,000 | Allegheny Technologies, Inc., Sr. Note, 9.375%, 06/01/2019 | 105,569 |
10,000 | BHP Finance (USA), Inc., 6.500%, 04/01/2019 | 11,673 |
Shares or Principal Amount | Value in U.S. Dollars |
$200,000 | Barrick Gold Corp., 6.950%, 04/01/2019 | 232,510 |
120,000 | Newmont Mining Corp., Company Guarantee, 5.875%, 04/01/2035 | 116,182 |
120,000 | Rio Tinto Finance USA Ltd., 5.875%, 07/15/2013 | 130,973 |
100,000 | 2,3 | Xstrata Finance Canada Ltd., Unsecd. Note, 5.500%, 11/16/2011 | 104,706 |
TOTAL | 855,585 |
Basic Industry - Paper – 0.1% |
30,000 | International Paper Co., Sr. Unsecd. Note, 7.500%, 08/15/2021 | 34,287 |
20,000 | Louisiana-Pacific Corp., 8.875%, 08/15/2010 | 20,475 |
150,000 | Pope & Talbot, Inc., 8.375%, 6/1/2013 | 15 |
100,000 | Weyerhaeuser Co., Deb., 7.375%, 03/15/2032 | 97,678 |
TOTAL | 152,455 |
Capital Goods - Aerospace & Defense – 0.1% |
50,000 | 2,3 | BAE Systems Holdings, Inc., 5.200%, 08/15/2015 | 54,266 |
100,000 | Boeing Co., 4.875%, 02/15/2020 | 107,350 |
25,000 | Lockheed Martin Corp., Sr. Note, 4.121%, 03/14/2013 | 26,647 |
TOTAL | 188,263 |
Capital Goods - Building Materials – 0.0% |
50,000 | RPM International, Inc., 6.500%, 02/15/2018 | 54,242 |
40,000 | RPM International, Inc., Sr. Unsecd. Note, 6.125%, 10/15/2019 | 42,790 |
TOTAL | 97,032 |
Capital Goods - Diversified Manufacturing – 0.1% |
20,000 | Dover Corp., Note, 5.450%, 03/15/2018 | 22,113 |
70,000 | Emerson Electric Co., 4.875%, 10/15/2019 | 75,860 |
68,000 | 2,3 | Hutchison Whampoa International Ltd., 6.500%, 02/13/2013 | 74,124 |
100,000 | Roper Industries, Inc., Sr. Unsecd. Note, 6.250%, 09/01/2019 | 108,039 |
90,000 | 2,3 | Textron Financial Corp., Jr. Sub. Note, 6.000%, 02/15/2067 | 66,150 |
TOTAL | 346,286 |
Capital Goods - Environmental – 0.1% |
110,000 | 2,3 | Republic Services, Inc., Sr. Unsecd. Note, Series 144A, 5.500%, 09/15/2019 | 116,543 |
25,000 | Waste Management, Inc., 7.375%, 03/11/2019 | 29,839 |
TOTAL | 146,382 |
Capital Goods - Packaging – 0.0% |
40,000 | Pactiv Corp., 6.400%, 01/15/2018 | 41,311 |
Communications - Media & Cable – 0.2% |
27,000 | Comcast Cable Communications Holdings, Company Guarantee, 8.375%, 03/15/2013 | 31,373 |
Shares or Principal Amount | Value in U.S. Dollars |
$100,000 | Comcast Corp., 7.050%, 03/15/2033 | 111,891 |
100,000 | Comcast Corp., Company Guarantee, 6.500%, 01/15/2017 | 112,381 |
120,000 | Time Warner Cable, Inc., Company Guarantee, 6.750%, 06/15/2039 | 128,828 |
20,000 | Time Warner Cable, Inc., Company Guarantee, 8.250%, 04/01/2019 | 24,335 |
50,000 | Time Warner Cable, Inc., Company Guarantee, 8.750%, 02/14/2019 | 62,245 |
50,000 | Time Warner Cable, Inc., Sr. Unsecd. Note, 5.850%, 05/01/2017 | 54,502 |
TOTAL | 525,555 |
Communications - Media Noncable – 0.1% |
120,000 | News America Holdings, Inc., Sr. Deb., 9.250%, 02/01/2013 | 141,076 |
90,000 | News America, Inc., 5.650%, 08/15/2020 | 97,578 |
TOTAL | 238,654 |
Communications - Telecom Wireless – 0.2% |
130,000 | AT&T Wireless Services, Inc., 8.750%, 03/01/2031 | 173,277 |
90,000 | America Movil S.A.B. de C.V., Note, 5.750%, 01/15/2015 | 99,136 |
20,000 | Vodafone Group PLC, 5.350%, 02/27/2012 | 21,087 |
90,000 | Vodafone Group PLC, Note, 5.625%, 02/27/2017 | 97,562 |
TOTAL | 391,062 |
Communications - Telecom Wirelines – 0.2% |
15,000 | CenturyTel, Inc., Sr. Note, 6.150%, 09/15/2019 | 14,608 |
150,000 | Deutsche Telekom International Finance BV, 4.875%, 07/08/2014 | 160,371 |
45,000 | France Telecom SA, Sr. Unsecd. Note, 5.375%, 07/08/2019 | 48,254 |
100,000 | Telefonica SA, Sr. Note, 5.855%, 02/04/2013 | 107,286 |
40,000 | Verizon Communications, Inc., 6.100%, 04/15/2018 | 44,550 |
50,000 | Verizon Communications, Inc., Sr. Unsecd. Note, 6.350%, 04/01/2019 | 56,986 |
TOTAL | 432,055 |
Consumer Cyclical - Automotive – 0.0% |
70,000 | DaimlerChrysler North America Holding Corp., 6.500%, 11/15/2013 | 77,496 |
Consumer Cyclical - Entertainment – 0.2% |
80,000 | International Speedway Corp., 5.400%, 04/15/2014 | 86,350 |
280,000 | Time Warner, Inc., Company Guarantee, 6.875%, 05/01/2012 | 305,346 |
TOTAL | 391,696 |
Consumer Cyclical - Lodging – 0.0% |
50,000 | Wyndham Worldwide Corp., Sr. Unsecd. Note, 6.000%, 12/01/2016 | 48,595 |
Consumer Cyclical - Retailers – 0.2% |
179,755 | 2,3 | CVS Caremark Corp., Pass Thru Cert., 5.298%, 01/11/2027 | 176,061 |
60,000 | Costco Wholesale Corp., 5.300%, 03/15/2012 | 64,361 |
20,000 | JC Penney Corp., Inc., Sr. Unsecd. Note, 5.750%, 02/15/2018 | 20,150 |
Shares or Principal Amount | Value in U.S. Dollars |
$70,000 | Target Corp., Note, 5.875%, 07/15/2016 | 81,054 |
40,000 | Wal-Mart Stores, Inc., 6.200%, 04/15/2038 | 44,682 |
TOTAL | 386,308 |
Consumer Non-Cyclical - Food/Beverage – 0.3% |
90,000 | 2,3 | Bacardi Ltd., Sr. Note, 7.450%, 04/01/2014 | 103,942 |
70,000 | Bottling Group LLC, Note, 5.500%, 04/01/2016 | 79,090 |
30,000 | Coca-Cola Enterprises, Inc., 4.250%, 03/01/2015 | 32,136 |
80,000 | Diageo Capital PLC, Company Guarantee, 7.375%, 01/15/2014 | 93,454 |
60,000 | General Mills, Inc., Note, 5.700%, 02/15/2017 | 67,901 |
125,000 | Kraft Foods, Inc., Note, 5.250%, 10/01/2013 | 137,406 |
100,000 | Kraft Foods, Inc., Sr. Unsecd. Note, 6.125%, 02/01/2018 | 110,562 |
50,000 | PepsiCo, Inc., 4.650%, 02/15/2013 | 54,048 |
30,000 | Ralcorp Holdings, Inc., Company Guarantee, 6.625%, 08/15/2039 | 31,107 |
15,000 | Sysco Corp., Sr. Note, 5.375%, 03/17/2019 | 16,562 |
TOTAL | 726,208 |
Consumer Non-Cyclical - Health Care – 0.1% |
50,000 | Boston Scientific Corp., 4.500%, 01/15/2015 | 48,686 |
50,000 | Boston Scientific Corp., 6.000%, 01/15/2020 | 48,487 |
20,000 | Express Scripts, Inc., Sr. Unsecd. Note, 7.25%, 6/15/2019 | 23,957 |
75,000 | Quest Diagnostics, Inc., Sr. Unsecd. Note, 6.400%, 07/01/2017 | 85,444 |
TOTAL | 206,574 |
Consumer Non-Cyclical - Pharmaceuticals – 0.1% |
40,000 | Abbott Laboratories, 5.150%, 11/30/2012 | 43,708 |
100,000 | Genentech, Inc., Note, 4.750%, 07/15/2015 | 109,107 |
80,000 | Pfizer, Inc., Sr. Unsecd. Note, 6.200%, 03/15/2019 | 92,661 |
TOTAL | 245,476 |
Consumer Non-Cyclical - Products – 0.0% |
45,000 | Philips Electronics NV, 5.750%, 03/11/2018 | 50,168 |
Consumer Non-Cyclical - Supermarkets – 0.0% |
25,000 | Kroger Co., Bond, 6.900%, 04/15/2038 | 29,421 |
Consumer Non-Cyclical - Tobacco – 0.0% |
70,000 | Altria Group, Inc., 9.250%, 08/06/2019 | 83,294 |
Energy - Independent – 0.1% |
120,000 | Canadian Natural Resources Ltd., 4.900%, 12/01/2014 | 129,416 |
30,000 | EOG Resources, Inc., Note, 5.625%, 06/01/2019 | 33,288 |
25,000 | Pemex Project Funding Master, 5.750%, 12/15/2015 | 26,234 |
80,000 | 2,3 | Petroleos Mexicanos, Series 144A, 4.875%, 3/15/2015 | 82,026 |
Shares or Principal Amount | Value in U.S. Dollars |
$20,000 | XTO Energy, Inc., 6.750%, 08/01/2037 | 24,033 |
25,000 | XTO Energy, Inc., Sr. Unsecd. Note, 6.250%, 08/01/2017 | 28,955 |
TOTAL | 323,952 |
Energy - Integrated – 0.1% |
60,000 | Conoco, Inc., Sr. Note, 6.950%, 04/15/2029 | 71,486 |
100,000 | ConocoPhillips Australia Funding Co., 5.500%, 04/15/2013 | 109,856 |
35,000 | Petro-Canada, Deb., 7.000%, 11/15/2028 | 38,568 |
33,340 | 2,3 | Qatar Petroleum, 5.579%, 05/30/2011 | 34,147 |
100,000 | 2,3 | Statoil ASA, 5.125%, 04/30/2014 | 110,323 |
TOTAL | 364,380 |
Energy - Oil Field Services – 0.0% |
50,000 | Noble Drilling Corp., Sr. Note, 7.5%, 3/15/2019 | 58,179 |
25,000 | Weatherford International Ltd., 6.000%, 03/15/2018 | 26,004 |
20,000 | Weatherford International Ltd., 7.000%, 03/15/2038 | 19,305 |
TOTAL | 103,488 |
Energy - Refining – 0.1% |
110,000 | Premcor Refining Group, Inc., 6.125%, 05/01/2011 | 114,705 |
25,000 | Valero Energy Corp., 9.375%, 03/15/2019 | 29,735 |
TOTAL | 144,440 |
Financial Institution - Banking – 1.0% |
50,000 | Bank of America Corp., Sr. Note, 5.375%, 06/15/2014 | 51,444 |
120,000 | Bank of America Corp., Sr. Note, 7.375%, 5/15/2014 | 132,932 |
100,000 | 2,3 | Barclays Bank PLC, 5.926%, 12/31/2049 | 77,625 |
70,000 | Capital One Financial Corp., Sr. Note, 7.375%, 05/23/2014 | 79,712 |
80,000 | Citigroup, Inc., Note, 5.125%, 05/05/2014 | 81,285 |
60,000 | 2,3 | Commonwealth Bank of Australia, Sr. Unsecd. Note, Series 144A, 3.750%, 10/15/2014 | 61,169 |
200,000 | First Union Institutional, Bond, 8.04%, 12/1/2026 | 201,000 |
50,000 | Goldman Sachs Group, Inc., 6.125%, 02/15/2033 | 46,827 |
150,000 | Goldman Sachs Group, Inc., Sr. Note, 6.150%, 04/01/2018 | 154,104 |
320,000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 5.125%, 01/15/2015 | 330,008 |
100,000 | HSBC Finance Capital Trust IX, Note, 5.911%, 11/30/2035 | 84,750 |
100,000 | HSBC Finance Corp., 5.000%, 06/30/2015 | 103,516 |
75,000 | Household Finance Corp., Unsecd. Note, 4.75%, 7/15/2013 | 78,442 |
90,000 | M & T Bank Corp., 5.375%, 05/24/2012 | 95,904 |
30,000 | Merrill Lynch & Co., Inc., Sr. Unsecd. Note, 6.050%, 08/15/2012 | 31,705 |
100,000 | Morgan Stanley Group, Inc., 5.300%, 03/01/2013 | 102,838 |
Shares or Principal Amount | Value in U.S. Dollars |
$100,000 | Morgan Stanley, Sr. Unsecd. Note, 6.625%, 04/01/2018 | 103,033 |
30,000 | Northern Trust Corp., 4.625%, 05/01/2014 | 32,356 |
15,000 | PNC Funding Corp., Sub. Note, 5.625%, 02/01/2017 | 15,783 |
470,547 | 2,3 | Regional Diversified Funding, 9.250%, 03/15/2030 | 275,726 |
20,000 | State Street Corp., Sr. Note, 4.300%, 05/30/2014 | 21,153 |
100,000 | U.S. Bank, N.A., 6.300%, 02/04/2014 | 112,037 |
140,000 | Wachovia Corp., 5.750%, 02/01/2018 | 149,895 |
40,000 | Wilmington Trust Corp., Sub. Note, 8.500%, 04/02/2018 | 41,122 |
TOTAL | 2,464,366 |
Financial Institution - Brokerage – 0.3% |
220,000 | Blackrock, Inc., 6.250%, 09/15/2017 | 249,324 |
50,000 | Charles Schwab Corp., Sr. Unsecd. Note, 4.950%, 06/01/2014 | 53,947 |
40,000 | Eaton Vance Corp., 6.500%, 10/02/2017 | 43,922 |
100,000 | 2,3 | FMR LLC, 4.75%, 3/01/2013 | 104,752 |
25,000 | Janus Capital Group, Inc., Sr. Note, 6.500%, 06/15/2012 | 25,799 |
30,000 | Janus Capital Group, Inc., Sr. Note, 6.950%, 06/15/2017 | 30,710 |
95,000 | Jefferies Group, Inc., Sr. Unsecd. Note, 8.500%, 07/15/2019 | 106,805 |
60,000 | Lehman Brothers Holdings, Note, 4.80%, 3/13/2014 | 12,750 |
30,000 | Nuveen Investments, 5.00%, 9/15/2010 | 30,000 |
30,000 | Nuveen Investments, 5.500%, 09/15/2015 | 22,950 |
75,000 | Raymond James Financial, Inc., 8.600%, 08/15/2019 | 86,162 |
TOTAL | 767,121 |
Financial Institution - Finance Noncaptive – 0.5% |
160,000 | American Express Co., Sr. Unsecd. Note, 8.125%, 05/20/2019 | 194,976 |
60,000 | American Express Credit Corp., Sr. Unsecd. Note, 5.125%, 08/25/2014 | 64,171 |
100,000 | American International Group, Inc., Sr. Note, 4.700%, 10/01/2010 | 99,775 |
120,000 | Berkshire Hathaway, Inc., Company Guarantee, 5.000%, 08/15/2013 | 130,543 |
120,000 | Capital One Capital IV, 6.745%, 02/17/2037 | 100,200 |
20,000 | Capital One Capital V, 10.250%, 08/15/2039 | 21,625 |
510,000 | General Electric Capital Corp., 5.625%, 05/01/2018 | 531,881 |
30,000 | General Electric Capital Corp., Note, Series MTN, 6.750%, 03/15/2032 | 31,135 |
80,000 | International Lease Finance Corp., 4.875%, 09/01/2010 | 79,800 |
30,000 | 2,3 | Macquarie Group Ltd., Note, Series 144A, 7.625%, 8/13/2019 | 33,404 |
TOTAL | 1,287,510 |
Financial Institution - Insurance - Health – 0.1% |
50,000 | CIGNA Corp., 6.350%, 03/15/2018 | 55,106 |
50,000 | UnitedHealth Group, Inc., Bond, 6.000%, 02/15/2018 | 54,958 |
Shares or Principal Amount | Value in U.S. Dollars |
$50,000 | Wellpoint, Inc., 5.850%, 01/15/2036 | 48,538 |
TOTAL | 158,602 |
Financial Institution - Insurance - Life – 0.7% |
100,000 | AXA-UAP, Sub. Note, 8.600%, 12/15/2030 | 115,204 |
100,000 | 2,3 | Massachusetts Mutual Life Insurance Co., Sub. Note, 8.875%, 06/01/2039 | 131,711 |
90,000 | MetLife, Inc., 6.750%, 06/01/2016 | 100,919 |
10,000 | MetLife, Inc., Jr. Sub. Note, 10.750%, 08/01/2069 | 11,911 |
80,000 | 2,3 | New York Life Insurance Co., Sub. Note, 6.750%, 11/15/2039 | 89,531 |
300,000 | 2,3 | Pacific LifeCorp., Bond, 6.600%, 09/15/2033 | 285,609 |
50,000 | Prudential Financial, Inc., 5.150%, 01/15/2013 | 52,968 |
40,000 | Prudential Financial, Inc., 6.625%, 12/01/2037 | 42,344 |
10,000 | Prudential Financial, Inc., Sr. Note, 7.375%, 06/15/2019 | 11,435 |
100,000 | Prudential Financial, Inc., Sr. Unsecd. Note, 4.750%, 09/17/2015 | 103,422 |
750,000 | 2 | Union Central Life Ins Co., Note, 8.20%, 11/1/2026 | 707,218 |
TOTAL | 1,652,272 |
Financial Institution - Insurance - P&C – 0.2% |
80,000 | ACE INA Holdings, Inc., Sr. Note, 5.700%, 02/15/2017 | 86,873 |
80,000 | CNA Financial Corp., 6.500%, 08/15/2016 | 82,764 |
15,000 | Chubb Corp., Sr. Note, 5.750%, 05/15/2018 | 16,489 |
50,000 | Horace Mann Educators Corp., Sr. Note, 6.850%, 04/15/2016 | 51,029 |
100,000 | 2,3 | Liberty Mutual Group, Inc., Unsecd. Note, 5.750%, 03/15/2014 | 103,270 |
30,000 | 2,3 | Nationwide Mutual Insurance Co., Note, Series 144A, 9.375%, 08/15/2039 | 34,342 |
10,000 | The Travelers Cos., Inc., Sr. Unsecd. Note, 5.500%, 12/01/2015 | 11,136 |
TOTAL | 385,903 |
Financial Institution - REITs – 0.2% |
45,000 | Avalonbay Communities, Inc., Sr. Unsecd. Note, Series MTN, 5.700%, 03/15/2017 | 48,248 |
75,000 | Boston Properties LP, Sr. Unsecd. Note, 5.875%, 10/15/2019 | 78,825 |
40,000 | Equity One, Inc., Bond, 6.000%, 09/15/2017 | 40,032 |
40,000 | Liberty Property LP, 6.625%, 10/01/2017 | 42,239 |
120,000 | Prologis, Sr. Note, 5.500%, 04/01/2012 | 125,493 |
20,000 | Prologis, Sr. Note, 7.625%, 8/15/2014 | 21,364 |
40,000 | Simon Property Group LP, 6.750%, 05/15/2014 | 44,391 |
50,000 | Simon Property Group, Inc., 6.350%, 08/28/2012 | 54,264 |
TOTAL | 454,856 |
Shares or Principal Amount | Value in U.S. Dollars |
Foreign-Local-Government – 0.0% |
$50,000 | Quebec, Province of, Note, Series MTNA, 7.035%, 3/10/2026 | 63,690 |
Municipal Services – 0.1% |
140,000 | 2,3 | Army Hawaii Family Housing, 5.524%, 6/15/2050 | 122,112 |
100,000 | 2,3 | Camp Pendleton & Quantico Housing LLC, 5.572%, 10/01/2050 | 86,682 |
TOTAL | 208,794 |
Technology – 0.3% |
20,000 | Cisco Systems, Inc., Sr. Unsecd. Note, 5.500%, 02/22/2016 | 22,688 |
40,000 | Dell Computer Corp., Deb., 7.100%, 04/15/2028 | 46,838 |
60,000 | Dun & Bradstreet Corp., Sr. Unsecd. Note, 5.500%, 03/15/2011 | 61,990 |
105,000 | Fiserv, Inc., Sr. Note, 6.800%, 11/20/2017 | 118,000 |
50,000 | Harris Corp., 5.950%, 12/01/2017 | 55,364 |
60,000 | Hewlett-Packard Co., Note, 5.400%, 03/01/2017 | 66,874 |
200,000 | IBM Corp., Sr. Note, 5.700%, 09/14/2017 | 227,869 |
100,000 | Oracle Corp., Sr. Unsecd. Note, Series WI, 5.000%, 01/15/2011 | 102,703 |
TOTAL | 702,326 |
Transportation - Railroads – 0.1% |
100,000 | Burlington Northern Santa Fe Corp., 4.875%, 01/15/2015 | 108,378 |
50,000 | Union Pacific Corp., 4.875%, 01/15/2015 | 53,410 |
45,000 | Union Pacific Corp., Bond, 6.625%, 2/01/2029 | 49,605 |
TOTAL | 211,393 |
Transportation - Services – 0.0% |
75,000 | 2,3 | Enterprise Rent-A-Car USA Finance Co., 6.375%, 10/15/2017 | 83,621 |
Utility - Electric – 0.5% |
60,000 | Appalachian Power Co., Sr. Unsecd. Note, 7.950%, 01/15/2020 | 74,069 |
50,000 | Cleveland Electric Illuminating Co., Sr. Unsecd. Note, 5.950%, 12/15/2036 | 48,717 |
50,000 | Commonwealth Edison Co., 1st Mtg. Bond, 5.800%, 03/15/2018 | 55,177 |
40,000 | Consolidated Edison Co., Sr. Unsecd. Note, 5.500%, 09/15/2016 | 44,054 |
10,000 | Consolidated Edison Co., Sr. Unsecd. Note, 6.650%, 04/01/2019 | 11,855 |
60,000 | 2,3 | Electricite De France SA, 5.50%, 1/26/2014 | 66,746 |
90,000 | FirstEnergy Solutions Co, Company Guarantee, 4.800%, 2/15/2015 | 92,970 |
50,000 | FirstEnergy Solutions Co, Company Guarantee, 6.05%, 8/15/2021 | 49,682 |
83,270 | 2,3 | Great River Energy, 1st Mtg. Note, 5.829%, 07/01/2017 | 91,878 |
120,000 | MidAmerican Energy Co., 4.650%, 10/01/2014 | 128,891 |
100,000 | National Rural Utilities Cooperative Finance Corp., Sr. Unsecd. Note, 10.375%, 11/01/2018 | 136,847 |
30,000 | Northern States Power Co., MN, 1st Mtg. Bond, 5.250%, 03/01/2018 | 32,633 |
Shares or Principal Amount | Value in U.S. Dollars |
$60,000 | PPL Energy Supply LLC, Sr. Unsecd. Note, 6.000%, 12/15/2036 | 62,989 |
40,000 | Progress Energy, Inc., 7.050%, 03/15/2019 | 46,324 |
100,000 | Union Electric Co., 6.000%, 04/01/2018 | 108,267 |
120,000 | Virginia Electric & Power Co., Sr. Unsecd. Note, 5.000%, 06/30/2019 | 128,001 |
80,000 | Virginia Electric & Power Co., Sr. Unsecd. Note, 5.100%, 11/30/2012 | 86,760 |
TOTAL | 1,265,860 |
Utility - Natural Gas Distributor – 0.1% |
120,000 | Atmos Energy Corp., 5.125%, 01/15/2013 | 128,322 |
15,000 | Atmos Energy Corp., 8.500%, 03/15/2019 | 18,728 |
60,000 | Sempra Energy, Sr. Unsecd. Note, 6.500%, 06/01/2016 | 68,864 |
TOTAL | 215,914 |
Utility - Natural Gas Pipelines – 0.2% |
100,000 | Duke Capital Corp., Sr. Note, 6.250%, 02/15/2013 | 109,107 |
70,000 | Enbridge, Inc., Sr. Note, 5.600%, 04/01/2017 | 76,521 |
110,000 | Enterprise Products Operating LLC, Company Guarantee, 9.750%, 01/31/2014 | 132,848 |
100,000 | Kinder Morgan Energy Partners LP, Sr. Unsecd. Note, 5.800%, 03/15/2035 | 91,117 |
TOTAL | 409,593 |
TOTAL CORPORATE BONDS (IDENTIFIED COST $16,721,354) | 17,230,311 |
Governments/Agencies – 0.0% |
Sovereign – 0.0% |
75,000 | United Mexican States, 6.625%, 03/03/2015 | 85,125 |
30,000 | United Mexican States, Series MTNA, 6.750%, 09/27/2034 | 33,241 |
TOTAL GOVERNMENTS/AGENCIES (IDENTIFIED COST $106,616) | 118,366 |
Mortgage-Backed Securities – 0.4% |
8,347 | Federal Home Loan Mortgage Corp. Pool C00592, 7.000%, 3/1/2028 | 9,234 |
6,508 | Federal Home Loan Mortgage Corp. Pool C00896, 7.500%, 12/1/2029 | 7,155 |
17,505 | Federal Home Loan Mortgage Corp. Pool C17281, 6.500%, 11/1/2028 | 19,366 |
15,685 | Federal Home Loan Mortgage Corp. Pool C19588, 6.500%, 12/1/2028 | 17,369 |
5,045 | Federal Home Loan Mortgage Corp. Pool C25621, 6.500%, 5/1/2029 | 5,578 |
20,858 | Federal Home Loan Mortgage Corp. Pool C76361, 6.000%, 2/1/2033 | 22,795 |
59,645 | Federal Home Loan Mortgage Corp. Pool E01545, 5.000%, 15 Year, 1/1/2019 | 63,891 |
3,275 | Federal Home Loan Mortgage Corp. Pool E20252, 7.000%, 15 Year, 7/1/2011 | 3,357 |
Shares or Principal Amount | Value in U.S. Dollars |
$1,158 | Federal Home Loan Mortgage Corp. Pool E77591, 6.500%, 7/1/2014 | 1,234 |
13,525 | Federal Home Loan Mortgage Corp. Pool E99510, 5.500%, 9/1/2018 | 14,610 |
17,915 | Federal Home Loan Mortgage Corp. Pool G01444, 6.500%, 8/1/2032 | 19,835 |
11,652 | Federal National Mortgage Association Pool 251697, 6.500%, 30 Year, 5/1/2028 | 12,874 |
29,681 | Federal National Mortgage Association Pool 252334, 6.500%, 30 Year, 2/1/2029 | 32,101 |
65,968 | Federal National Mortgage Association Pool 254720, 4.500%, 5/1/2018 | 69,834 |
65,897 | Federal National Mortgage Association Pool 254802, 4.500%, 7/1/2018 | 69,748 |
31,093 | Federal National Mortgage Association Pool 254905, 6.000%, 10/1/2033 | 33,941 |
63,340 | Federal National Mortgage Association Pool 255075, 5.500%, 2/1/2024 | 68,007 |
71,811 | Federal National Mortgage Association Pool 255079, 5.000%, 2/1/2019 | 76,819 |
2,948 | Federal National Mortgage Association Pool 303168, 9.500%, 30 Year, 2/1/2025 | 3,459 |
1,671 | Federal National Mortgage Association Pool 323159, 7.500%, 4/1/2028 | 1,834 |
13,438 | Federal National Mortgage Association Pool 323640, 7.500%, 4/1/2029 | 14,748 |
532 | Federal National Mortgage Association Pool 323970, 7.000%, 15 Year, 10/1/2014 | 566 |
26,108 | Federal National Mortgage Association Pool 428865, 7.000%, 6/1/2028 | 28,860 |
2,643 | Federal National Mortgage Association Pool 443215, 6.000%, 10/1/2028 | 2,882 |
1,514 | Federal National Mortgage Association Pool 511365, 7.000%, 8/1/2029 | 1,686 |
279 | Federal National Mortgage Association Pool 514184, 7.500%, 9/1/2029 | 307 |
58,337 | Federal National Mortgage Association Pool 545993, 6.000%, 11/1/2032 | 63,737 |
23,611 | Federal National Mortgage Association Pool 555272, 6.000%, 3/1/2033 | 25,804 |
53,380 | Federal National Mortgage Association Pool 713974, 5.500%, 7/1/2033 | 57,016 |
73,699 | Federal National Mortgage Association Pool 721502, 5.000%, 7/1/2033 | 77,508 |
1,431 | Government National Mortgage Association Pool 352214, 7.000%, 4/15/2023 | 1,577 |
5,685 | Government National Mortgage Association Pool 451522, 7.500%, 30 Year, 10/15/2027 | 6,225 |
12,909 | Government National Mortgage Association Pool 462556, 6.500%, 2/15/2028 | 14,299 |
480 | Government National Mortgage Association Pool 462739, 7.500%, 5/15/2028 | 526 |
678 | Government National Mortgage Association Pool 464835, 6.500%, 9/15/2028 | 751 |
10,632 | Government National Mortgage Association Pool 469699, 7.000%, 11/15/2028 | 11,798 |
Shares or Principal Amount | Value in U.S. Dollars |
$11,651 | Government National Mortgage Association Pool 486760, 6.500%, 12/15/2028 | 12,910 |
2,159 | Government National Mortgage Association Pool 780339, 8.000%, 30 Year, 12/15/2023 | 2,366 |
14,663 | Government National Mortgage Association Pool 780453, 7.500%, 30 Year, 12/15/2025 | 16,043 |
13,041 | Government National Mortgage Association Pool 780584, 7.000%, 30 Year, 6/15/2027 | 14,468 |
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $850,089) | 907,118 |
MUNICIPAL – 0.0% |
Illinois – 0.0% |
90,000 | Chicago, IL Metropolitan Water Reclamation District, Direct Payment Taxable Limited GO Build America Bonds, 5.720%, 12/01/2038 (IDENTIFIED COST $90,000) | 99,574 |
U.S. Treasury – 2.3% |
1,700,000 | 4,5 | United States Treasury Bill, 0.15%, 7/22/2010 | 1,699,642 |
2,950,000 | 4,5 | United States Treasury Bill, 0.095%, 8/5/2010 | 2,949,228 |
800,000 | 4 | United States Treasury Bond, 3.500%, 2/15/2039 | 703,875 |
100,000 | 4 | United States Treasury Note, 3.125%, 8/31/2013 | 105,453 |
TOTAL U.S. TREASURY (IDENTIFIED COST $5,475,796) | 5,458,198 |
EXCHANGE-TRADED FUNDS – 17.4% |
266,862 | iShares MSCI Emerging Market Index Fund | 10,167,442 |
13,259 | iShares MSCI Brazil Index Fund | 842,079 |
468,939 | iShares Russell 2000 Index Fund | 31,067,209 |
TOTAL EXCHANGE-TRADED FUNDS (IDENTIFIED COST $34,802,119) | 42,076,730 |
MUTUAL FUNDS – 39.6%;6 |
226,190 | Emerging Markets Fixed Income Core Fund | 5,510,014 |
290,142 | Federated InterContinental Fund, Institutional Shares | 11,272,026 |
562,861 | Federated Mid Cap Growth Strategies Fund, Institutional Shares | 16,548,110 |
902,351 | Federated Mortgage Core Portfolio | 9,167,888 |
100,296 | Federated Project and Trade Finance Core Fund | 995,939 |
2,441,879 | High Yield Bond Portfolio | 15,237,326 |
Shares or Principal Amount | Value in U.S. Dollars |
37,402,483 | 7 | Prime Value Obligations Fund, Institutional Shares, 0.24% | 37,402,483 |
TOTAL MUTUAL FUNDS (IDENTIFIED COST $95,438,039) | 96,133,786 |
TOTAL INVESTMENTS — 100.6% (IDENTIFIED COST $232,802,262)8 | 243,905,897 |
OTHER ASSETS AND LIABILITIES - NET — (0.6)%9 | (1,393,814) |
TOTAL NET ASSETS — 100% | $242,512,083 |
At May 31, 2010, the Fund had the following outstanding futures contracts:
Description | Number of Contracts | Notional Value | Expiration Date | Unrealized Appreciation/ (Depreciation) |
1CAC 40 Index Short Futures | 142 | $4,967,870 | June 2010 | $91,333 |
1IBEX 35 Index Short Futures | 12 | $1,123,980 | June 2010 | $(589) |
1OMX 30 Index Short Futures | 104 | $10,186,800 | June 2010 | $25,035 |
1Hang Seng Index Short Futures | 5 | $4,929,000 | June 2010 | $(15,917) |
1Topix Index Short Futures | 6 | $52,980,000 | June 2010 | $40,517 |
1United States Treasury Bonds 30-Year Short Futures | 6 | $735,938 | September 2010 | $11,331 |
1United States Treasury Notes 2-Year Short Futures | 30 | $6,544,219 | September 2010 | $(7,565) |
1United States Treasury Notes 5-Year Short Futures | 50 | $5,833,594 | September 2010 | $17,080 |
1United States Treasury Notes 10-Year Short Futures | 10 | $1,198,750 | September 2010 | $2,478 |
1AEX Index Long Futures | 73 | $4,688,060 | June 2010 | $(139,361) |
1DAX Index Long Futures | 14 | $2,079,875 | June 2010 | $(7,375) |
1KOSPI 200 Index Long Futures | 9 | $951,300,000 | June 2010 | $(64,476) |
1SGX MSCI Singapore Index Long Futures | 9 | $586,800 | June 2010 | $7,651 |
1S&P 500 Index Long Futures | 153 | $41,635,125 | June 2010 | $(1,936,400) |
1FTSE 100 Index Long Futures | 19 | $985,530 | June 2010 | $(102,956) |
1Swiss Market Index Long Futures | 34 | $2,149,480 | June 2010 | $(84,850) |
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | $(2,164,064) |
Credit Default Swap Counterparty | Goldman Sachs & Co. |
Reference Entity | Series 13 Investment Grade Index |
Buy/Sell | Sell |
Pay/Receive Fixed Rate | 1.00% |
Expiration Date | 12/20/2014 |
Implied Credit Spread at 5/31/201010 | 1.24% |
Notional Amount | $15,000,000 |
Market Value | $(60,433) |
Upfront Premiums Paid/(Received) | $94,117 |
Unrealized Depreciation | $(154,550) |
At May 31, 2010, the Fund had the following outstanding foreign exchange contracts:
Settlement Date | Foreign Currency Units to Deliver/Receive | In Exchange For | Unrealized Appreciation/ (Depreciation) |
Contracts Purchased: | |||
7/6/2010 | 6,000,000 Euro | $7,626,120 | $(260,395) |
7/6/2010 | 4,179,874 Euro | $5,414,693 | $(283,392) |
7/6/2010 | 4,179,874 Euro | $5,373,730 | $(242,430) |
7/6/2010 | 9,820,000 Euro | $12,049,140 | $6,096 |
Contracts Sold: | |||
7/6/2010 | 4,426,410 Euro | $5,989,597 | $555,644 |
7/6/2010 | 2,213,205 Euro | $3,000,376 | $283,399 |
7/6/2010 | 2,220,134 Euro | $3,000,000 | $274,518 |
7/6/2010 | 5,500,000 Euro | $6,989,290 | $237,376 |
7/6/2010 | 4,720,000 Euro | $5,996,146 | $201,776 |
7/6/2010 | 5,100,000 Euro | $6,351,336 | $90,470 |
9/15/2010 | 9,820,000 Euro | $12,057,585 | $(7,060) |
NET UNREALIZED APPRECIATION ON FOREIGN EXCHANGE CONTRACTS | $856,002 |
Net Unrealized Appreciation/Depreciation on Futures Contracts, Swap Contract and Foreign Exchange Contracts is included in “Other Assets and Liabilities — Net.”
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 May 31, 2010, these restricted securities amounted to $3,289,124, which represented 1.4% 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 May 31, 2010, these liquid restricted securities amounted to $2,581,906, which represented 1.1% 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 companies. |
7 | 7-Day net yield. |
8 | The cost of investments for federal tax purposes amounts to $232,803,695. |
9 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
10 | Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced entity or obligation. |
Note: The categories of investments are shown as a percentage of total net assets at May 31, 2010.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1 — quoted prices in active markets for identical securities
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
Semi-Annual Shareholder ReportValuation Inputs |
Level 1 - Quoted Prices and Investments in Mutual Funds* | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total |
Equity Securities: |
Common Stock |
Domestic | $76,726,372 | $ — | $ — | $76,726,372 |
International | 1,563,223 | — | — | 1,563,223 |
Debt Securities: |
Asset-Backed Securities | — | 2,384,856 | — | 2,384,856 |
Collateralized Mortgage Obligations | — | 1,207,363 | — | 1,207,363 |
Corporate Bonds | — | 17,230,311 | — | 17,230,311 |
Governments/Agencies | — | 118,366 | — | 118,366 |
Mortgage-Backed Securities | — | 907,118 | — | 907,118 |
Municipal | — | 99,574 | — | 99,574 |
U.S. Treasury | — | 5,458,198 | — | 5,458,198 |
Exchange-Traded Funds | 42,076,730 | — | — | 42,076,730 |
Mutual Funds | 96,133,786 | — | — | 96,133,786 |
TOTAL SECURITIES | $216,500,111 | $27,405,786 | $ — | $243,905,897 |
OTHER FINANCIAL INSTRUMENTS** | $(2,164,064) | $701,452 | $ — | $(1,462,612) |
* | Emerging Markets Fixed Income Core Fund (EMCORE) is an affiliated limited partnership offered only to registered investment companies and other accredited investors (see Note 5 to the Financial Statements). EMCORE invests primarily in emerging markets fixed-income securities. |
** | Other financial instruments include futures contracts, swap contract and foreign exchange contracts. |
The following acronyms are used throughout this portfolio:
MTN | — Medium Term Note |
REITs | — Real Estate Investment Trusts |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportStatement of Assets and Liabilities
May 31, 2010 (unaudited)
Assets: |
Total investments in securities, at value including $96,133,786 of investments in affiliated issuers (Note 5) (identified cost $232,802,262) | $243,905,897 |
Restricted cash (Note 2) | 115,698 |
Income receivable | 490,712 |
Receivable for investments sold | 121,942 |
Receivable for shares sold | 1,045,480 |
Receivable for foreign exchange contracts | 1,649,279 |
Receivable for periodic payments from swap contracts | 29,583 |
Other receivables | 6,213 |
TOTAL ASSETS | 247,364,804 |
Liabilities: |
Payable for investments purchased | $3,001,637 |
Payable for shares redeemed | 241,848 |
Payable for foreign exchange contracts | 793,277 |
Payable for daily variation margin | 524,562 |
Swaps, at value (premium paid $94,117) | 60,433 |
Payable for Directors'/Trustees' fees | 1,256 |
Payable for distribution services fee (Note 5) | 52,342 |
Payable for shareholder services fee (Note 5) | 46,579 |
Accrued expenses | 130,787 |
TOTAL LIABILITIES | 4,852,721 |
Net assets for 15,726,881 shares outstanding | $242,512,083 |
Net Assets Consist of: |
Paid-in capital | $263,075,281 |
Net unrealized appreciation of investments, futures contracts, swap contracts and translation of assets and liabilities in foreign currency | 9,620,993 |
Accumulated net realized loss on investments, futures contracts, swap contracts and foreign currency transactions | (31,101,962) |
Undistributed net investment income | 917,771 |
TOTAL NET ASSETS | $242,512,083 |
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
Class A Shares: |
Net asset value per share ($136,152,351 ÷ 8,811,966 shares outstanding), no par value, unlimited shares authorized | $15.45 |
Offering price per share (100/94.50 of $15.45) | $16.35 |
Redemption proceeds per share | $15.45 |
Class B Shares: |
Net asset value per share ($16,596,219 ÷ 1,081,314 shares outstanding), no par value, unlimited shares authorized | $15.35 |
Offering price per share | $15.35 |
Redemption proceeds per share (94.50/100 of $15.35) | $14.50 |
Class C Shares: |
Net asset value per share ($31,961,284 ÷ 2,090,352 shares outstanding), no par value, unlimited shares authorized | $15.29 |
Offering price per share | $15.29 |
Redemption proceeds per share (99.00/100 of $15.29) | $15.14 |
Class K Shares: |
Net asset value per share ($48,106,989 ÷ 3,116,659 shares outstanding), no par value, unlimited shares authorized | $15.44 |
Offering price per share | $15.44 |
Redemption proceeds per share | $15.44 |
Institutional Shares: |
Net asset value per share ($9,695,240 ÷ 626,590 shares outstanding), no par value, unlimited shares authorized | $15.47 |
Offering price per share | $15.47 |
Redemption proceeds per share | $15.47 |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportStatement of Operations
Six Months Ended May 31, 2010 (unaudited)
Investment Income: |
Dividends (including $849,198 received from affiliated issuers (Note 5) and net of foreign taxes withheld of $1,258) | $2,136,903 |
Interest | 739,684 |
Investment income allocated from affiliated partnership (Note 5) | 195,401 |
TOTAL INCOME | 3,071,988 |
Expenses: |
Investment adviser fee (Note 5) | $842,872 |
Administrative personnel and services fee (Note 5) | 154,576 |
Custodian fees | 26,085 |
Transfer and dividend disbursing agent fees and expenses — Class A Shares | 150,372 |
Transfer and dividend disbursing agent fees and expenses — Class B Shares | 24,709 |
Transfer and dividend disbursing agent fees and expenses — Class C Shares | 30,232 |
Transfer and dividend disbursing agent fees and expenses — Class K Shares | 90,280 |
Transfer and dividend disbursing agent fees and expenses — Institutional Shares | 2,684 |
Directors'/Trustees' fees | 4,290 |
Auditing fees | 13,089 |
Legal fees | 3,599 |
Portfolio accounting fees | 76,195 |
Distribution services fee — Class B Shares (Note 5) | 70,886 |
Distribution services fee — Class C Shares (Note 5) | 115,492 |
Distribution services fee — Class K Shares (Note 5) | 121,809 |
Shareholder services fee — Class A Shares (Note 5) | 178,145 |
Shareholder services fee — Class B Shares (Note 5) | 23,629 |
Shareholder services fee — Class C Shares (Note 5) | 38,440 |
Account administration fee — Class A Shares | 1,788 |
Share registration costs | 37,780 |
Printing and postage | 44,972 |
Insurance premiums | 2,332 |
Miscellaneous | 4,734 |
TOTAL EXPENSES | 2,058,990 |
Waivers, Reimbursements and Expense Reduction: |
Waiver/reimbursement of investment adviser fee (Note 5) | $(104,457) |
Waiver of administrative personnel and services fee (Note 5) | (31,173) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Class A Shares (Note 5) | (51,485) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Class B Shares (Note 5) | (7,329) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Class C Shares (Note 5) | (3,414) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Institutional Shares (Note 5) | (463) |
Fees paid indirectly from directed brokerage arrangements (Note 6) | (27,245) |
TOTAL WAIVERS, REIMBURSEMENTS AND EXPENSE REDUCTION | $(225,566) |
Net expenses | $1,833,424 |
Net investment income | 1,238,564 |
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Swap Contracts and Foreign Currency Transactions: |
Net realized gain on investments and foreign currency transactions (including realized gain of $49,074 on sales of investments in affiliated issuers) (Note 5) | 4,413,251 |
Net realized gain on futures contracts | 2,617,621 |
Net realized gain on swap contracts | 430,004 |
Net realized gain allocated from affiliated partnership (Note 5) | 10,823 |
Net change in unrealized appreciation of investments and translation of assets and liabilities in foreign currency | (8,635,309) |
Net change in unrealized appreciation of futures contracts | (2,750,043) |
Net change in unrealized appreciation of swap contracts | (402,404) |
Net realized and unrealized loss on investments, futures contracts, swap contracts and foreign currency transactions | (4,316,057) |
Change in net assets resulting from operations | $(3,077,493) |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportStatement of Changes in Net Assets
Six Months Ended (unaudited) 5/31/2010 | Year Ended 11/30/2009 |
Increase (Decrease) in Net Assets |
Operations: |
Net investment income | $1,238,564 | $3,626,329 |
Net realized gain on investments including allocation from affiliated partnership, futures contracts, swap contracts and foreign currency transactions | 7,471,699 | 548,019 |
Net change in unrealized appreciation/depreciation of investments, futures contracts, swap contracts and translation of assets and liabilities in foreign currency | (11,787,756) | 37,935,648 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | (3,077,493) | 42,109,996 |
Distributions to Shareholders: |
Distributions from net investment income |
Class A Shares | (158,051) | (2,629,338) |
Class B Shares | (21,313) | (267,729) |
Class C Shares | (30,767) | (285,201) |
Class K Shares | (50,986) | (384,837) |
Institutional Shares | (2,951) | (19,202) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (264,068) | (3,586,307) |
Share Transactions: |
Proceeds from sale of shares | 49,510,372 | 69,643,362 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | 5,272,582 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | 8,053,895 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | 6,951,526 |
Net asset value of shares issued to shareholders in payment of distributions declared | 249,751 | 3,363,174 |
Cost of shares redeemed | (52,062,109) | (70,213,064) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (2,301,986) | 23,071,475 |
Change in net assets | (5,643,547) | 61,595,164 |
Net Assets: |
Beginning of period | 248,155,630 | 186,560,466 |
End of period (including undistributed (distributions in excess of) net investment income of $917,771 and $(56,725), respectively) | $242,512,083 | $248,155,630 |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportNotes to Financial Statements
May 31, 2010 (unaudited)
Federated Stock and Bond Fund (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 five classes of shares: Class A Shares, Class B Shares, Class C Shares, Class K Shares and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The financial highlights of the Institutional Shares are presented separately. The primary 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 June 15, 2009, the Fund received assets from Federated Target ETF Fund 2015 (FT2015), Federated Target ETF Fund 2025 (FT2025) and Federated Target ETF Fund 2035 (FT2035) (collectively, “Acquired Funds”) as a result of a tax-free reorganization, as follows:
Shares of the Fund Issued | Acquired Funds Net Assets Received | Unrealized Appreciation1 | Net Assets of the Fund Immediately Prior to Combination | Net Assets of the Fund Immediately After Combination |
FT2015 | 374,734 | $5,272,582 | $244,522 |
FT2025 | 572,336 | 8,053,895 | 705,623 |
FT2035 | 494,024 | 6,951,526 | 499,642 |
TOTAL | 1,441,094 | $20,278,003 | $1,449,787 | $200,320,350 | $220,598,353 |
1 | Unrealized appreciation is included in the Acquired Funds 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 U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
- 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 acquired with remaining maturities of 60 days or less are valued at their cost (adjusted for the accretion of any discount or amortization of any premium).
- Shares of other mutual funds 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.
Fair Valuation and Significant Events Procedures
The Trustees have authorized the use of pricing services to provide evaluations of the current fair value of certain investments for purposes of calculating the NAV. Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for other types of fixed-income securities and OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:
- With respect to securities traded in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures or options contracts;
- With respect to price evaluations of fixed-income securities determined before the close of regular trading on the NYSE, actions by the Federal Reserve Open Market Committee and other significant trends in U.S. fixed-income markets;
- 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.
The Trustees have approved the use of a pricing service to determine the fair value of equity securities traded principally in foreign markets when the Adviser determines that there has been a significant trend in the U.S. equity markets or in index futures trading. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Fund will determine the fair value of the investment using another method approved by the Trustees.
Semi-Annual Shareholder ReportIt is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a “securities entitlement” and exercises “control” as those terms are defined in the Uniform Commercial Code. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.
The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.
The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Positive or negative inflation adjustments on Treasury Inflation-Protected Securities are included in interest income. Distributions of net investment income are declared and paid quarterly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that Class A Shares, Class B Shares, Class C Shares, Class K Shares and Institutional Shares may bear distribution services fees, shareholder services fees, account administration fees and certain transfer and dividend disbursing agent fees unique to those 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 on fixed-income securities 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.
Semi-Annual Shareholder ReportIt is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the six months ended May 31, 2010, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of September 5, 2008, the Fund's domicile and form of organization changed from a Maryland Corporation to a Massachusetts business trust. As of May 31, 2010, tax years 2006 through 2009 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America, the state of Maryland, the Commonwealth of Massachusetts and the Commonwealth of Pennsylvania.
The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.
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.
Swap Contracts
Swap contracts involve two parties that agree to exchange the returns (or the differential in rates of return) earned or realized on particular predetermined investments, instruments, indices or other measures. The gross returns to be exchanged or “swapped” between parties are generally calculated with respect to a “notional amount” for a predetermined period of time. The Fund may enter into interest rate, total return, credit default, currency and other swap agreements. Risks may arise upon entering into swap agreements from the potential inability of the counterparties to meet the terms of their contract from unanticipated changes in the value of the swap agreement. The Fund uses credit default swaps to manage exposure to a given issuer or sector by either selling protection to increase exposure, or buying protection to reduce exposure. The “buyer” in a credit default swap is obligated to pay the “seller” a periodic stream of payments over the term of the contract provided that no event of default on an underlying reference obligation has occurred. If an event of default occurs, the seller must pay the buyer the full notional value, or the “par value,” of the reference obligation in exchange for the reference obligation. In connection with these agreements, securities may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency. Recovery values are assumed by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is typically determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specific valuation method, are used to calculate the settlement value. The maximum amount of the payment that may occur, as a result of a credit event payable by the protection seller, is equal to the notional amount of the underlying index or security. The Fund's maximum exposure to loss of the notional value of credit default swaps outstanding at May 31, 2010 is $15,000,000.
Semi-Annual Shareholder ReportUpfront payments received or paid by the Fund will be reflected as an asset or liability on the Statement of Assets and Liabilities. Changes in the value of swap contracts are included in swaps, at value on the Statement of Assets and Liabilities, and periodic payments are reported as Net realized gain (loss) on swap contracts in the Statement of Operations.
Swap contracts outstanding at period end are listed after the Fund's Portfolio of Investments.
Futures Contracts
The Fund purchases and sells financial futures contracts to manage cash flows, enhance yield and to potentially reduce transaction costs. Upon entering into a financial 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. There is minimal counterparty risk to the Fund since futures are exchange traded and the exchange's clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
Futures contracts outstanding at period end are listed after the Fund's Portfolio of Investments.
Foreign Exchange Contracts
The Fund may enter into foreign exchange contracts for the delayed delivery of securities or foreign currency exchange transactions. The Fund may enter into foreign exchange contracts to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies, whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering into these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date.
Foreign exchange contracts outstanding at period end are listed after the Fund's Portfolio of Investments.
Foreign Currency Translation
The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (FCs) are translated into U.S. dollars based on the rates 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 Semi-Annual Shareholder ReportReported 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.
Restricted Securities
The Fund may purchase securities which are considered restricted. Restricted securities are securities 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) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security 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 such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Trustees. 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 accordance with procedures established by and under the general supervision of the Trustees.
Additional information on restricted securities, excluding securities purchased under Rule 144A, if applicable, that have been deemed liquid by the Trustees, held at May 31, 2010, is as follows:
Security | Acquisition Date | Acquisition Cost | Market Value |
Union Central Life Ins Co., Note, 8.20%, 11/1/2026 | 3/31/1999 | $790,785 | $707,218 |
Additional Disclosure Related to Derivative Instruments
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 | — | $ — | Payable for daily variation margin | $(23,324)* |
Fair Value of Derivative Instruments | ||||
Asset | Liability | |||
Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |
Equity contracts | — | $ — | Payable for daily variation margin | $2,187,388* |
Foreign exchange contracts | Receivable for foreign exchange contracts | $1,649,279 | Payable for foreign exchange contracts | $793,277 |
Credit contracts | Receivable for periodic payments from swap contracts | $29,583 | Swaps, at value | $60,433 |
Total derivatives not accounted for as hedging instruments under ASC Topic 815 | $1,678,862 | $3,017,774 |
* | Includes cumulative appreciation/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. |
The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended May 31, 2010
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | |||
Credit Default Swaps | Futures | Total | |
Interest rate contracts | $ — | $(177,478) | $(177,478) |
Equity contracts | $ — | $2,795,099 | $2,795,099 |
Credit contracts | $430,004 | $ — | $430,004 |
TOTAL | $430,004 | $2,617,621 | $3,047,625 |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||
Credit Default Swaps | Futures | Forward Currency Contracts | Total | |
Interest rate contracts | $ — | $(7,565) | $ — | $(7,565) |
Equity contracts | $ — | $(2,742,478) | $ — | $(2,742,478) |
Foreign exchange contracts | $ — | $ — | $1,229,280 | $1,229,280 |
Credit contracts | $(402,404) | $ — | $ — | $(402,404) |
TOTAL | $(402,404) | $(2,750,043) | $1,229,280 | $(1,923,167) |
Other
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.
Semi-Annual Shareholder ReportThe following tables summarize share activity:
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class A Shares: | Shares | Amount | Shares | Amount |
Shares sold | 955,965 | $15,294,380 | 1,851,463 | $25,328,003 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | — | 138,737 | 1,950,574 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | — | 192,254 | 2,703,126 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | — | 184,524 | 2,594,400 |
Shares issued to shareholders in payment of distributions declared | 9,189 | 147,485 | 182,962 | 2,452,902 |
Shares redeemed | (1,716,820) | (27,295,699) | (2,550,336) | (34,968,933) |
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS | (751,666) | $(11,853,834) | (396) | $60,072 |
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class B Shares: | Shares | Amount | Shares | Amount |
Shares sold | 111,671 | $1,780,286 | 274,805 | $3,808,687 |
Shares issued to shareholders in payment of distributions declared | 1,269 | 20,304 | 19,052 | 250,988 |
Shares redeemed | (322,376) | (5,120,472) | (656,572) | (8,884,783) |
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS | (209,436) | $(3,319,882) | (362,715) | $(4,825,108) |
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class C Shares: | Shares | Amount | Shares | Amount |
Shares sold | 680,132 | $10,713,478 | 1,002,107 | $13,808,180 |
Shares issued to shareholders in payment of distributions declared | 1,789 | 28,514 | 19,606 | 258,296 |
Shares redeemed | (409,980) | (6,451,216) | (783,732) | (10,601,445) |
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS | 271,941 | $4,290,776 | 237,981 | $3,465,031 |
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class K Shares: | Shares | Amount | Shares | Amount |
Shares sold | 873,165 | $14,004,739 | 1,822,012 | $25,416,459 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | — | 192,931 | 2,716,507 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | — | 339,137 | 4,775,071 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | — | 269,074 | 3,788,720 |
Shares issued to shareholders in payment of distributions declared | 3,172 | 50,979 | 28,544 | 384,790 |
Shares redeemed | (774,197) | (12,397,451) | (1,080,496) | (15,220,214) |
NET CHANGE RESULTING FROM CLASS K SHARE TRANSACTIONS | 102,140 | $1,658,267 | 1,571,202 | $21,861,333 |
Six Months Ended 5/31/2010 | Period Ended 11/30/20091 | ||
Institutional Shares: | Shares | Amount | Shares | Amount |
Shares sold | 499,874 | $7,717,489 | 86,196 | $1,282,033 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | — | 43,066 | 605,501 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | — | 40,945 | 575,698 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | — | 40,426 | 568,406 |
Shares issued to shareholders in payment of distributions declared | 154 | 2,469 | 1,079 | 16,198 |
Shares redeemed | (50,816) | (797,271) | (34,334) | (537,689) |
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS | 449,212 | $6,922,687 | 177,378 | $2,510,147 |
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | (137,809) | $(2,301,986) | 1,623,450 | $23,071,475 |
1 | Reflects operations from June 12, 2009, (date of initial investment) to November 30, 2009. |
At May 31, 2010, the cost of investments for federal tax purposes was $232,803,695. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation/depreciation resulting from changes in foreign currency exchange rates, outstanding foreign currency commitments, futures contracts and swap contracts was $11,102,202. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $16,474,052 and net unrealized depreciation from investments for those securities having an excess of cost over value of $5,371,850.
At November 30, 2009, the Fund had a capital loss carryforward of $32,829,608 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 income tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
Expiration Year | Expiration Amount |
2010 | $1,244,627 |
2015 | $1,453,609 |
2016 | $25,710,105 |
2017 | $4,421,267 |
As a result of the tax-free transfer of assets from Vintage Balanced Fund, Federated Target ETF Fund 2015, Federated Target ETF Fund 2025 and Federated Target ETF Fund 2035, certain capital loss carryforwards listed above may be limited.
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Federated Global Investment Management Corp. is the Fund's investment adviser (the “Adviser”). The advisory agreement between the Fund and the Adviser provides for an annual 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 gains or losses. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee. For the six months ended May 31, 2010, the Adviser voluntarily waived $47,733 of its fee. For the six months ended May 31, 2010, an affiliate of the Adviser reimbursed $62,691 of transfer and dividend disbursing agent fees and expenses.
Certain of the Fund's assets are managed by Federated Investment Management Company (FIMCO) and Federated Equity Management Company of Pennsylvania (FEMCOPA) (the “Sub-Advisers”). Under the terms of a sub-advisory agreement between the Adviser and the Sub-Advisers, the Sub-Advisers receive 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. For the six months ended May 31, 2010, FIMCO and FEMCOPA earned fees of $90,618 and $403,870, respectively.
Semi-Annual Shareholder ReportFederated 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 certain Federated funds as specified below:
Administrative Fee | Average Aggregate Daily Net Assets of the Federated Funds |
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. Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the six months ended May 31, 2010, the net fee paid to FAS was 0.100% of average daily net assets of the Fund. FAS waived $31,173 of its fee.
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 at the following percentages of average daily net assets annually, to compensate FSC:
Share Class Name | Percentage of Average Daily Net Assets of Class |
Class B Shares | 0.75% |
Class C Shares | 0.75% |
Class K Shares | 0.50% |
Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the six months ended May 31, 2010, FSC retained $1,113 of fees paid by the Fund.
Sales Charges
Front-end sales charges and contingent deferred sales charges do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the six months ended May 31, 2010, FSC retained $3,157 in sales charges from the sale of Class A Shares.
Shareholder Services Fee
The Fund may pay fees (“Service Fees”) up to 0.25% of the average daily net assets of the Fund's Class A Shares, Class B Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for Service Fees. For the six months ended May 31, 2010, FSSC did not receive any fees paid by the Fund.
Semi-Annual Shareholder ReportThe Adviser and its affiliates (which may include FSC, FAS and FSSC) have voluntarily agreed to waive their fees and/or reimburse expenses so that total annual fund operating expenses (as shown in the financial highlights, but excluding expenses allocated from affiliated partnerships) paid by the Fund's Class A Shares, Class B Shares, Class C Shares, Class K Shares and Institutional Shares (after the voluntary waivers and reimbursements) will not exceed 1.25%, 2.05%, 2.05%, 1.75% and 1.00% (the “Fee Limit”), respectively, through the later of (the “Termination Date”): (a) January 31, 2011; or (b) the date of the Fund's next effective Prospectus. While the Adviser and its affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.
Interfund Transactions
During the six months ended May 31, 2010, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $108,704 and $28,889, respectively.
General
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.
Semi-Annual Shareholder ReportAffiliated holdings are mutual funds which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse the Fund for certain investment adviser fees as a result of transactions in other affiliated mutual funds. For the six months ended May 31, 2010, the Adviser reimbursed $56,724. Transactions with affiliated companies during the six months ended May 31, 2010, were as follows:
Affiliates | Balance of Shares Held 11/30/2009 | Purchases/ Additions | Sales/ Reductions | Balance of Shares Held 5/31/2010 | Value | Dividend Income/ Affiliated Investment Income |
Emerging Markets Fixed Income Core Fund | 199,106 | 47,680 | 20,596 | 226,190 | $5,510,014 | $195,401 |
Federated InterContinental Fund, Institutional Shares | — | 290,142 | — | 290,142 | 11,272,026 | — |
Federated Mid Cap Growth Strategies Fund, Institutional Shares | — | 562,861 | — | 562,861 | 16,548,110 | — |
Federated Mortgage Core Portfolio | 946,934 | 211,726 | 256,309 | 902,351 | 9,167,888 | 232,733 |
Federated Project and Trade Finance Core Fund | — | 100,296 | — | 100,296 | 995,939 | 5,938 |
High Yield Bond Portfolio | 1,867,382 | 694,689 | 120,192 | 2,441,879 | 15,237,326 | 591,376 |
Prime Value Obligations Fund, Institutional Shares | 36,095,022 | 87,398,129 | 86,090,668 | 37,402,483 | 37,402,483 | 19,151 |
TOTAL OF AFFILIATED TRANSACTIONS | 39,108,444 | 89,305,523 | 86,487,765 | 41,926,202 | $96,133,786 | $1,044,599 |
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC), the Fund may invest in portfolios of Federated Core Trust (“Core Trust”), which is managed by FIMCO, an affiliate to the Fund's adviser. Core Trust is an open-end management company, registered under the Act, available only to registered investment companies and other institutional investors. The investment objective of High Yield Bond Portfolio, a portfolio of Core Trust, is to seek high current income by investing primarily in a diversified portfolio of lower rated fixed-income securities. The investment objective of Federated Mortgage Core Portfolio, a portfolio of Core Trust, is to provide total return. Federated receives no advisory or administrative fees on behalf of Core Trust. Income distributions from Core Trust are declared daily and paid monthly, and are recorded by the Fund as dividend income. Capital gain distributions, if any, from Core Trust are declared and paid annually, and are recorded by the Fund as capital gains. The performance of the Fund is directly affected by the performance of the Core Trust. A copy of the Core Trust's financial statements is available on the EDGAR Database on the SEC's website or upon request from the Fund.
Semi-Annual Shareholder ReportThe 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, 2010, the Fund's expenses were reduced by $27,245 under these arrangements.
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the six months ended May 31, 2010, were as follows:
Purchases | $189,063,866 |
Sales | $187,684,119 |
The Fund participates in a $100,000,000 unsecured, uncommitted revolving line of credit (LOC) agreement with PNC Bank. The LOC was made available for extraordinary or emergency purposes, primarily for financing redemption payments. Borrowings are charged interest at a rate offered to the Fund by PNC Bank at the time of the borrowing. As of May 31, 2010, there were no outstanding loans. During the six months ended May 31, 2010, the Fund did not utilize the LOC.
Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other funds advised by subsidiaries of Federated Investors, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of May 31, 2010, there were no outstanding loans. During the six months ended May 31, 2010, the program was not utilized.
Since October 2003, Federated Investors, Inc. and related entities (collectively, “Federated”), and various Federated sponsored mutual funds (“Federated Funds”) have been named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of certain Federated 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 Semi-Annual Shareholder ReportManagement has evaluated subsequent events through the date the financial statements were issued, and determined that no events have occurred that require additional disclosure.
Semi-Annual Shareholder ReportEvaluation and Approval of Advisory Contract - May 2010
Federated Stock and Bond Fund (the “Fund”)
The Fund's Board reviewed the Fund's investment advisory and subadvisory contracts at meetings held in May 2010. The Board's decision regarding these contracts reflects the exercise of its business judgment on whether to continue the existing arrangements.
In this connection, the Federated funds' Board had previously appointed a Senior Officer, whose duties include specified responsibilities relating to the process by which advisory fees are to be charged to a Federated fund. The Senior Officer has the authority to retain consultants, experts, or staff as may be reasonably necessary to assist in the performance of his duties, reports directly to the Board, and may be terminated only with the approval of a majority of the independent members of the Board. The Senior Officer prepared and furnished to the Board an independent, written evaluation that covered topics discussed below. The Board considered that evaluation, along with other information, in deciding to approve the advisory and subadvisory contracts.
During its review of these contracts, the Board considered compensation and benefits received by the Adviser and subadvisers. This included the fees received for services provided to the Fund by other entities in the Federated organization and research services (if any) received by the Adviser from brokers that execute Federated fund trades, as well as advisory fees. The Board is also familiar with and considered judicial decisions concerning allegedly excessive investment advisory fees, which have indicated that the following factors may be relevant to an Adviser's fiduciary duty with respect to its receipt of compensation from a fund: the nature and quality of the services provided by the Adviser, including the performance of the fund; the Adviser's cost of providing the services; the extent to which the Adviser may realize “economies of scale” as a fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser's relationship with a fund; performance and expenses of comparable funds; and the extent to which the independent Board members are fully informed about all facts the Board deems relevant bearing on the Adviser's services and fees. The Board further considered management fees (including any components thereof) charged to institutional and other clients of the Adviser and subadvisers for what might be viewed as like services, and the cost to the Adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit and profit margins of the Adviser and its affiliates for supplying such services. The Board was aware of these factors and was guided by them in its review of the Fund's advisory and subadvisory contracts to the extent it considered them to be appropriate and relevant, as discussed further below.
Semi-Annual Shareholder ReportThe Senior Officer reviewed reports compiled by Federated, using data supplied by independent fund ranking organizations, regarding the performance of, and fees charged by, other mutual funds, noting his view that comparisons to fund peer groups are relevant in judging the reasonableness of proposed fees.
For the periods covered by the report, the Fund's performance for the three-year and five-year periods was above the median of the relevant peer group, and the Fund's performance fell below the median of the relevant peer group for the one-year period. The Board discussed the Fund's performance with the Adviser and recognized the efforts being undertaken by the Adviser. The Board will continue to monitor these efforts and the performance of the Fund.
The Board also received financial information about Federated, including reports on the compensation and benefits Federated derived from its relationships with the Federated funds. These reports 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 reports also discussed any indirect benefit Federated may derive from its receipt of research Semi-Annual Shareholder ReportFederated furnished reports, requested by the Senior Officer, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses on a fund-by-fund basis, using allocation methodologies specified by the Senior Officer. The Senior Officer noted that, although they may apply consistent allocation processes, the inherent difficulties in allocating costs (and the unavoidable arbitrary aspects of that exercise) and the lack of consensus on how to allocate those costs may render such allocation reports unreliable. The allocation reports were considered in the analysis by the Board but were determined to be of limited use.
The Board and the Senior Officer also reviewed a report compiled by Federated comparing profitability information for Federated to other publicly held fund management companies. In this regard, the Senior Officer noted the limited availability of such information, but nonetheless concluded that Federated's profit margins did not appear to be excessive and the Board agreed.
The Senior Officer's evaluation also discussed the notion of possible realization of “economies of scale” as a fund grows larger. The Board considered in this regard that the Adviser has made significant and long-term investments in areas that support all of the Federated funds, such as personnel and processes for the portfolio management, compliance, and risk management functions; and systems technology; and that the benefits of these efforts (as well as any economies, should they exist) were likely to be enjoyed by the fund complex as a whole. Finally, the Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which (as discussed in the Senior Officer's evaluation) is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fee as the fund attains a certain size. The Senior Officer did not recommend institution of breakpoints in pricing Federated's fund advisory services at this time.
It was noted in the materials for the Board meeting that for the period covered by the report, the Fund's investment advisory fee, after waivers and expense reimbursements, if any, was above the median of the relevant peer group. The Board reviewed the fees and other expenses of the Fund with the Adviser and was satisfied that the overall expense structure of the Fund remained competitive. The Board will continue to monitor advisory fees and other expenses borne by the Fund.
Semi-Annual Shareholder ReportIn its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund.
The Board based its decision to approve the advisory and subadvisory contracts on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the contract reflects its determination that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangements.
Semi-Annual Shareholder ReportVoting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available from Federated's website at FederatedInvestors.com. To access this information from the “Products” section of the website, click on the “Prospectuses and Regulatory Reports” link under “Related Information,” then select the appropriate link opposite the name of the Fund; or select the name of the Fund and from the Fund's page, click on the “Prospectuses and Regulatory Reports” link. Form N-PX filings are also available at the SEC's website at www.sec.gov.
Quarterly Portfolio Schedule
The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on “Form N-Q.” These filings are available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the “Products” section of Federated's website at FederatedInvestors.com by clicking on “Portfolio Holdings” under “Related Information,” then selecting the appropriate link opposite the name of the Fund; or select the name of the Fund and from the Fund's page, click on the “Portfolio Holdings” link.
Semi-Annual Shareholder ReportMutual 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.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERYIn 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.
Semi-Annual Shareholder Report![](https://capedge.com/proxy/N-CSRS/0001318148-10-001156/img6beed5bb1.jpg)
Federated Stock and Bond Fund
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
Cusip 313911109
Cusip 313911208
Cusip 313911307
Cusip 313911406
8080105 (7/10)
Federated is a registered mark of Federated Investors, Inc.
2010 © Federated Investors, Inc.
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Federated Stock and Bond Fund
SEMI-ANNUAL SHAREHOLDER REPORT
May 31, 2010
Institutional Shares
FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
PORTFOLIO OF INVESTMENTS SUMMARY TABLES
PORTFOLIO OF INVESTMENTS
STATEMENT OF ASSETS AND LIABILITIES
STATEMENT OF OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
NOTES TO FINANCIAL STATEMENTS
EVALUATION AND APPROVAL OF ADVISORY CONTRACT
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE
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Financial Highlights - Institutional Shares
(For a Share Outstanding Throughout Each Period)
Six Months Ended (unaudited) 5/31/2010 | Period Ended 11/30/20091 |
Net Asset Value, Beginning of Period | $15.65 | $14.06 |
Income From Investment Operations: |
Net investment income | 0.122 | 0.13 |
Net realized and unrealized gain (loss) on investments, futures contracts, swap contracts and foreign currency transactions | (0.28) | 1.56 |
TOTAL FROM INVESTMENT OPERATIONS | (0.16) | 1.69 |
Less Distributions: |
Distributions from net investment income | (0.02) | (0.10) |
Net Asset Value, End of Period | $15.47 | $15.65 |
Total Return3 | (1.05)% | 12.07% |
Ratios to Average Net Assets: |
Net expenses | 1.00%4,5 | 1.00%4,5 |
Net investment income | 1.50%4 | 1.91%4 |
Expense waiver/reimbursement6 | 0.16%4 | 0.13%4 |
Supplemental Data: |
Net assets, end of period (000 omitted) | $9,695 | $2,776 |
Portfolio turnover | 89% | 254%7 |
1 | Reflects operations for the period from June 12, 2009 (date of initial investment) to November 30, 2009. |
2 | Per share number has been calculated using the average shares method. |
3 | Based on net asset value. Total returns for periods of less than one year are not annualized. |
4 | Computed on an annualized basis. |
5 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratios are 0.98% and 1.00% for the six months ended May 31, 2010, and for the period ended November 30, 2009, respectively, after taking into account these expense reductions. |
6 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
7 | Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the year ended November 30, 2009. |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportShareholder Expense Example (unaudited)
As a shareholder of the Fund, you incur ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or shareholder services fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from December 1, 2009 to May 31, 2010.
The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Semi-Annual Shareholder ReportBeginning Account Value 12/1/2009 | Ending Account Value 5/31/2010 | Expenses Paid During Period1 |
Actual | $1,000 | $989.50 | $4.96 |
Hypothetical (assuming a 5% return before expenses) | $1,000 | $1,019.95 | $5.04 |
1 | Expenses are equal to the Fund's annualized net expense ratio of 1.00%, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half-year period). |
Portfolio of Investments Summary Tables (unaudited)
At May 31, 2010, the Fund's portfolio composition1 was as follows:
Portfolio Composition | Percentage of Total Net Assets2 |
Domestic Equity Securities | 54.9% |
Corporate Debt Securities | 14.0% |
International Equity Securities | 5.6% |
Mortgage-Backed Securities3 | 4.8% |
U.S. Treasury and Agency Securities | 2.3% |
Foreign Debt Securities | 1.7% |
Asset-Backed Securities | 1.2% |
Municipal Security4 | 0.0% |
Derivative Contracts5 | (0.6)% |
Cash Equivalents6 | 16.3% |
Other Assets and Liabilities — Net7 | (0.2)% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus and Statement of Additional Information for a description of these security types. |
2 | As of the date specified above, the Fund owned shares of one or more affiliated investment companies. For purposes of this table, the affiliated investment company (other than an affiliated money market mutual fund) is not treated as a single portfolio security, but rather the Fund is treated as owning a pro rata portion of each security and each other asset and liability owned by the affiliated investment company. Accordingly, the percentages of total net assets shown in the table will differ from those presented on the Portfolio of Investments. |
3 | For purposes of this table, Mortgage-Backed Securities include mortgage-backed securities guaranteed by Government Sponsored Entities and adjustable rate mortgage-backed securities. |
4 | Represents less than 0.1%. |
5 | 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. |
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. |
Sector Composition of Equity Holdings | Percentage of Equity Securities |
Information Technology | 19.8% |
Consumer Discretionary | 14.6% |
Industrials | 13.9% |
Financials | 13.8% |
Health Care | 11.3% |
Consumer Staples | 9.9% |
Energy | 9.1% |
Materials | 2.9% |
Utilities | 2.6% |
Telecommunication Services | 2.1% |
TOTAL | 100.0% |
8 | 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. |
Portfolio of Investments
May 31, 2010 (unaudited)
Shares or Principal Amount | Value in U.S. Dollars |
COMMON STOCKS – 32.3% |
Consumer Discretionary – 4.7% |
2,000 | 1 | Amazon.com, Inc. | 250,920 |
1,500 | 1 | Bed Bath & Beyond, Inc. | 67,305 |
2,000 | Best Buy Co., Inc. | 84,500 |
16,800 | Comcast Corp., Class A | 303,912 |
73,800 | D. R. Horton, Inc. | 899,622 |
5,700 | 1 | DIRECTV — Class A | 214,833 |
47,800 | 1 | Ford Motor Co. | 560,694 |
2,000 | Gap (The), Inc. | 43,600 |
900 | Genuine Parts Co. | 36,549 |
10,000 | Home Depot, Inc. | 338,600 |
9,600 | Johnson Controls, Inc. | 273,888 |
19,200 | KB HOME | 278,016 |
11,500 | 1 | Kohl's Corp. | 583,625 |
11,400 | 1 | Las Vegas Sand Corp. | 267,672 |
47,300 | Lennar Corp., Class A | 818,290 |
500 | Limited Brands | 12,430 |
8,600 | Lowe's Cos., Inc. | 212,850 |
9,800 | M.D.C. Holdings, Inc. | 307,524 |
800 | Macy's, Inc. | 17,768 |
11,774 | McDonald's Corp. | 787,327 |
500 | 1 | NVR, Inc. | 342,640 |
13,300 | News Corp., Inc. — Class A | 175,560 |
300 | Nordstrom, Inc. | 11,910 |
14,300 | Omnicom Group, Inc. | 542,685 |
1,700 | Penney (J.C.) Co., Inc. | 46,733 |
300 | 1 | Priceline.com, Inc. | 57,348 |
79,400 | 1 | Pulte Group, Inc. | 884,516 |
200 | Ross Stores, Inc. | 10,480 |
14,700 | Ryland Group, Inc. | 273,420 |
600 | Sherwin-Williams Co. | 45,978 |
8,500 | Stanley Black & Decker, Inc. | 474,215 |
4,300 | Staples, Inc. | 92,536 |
2,500 | TJX Cos., Inc. | 113,650 |
4,500 | Target Corp. | 245,385 |
Shares or Principal Amount | Value in U.S. Dollars |
200 | Tiffany & Co. | 9,086 |
2,109 | Time Warner Cable, Inc. | 115,426 |
6,900 | Time Warner, Inc. | 213,831 |
41,700 | 1 | Toll Brothers, Inc. | 878,619 |
3,600 | 1 | Viacom, Inc., Class B — New | 120,996 |
11,700 | Walt Disney Co. | 391,014 |
TOTAL | 11,405,953 |
Consumer Staples – 3.2% |
16,820 | Altria Group, Inc. | 341,278 |
6,056 | Archer-Daniels-Midland Co. | 153,035 |
3,500 | CVS Corp. | 121,205 |
4,094 | ConAgra Foods, Inc. | 98,993 |
1,100 | Costco Wholesale Corp. | 64,075 |
3,038 | General Mills, Inc. | 216,397 |
17,749 | Heinz (H.J.) Co. | 784,151 |
14,119 | Kellogg Co. | 754,378 |
14,078 | Kraft Foods, Inc., Class A | 402,631 |
19,400 | Kroger Co. | 390,522 |
1,445 | Lorillard, Inc. | 103,303 |
4,000 | Mead Johnson Nutrition Co. | 197,280 |
20,617 | PepsiCo, Inc. | 1,296,603 |
15,212 | Philip Morris International, Inc. | 671,153 |
6,700 | Procter & Gamble Co. | 409,303 |
1,525 | Reynolds American, Inc. | 79,514 |
6,300 | Sara Lee Corp. | 89,271 |
1,500 | Sysco Corp. | 44,715 |
18,658 | The Coca-Cola Co. | 959,021 |
9,200 | Wal-Mart Stores, Inc. | 465,152 |
2,500 | Walgreen Co. | 80,100 |
TOTAL | 7,722,080 |
Energy – 3.0% |
2,729 | Anadarko Petroleum Corp. | 142,809 |
1,764 | Apache Corp. | 157,948 |
2,400 | Baker Hughes, Inc. | 91,536 |
3,150 | Chesapeake Energy Corp. | 70,371 |
22,579 | Chevron Corp. | 1,667,911 |
8,483 | ConocoPhillips | 439,928 |
Shares or Principal Amount | Value in U.S. Dollars |
2,716 | Devon Energy Corp. | 173,417 |
1,263 | EOG Resources, Inc. | 132,413 |
38,572 | Exxon Mobil Corp. | 2,332,063 |
4,529 | Halliburton Co. | 112,455 |
1,464 | Hess Corp. | 77,885 |
3,540 | Marathon Oil Corp. | 110,059 |
827 | 1 | NRG Energy, Inc. | 19,310 |
2,080 | National-Oilwell, Inc. | 79,310 |
1,100 | Noble Energy, Inc. | 65,439 |
6,117 | Occidental Petroleum Corp. | 504,714 |
13,200 | Schlumberger Ltd. | 741,180 |
1,692 | 1 | Southwestern Energy Co. | 63,636 |
3,407 | Spectra Energy Corp. | 68,174 |
2,923 | XTO Energy, Inc. | 124,929 |
TOTAL | 7,175,487 |
Financials – 4.4% |
800 | AON Corp. | 31,576 |
900 | Aflac, Inc. | 39,870 |
1,600 | Allstate Corp. | 49,008 |
7,612 | American Express Co. | 303,491 |
638 | Avalonbay Communities, Inc. | 62,562 |
2,800 | BB&T Corp. | 84,672 |
81,452 | Bank of America Corp. | 1,282,055 |
3,209 | 1 | Berkshire Hathaway, Inc. — Class B | 226,395 |
1,037 | Boston Properties, Inc. | 79,517 |
459 | CME Group, Inc. | 145,342 |
2,881 | Capital One Financial Corp. | 118,985 |
1,000 | Chubb Corp. | 50,240 |
224,549 | 1 | Citigroup, Inc. | 889,214 |
2,131 | Equity Residential Properties Trust | 96,172 |
3,300 | Fifth Third Bancorp | 42,867 |
986 | Franklin Resources, Inc. | 96,717 |
1,500 | 1 | Genworth Financial, Inc., Class A | 23,385 |
4,639 | Goldman Sachs Group, Inc. | 669,222 |
2,247 | HCP, Inc. | 71,589 |
1,200 | Hartford Financial Services Group, Inc. | 30,084 |
4,878 | Host Hotels & Resorts, Inc. | 69,560 |
Shares or Principal Amount | Value in U.S. Dollars |
35,888 | J.P. Morgan Chase & Co. | 1,420,447 |
1,900 | Kimco Realty Corp. | 27,170 |
1,100 | Loews Corp. | 35,761 |
300 | M & T Bank Corp. | 23,772 |
1,600 | Marsh & McLennan Cos., Inc. | 34,896 |
14,100 | MetLife, Inc. | 570,909 |
9,054 | Morgan Stanley | 245,454 |
10,700 | PNC Financial Services Group | 671,425 |
1,200 | Plum Creek Timber Co., Inc. | 42,024 |
2,000 | Progressive Corp. Ohio | 39,180 |
2,250 | Prologis Trust | 25,605 |
900 | Prudential Financial | 51,939 |
1,286 | Public Storage | 119,199 |
5,000 | Regions Financial Corp. | 38,150 |
6,499 | Schwab (Charles) Corp. | 106,194 |
2,165 | Simon Property Group, Inc. | 184,090 |
10,637 | State Street Corp. | 406,014 |
2,000 | SunTrust Banks, Inc. | 53,900 |
7,710 | The Bank of New York Mellon Corp. | 209,712 |
11,000 | The Travelers Cos, Inc. | 544,170 |
28,226 | U.S. Bancorp | 676,295 |
1,190 | Ventas, Inc. | 55,871 |
1,491 | Vornado Realty Trust | 115,821 |
21,300 | Wells Fargo & Co. | 611,097 |
TOTAL | 10,771,618 |
Health Care – 3.7% |
21,694 | Abbott Laboratories | 1,031,767 |
2,151 | Aetna, Inc. | 62,723 |
1,400 | AmerisourceBergen Corp. | 43,792 |
5,809 | 1 | Amgen, Inc. | 300,790 |
819 | Bard (C.R.), Inc. | 66,314 |
3,130 | Baxter International, Inc. | 132,180 |
1,202 | Becton, Dickinson & Co. | 85,703 |
13,647 | 1 | Boston Scientific Corp. | 82,564 |
21,753 | Bristol-Myers Squibb Co. | 504,887 |
2,392 | CIGNA Corp. | 80,060 |
1,793 | Cardinal Health, Inc. | 61,841 |
Shares or Principal Amount | Value in U.S. Dollars |
5,352 | 1 | Celgene Corp. | 282,372 |
6,826 | 1 | Express Scripts, Inc., Class A | 686,696 |
2,600 | 1 | Genzyme Corp. | 126,490 |
11,323 | 1 | Gilead Sciences, Inc. | 406,722 |
9,000 | 1 | Hospira, Inc. | 468,540 |
219 | 1 | Intuitive Surgical, Inc. | 70,687 |
22,678 | Johnson & Johnson | 1,322,127 |
6,022 | Lilly (Eli) & Co. | 197,461 |
1,408 | McKesson HBOC, Inc. | 98,560 |
2,403 | 1 | Medco Health Solutions, Inc. | 138,533 |
5,632 | Medtronic, Inc. | 220,662 |
28,631 | Merck & Co., Inc. | 964,578 |
47,382 | Pfizer, Inc. | 721,628 |
1,411 | Quest Diagnostics, Inc. | 74,430 |
1,686 | 1 | St. Jude Medical, Inc. | 62,955 |
1,441 | Stryker Corp. | 76,416 |
2,396 | 1 | Thermo Fisher Scientific, Inc. | 124,736 |
5,935 | UnitedHealth Group, Inc. | 172,531 |
2,344 | 1 | Wellpoint, Inc. | 120,247 |
1,109 | 1 | Zimmer Holdings, Inc. | 62,026 |
TOTAL | 8,851,018 |
Industrials – 4.5% |
9,530 | 3M Co. | 755,824 |
6,767 | Boeing Co. | 434,306 |
4,100 | CSX Corp. | 214,225 |
5,613 | Caterpillar, Inc. | 341,046 |
4,528 | Cummins, Inc. | 307,813 |
2,335 | Danaher Corp. | 185,352 |
3,848 | Deere & Co. | 221,953 |
26,000 | 1 | Delta Air Lines, Inc. | 353,080 |
6,500 | Donnelley (R.R.) & Sons Co. | 124,540 |
1,600 | Dun & Bradstreet Corp. | 116,784 |
1,443 | Eaton Corp. | 100,938 |
6,775 | Emerson Electric Co. | 314,631 |
4,000 | Equifax, Inc. | 121,000 |
5,000 | Fluor Corp. | 234,600 |
3,475 | General Dynamics Corp. | 235,953 |
Shares or Principal Amount | Value in U.S. Dollars |
122,521 | General Electric Co. | 2,003,218 |
6,897 | Honeywell International, Inc. | 294,985 |
1,504 | ITT Corp. | 72,613 |
3,072 | Illinois Tool Works, Inc. | 142,633 |
5,700 | Iron Mountain, Inc. | 139,764 |
3,800 | Joy Global, Inc. | 193,800 |
900 | L-3 Communications Holdings, Inc. | 74,367 |
2,874 | Lockheed Martin Corp. | 229,690 |
2,719 | Northrop Grumman Corp. | 164,472 |
2,911 | PACCAR, Inc. | 119,351 |
1,400 | Parker-Hannifin Corp. | 86,044 |
6,500 | Pitney Bowes, Inc. | 147,160 |
5,365 | Precision Castparts Corp. | 626,095 |
8,894 | Raytheon Co. | 466,135 |
10,100 | Republic Services, Inc. | 294,112 |
4,600 | Robert Half International, Inc. | 116,334 |
2,700 | 1 | Stericycle, Inc. | 158,274 |
12,235 | Tyco International Ltd. | 442,785 |
8,448 | United Technologies Corp. | 569,226 |
15,300 | Waste Management, Inc. | 497,403 |
TOTAL | 10,900,506 |
Information Technology – 6.4% |
4,155 | 1 | Adobe Systems, Inc. | 133,292 |
2,241 | Altera Corp. | 52,820 |
1,949 | Analog Devices, Inc. | 56,852 |
8,947 | 1 | Apple, Inc. | 2,300,811 |
10,230 | Applied Materials, Inc. | 132,069 |
3,698 | Automatic Data Processing, Inc. | 151,174 |
2,581 | Broadcom Corp. | 89,096 |
3,681 | CA, Inc. | 74,540 |
60,834 | 1 | Cisco Systems, Inc. | 1,408,916 |
2,216 | 1 | Cognizant Technology Solutions Corp. | 110,889 |
24,967 | Corning, Inc. | 435,175 |
11,905 | 1 | Dell, Inc. | 158,694 |
14,368 | 1 | EMC Corp. Mass | 267,532 |
8,352 | 1 | eBay, Inc. | 178,816 |
1,733 | 1 | Google, Inc. | 840,817 |
Shares or Principal Amount | Value in U.S. Dollars |
30,217 | Hewlett-Packard Co. | 1,390,284 |
63,832 | Intel Corp. | 1,367,281 |
9,392 | International Business Machines Corp. | 1,176,442 |
2,282 | 1 | Intuit, Inc. | 81,559 |
1,758 | Linear Technology Corp. | 49,154 |
709 | Mastercard, Inc. Class A | 143,055 |
5,445 | 1 | Micron Technology, Inc. | 49,495 |
84,104 | Microsoft Corp. | 2,169,883 |
16,058 | 1 | Motorola, Inc. | 109,997 |
3,768 | 1 | NVIDIA Corp. | 49,512 |
52,528 | Oracle Corp. | 1,185,557 |
3,064 | Paychex, Inc. | 87,447 |
12,586 | Qualcomm, Inc. | 447,558 |
5,934 | 1 | Symantec Corp. | 84,085 |
7,970 | Texas Instruments, Inc. | 194,627 |
3,200 | Visa, Inc.-Class A Shares | 231,872 |
5,044 | Western Union Co. | 80,502 |
2,102 | Xilinx, Inc. | 51,394 |
8,355 | 1 | Yahoo, Inc. | 128,166 |
TOTAL | 15,469,363 |
Materials – 0.9% |
4,200 | Agnico Eagle Mines, Ltd. | 246,036 |
1,109 | Air Products & Chemicals, Inc. | 76,588 |
400 | Airgas, Inc. | 24,988 |
2,882 | Alcoa, Inc. | 33,547 |
300 | CF Industries Holdings, Inc. | 20,577 |
648 | Cliffs Natural Resources, Inc. | 36,197 |
13,460 | Dow Chemical Co. | 362,209 |
2,449 | Du Pont (E.I.) de Nemours & Co. | 88,580 |
622 | Ecolab, Inc. | 29,377 |
7,725 | Freeport-McMoRan Copper & Gold, Inc. | 541,136 |
1,202 | International Paper Co. | 27,922 |
2,900 | Lubrizol Corp. | 256,853 |
1,485 | Monsanto Co. | 75,542 |
1,387 | Newmont Mining Corp. | 74,648 |
893 | Nucor Corp. | 38,444 |
466 | PPG Industries, Inc. | 29,857 |
Shares or Principal Amount | Value in U.S. Dollars |
839 | Praxair, Inc. | 65,106 |
591 | Sigma-Aldrich Corp. | 31,489 |
3,916 | Teck Cominco Ltd., Class B | 133,222 |
682 | United States Steel Corp. | 32,197 |
652 | Vulcan Materials Co. | 32,913 |
565 | Weyerhaeuser Co. | 24,058 |
TOTAL | 2,281,486 |
Telecommunication Services – 0.7% |
29,700 | AT&T, Inc. | 721,710 |
2,000 | 1 | American Tower Systems Corp. | 81,060 |
88,800 | Qwest Communications International, Inc. | 465,312 |
14,200 | Verizon Communications | 390,784 |
TOTAL | 1,658,866 |
Utilities – 0.8% |
1,181 | 1 | AES Corp. | 12,129 |
3,076 | Ameren Corp. | 75,854 |
2,782 | American Electric Power Co., Inc. | 88,913 |
454 | Consolidated Edison Co. | 19,336 |
2,514 | Constellation Energy Group | 88,945 |
287 | DTE Energy Co. | 13,061 |
3,537 | Dominion Resources, Inc. | 137,801 |
7,786 | Duke Energy Corp. | 124,265 |
1,631 | EQT Corp. | 63,919 |
592 | Edison International | 19,157 |
1,095 | Entergy Corp. | 82,202 |
3,930 | Exelon Corp. | 151,698 |
2,402 | FPL Group, Inc. | 119,932 |
503 | FirstEnergy Corp. | 17,711 |
2,181 | P G & E Corp. | 90,511 |
617 | PPL Corp. | 15,925 |
525 | Progress Energy, Inc. | 20,260 |
2,966 | Public Service Enterprises Group, Inc. | 90,849 |
311 | Questar Corp. | 13,951 |
418 | Sempra Energy | 19,228 |
22,959 | Southern Co. | 750,759 |
400 | Wisconsin Energy Corp. | 19,600 |
Shares or Principal Amount | Value in U.S. Dollars |
840 | Xcel Energy, Inc. | 17,212 |
TOTAL | 2,053,218 |
TOTAL COMMON STOCKS (IDENTIFIED COST $75,629,427) | 78,289,595 |
Asset-Backed Securities – 1.0% |
$8,670 | 2,3 | 125 Home Loan Owner Trust 1998-1A B1, 9.76%, 2/15/2029 | 7,196 |
250,000 | Banc of America Commercial Mortgage, Inc. 2007-4 A4, 5.744%, 2/10/2051 | 243,468 |
800,000 | Citigroup/Deutsche Bank Commercial Mortgage 2007-CD5, Series 2007-CD5, 5.886%, 11/15/2044 | 782,403 |
350,000 | LB-UBS Commercial Mortgage Trust 2008-C1 A2, 6.324%, 4/15/2041 | 354,044 |
100,000 | Merrill Lynch Mortgage Trust 2008-C1 AM, 6.461%, 2/12/2051 | 79,153 |
400,000 | Merrill Lynch/Countrywide Commercial Mortgage 2007-6, Series 2007-6, 5.485%, 03/12/2051 | 361,595 |
315,000 | Morgan Stanley Capital I 2006-IQ12 A4, 5.332%, 12/15/2043 | 311,797 |
250,000 | Morgan Stanley Capital, Inc. A4, 5.880%, 6/11/2049 | 245,200 |
TOTAL ASSET-BACKED SECURITIES (IDENTIFIED COST $2,431,187) | 2,384,856 |
Collateralized Mortgage Obligations – 0.5% |
800,000 | Citigroup/Deutsche Bank Commercial Mortgage 2007-CD4 A3, 5.293%, 12/11/2049 | 781,983 |
450,000 | JP Morgan Chase Commercial Mortgage Securities 2007-C1 A4, 5.716%, 2/15/2051 | 421,136 |
5,306 | 2,3 | SMFC Trust Asset-Backed Certificates, 1997-A B1-4, 7.719%, 1/28/2027 | 4,244 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $1,257,635) | 1,207,363 |
Corporate Bonds – 7.1% |
Basic Industry - Chemicals – 0.1% |
95,000 | Dow Chemical Co., Note, 8.550%, 05/15/2019 | 112,853 |
40,000 | Du Pont (E.I.) de Nemours & Co., 5.000%, 01/15/2013 | 43,424 |
100,000 | Praxair, Inc., 4.625%, 03/30/2015 | 109,013 |
35,000 | Rohm & Haas Co., 6.000%, 09/15/2017 | 37,064 |
TOTAL | 302,354 |
Basic Industry - Metals & Mining – 0.4% |
80,000 | Alcan, Inc., 5.000%, 06/01/2015 | 85,632 |
70,000 | Alcoa, Inc., Note, 5.550%, 02/01/2017 | 68,340 |
90,000 | Allegheny Technologies, Inc., Sr. Note, 9.375%, 06/01/2019 | 105,569 |
10,000 | BHP Finance (USA), Inc., 6.500%, 04/01/2019 | 11,673 |
Shares or Principal Amount | Value in U.S. Dollars |
$200,000 | Barrick Gold Corp., 6.950%, 04/01/2019 | 232,510 |
120,000 | Newmont Mining Corp., Company Guarantee, 5.875%, 04/01/2035 | 116,182 |
120,000 | Rio Tinto Finance USA Ltd., 5.875%, 07/15/2013 | 130,973 |
100,000 | 2,3 | Xstrata Finance Canada Ltd., Unsecd. Note, 5.500%, 11/16/2011 | 104,706 |
TOTAL | 855,585 |
Basic Industry - Paper – 0.1% |
30,000 | International Paper Co., Sr. Unsecd. Note, 7.500%, 08/15/2021 | 34,287 |
20,000 | Louisiana-Pacific Corp., 8.875%, 08/15/2010 | 20,475 |
150,000 | Pope & Talbot, Inc., 8.375%, 6/1/2013 | 15 |
100,000 | Weyerhaeuser Co., Deb., 7.375%, 03/15/2032 | 97,678 |
TOTAL | 152,455 |
Capital Goods - Aerospace & Defense – 0.1% |
50,000 | 2,3 | BAE Systems Holdings, Inc., 5.200%, 08/15/2015 | 54,266 |
100,000 | Boeing Co., 4.875%, 02/15/2020 | 107,350 |
25,000 | Lockheed Martin Corp., Sr. Note, 4.121%, 03/14/2013 | 26,647 |
TOTAL | 188,263 |
Capital Goods - Building Materials – 0.0% |
50,000 | RPM International, Inc., 6.500%, 02/15/2018 | 54,242 |
40,000 | RPM International, Inc., Sr. Unsecd. Note, 6.125%, 10/15/2019 | 42,790 |
TOTAL | 97,032 |
Capital Goods - Diversified Manufacturing – 0.1% |
20,000 | Dover Corp., Note, 5.450%, 03/15/2018 | 22,113 |
70,000 | Emerson Electric Co., 4.875%, 10/15/2019 | 75,860 |
68,000 | 2,3 | Hutchison Whampoa International Ltd., 6.500%, 02/13/2013 | 74,124 |
100,000 | Roper Industries, Inc., Sr. Unsecd. Note, 6.250%, 09/01/2019 | 108,039 |
90,000 | 2,3 | Textron Financial Corp., Jr. Sub. Note, 6.000%, 02/15/2067 | 66,150 |
TOTAL | 346,286 |
Capital Goods - Environmental – 0.1% |
110,000 | 2,3 | Republic Services, Inc., Sr. Unsecd. Note, Series 144A, 5.500%, 09/15/2019 | 116,543 |
25,000 | Waste Management, Inc., 7.375%, 03/11/2019 | 29,839 |
TOTAL | 146,382 |
Capital Goods - Packaging – 0.0% |
40,000 | Pactiv Corp., 6.400%, 01/15/2018 | 41,311 |
Communications - Media & Cable – 0.2% |
27,000 | Comcast Cable Communications Holdings, Company Guarantee, 8.375%, 03/15/2013 | 31,373 |
Shares or Principal Amount | Value in U.S. Dollars |
$100,000 | Comcast Corp., 7.050%, 03/15/2033 | 111,891 |
100,000 | Comcast Corp., Company Guarantee, 6.500%, 01/15/2017 | 112,381 |
120,000 | Time Warner Cable, Inc., Company Guarantee, 6.750%, 06/15/2039 | 128,828 |
20,000 | Time Warner Cable, Inc., Company Guarantee, 8.250%, 04/01/2019 | 24,335 |
50,000 | Time Warner Cable, Inc., Company Guarantee, 8.750%, 02/14/2019 | 62,245 |
50,000 | Time Warner Cable, Inc., Sr. Unsecd. Note, 5.850%, 05/01/2017 | 54,502 |
TOTAL | 525,555 |
Communications - Media Noncable – 0.1% |
120,000 | News America Holdings, Inc., Sr. Deb., 9.250%, 02/01/2013 | 141,076 |
90,000 | News America, Inc., 5.650%, 08/15/2020 | 97,578 |
TOTAL | 238,654 |
Communications - Telecom Wireless – 0.2% |
130,000 | AT&T Wireless Services, Inc., 8.750%, 03/01/2031 | 173,277 |
90,000 | America Movil S.A.B. de C.V., Note, 5.750%, 01/15/2015 | 99,136 |
20,000 | Vodafone Group PLC, 5.350%, 02/27/2012 | 21,087 |
90,000 | Vodafone Group PLC, Note, 5.625%, 02/27/2017 | 97,562 |
TOTAL | 391,062 |
Communications - Telecom Wirelines – 0.2% |
15,000 | CenturyTel, Inc., Sr. Note, 6.150%, 09/15/2019 | 14,608 |
150,000 | Deutsche Telekom International Finance BV, 4.875%, 07/08/2014 | 160,371 |
45,000 | France Telecom SA, Sr. Unsecd. Note, 5.375%, 07/08/2019 | 48,254 |
100,000 | Telefonica SA, Sr. Note, 5.855%, 02/04/2013 | 107,286 |
40,000 | Verizon Communications, Inc., 6.100%, 04/15/2018 | 44,550 |
50,000 | Verizon Communications, Inc., Sr. Unsecd. Note, 6.350%, 04/01/2019 | 56,986 |
TOTAL | 432,055 |
Consumer Cyclical - Automotive – 0.0% |
70,000 | DaimlerChrysler North America Holding Corp., 6.500%, 11/15/2013 | 77,496 |
Consumer Cyclical - Entertainment – 0.2% |
80,000 | International Speedway Corp., 5.400%, 04/15/2014 | 86,350 |
280,000 | Time Warner, Inc., Company Guarantee, 6.875%, 05/01/2012 | 305,346 |
TOTAL | 391,696 |
Consumer Cyclical - Lodging – 0.0% |
50,000 | Wyndham Worldwide Corp., Sr. Unsecd. Note, 6.000%, 12/01/2016 | 48,595 |
Consumer Cyclical - Retailers – 0.2% |
179,755 | 2,3 | CVS Caremark Corp., Pass Thru Cert., 5.298%, 01/11/2027 | 176,061 |
60,000 | Costco Wholesale Corp., 5.300%, 03/15/2012 | 64,361 |
20,000 | JC Penney Corp., Inc., Sr. Unsecd. Note, 5.750%, 02/15/2018 | 20,150 |
Shares or Principal Amount | Value in U.S. Dollars |
$70,000 | Target Corp., Note, 5.875%, 07/15/2016 | 81,054 |
40,000 | Wal-Mart Stores, Inc., 6.200%, 04/15/2038 | 44,682 |
TOTAL | 386,308 |
Consumer Non-Cyclical - Food/Beverage – 0.3% |
90,000 | 2,3 | Bacardi Ltd., Sr. Note, 7.450%, 04/01/2014 | 103,942 |
70,000 | Bottling Group LLC, Note, 5.500%, 04/01/2016 | 79,090 |
30,000 | Coca-Cola Enterprises, Inc., 4.250%, 03/01/2015 | 32,136 |
80,000 | Diageo Capital PLC, Company Guarantee, 7.375%, 01/15/2014 | 93,454 |
60,000 | General Mills, Inc., Note, 5.700%, 02/15/2017 | 67,901 |
125,000 | Kraft Foods, Inc., Note, 5.250%, 10/01/2013 | 137,406 |
100,000 | Kraft Foods, Inc., Sr. Unsecd. Note, 6.125%, 02/01/2018 | 110,562 |
50,000 | PepsiCo, Inc., 4.650%, 02/15/2013 | 54,048 |
30,000 | Ralcorp Holdings, Inc., Company Guarantee, 6.625%, 08/15/2039 | 31,107 |
15,000 | Sysco Corp., Sr. Note, 5.375%, 03/17/2019 | 16,562 |
TOTAL | 726,208 |
Consumer Non-Cyclical - Health Care – 0.1% |
50,000 | Boston Scientific Corp., 4.500%, 01/15/2015 | 48,686 |
50,000 | Boston Scientific Corp., 6.000%, 01/15/2020 | 48,487 |
20,000 | Express Scripts, Inc., Sr. Unsecd. Note, 7.25%, 6/15/2019 | 23,957 |
75,000 | Quest Diagnostics, Inc., Sr. Unsecd. Note, 6.400%, 07/01/2017 | 85,444 |
TOTAL | 206,574 |
Consumer Non-Cyclical - Pharmaceuticals – 0.1% |
40,000 | Abbott Laboratories, 5.150%, 11/30/2012 | 43,708 |
100,000 | Genentech, Inc., Note, 4.750%, 07/15/2015 | 109,107 |
80,000 | Pfizer, Inc., Sr. Unsecd. Note, 6.200%, 03/15/2019 | 92,661 |
TOTAL | 245,476 |
Consumer Non-Cyclical - Products – 0.0% |
45,000 | Philips Electronics NV, 5.750%, 03/11/2018 | 50,168 |
Consumer Non-Cyclical - Supermarkets – 0.0% |
25,000 | Kroger Co., Bond, 6.900%, 04/15/2038 | 29,421 |
Consumer Non-Cyclical - Tobacco – 0.0% |
70,000 | Altria Group, Inc., 9.250%, 08/06/2019 | 83,294 |
Energy - Independent – 0.1% |
120,000 | Canadian Natural Resources Ltd., 4.900%, 12/01/2014 | 129,416 |
30,000 | EOG Resources, Inc., Note, 5.625%, 06/01/2019 | 33,288 |
25,000 | Pemex Project Funding Master, 5.750%, 12/15/2015 | 26,234 |
80,000 | 2,3 | Petroleos Mexicanos, Series 144A, 4.875%, 3/15/2015 | 82,026 |
Shares or Principal Amount | Value in U.S. Dollars |
$20,000 | XTO Energy, Inc., 6.750%, 08/01/2037 | 24,033 |
25,000 | XTO Energy, Inc., Sr. Unsecd. Note, 6.250%, 08/01/2017 | 28,955 |
TOTAL | 323,952 |
Energy - Integrated – 0.1% |
60,000 | Conoco, Inc., Sr. Note, 6.950%, 04/15/2029 | 71,486 |
100,000 | ConocoPhillips Australia Funding Co., 5.500%, 04/15/2013 | 109,856 |
35,000 | Petro-Canada, Deb., 7.000%, 11/15/2028 | 38,568 |
33,340 | 2,3 | Qatar Petroleum, 5.579%, 05/30/2011 | 34,147 |
100,000 | 2,3 | Statoil ASA, 5.125%, 04/30/2014 | 110,323 |
TOTAL | 364,380 |
Energy - Oil Field Services – 0.0% |
50,000 | Noble Drilling Corp., Sr. Note, 7.5%, 3/15/2019 | 58,179 |
25,000 | Weatherford International Ltd., 6.000%, 03/15/2018 | 26,004 |
20,000 | Weatherford International Ltd., 7.000%, 03/15/2038 | 19,305 |
TOTAL | 103,488 |
Energy - Refining – 0.1% |
110,000 | Premcor Refining Group, Inc., 6.125%, 05/01/2011 | 114,705 |
25,000 | Valero Energy Corp., 9.375%, 03/15/2019 | 29,735 |
TOTAL | 144,440 |
Financial Institution - Banking – 1.0% |
50,000 | Bank of America Corp., Sr. Note, 5.375%, 06/15/2014 | 51,444 |
120,000 | Bank of America Corp., Sr. Note, 7.375%, 5/15/2014 | 132,932 |
100,000 | 2,3 | Barclays Bank PLC, 5.926%, 12/31/2049 | 77,625 |
70,000 | Capital One Financial Corp., Sr. Note, 7.375%, 05/23/2014 | 79,712 |
80,000 | Citigroup, Inc., Note, 5.125%, 05/05/2014 | 81,285 |
60,000 | 2,3 | Commonwealth Bank of Australia, Sr. Unsecd. Note, Series 144A, 3.750%, 10/15/2014 | 61,169 |
200,000 | First Union Institutional, Bond, 8.04%, 12/1/2026 | 201,000 |
50,000 | Goldman Sachs Group, Inc., 6.125%, 02/15/2033 | 46,827 |
150,000 | Goldman Sachs Group, Inc., Sr. Note, 6.150%, 04/01/2018 | 154,104 |
320,000 | Goldman Sachs Group, Inc., Sr. Unsecd. Note, 5.125%, 01/15/2015 | 330,008 |
100,000 | HSBC Finance Capital Trust IX, Note, 5.911%, 11/30/2035 | 84,750 |
100,000 | HSBC Finance Corp., 5.000%, 06/30/2015 | 103,516 |
75,000 | Household Finance Corp., Unsecd. Note, 4.75%, 7/15/2013 | 78,442 |
90,000 | M & T Bank Corp., 5.375%, 05/24/2012 | 95,904 |
30,000 | Merrill Lynch & Co., Inc., Sr. Unsecd. Note, 6.050%, 08/15/2012 | 31,705 |
100,000 | Morgan Stanley Group, Inc., 5.300%, 03/01/2013 | 102,838 |
Shares or Principal Amount | Value in U.S. Dollars |
$100,000 | Morgan Stanley, Sr. Unsecd. Note, 6.625%, 04/01/2018 | 103,033 |
30,000 | Northern Trust Corp., 4.625%, 05/01/2014 | 32,356 |
15,000 | PNC Funding Corp., Sub. Note, 5.625%, 02/01/2017 | 15,783 |
470,547 | 2,3 | Regional Diversified Funding, 9.250%, 03/15/2030 | 275,726 |
20,000 | State Street Corp., Sr. Note, 4.300%, 05/30/2014 | 21,153 |
100,000 | U.S. Bank, N.A., 6.300%, 02/04/2014 | 112,037 |
140,000 | Wachovia Corp., 5.750%, 02/01/2018 | 149,895 |
40,000 | Wilmington Trust Corp., Sub. Note, 8.500%, 04/02/2018 | 41,122 |
TOTAL | 2,464,366 |
Financial Institution - Brokerage – 0.3% |
220,000 | Blackrock, Inc., 6.250%, 09/15/2017 | 249,324 |
50,000 | Charles Schwab Corp., Sr. Unsecd. Note, 4.950%, 06/01/2014 | 53,947 |
40,000 | Eaton Vance Corp., 6.500%, 10/02/2017 | 43,922 |
100,000 | 2,3 | FMR LLC, 4.75%, 3/01/2013 | 104,752 |
25,000 | Janus Capital Group, Inc., Sr. Note, 6.500%, 06/15/2012 | 25,799 |
30,000 | Janus Capital Group, Inc., Sr. Note, 6.950%, 06/15/2017 | 30,710 |
95,000 | Jefferies Group, Inc., Sr. Unsecd. Note, 8.500%, 07/15/2019 | 106,805 |
60,000 | Lehman Brothers Holdings, Note, 4.80%, 3/13/2014 | 12,750 |
30,000 | Nuveen Investments, 5.00%, 9/15/2010 | 30,000 |
30,000 | Nuveen Investments, 5.500%, 09/15/2015 | 22,950 |
75,000 | Raymond James Financial, Inc., 8.600%, 08/15/2019 | 86,162 |
TOTAL | 767,121 |
Financial Institution - Finance Noncaptive – 0.5% |
160,000 | American Express Co., Sr. Unsecd. Note, 8.125%, 05/20/2019 | 194,976 |
60,000 | American Express Credit Corp., Sr. Unsecd. Note, 5.125%, 08/25/2014 | 64,171 |
100,000 | American International Group, Inc., Sr. Note, 4.700%, 10/01/2010 | 99,775 |
120,000 | Berkshire Hathaway, Inc., Company Guarantee, 5.000%, 08/15/2013 | 130,543 |
120,000 | Capital One Capital IV, 6.745%, 02/17/2037 | 100,200 |
20,000 | Capital One Capital V, 10.250%, 08/15/2039 | 21,625 |
510,000 | General Electric Capital Corp., 5.625%, 05/01/2018 | 531,881 |
30,000 | General Electric Capital Corp., Note, Series MTN, 6.750%, 03/15/2032 | 31,135 |
80,000 | International Lease Finance Corp., 4.875%, 09/01/2010 | 79,800 |
30,000 | 2,3 | Macquarie Group Ltd., Note, Series 144A, 7.625%, 8/13/2019 | 33,404 |
TOTAL | 1,287,510 |
Financial Institution - Insurance - Health – 0.1% |
50,000 | CIGNA Corp., 6.350%, 03/15/2018 | 55,106 |
50,000 | UnitedHealth Group, Inc., Bond, 6.000%, 02/15/2018 | 54,958 |
Shares or Principal Amount | Value in U.S. Dollars |
$50,000 | Wellpoint, Inc., 5.850%, 01/15/2036 | 48,538 |
TOTAL | 158,602 |
Financial Institution - Insurance - Life – 0.7% |
100,000 | AXA-UAP, Sub. Note, 8.600%, 12/15/2030 | 115,204 |
100,000 | 2,3 | Massachusetts Mutual Life Insurance Co., Sub. Note, 8.875%, 06/01/2039 | 131,711 |
90,000 | MetLife, Inc., 6.750%, 06/01/2016 | 100,919 |
10,000 | MetLife, Inc., Jr. Sub. Note, 10.750%, 08/01/2069 | 11,911 |
80,000 | 2,3 | New York Life Insurance Co., Sub. Note, 6.750%, 11/15/2039 | 89,531 |
300,000 | 2,3 | Pacific LifeCorp., Bond, 6.600%, 09/15/2033 | 285,609 |
50,000 | Prudential Financial, Inc., 5.150%, 01/15/2013 | 52,968 |
40,000 | Prudential Financial, Inc., 6.625%, 12/01/2037 | 42,344 |
10,000 | Prudential Financial, Inc., Sr. Note, 7.375%, 06/15/2019 | 11,435 |
100,000 | Prudential Financial, Inc., Sr. Unsecd. Note, 4.750%, 09/17/2015 | 103,422 |
750,000 | 2 | Union Central Life Ins Co., Note, 8.20%, 11/1/2026 | 707,218 |
TOTAL | 1,652,272 |
Financial Institution - Insurance - P&C – 0.2% |
80,000 | ACE INA Holdings, Inc., Sr. Note, 5.700%, 02/15/2017 | 86,873 |
80,000 | CNA Financial Corp., 6.500%, 08/15/2016 | 82,764 |
15,000 | Chubb Corp., Sr. Note, 5.750%, 05/15/2018 | 16,489 |
50,000 | Horace Mann Educators Corp., Sr. Note, 6.850%, 04/15/2016 | 51,029 |
100,000 | 2,3 | Liberty Mutual Group, Inc., Unsecd. Note, 5.750%, 03/15/2014 | 103,270 |
30,000 | 2,3 | Nationwide Mutual Insurance Co., Note, Series 144A, 9.375%, 08/15/2039 | 34,342 |
10,000 | The Travelers Cos., Inc., Sr. Unsecd. Note, 5.500%, 12/01/2015 | 11,136 |
TOTAL | 385,903 |
Financial Institution - REITs – 0.2% |
45,000 | Avalonbay Communities, Inc., Sr. Unsecd. Note, Series MTN, 5.700%, 03/15/2017 | 48,248 |
75,000 | Boston Properties LP, Sr. Unsecd. Note, 5.875%, 10/15/2019 | 78,825 |
40,000 | Equity One, Inc., Bond, 6.000%, 09/15/2017 | 40,032 |
40,000 | Liberty Property LP, 6.625%, 10/01/2017 | 42,239 |
120,000 | Prologis, Sr. Note, 5.500%, 04/01/2012 | 125,493 |
20,000 | Prologis, Sr. Note, 7.625%, 8/15/2014 | 21,364 |
40,000 | Simon Property Group LP, 6.750%, 05/15/2014 | 44,391 |
50,000 | Simon Property Group, Inc., 6.350%, 08/28/2012 | 54,264 |
TOTAL | 454,856 |
Shares or Principal Amount | Value in U.S. Dollars |
Foreign-Local-Government – 0.0% |
$50,000 | Quebec, Province of, Note, Series MTNA, 7.035%, 3/10/2026 | 63,690 |
Municipal Services – 0.1% |
140,000 | 2,3 | Army Hawaii Family Housing, 5.524%, 6/15/2050 | 122,112 |
100,000 | 2,3 | Camp Pendleton & Quantico Housing LLC, 5.572%, 10/01/2050 | 86,682 |
TOTAL | 208,794 |
Technology – 0.3% |
20,000 | Cisco Systems, Inc., Sr. Unsecd. Note, 5.500%, 02/22/2016 | 22,688 |
40,000 | Dell Computer Corp., Deb., 7.100%, 04/15/2028 | 46,838 |
60,000 | Dun & Bradstreet Corp., Sr. Unsecd. Note, 5.500%, 03/15/2011 | 61,990 |
105,000 | Fiserv, Inc., Sr. Note, 6.800%, 11/20/2017 | 118,000 |
50,000 | Harris Corp., 5.950%, 12/01/2017 | 55,364 |
60,000 | Hewlett-Packard Co., Note, 5.400%, 03/01/2017 | 66,874 |
200,000 | IBM Corp., Sr. Note, 5.700%, 09/14/2017 | 227,869 |
100,000 | Oracle Corp., Sr. Unsecd. Note, Series WI, 5.000%, 01/15/2011 | 102,703 |
TOTAL | 702,326 |
Transportation - Railroads – 0.1% |
100,000 | Burlington Northern Santa Fe Corp., 4.875%, 01/15/2015 | 108,378 |
50,000 | Union Pacific Corp., 4.875%, 01/15/2015 | 53,410 |
45,000 | Union Pacific Corp., Bond, 6.625%, 2/01/2029 | 49,605 |
TOTAL | 211,393 |
Transportation - Services – 0.0% |
75,000 | 2,3 | Enterprise Rent-A-Car USA Finance Co., 6.375%, 10/15/2017 | 83,621 |
Utility - Electric – 0.5% |
60,000 | Appalachian Power Co., Sr. Unsecd. Note, 7.950%, 01/15/2020 | 74,069 |
50,000 | Cleveland Electric Illuminating Co., Sr. Unsecd. Note, 5.950%, 12/15/2036 | 48,717 |
50,000 | Commonwealth Edison Co., 1st Mtg. Bond, 5.800%, 03/15/2018 | 55,177 |
40,000 | Consolidated Edison Co., Sr. Unsecd. Note, 5.500%, 09/15/2016 | 44,054 |
10,000 | Consolidated Edison Co., Sr. Unsecd. Note, 6.650%, 04/01/2019 | 11,855 |
60,000 | 2,3 | Electricite De France SA, 5.50%, 1/26/2014 | 66,746 |
90,000 | FirstEnergy Solutions Co, Company Guarantee, 4.800%, 2/15/2015 | 92,970 |
50,000 | FirstEnergy Solutions Co, Company Guarantee, 6.05%, 8/15/2021 | 49,682 |
83,270 | 2,3 | Great River Energy, 1st Mtg. Note, 5.829%, 07/01/2017 | 91,878 |
120,000 | MidAmerican Energy Co., 4.650%, 10/01/2014 | 128,891 |
100,000 | National Rural Utilities Cooperative Finance Corp., Sr. Unsecd. Note, 10.375%, 11/01/2018 | 136,847 |
30,000 | Northern States Power Co., MN, 1st Mtg. Bond, 5.250%, 03/01/2018 | 32,633 |
Shares or Principal Amount | Value in U.S. Dollars |
$60,000 | PPL Energy Supply LLC, Sr. Unsecd. Note, 6.000%, 12/15/2036 | 62,989 |
40,000 | Progress Energy, Inc., 7.050%, 03/15/2019 | 46,324 |
100,000 | Union Electric Co., 6.000%, 04/01/2018 | 108,267 |
120,000 | Virginia Electric & Power Co., Sr. Unsecd. Note, 5.000%, 06/30/2019 | 128,001 |
80,000 | Virginia Electric & Power Co., Sr. Unsecd. Note, 5.100%, 11/30/2012 | 86,760 |
TOTAL | 1,265,860 |
Utility - Natural Gas Distributor – 0.1% |
120,000 | Atmos Energy Corp., 5.125%, 01/15/2013 | 128,322 |
15,000 | Atmos Energy Corp., 8.500%, 03/15/2019 | 18,728 |
60,000 | Sempra Energy, Sr. Unsecd. Note, 6.500%, 06/01/2016 | 68,864 |
TOTAL | 215,914 |
Utility - Natural Gas Pipelines – 0.2% |
100,000 | Duke Capital Corp., Sr. Note, 6.250%, 02/15/2013 | 109,107 |
70,000 | Enbridge, Inc., Sr. Note, 5.600%, 04/01/2017 | 76,521 |
110,000 | Enterprise Products Operating LLC, Company Guarantee, 9.750%, 01/31/2014 | 132,848 |
100,000 | Kinder Morgan Energy Partners LP, Sr. Unsecd. Note, 5.800%, 03/15/2035 | 91,117 |
TOTAL | 409,593 |
TOTAL CORPORATE BONDS (IDENTIFIED COST $16,721,354) | 17,230,311 |
Governments/Agencies – 0.0% |
Sovereign – 0.0% |
75,000 | United Mexican States, 6.625%, 03/03/2015 | 85,125 |
30,000 | United Mexican States, Series MTNA, 6.750%, 09/27/2034 | 33,241 |
TOTAL GOVERNMENTS/AGENCIES (IDENTIFIED COST $106,616) | 118,366 |
Mortgage-Backed Securities – 0.4% |
8,347 | Federal Home Loan Mortgage Corp. Pool C00592, 7.000%, 3/1/2028 | 9,234 |
6,508 | Federal Home Loan Mortgage Corp. Pool C00896, 7.500%, 12/1/2029 | 7,155 |
17,505 | Federal Home Loan Mortgage Corp. Pool C17281, 6.500%, 11/1/2028 | 19,366 |
15,685 | Federal Home Loan Mortgage Corp. Pool C19588, 6.500%, 12/1/2028 | 17,369 |
5,045 | Federal Home Loan Mortgage Corp. Pool C25621, 6.500%, 5/1/2029 | 5,578 |
20,858 | Federal Home Loan Mortgage Corp. Pool C76361, 6.000%, 2/1/2033 | 22,795 |
59,645 | Federal Home Loan Mortgage Corp. Pool E01545, 5.000%, 15 Year, 1/1/2019 | 63,891 |
3,275 | Federal Home Loan Mortgage Corp. Pool E20252, 7.000%, 15 Year, 7/1/2011 | 3,357 |
Shares or Principal Amount | Value in U.S. Dollars |
$1,158 | Federal Home Loan Mortgage Corp. Pool E77591, 6.500%, 7/1/2014 | 1,234 |
13,525 | Federal Home Loan Mortgage Corp. Pool E99510, 5.500%, 9/1/2018 | 14,610 |
17,915 | Federal Home Loan Mortgage Corp. Pool G01444, 6.500%, 8/1/2032 | 19,835 |
11,652 | Federal National Mortgage Association Pool 251697, 6.500%, 30 Year, 5/1/2028 | 12,874 |
29,681 | Federal National Mortgage Association Pool 252334, 6.500%, 30 Year, 2/1/2029 | 32,101 |
65,968 | Federal National Mortgage Association Pool 254720, 4.500%, 5/1/2018 | 69,834 |
65,897 | Federal National Mortgage Association Pool 254802, 4.500%, 7/1/2018 | 69,748 |
31,093 | Federal National Mortgage Association Pool 254905, 6.000%, 10/1/2033 | 33,941 |
63,340 | Federal National Mortgage Association Pool 255075, 5.500%, 2/1/2024 | 68,007 |
71,811 | Federal National Mortgage Association Pool 255079, 5.000%, 2/1/2019 | 76,819 |
2,948 | Federal National Mortgage Association Pool 303168, 9.500%, 30 Year, 2/1/2025 | 3,459 |
1,671 | Federal National Mortgage Association Pool 323159, 7.500%, 4/1/2028 | 1,834 |
13,438 | Federal National Mortgage Association Pool 323640, 7.500%, 4/1/2029 | 14,748 |
532 | Federal National Mortgage Association Pool 323970, 7.000%, 15 Year, 10/1/2014 | 566 |
26,108 | Federal National Mortgage Association Pool 428865, 7.000%, 6/1/2028 | 28,860 |
2,643 | Federal National Mortgage Association Pool 443215, 6.000%, 10/1/2028 | 2,882 |
1,514 | Federal National Mortgage Association Pool 511365, 7.000%, 8/1/2029 | 1,686 |
279 | Federal National Mortgage Association Pool 514184, 7.500%, 9/1/2029 | 307 |
58,337 | Federal National Mortgage Association Pool 545993, 6.000%, 11/1/2032 | 63,737 |
23,611 | Federal National Mortgage Association Pool 555272, 6.000%, 3/1/2033 | 25,804 |
53,380 | Federal National Mortgage Association Pool 713974, 5.500%, 7/1/2033 | 57,016 |
73,699 | Federal National Mortgage Association Pool 721502, 5.000%, 7/1/2033 | 77,508 |
1,431 | Government National Mortgage Association Pool 352214, 7.000%, 4/15/2023 | 1,577 |
5,685 | Government National Mortgage Association Pool 451522, 7.500%, 30 Year, 10/15/2027 | 6,225 |
12,909 | Government National Mortgage Association Pool 462556, 6.500%, 2/15/2028 | 14,299 |
480 | Government National Mortgage Association Pool 462739, 7.500%, 5/15/2028 | 526 |
678 | Government National Mortgage Association Pool 464835, 6.500%, 9/15/2028 | 751 |
10,632 | Government National Mortgage Association Pool 469699, 7.000%, 11/15/2028 | 11,798 |
Shares or Principal Amount | Value in U.S. Dollars |
$11,651 | Government National Mortgage Association Pool 486760, 6.500%, 12/15/2028 | 12,910 |
2,159 | Government National Mortgage Association Pool 780339, 8.000%, 30 Year, 12/15/2023 | 2,366 |
14,663 | Government National Mortgage Association Pool 780453, 7.500%, 30 Year, 12/15/2025 | 16,043 |
13,041 | Government National Mortgage Association Pool 780584, 7.000%, 30 Year, 6/15/2027 | 14,468 |
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $850,089) | 907,118 |
MUNICIPAL – 0.0% |
Illinois – 0.0% |
90,000 | Chicago, IL Metropolitan Water Reclamation District, Direct Payment Taxable Limited GO Build America Bonds, 5.720%, 12/01/2038 (IDENTIFIED COST $90,000) | 99,574 |
U.S. Treasury – 2.3% |
1,700,000 | 4,5 | United States Treasury Bill, 0.15%, 7/22/2010 | 1,699,642 |
2,950,000 | 4,5 | United States Treasury Bill, 0.095%, 8/5/2010 | 2,949,228 |
800,000 | 4 | United States Treasury Bond, 3.500%, 2/15/2039 | 703,875 |
100,000 | 4 | United States Treasury Note, 3.125%, 8/31/2013 | 105,453 |
TOTAL U.S. TREASURY (IDENTIFIED COST $5,475,796) | 5,458,198 |
EXCHANGE-TRADED FUNDS – 17.4% |
266,862 | iShares MSCI Emerging Market Index Fund | 10,167,442 |
13,259 | iShares MSCI Brazil Index Fund | 842,079 |
468,939 | iShares Russell 2000 Index Fund | 31,067,209 |
TOTAL EXCHANGE-TRADED FUNDS (IDENTIFIED COST $34,802,119) | 42,076,730 |
MUTUAL FUNDS – 39.6%;6 |
226,190 | Emerging Markets Fixed Income Core Fund | 5,510,014 |
290,142 | Federated InterContinental Fund, Institutional Shares | 11,272,026 |
562,861 | Federated Mid Cap Growth Strategies Fund, Institutional Shares | 16,548,110 |
902,351 | Federated Mortgage Core Portfolio | 9,167,888 |
100,296 | Federated Project and Trade Finance Core Fund | 995,939 |
2,441,879 | High Yield Bond Portfolio | 15,237,326 |
Shares or Principal Amount | Value in U.S. Dollars |
37,402,483 | 7 | Prime Value Obligations Fund, Institutional Shares, 0.24% | 37,402,483 |
TOTAL MUTUAL FUNDS (IDENTIFIED COST $95,438,039) | 96,133,786 |
TOTAL INVESTMENTS — 100.6% (IDENTIFIED COST $232,802,262)8 | 243,905,897 |
OTHER ASSETS AND LIABILITIES - NET — (0.6)%9 | (1,393,814) |
TOTAL NET ASSETS — 100% | $242,512,083 |
At May 31, 2010, the Fund had the following outstanding futures contracts:
Description | Number of Contracts | Notional Value | Expiration Date | Unrealized Appreciation/ (Depreciation) |
1CAC 40 Index Short Futures | 142 | $4,967,870 | June 2010 | $91,333 |
1IBEX 35 Index Short Futures | 12 | $1,123,980 | June 2010 | $(589) |
1OMX 30 Index Short Futures | 104 | $10,186,800 | June 2010 | $25,035 |
1Hang Seng Index Short Futures | 5 | $4,929,000 | June 2010 | $(15,917) |
1Topix Index Short Futures | 6 | $52,980,000 | June 2010 | $40,517 |
1United States Treasury Bonds 30-Year Short Futures | 6 | $735,938 | September 2010 | $11,331 |
1United States Treasury Notes 2-Year Short Futures | 30 | $6,544,219 | September 2010 | $(7,565) |
1United States Treasury Notes 5-Year Short Futures | 50 | $5,833,594 | September 2010 | $17,080 |
1United States Treasury Notes 10-Year Short Futures | 10 | $1,198,750 | September 2010 | $2,478 |
1AEX Index Long Futures | 73 | $4,688,060 | June 2010 | $(139,361) |
1DAX Index Long Futures | 14 | $2,079,875 | June 2010 | $(7,375) |
1KOSPI 200 Index Long Futures | 9 | $951,300,000 | June 2010 | $(64,476) |
1SGX MSCI Singapore Index Long Futures | 9 | $586,800 | June 2010 | $7,651 |
1S&P 500 Index Long Futures | 153 | $41,635,125 | June 2010 | $(1,936,400) |
1FTSE 100 Index Long Futures | 19 | $985,530 | June 2010 | $(102,956) |
1Swiss Market Index Long Futures | 34 | $2,149,480 | June 2010 | $(84,850) |
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | $(2,164,064) |
Credit Default Swap Counterparty | Goldman Sachs & Co. |
Reference Entity | Series 13 Investment Grade Index |
Buy/Sell | Sell |
Pay/Receive Fixed Rate | 1.00% |
Expiration Date | 12/20/2014 |
Implied Credit Spread at 5/31/201010 | 1.24% |
Notional Amount | $15,000,000 |
Market Value | $(60,433) |
Upfront Premiums Paid/(Received) | $94,117 |
Unrealized Depreciation | $(154,550) |
At May 31, 2010, the Fund had the following outstanding foreign exchange contracts:
Settlement Date | Foreign Currency Units to Deliver/Receive | In Exchange For | Unrealized Appreciation/ (Depreciation) |
Contracts Purchased: | |||
7/6/2010 | 6,000,000 Euro | $7,626,120 | $(260,395) |
7/6/2010 | 4,179,874 Euro | $5,414,693 | $(283,392) |
7/6/2010 | 4,179,874 Euro | $5,373,730 | $(242,430) |
7/6/2010 | 9,820,000 Euro | $12,049,140 | $6,096 |
Contracts Sold: | |||
7/6/2010 | 4,426,410 Euro | $5,989,597 | $555,644 |
7/6/2010 | 2,213,205 Euro | $3,000,376 | $283,399 |
7/6/2010 | 2,220,134 Euro | $3,000,000 | $274,518 |
7/6/2010 | 5,500,000 Euro | $6,989,290 | $237,376 |
7/6/2010 | 4,720,000 Euro | $5,996,146 | $201,776 |
7/6/2010 | 5,100,000 Euro | $6,351,336 | $90,470 |
9/15/2010 | 9,820,000 Euro | $12,057,585 | $(7,060) |
NET UNREALIZED APPRECIATION ON FOREIGN EXCHANGE CONTRACTS | $856,002 |
Net Unrealized Appreciation/Depreciation on Futures Contracts, Swap Contract and Foreign Exchange Contracts is included in “Other Assets and Liabilities — Net.”
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 May 31, 2010, these restricted securities amounted to $3,289,124, which represented 1.4% 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 May 31, 2010, these liquid restricted securities amounted to $2,581,906, which represented 1.1% 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 companies. |
7 | 7-Day net yield. |
8 | The cost of investments for federal tax purposes amounts to $232,803,695. |
9 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
10 | Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements serve as an indicator of the current status of the payment/performance risk and represent the likelihood or risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity's credit soundness and a greater likelihood or risk of default or other credit event occurring as defined under the terms of the agreement. A credit spread identified as “Defaulted” indicates a credit event has occurred for the referenced entity or obligation. |
Note: The categories of investments are shown as a percentage of total net assets at May 31, 2010.
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1 — quoted prices in active markets for identical securities
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments)
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
Semi-Annual Shareholder ReportValuation Inputs |
Level 1 - Quoted Prices and Investments in Mutual Funds* | Level 2 - Other Significant Observable Inputs | Level 3 - Significant Unobservable Inputs | Total |
Equity Securities: |
Common Stock |
Domestic | $76,726,372 | $ — | $ — | $76,726,372 |
International | 1,563,223 | — | — | 1,563,223 |
Debt Securities: |
Asset-Backed Securities | — | 2,384,856 | — | 2,384,856 |
Collateralized Mortgage Obligations | — | 1,207,363 | — | 1,207,363 |
Corporate Bonds | — | 17,230,311 | — | 17,230,311 |
Governments/Agencies | — | 118,366 | — | 118,366 |
Mortgage-Backed Securities | — | 907,118 | — | 907,118 |
Municipal | — | 99,574 | — | 99,574 |
U.S. Treasury | — | 5,458,198 | — | 5,458,198 |
Exchange-Traded Funds | 42,076,730 | — | — | 42,076,730 |
Mutual Funds | 96,133,786 | — | — | 96,133,786 |
TOTAL SECURITIES | $216,500,111 | $27,405,786 | $ — | $243,905,897 |
OTHER FINANCIAL INSTRUMENTS** | $(2,164,064) | $701,452 | $ — | $(1,462,612) |
* | Emerging Markets Fixed Income Core Fund (EMCORE) is an affiliated limited partnership offered only to registered investment companies and other accredited investors (see Note 5 to the Financial Statements). EMCORE invests primarily in emerging markets fixed-income securities. |
** | Other financial instruments include futures contracts, swap contract and foreign exchange contracts. |
The following acronyms are used throughout this portfolio:
MTN | — Medium Term Note |
REITs | — Real Estate Investment Trusts |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportStatement of Assets and Liabilities
May 31, 2010 (unaudited)
Assets: |
Total investments in securities, at value including $96,133,786 of investments in affiliated issuers (Note 5) (identified cost $232,802,262) | $243,905,897 |
Restricted cash (Note 2) | 115,698 |
Income receivable | 490,712 |
Receivable for investments sold | 121,942 |
Receivable for shares sold | 1,045,480 |
Receivable for foreign exchange contracts | 1,649,279 |
Receivable for periodic payments from swap contracts | 29,583 |
Other receivables | 6,213 |
TOTAL ASSETS | 247,364,804 |
Liabilities: |
Payable for investments purchased | $3,001,637 |
Payable for shares redeemed | 241,848 |
Payable for foreign exchange contracts | 793,277 |
Payable for daily variation margin | 524,562 |
Swaps, at value (premium paid $94,117) | 60,433 |
Payable for Directors'/Trustees' fees | 1,256 |
Payable for distribution services fee (Note 5) | 52,342 |
Payable for shareholder services fee (Note 5) | 46,579 |
Accrued expenses | 130,787 |
TOTAL LIABILITIES | 4,852,721 |
Net assets for 15,726,881 shares outstanding | $242,512,083 |
Net Assets Consist of: |
Paid-in capital | $263,075,281 |
Net unrealized appreciation of investments, futures contracts, swap contracts and translation of assets and liabilities in foreign currency | 9,620,993 |
Accumulated net realized loss on investments, futures contracts, swap contracts and foreign currency transactions | (31,101,962) |
Undistributed net investment income | 917,771 |
TOTAL NET ASSETS | $242,512,083 |
Net Asset Value, Offering Price and Redemption Proceeds Per Share |
Class A Shares: |
Net asset value per share ($136,152,351 ÷ 8,811,966 shares outstanding), no par value, unlimited shares authorized | $15.45 |
Offering price per share (100/94.50 of $15.45) | $16.35 |
Redemption proceeds per share | $15.45 |
Class B Shares: |
Net asset value per share ($16,596,219 ÷ 1,081,314 shares outstanding), no par value, unlimited shares authorized | $15.35 |
Offering price per share | $15.35 |
Redemption proceeds per share (94.50/100 of $15.35) | $14.50 |
Class C Shares: |
Net asset value per share ($31,961,284 ÷ 2,090,352 shares outstanding), no par value, unlimited shares authorized | $15.29 |
Offering price per share | $15.29 |
Redemption proceeds per share (99.00/100 of $15.29) | $15.14 |
Class K Shares: |
Net asset value per share ($48,106,989 ÷ 3,116,659 shares outstanding), no par value, unlimited shares authorized | $15.44 |
Offering price per share | $15.44 |
Redemption proceeds per share | $15.44 |
Institutional Shares: |
Net asset value per share ($9,695,240 ÷ 626,590 shares outstanding), no par value, unlimited shares authorized | $15.47 |
Offering price per share | $15.47 |
Redemption proceeds per share | $15.47 |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportStatement of Operations
Six Months Ended May 31, 2010 (unaudited)
Investment Income: |
Dividends (including $849,198 received from affiliated issuers (Note 5) and net of foreign taxes withheld of $1,258) | $2,136,903 |
Interest | 739,684 |
Investment income allocated from affiliated partnership (Note 5) | 195,401 |
TOTAL INCOME | 3,071,988 |
Expenses: |
Investment adviser fee (Note 5) | $842,872 |
Administrative personnel and services fee (Note 5) | 154,576 |
Custodian fees | 26,085 |
Transfer and dividend disbursing agent fees and expenses — Class A Shares | 150,372 |
Transfer and dividend disbursing agent fees and expenses — Class B Shares | 24,709 |
Transfer and dividend disbursing agent fees and expenses — Class C Shares | 30,232 |
Transfer and dividend disbursing agent fees and expenses — Class K Shares | 90,280 |
Transfer and dividend disbursing agent fees and expenses — Institutional Shares | 2,684 |
Directors'/Trustees' fees | 4,290 |
Auditing fees | 13,089 |
Legal fees | 3,599 |
Portfolio accounting fees | 76,195 |
Distribution services fee — Class B Shares (Note 5) | 70,886 |
Distribution services fee — Class C Shares (Note 5) | 115,492 |
Distribution services fee — Class K Shares (Note 5) | 121,809 |
Shareholder services fee — Class A Shares (Note 5) | 178,145 |
Shareholder services fee — Class B Shares (Note 5) | 23,629 |
Shareholder services fee — Class C Shares (Note 5) | 38,440 |
Account administration fee — Class A Shares | 1,788 |
Share registration costs | 37,780 |
Printing and postage | 44,972 |
Insurance premiums | 2,332 |
Miscellaneous | 4,734 |
TOTAL EXPENSES | 2,058,990 |
Waivers, Reimbursements and Expense Reduction: |
Waiver/reimbursement of investment adviser fee (Note 5) | $(104,457) |
Waiver of administrative personnel and services fee (Note 5) | (31,173) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Class A Shares (Note 5) | (51,485) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Class B Shares (Note 5) | (7,329) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Class C Shares (Note 5) | (3,414) |
Reimbursement of transfer and dividend disbursing agent fees and expenses — Institutional Shares (Note 5) | (463) |
Fees paid indirectly from directed brokerage arrangements (Note 6) | (27,245) |
TOTAL WAIVERS, REIMBURSEMENTS AND EXPENSE REDUCTION | $(225,566) |
Net expenses | $1,833,424 |
Net investment income | 1,238,564 |
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Swap Contracts and Foreign Currency Transactions: |
Net realized gain on investments and foreign currency transactions (including realized gain of $49,074 on sales of investments in affiliated issuers) (Note 5) | 4,413,251 |
Net realized gain on futures contracts | 2,617,621 |
Net realized gain on swap contracts | 430,004 |
Net realized gain allocated from affiliated partnership (Note 5) | 10,823 |
Net change in unrealized appreciation of investments and translation of assets and liabilities in foreign currency | (8,635,309) |
Net change in unrealized appreciation of futures contracts | (2,750,043) |
Net change in unrealized appreciation of swap contracts | (402,404) |
Net realized and unrealized loss on investments, futures contracts, swap contracts and foreign currency transactions | (4,316,057) |
Change in net assets resulting from operations | $(3,077,493) |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportStatement of Changes in Net Assets
Six Months Ended (unaudited) 5/31/2010 | Year Ended 11/30/2009 |
Increase (Decrease) in Net Assets |
Operations: |
Net investment income | $1,238,564 | $3,626,329 |
Net realized gain on investments including allocation from affiliated partnership, futures contracts, swap contracts and foreign currency transactions | 7,471,699 | 548,019 |
Net change in unrealized appreciation/depreciation of investments, futures contracts, swap contracts and translation of assets and liabilities in foreign currency | (11,787,756) | 37,935,648 |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | (3,077,493) | 42,109,996 |
Distributions to Shareholders: |
Distributions from net investment income |
Class A Shares | (158,051) | (2,629,338) |
Class B Shares | (21,313) | (267,729) |
Class C Shares | (30,767) | (285,201) |
Class K Shares | (50,986) | (384,837) |
Institutional Shares | (2,951) | (19,202) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (264,068) | (3,586,307) |
Share Transactions: |
Proceeds from sale of shares | 49,510,372 | 69,643,362 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | 5,272,582 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | 8,053,895 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | 6,951,526 |
Net asset value of shares issued to shareholders in payment of distributions declared | 249,751 | 3,363,174 |
Cost of shares redeemed | (52,062,109) | (70,213,064) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (2,301,986) | 23,071,475 |
Change in net assets | (5,643,547) | 61,595,164 |
Net Assets: |
Beginning of period | 248,155,630 | 186,560,466 |
End of period (including undistributed (distributions in excess of) net investment income of $917,771 and $(56,725), respectively) | $242,512,083 | $248,155,630 |
See Notes which are an integral part of the Financial Statements
Semi-Annual Shareholder ReportNotes to Financial Statements
May 31, 2010 (unaudited)
Federated Stock and Bond Fund (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 five classes of shares: Class A Shares, Class B Shares, Class C Shares, Class K Shares and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The financial highlights of the Class A Shares, Class B Shares, Class C Shares and Class K Shares are presented separately. The primary 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 June 15, 2009, the Fund received assets from Federated Target ETF Fund 2015 (FT2015), Federated Target ETF Fund 2025 (FT2025) and Federated Target ETF Fund 2035 (FT2035) (collectively, “Acquired Funds”) as a result of a tax-free reorganization, as follows:
Shares of the Fund Issued | Acquired Funds Net Assets Received | Unrealized Appreciation1 | Net Assets of the Fund Immediately Prior to Combination | Net Assets of the Fund Immediately After Combination |
FT2015 | 374,734 | $5,272,582 | $244,522 |
FT2025 | 572,336 | 8,053,895 | 705,623 |
FT2035 | 494,024 | 6,951,526 | 499,642 |
TOTAL | 1,441,094 | $20,278,003 | $1,449,787 | $200,320,350 | $220,598,353 |
1 | Unrealized appreciation is included in the Acquired Funds 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 U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), the Fund generally values investments as follows:
- 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 acquired with remaining maturities of 60 days or less are valued at their cost (adjusted for the accretion of any discount or amortization of any premium).
- Shares of other mutual funds 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.
Fair Valuation and Significant Events Procedures
The Trustees have authorized the use of pricing services to provide evaluations of the current fair value of certain investments for purposes of calculating the NAV. Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for other types of fixed-income securities and OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:
- With respect to securities traded in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures or options contracts;
- With respect to price evaluations of fixed-income securities determined before the close of regular trading on the NYSE, actions by the Federal Reserve Open Market Committee and other significant trends in U.S. fixed-income markets;
- 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.
The Trustees have approved the use of a pricing service to determine the fair value of equity securities traded principally in foreign markets when the Adviser determines that there has been a significant trend in the U.S. equity markets or in index futures trading. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Fund will determine the fair value of the investment using another method approved by the Trustees.
Semi-Annual Shareholder ReportIt is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a “securities entitlement” and exercises “control” as those terms are defined in the Uniform Commercial Code. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.
The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.
The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Positive or negative inflation adjustments on Treasury Inflation-Protected Securities are included in interest income. Distributions of net investment income are declared and paid quarterly. Non-cash dividends included in dividend income, if any, are recorded at fair value. Investment income, realized and unrealized gains and losses and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that Class A Shares, Class B Shares, Class C Shares, Class K Shares and Institutional Shares may bear distribution services fees, shareholder services fees, account administration fees and certain transfer and dividend disbursing agent fees unique to those 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 on fixed-income securities 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.
Semi-Annual Shareholder ReportIt is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the six months ended May 31, 2010, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of September 5, 2008, the Fund's domicile and form of organization changed from a Maryland Corporation to a Massachusetts business trust. As of May 31, 2010, tax years 2006 through 2009 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America, the state of Maryland, the Commonwealth of Massachusetts and the Commonwealth of Pennsylvania.
The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.
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.
Swap Contracts
Swap contracts involve two parties that agree to exchange the returns (or the differential in rates of return) earned or realized on particular predetermined investments, instruments, indices or other measures. The gross returns to be exchanged or “swapped” between parties are generally calculated with respect to a “notional amount” for a predetermined period of time. The Fund may enter into interest rate, total return, credit default, currency and other swap agreements. Risks may arise upon entering into swap agreements from the potential inability of the counterparties to meet the terms of their contract from unanticipated changes in the value of the swap agreement. The Fund uses credit default swaps to manage exposure to a given issuer or sector by either selling protection to increase exposure, or buying protection to reduce exposure. The “buyer” in a credit default swap is obligated to pay the “seller” a periodic stream of payments over the term of the contract provided that no event of default on an underlying reference obligation has occurred. If an event of default occurs, the seller must pay the buyer the full notional value, or the “par value,” of the reference obligation in exchange for the reference obligation. In connection with these agreements, securities may be identified as collateral in accordance with the terms of the respective swap agreements to provide assets of value and recourse in the event of default or bankruptcy/insolvency. Recovery values are assumed by market makers considering either industry standard recovery rates or entity specific factors and considerations until a credit event occurs. If a credit event has occurred, the recovery value is typically determined by a facilitated auction whereby a minimum number of allowable broker bids, together with a specific valuation method, are used to calculate the settlement value. The maximum amount of the payment that may occur, as a result of a credit event payable by the protection seller, is equal to the notional amount of the underlying index or security. The Fund's maximum exposure to loss of the notional value of credit default swaps outstanding at May 31, 2010 is $15,000,000.
Semi-Annual Shareholder ReportUpfront payments received or paid by the Fund will be reflected as an asset or liability on the Statement of Assets and Liabilities. Changes in the value of swap contracts are included in swaps, at value on the Statement of Assets and Liabilities, and periodic payments are reported as Net realized gain (loss) on swap contracts in the Statement of Operations.
Swap contracts outstanding at period end are listed after the Fund's Portfolio of Investments.
Futures Contracts
The Fund purchases and sells financial futures contracts to manage cash flows, enhance yield and to potentially reduce transaction costs. Upon entering into a financial 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. There is minimal counterparty risk to the Fund since futures are exchange traded and the exchange's clearinghouse, as counterparty to all exchange-traded futures, guarantees the futures against default.
Futures contracts outstanding at period end are listed after the Fund's Portfolio of Investments.
Foreign Exchange Contracts
The Fund may enter into foreign exchange contracts for the delayed delivery of securities or foreign currency exchange transactions. The Fund may enter into foreign exchange contracts to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies, whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering into these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date.
Foreign exchange contracts outstanding at period end are listed after the Fund's Portfolio of Investments.
Foreign Currency Translation
The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies (FCs) are translated into U.S. dollars based on the rates 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 Semi-Annual Shareholder ReportReported 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.
Restricted Securities
The Fund may purchase securities which are considered restricted. Restricted securities are securities 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) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security 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 such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Trustees. 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 accordance with procedures established by and under the general supervision of the Trustees.
Additional information on restricted securities, excluding securities purchased under Rule 144A, if applicable, that have been deemed liquid by the Trustees, held at May 31, 2010, is as follows:
Security | Acquisition Date | Acquisition Cost | Market Value |
Union Central Life Ins Co., Note, 8.20%, 11/1/2026 | 3/31/1999 | $790,785 | $707,218 |
Additional Disclosure Related to Derivative Instruments
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 | — | $ — | Payable for daily variation margin | $(23,324)* |
Fair Value of Derivative Instruments | ||||
Asset | Liability | |||
Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |
Equity contracts | — | $ — | Payable for daily variation margin | $2,187,388* |
Foreign exchange contracts | Receivable for foreign exchange contracts | $1,649,279 | Payable for foreign exchange contracts | $793,277 |
Credit contracts | Receivable for periodic payments from swap contracts | $29,583 | Swaps, at value | $60,433 |
Total derivatives not accounted for as hedging instruments under ASC Topic 815 | $1,678,862 | $3,017,774 |
* | Includes cumulative appreciation/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. |
The Effect of Derivative Instruments on the Statement of Operations for the Six Months Ended May 31, 2010
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | |||
Credit Default Swaps | Futures | Total | |
Interest rate contracts | $ — | $(177,478) | $(177,478) |
Equity contracts | $ — | $2,795,099 | $2,795,099 |
Credit contracts | $430,004 | $ — | $430,004 |
TOTAL | $430,004 | $2,617,621 | $3,047,625 |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | ||||
Credit Default Swaps | Futures | Forward Currency Contracts | Total | |
Interest rate contracts | $ — | $(7,565) | $ — | $(7,565) |
Equity contracts | $ — | $(2,742,478) | $ — | $(2,742,478) |
Foreign exchange contracts | $ — | $ — | $1,229,280 | $1,229,280 |
Credit contracts | $(402,404) | $ — | $ — | $(402,404) |
TOTAL | $(402,404) | $(2,750,043) | $1,229,280 | $(1,923,167) |
Other
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.
Semi-Annual Shareholder ReportThe following tables summarize share activity:
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class A Shares: | Shares | Amount | Shares | Amount |
Shares sold | 955,965 | $15,294,380 | 1,851,463 | $25,328,003 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | — | 138,737 | 1,950,574 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | — | 192,254 | 2,703,126 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | — | 184,524 | 2,594,400 |
Shares issued to shareholders in payment of distributions declared | 9,189 | 147,485 | 182,962 | 2,452,902 |
Shares redeemed | (1,716,820) | (27,295,699) | (2,550,336) | (34,968,933) |
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS | (751,666) | $(11,853,834) | (396) | $60,072 |
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class B Shares: | Shares | Amount | Shares | Amount |
Shares sold | 111,671 | $1,780,286 | 274,805 | $3,808,687 |
Shares issued to shareholders in payment of distributions declared | 1,269 | 20,304 | 19,052 | 250,988 |
Shares redeemed | (322,376) | (5,120,472) | (656,572) | (8,884,783) |
NET CHANGE RESULTING FROM CLASS B SHARE TRANSACTIONS | (209,436) | $(3,319,882) | (362,715) | $(4,825,108) |
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class C Shares: | Shares | Amount | Shares | Amount |
Shares sold | 680,132 | $10,713,478 | 1,002,107 | $13,808,180 |
Shares issued to shareholders in payment of distributions declared | 1,789 | 28,514 | 19,606 | 258,296 |
Shares redeemed | (409,980) | (6,451,216) | (783,732) | (10,601,445) |
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS | 271,941 | $4,290,776 | 237,981 | $3,465,031 |
Six Months Ended 5/31/2010 | Year Ended 11/30/2009 | ||
Class K Shares: | Shares | Amount | Shares | Amount |
Shares sold | 873,165 | $14,004,739 | 1,822,012 | $25,416,459 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | — | 192,931 | 2,716,507 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | — | 339,137 | 4,775,071 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | — | 269,074 | 3,788,720 |
Shares issued to shareholders in payment of distributions declared | 3,172 | 50,979 | 28,544 | 384,790 |
Shares redeemed | (774,197) | (12,397,451) | (1,080,496) | (15,220,214) |
NET CHANGE RESULTING FROM CLASS K SHARE TRANSACTIONS | 102,140 | $1,658,267 | 1,571,202 | $21,861,333 |
Six Months Ended 5/31/2010 | Period Ended 11/30/20091 | ||
Institutional Shares: | Shares | Amount | Shares | Amount |
Shares sold | 499,874 | $7,717,489 | 86,196 | $1,282,033 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2015 | — | — | 43,066 | 605,501 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2025 | — | — | 40,945 | 575,698 |
Proceeds from shares issued in connection with the tax-free transfer of assets from Federated Target ETF Fund 2035 | — | — | 40,426 | 568,406 |
Shares issued to shareholders in payment of distributions declared | 154 | 2,469 | 1,079 | 16,198 |
Shares redeemed | (50,816) | (797,271) | (34,334) | (537,689) |
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS | 449,212 | $6,922,687 | 177,378 | $2,510,147 |
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | (137,809) | $(2,301,986) | 1,623,450 | $23,071,475 |
1 | Reflects operations from June 12, 2009, (date of initial investment) to November 30, 2009. |
At May 31, 2010, the cost of investments for federal tax purposes was $232,803,695. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation/depreciation resulting from changes in foreign currency exchange rates, outstanding foreign currency commitments, futures contracts and swap contracts was $11,102,202. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $16,474,052 and net unrealized depreciation from investments for those securities having an excess of cost over value of $5,371,850.
At November 30, 2009, the Fund had a capital loss carryforward of $32,829,608 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 income tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
Expiration Year | Expiration Amount |
2010 | $1,244,627 |
2015 | $1,453,609 |
2016 | $25,710,105 |
2017 | $4,421,267 |
As a result of the tax-free transfer of assets from Vintage Balanced Fund, Federated Target ETF Fund 2015, Federated Target ETF Fund 2025 and Federated Target ETF Fund 2035, certain capital loss carryforwards listed above may be limited.
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Federated Global Investment Management Corp. is the Fund's investment adviser (the “Adviser”). The advisory agreement between the Fund and the Adviser provides for an annual 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 gains or losses. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee. For the six months ended May 31, 2010, the Adviser voluntarily waived $47,733 of its fee. For the six months ended May 31, 2010, an affiliate of the Adviser reimbursed $62,691 of transfer and dividend disbursing agent fees and expenses.
Certain of the Fund's assets are managed by Federated Investment Management Company (FIMCO) and Federated Equity Management Company of Pennsylvania (FEMCOPA) (the “Sub-Advisers”). Under the terms of a sub-advisory agreement between the Adviser and the Sub-Advisers, the Sub-Advisers receive 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. For the six months ended May 31, 2010, FIMCO and FEMCOPA earned fees of $90,618 and $403,870, respectively.
Semi-Annual Shareholder ReportFederated 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 certain Federated funds as specified below:
Administrative Fee | Average Aggregate Daily Net Assets of the Federated Funds |
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. Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the six months ended May 31, 2010, the net fee paid to FAS was 0.100% of average daily net assets of the Fund. FAS waived $31,173 of its fee.
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 at the following percentages of average daily net assets annually, to compensate FSC:
Share Class Name | Percentage of Average Daily Net Assets of Class |
Class B Shares | 0.75% |
Class C Shares | 0.75% |
Class K Shares | 0.50% |
Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the six months ended May 31, 2010, FSC retained $1,113 of fees paid by the Fund.
Sales Charges
Front-end sales charges and contingent deferred sales charges do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the six months ended May 31, 2010, FSC retained $3,157 in sales charges from the sale of Class A Shares.
Shareholder Services Fee
The Fund may pay fees (“Service Fees”) up to 0.25% of the average daily net assets of the Fund's Class A Shares, Class B Shares and Class C Shares to financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for Service Fees. For the six months ended May 31, 2010, FSSC did not receive any fees paid by the Fund.
Semi-Annual Shareholder ReportThe Adviser and its affiliates (which may include FSC, FAS and FSSC) have voluntarily agreed to waive their fees and/or reimburse expenses so that total annual fund operating expenses (as shown in the financial highlights, but excluding expenses allocated from affiliated partnerships) paid by the Fund's Class A Shares, Class B Shares, Class C Shares, Class K Shares and Institutional Shares (after the voluntary waivers and reimbursements) will not exceed 1.25%, 2.05%, 2.05%, 1.75% and 1.00% (the “Fee Limit”), respectively, through the later of (the “Termination Date”): (a) January 31, 2011; or (b) the date of the Fund's next effective Prospectus. While the Adviser and its affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.
Interfund Transactions
During the six months ended May 31, 2010, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $108,704 and $28,889, respectively.
General
Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.
Semi-Annual Shareholder ReportAffiliated holdings are mutual funds which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse the Fund for certain investment adviser fees as a result of transactions in other affiliated mutual funds. For the six months ended May 31, 2010, the Adviser reimbursed $56,724. Transactions with affiliated companies during the six months ended May 31, 2010, were as follows:
Affiliates | Balance of Shares Held 11/30/2009 | Purchases/ Additions | Sales/ Reductions | Balance of Shares Held 5/31/2010 | Value | Dividend Income/ Affiliated Investment Income |
Emerging Markets Fixed Income Core Fund | 199,106 | 47,680 | 20,596 | 226,190 | $5,510,014 | $195,401 |
Federated InterContinental Fund, Institutional Shares | — | 290,142 | — | 290,142 | 11,272,026 | — |
Federated Mid Cap Growth Strategies Fund, Institutional Shares | — | 562,861 | — | 562,861 | 16,548,110 | — |
Federated Mortgage Core Portfolio | 946,934 | 211,726 | 256,309 | 902,351 | 9,167,888 | 232,733 |
Federated Project and Trade Finance Core Fund | — | 100,296 | — | 100,296 | 995,939 | 5,938 |
High Yield Bond Portfolio | 1,867,382 | 694,689 | 120,192 | 2,441,879 | 15,237,326 | 591,376 |
Prime Value Obligations Fund, Institutional Shares | 36,095,022 | 87,398,129 | 86,090,668 | 37,402,483 | 37,402,483 | 19,151 |
TOTAL OF AFFILIATED TRANSACTIONS | 39,108,444 | 89,305,523 | 86,487,765 | 41,926,202 | $96,133,786 | $1,044,599 |
Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC), the Fund may invest in portfolios of Federated Core Trust (“Core Trust”), which is managed by FIMCO, an affiliate to the Fund's adviser. Core Trust is an open-end management company, registered under the Act, available only to registered investment companies and other institutional investors. The investment objective of High Yield Bond Portfolio, a portfolio of Core Trust, is to seek high current income by investing primarily in a diversified portfolio of lower rated fixed-income securities. The investment objective of Federated Mortgage Core Portfolio, a portfolio of Core Trust, is to provide total return. Federated receives no advisory or administrative fees on behalf of Core Trust. Income distributions from Core Trust are declared daily and paid monthly, and are recorded by the Fund as dividend income. Capital gain distributions, if any, from Core Trust are declared and paid annually, and are recorded by the Fund as capital gains. The performance of the Fund is directly affected by the performance of the Core Trust. A copy of the Core Trust's financial statements is available on the EDGAR Database on the SEC's website or upon request from the Fund.
Semi-Annual Shareholder ReportThe 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, 2010, the Fund's expenses were reduced by $27,245 under these arrangements.
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the six months ended May 31, 2010, were as follows:
Purchases | $189,063,866 |
Sales | $187,684,119 |
The Fund participates in a $100,000,000 unsecured, uncommitted revolving line of credit (LOC) agreement with PNC Bank. The LOC was made available for extraordinary or emergency purposes, primarily for financing redemption payments. Borrowings are charged interest at a rate offered to the Fund by PNC Bank at the time of the borrowing. As of May 31, 2010, there were no outstanding loans. During the six months ended May 31, 2010, the Fund did not utilize the LOC.
Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other funds advised by subsidiaries of Federated Investors, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of May 31, 2010, there were no outstanding loans. During the six months ended May 31, 2010, the program was not utilized.
Since October 2003, Federated Investors, Inc. and related entities (collectively, “Federated”), and various Federated sponsored mutual funds (“Federated Funds”) have been named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of certain Federated 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 Semi-Annual Shareholder ReportManagement has evaluated subsequent events through the date the financial statements were issued, and determined that no events have occurred that require additional disclosure.
Semi-Annual Shareholder ReportEvaluation and Approval of Advisory Contract - May 2010
Federated Stock and Bond Fund (the “Fund”)
The Fund's Board reviewed the Fund's investment advisory and subadvisory contracts at meetings held in May 2010. The Board's decision regarding these contracts reflects the exercise of its business judgment on whether to continue the existing arrangements.
In this connection, the Federated funds' Board had previously appointed a Senior Officer, whose duties include specified responsibilities relating to the process by which advisory fees are to be charged to a Federated fund. The Senior Officer has the authority to retain consultants, experts, or staff as may be reasonably necessary to assist in the performance of his duties, reports directly to the Board, and may be terminated only with the approval of a majority of the independent members of the Board. The Senior Officer prepared and furnished to the Board an independent, written evaluation that covered topics discussed below. The Board considered that evaluation, along with other information, in deciding to approve the advisory and subadvisory contracts.
During its review of these contracts, the Board considered compensation and benefits received by the Adviser and subadvisers. This included the fees received for services provided to the Fund by other entities in the Federated organization and research services (if any) received by the Adviser from brokers that execute Federated fund trades, as well as advisory fees. The Board is also familiar with and considered judicial decisions concerning allegedly excessive investment advisory fees, which have indicated that the following factors may be relevant to an Adviser's fiduciary duty with respect to its receipt of compensation from a fund: the nature and quality of the services provided by the Adviser, including the performance of the fund; the Adviser's cost of providing the services; the extent to which the Adviser may realize “economies of scale” as a fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser's relationship with a fund; performance and expenses of comparable funds; and the extent to which the independent Board members are fully informed about all facts the Board deems relevant bearing on the Adviser's services and fees. The Board further considered management fees (including any components thereof) charged to institutional and other clients of the Adviser and subadvisers for what might be viewed as like services, and the cost to the Adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit and profit margins of the Adviser and its affiliates for supplying such services. The Board was aware of these factors and was guided by them in its review of the Fund's advisory and subadvisory contracts to the extent it considered them to be appropriate and relevant, as discussed further below.
Semi-Annual Shareholder ReportThe Senior Officer reviewed reports compiled by Federated, using data supplied by independent fund ranking organizations, regarding the performance of, and fees charged by, other mutual funds, noting his view that comparisons to fund peer groups are relevant in judging the reasonableness of proposed fees.
For the periods covered by the report, the Fund's performance for the three-year and five-year periods was above the median of the relevant peer group, and the Fund's performance fell below the median of the relevant peer group for the one-year period. The Board discussed the Fund's performance with the Adviser and recognized the efforts being undertaken by the Adviser. The Board will continue to monitor these efforts and the performance of the Fund.
The Board also received financial information about Federated, including reports on the compensation and benefits Federated derived from its relationships with the Federated funds. These reports 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 reports also discussed any indirect benefit Federated may derive from its receipt of research Semi-Annual Shareholder ReportFederated furnished reports, requested by the Senior Officer, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses on a fund-by-fund basis, using allocation methodologies specified by the Senior Officer. The Senior Officer noted that, although they may apply consistent allocation processes, the inherent difficulties in allocating costs (and the unavoidable arbitrary aspects of that exercise) and the lack of consensus on how to allocate those costs may render such allocation reports unreliable. The allocation reports were considered in the analysis by the Board but were determined to be of limited use.
The Board and the Senior Officer also reviewed a report compiled by Federated comparing profitability information for Federated to other publicly held fund management companies. In this regard, the Senior Officer noted the limited availability of such information, but nonetheless concluded that Federated's profit margins did not appear to be excessive and the Board agreed.
The Senior Officer's evaluation also discussed the notion of possible realization of “economies of scale” as a fund grows larger. The Board considered in this regard that the Adviser has made significant and long-term investments in areas that support all of the Federated funds, such as personnel and processes for the portfolio management, compliance, and risk management functions; and systems technology; and that the benefits of these efforts (as well as any economies, should they exist) were likely to be enjoyed by the fund complex as a whole. Finally, the Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which (as discussed in the Senior Officer's evaluation) is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fee as the fund attains a certain size. The Senior Officer did not recommend institution of breakpoints in pricing Federated's fund advisory services at this time.
It was noted in the materials for the Board meeting that for the period covered by the report, the Fund's investment advisory fee, after waivers and expense reimbursements, if any, was above the median of the relevant peer group. The Board reviewed the fees and other expenses of the Fund with the Adviser and was satisfied that the overall expense structure of the Fund remained competitive. The Board will continue to monitor advisory fees and other expenses borne by the Fund.
Semi-Annual Shareholder ReportIn its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund.
The Board based its decision to approve the advisory and subadvisory contracts on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the contract reflects its determination that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangements.
Semi-Annual Shareholder ReportVoting Proxies on Fund Portfolio Securities
A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available from Federated's website at FederatedInvestors.com. To access this information from the “Products” section of the website, click on the “Prospectuses and Regulatory Reports” link under “Related Information,” then select the appropriate link opposite the name of the Fund; or select the name of the Fund and from the Fund's page, click on the “Prospectuses and Regulatory Reports” link. Form N-PX filings are also available at the SEC's website at www.sec.gov.
Quarterly Portfolio Schedule
The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on “Form N-Q.” These filings are available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the “Products” section of Federated's website at FederatedInvestors.com by clicking on “Portfolio Holdings” under “Related Information,” then selecting the appropriate link opposite the name of the Fund; or select the name of the Fund and from the Fund's page, click on the “Portfolio Holdings” link.
Semi-Annual Shareholder ReportMutual 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.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERYIn 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.
Semi-Annual Shareholder Report![](https://capedge.com/proxy/N-CSRS/0001318148-10-001156/imge62b57cd1.jpg)
Federated Stock and Bond Fund
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
Cusip 313911505
Q450549 (7/10)
Federated is a registered mark of Federated Investors, Inc.
2010 © Federated Investors, Inc.
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 |
Registrant | Federated Stock and Bond Fund |
By | /S/ Richard A. Novak |
Richard A. Novak | |
Principal Financial Officer | |
Date | July 21, 2010 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. | |
By | /S/ J. Christopher Donahue |
J. Christopher Donahue | |
Principal Executive Officer | |
Date | July 21, 2010 |
By | /S/ Richard A. Novak |
Richard A. Novak | |
Principal Financial Officer | |
Date | July 21, 2010 |