Federated Managed Pool Series N-CSR Certified annual shareholder report (management investment company)

United States

Securities and Exchange Commission

Washington, D.C.  20549

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

811-21822

(Investment Company Act File Number)

Federated Managed Pool Series

_______________________________________________________________

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7000

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

Date of Fiscal Year End:  12/31/07

Date of Reporting Period:  12/31/07

Item 1.                      Reports to Stockholders

Federated Corporate Bond Strategy Portfolio

A Portfolio of Federated Managed Pool Series

ANNUAL SHAREHOLDER REPORT

December 31, 2007

FINANCIAL HIGHLIGHTS

SHAREHOLDER EXPENSE EXAMPLE

MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE

PORTFOLIO OF INVESTMENTS SUMMARY TABLE

PORTFOLIO OF INVESTMENTS

STATEMENT OF ASSETS AND LIABILITIES

STATEMENT OF OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

NOTES TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BOARD OF TRUSTEES AND TRUST OFFICERS

EVALUATION AND APPROVAL OF ADVISORY CONTRACT

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

QUARTERLY PORTFOLIO SCHEDULE

NOT FDIC INSURED  MAY LOSE VALUE  NO BANK GUARANTEE

Financial Highlights

(For a Share Outstanding Throughout Each Period)

	Year  Ended 12/31/2007		Period Ended 12/31/2006	1
Net Asset Value, Beginning of Period	$10.33		$10.00
Income From Investment Operations:
Net investment income	0.62		0.33
Net realized and unrealized gain (loss) on investments	(0.10	)	0.34
TOTAL FROM INVESTMENT OPERATIONS	0.52		0.67
Less Distributions:
Distributions from net investment income	(0.62	)	(0.33	)
Distributions from net realized gain on investments	(0.02	)	(0.01	)
TOTAL DISTRIBUTIONS	(0.64	)	(0.34	)
Net Asset Value, End of Period	$10.21		$10.33
Total Return2	5.22	%	6.78	%
Ratios to Average Net Assets:
Net expenses	0.00	%	0.00	%3
Net investment income	6.09	%	6.07	%3
Supplemental Data:
Net assets, end of period (000 omitted)	$7,797		$5,165
Portfolio turnover	29	%	20	%

1Reflects operations for the period from June 20, 2006 (start of performance) to December 31, 2006.

2Based 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.

3Computed on an annualized basis.

See Notes which are an integral part of the Financial Statements

Shareholder Expense Example

As a shareholder of the Fund, you incur ongoing costs, including to the extent applicable, management fees, 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 July 1, 2007 to December 31, 2007.

ACTUAL EXPENSES

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.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

	Beginning Account Value 7/1/2007	Ending Account Value 12/31/2007	Expenses Paid During Period1
Actual	$1,000	$1,043.00	$0.00
Hypothetical (assuming a 5% return before expenses)	$1,000	$1,025.21	$0.00

1Expenses are equal to the Fund’s annualized net expense ratio of 0.00%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Management’s Discussion of Fund Performance

The fund’s total return, based on net asset value for the 12-month reporting period was 5.22%. The total return of the Baa Component of the Lehman Brothers U.S. Credit Index (LBUSCI)¹, was 4.74%. The fund’s total return for the most recent completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the benchmark index.

During the period, the most significant factors affecting the fund’s performance relative to the index were (1) individual security and quality selection; (2) the effect of changing interest rates² (referred to as “duration”)³; and (3) the exposure or lack thereof to varying points along the maturity spectrum (referred to as “yield curve strategy”).

Market Overview

Over the 12-month reporting period, interest rate levels fell for all points along the maturity spectrum, in response to both a generally slowing domestic economy and the onset of a credit crises emanating from the housing slowdown. In the third quarter of the fiscal year, mortgage-related data showed significant deterioration in credit quality as delinquency rates rose and virtually all housing indicators moved decisively negative. In this environment, a dramatic flight to quality ensued in the bond market, with pure U.S. Treasury securities representing the safe haven for investment dollars. Non-Treasury sectors significantly underperformed comparable maturity Treasuries to include U.S. government agency securities, mortgage-backed securities, corporate bonds (both investment grade and especially high yield bonds) and emerging market bonds. As is typical of a risk adverse investment environment, interest rates fell, with the largest declines occurring in the short-to-intermediate maturities, with much smaller rate declines for longer maturity bonds. As financial market anxiety grew, the Federal Reserve Board reduced the federal funds target rate by 0.50% to 4.75% at its September 2007 meeting followed by two additional 0.25% rate cuts at both its October and December 2007 meetings to 4.25%.

Security/Quality Selection

Security/quality selection was a significant positive contributor to the fund’s relative performance during the reporting period versus the LBUSCI. While there were individual securities which both contributed and detracted from fund performance, overall security selection represented a positive factor. Owning securities of the following corporate issuers provided a significant positive impact: Archstone Smith, Daimler Chrysler North American Holding Corp., FMR Corp. (Fidelity Management) and Liberty Mutual Group, Inc. Those individual corporate issuers which detracted from performance included: Capmark Financial, Residential Capital and Capital One Financial Corp. A very important positive contributor to performance was the decision to maintain a higher average quality relative to the LBUSCI, which is fully comprised of Baa/BBB rated securities. The portfolio consistently maintained exposure to both Aa and A rated corporate debt securities throughout the reporting period, a fiscal year in which the highest quality rating categories outperformed lower quality debt instruments.

Duration

Duration was a negative contributor to relative performance. The average portfolio duration for the entire fiscal year was slightly less than the LBUSCI. As a result, the fund was not in a position to relatively benefit from falling interest rates.

Yield Curve

The fund’s yield curve strategy was a positive contributor to relative performance versus the LBUSCI. The fund concentrated investments in the short-to-intermediate maturities (3-7 years), while relatively underweighting the longer maturities. Thus, the fund was positioned along the “yield curve” to take advantage of those maturities experiencing more sizable rate declines/price increases. For example, the 30-year U.S. Treasury rate fell by 0.36% over the reporting period, while the shorter 5-year and 2-year rates fell by 1.25% and 1.76%, respectively.

1The LBUSCI is an unmanaged index comprised of corporate bonds or securities represented by the following. The index is unmanaged and unlike the fund, is not affected by cashflows. It is not possible to invest directly in an index.

2Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.

3Duration is a measure of a security’s price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities with shorter durations. For purposes of this Management Discussion of Fund Performance, duration is determined using a third-party analytical system.

GROWTH OF A $10,000 INVESTMENT

The graph below illustrates the hypothetical investment of $10,0001 in the Federated Corporate Bond Strategy Portfolio (the “Fund”) from June 20, 2006 (start of performance)to December 31, 2007compared to the Baa (BBB) Component of the Lehman Brothers U.S. Credit Index (LBUSCI).2

Average Annual Total Returns for the Period Ended 12/31/2007
1 Year	5.22%
Start of Performance (6/20/2006)	7.88%

Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1Represents a hypothetical investment of $10,000 in the Fund.

2The LBUSCI is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged and, unlike the Fund, is not affected by cashflows. It is not possible to invest directly in an index.

Portfolio of Investments Summary Table

At December 31, 2007, the Fund’s portfolio composition1 was as follows:

Security Type	Percentage of Total Net Assets
Corporate Debt Securities	82.7%
U.S Treasury and Agency Securities2	12.8%
Cash Equivalents3	3.0%
Other Assets and Liabilities – Net4	1.5%
TOTAL	100.0%

1See the Fund’s Prospectus and Statement of Additional Information for a description of these security types.

2For purposes of this table, U.S. Treasury and Agency Securities do not include mortgage-backed securities guaranteed by Government Sponsored Entities.

3Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements.

4Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Portfolio of Investments

December 31, 2007

	Principal Amount or Shares				Value
			CORPORATE BONDS—82.7%
			Basic Industry - Chemicals—0.1%
$	10,000		Rohm & Haas Co., 6.00%, 9/15/2017	$	10,109
			Basic Industry - Metals & Mining—4.3%
	95,000		Alcoa, Inc., Note, 5.55%, 2/1/2017		92,699
	75,000		BHP Finance (USA), Inc., 4.80%, 4/15/2013		72,916
	75,000		Barrick Gold Corp., 4.875%, 11/15/2014		71,519
	50,000		Newmont Mining Corp., Company Guarantee, 5.875%, 4/1/2035		43,600
	55,000		Xstrata Canada Corp., 6.00%, 10/15/2015		56,017
			TOTAL		336,751
			Capital Goods - Aerospace & Defense—3.8%
	75,000	1,2	BAE Systems Holdings, Inc., 5.20%, 8/15/2015		73,611
	75,000		Embraer Overseas Ltd., Sr. Unsecd. Note, 6.375%, 1/24/2017		71,348
	75,000		Raytheon Co., Unsecd. Note, 5.375%, 4/1/2013		77,033
	75,000		Rockwell Collins, Unsecd. Note, 4.75%, 12/1/2013		75,056
			TOTAL		297,048
			Capital Goods - Building Materials—0.3%
	25,000		Masco Corp., Note, 5.875%, 7/15/2012		25,812
			Capital Goods - Diversified Manufacturing—1.2%
	20,000	1,2	Textron Financial Corp., Jr. Sub. Note, 6.00%, 2/15/2067		18,154
	75,000		Thomas & Betts Corp., Note, 7.25%, 6/1/2013		77,340
			TOTAL		95,494
			Capital Goods - Environmental—2.1%
	75,000		Republic Services, Inc., Note, 6.75%, 8/15/2011		79,074
	75,000		Waste Management, Inc., Company Guarantee, 7.375%, 5/15/2029		82,120
			TOTAL		161,194
			Communications - Media & Cable—2.3%
	75,000		Comcast Corp., 7.05%, 3/15/2033		81,724
	75,000		Cox Communications, Inc., Unsecd. Note, 5.45%, 12/15/2014		73,607
	25,000		Time Warner Cable, Inc., Sr. Unsecd. Note, 5.85%, 5/1/2017		25,232
			TOTAL		180,563
			Communications - Media Noncable—2.1%
	75,000		British Sky Broadcasting Group PLC, 8.20%, 7/15/2009		78,560
	75,000		News America Holdings, Inc., Sr. Deb., 9.25%, 2/1/2013		88,055
			TOTAL		166,615
			Communications - Telecom Wireless—3.3%
	75,000		AT&T Wireless Services, Inc., 8.75%, 3/1/2031		97,048
	75,000		America Movil S.A. de C.V., Note, 5.75%, 1/15/2015		74,843
	50,000		Sprint Capital Corp., Company Guarantee, 8.75%, 3/15/2032		56,429
	5,000		Vodafone Group PLC, 5.35%, 2/27/2012		5,072
	20,000		Vodafone Group PLC, Note, 5.625%, 2/27/2017		20,178
			TOTAL		253,570
			Communications - Telecom Wirelines—3.4%
	35,000		Embarq Corp., 6.738%, 6/1/2013		36,244
	75,000		Telecom Italia Capital, Note, 4.875%, 10/1/2010		74,677
	40,000		Telefonica SA, Company Guarantee, 7.045%, 6/20/2036		45,234
	30,000		Telefonica SA, Sr. Note, 5.855%, 2/4/2013		30,919
	75,000		Telefonos de Mexico, Note, 4.50%, 11/19/2008		74,653
			TOTAL		261,727
			Consumer Cyclical - Automotive—2.8%
	75,000		DaimlerChrysler North America Holding Corp., Company Guarantee, 8.50%, 1/18/2031		93,473
	75,000		Johnson Controls, Inc., Sr. Note, 5.25%, 1/15/2011		75,794
	50,000	1,2	Nissan Motor Acceptance Corp., Sr. Unsecd. Note, 5.625%, 3/14/2011		50,627
			TOTAL		219,894
			Consumer Cyclical - Entertainment—1.0%
	75,000		Time Warner, Inc., 5.50%, 11/15/2011		75,266
			Consumer Cyclical - Lodging—0.9%
	75,000		Wyndham Worldwide Corp., Sr. Unsecd. Note, 6.00%, 12/1/2016		71,761
			Consumer Cyclical - Retailers—1.9%
	75,000		CVS Caremark Corp., Sr. Unsecd. Note, 5.75%, 6/1/2017		75,976
	75,000		JC Penney Corp., Inc., Sr. Unsecd. Note, 5.75%, 2/15/2018		70,580
			TOTAL		146,556
			Consumer Non-Cyclical Food/Beverage—2.0%
	75,000		General Mills, Inc., Note, 5.70%, 2/15/2017		73,959
	75,000	1,2	SABMiller PLC, Note, 6.50%, 7/1/2016		78,223
			TOTAL		152,182
			Consumer Non-Cyclical Health Care—2.2%
	75,000		Anthem, Inc., 6.80%, 8/1/2012		80,572
	15,000	1,2	Covidien International Finance SA, 6.55%, 10/15/2037		15,540
	75,000		Thermo Electron Corp., Sr. Unsecd. Note, 5.00%, 6/1/2015		71,647
			TOTAL		167,759
			Consumer Non-Cyclical Pharmaceuticals—1.3%
	25,000		Eli Lilly & Co., Bond, 5.20%, 3/15/2017		24,891
	75,000		Wyeth, 6.45%, 2/1/2024		78,896
			TOTAL		103,787
			Consumer Non-Cyclical Supermarkets—1.0%
	75,000		Kroger Co., 7.25%, 6/1/2009		77,177
			Energy - Independent—4.0%
	75,000		Anadarko Petroleum Corp., Sr. Unsecd. Note, 5.95%, 9/15/2016		76,496
	75,000		Canadian Natural Resources Ltd., 4.90%, 12/1/2014		71,813
	75,000		Pemex Project Funding Master, Company Guarantee, 9.125%, 10/13/2010		83,111
	55,000		XTO Energy, Inc., 6.75%, 8/1/2037		60,009
	20,000		XTO Energy, Inc., Sr. Unsecd. Note, 6.25%, 8/1/2017		20,997
			TOTAL		312,426
			Energy - Integrated—0.7%
	50,000		Husky Oil Ltd., Deb., 7.55%, 11/15/2016		56,352
			Energy - Oil Field Services—0.3%
	20,000		Enbridge, Inc., Sr. Note, 5.60%, 4/1/2017		19,536
			Energy - Refining—0.9%
	75,000		Valero Energy Corp., Note, 4.75%, 4/1/2014		72,253
			Financial Institution - Banking—7.3%
	30,000		Capital One Capital IV, 6.745%, 2/17/2037		22,365
	75,000		Capital One Financial Corp., Note, 7.125%, 8/1/2008		75,690
	75,000		Corp Andina De Fomento, Bond, 7.375%, 1/18/2011		81,014
	100,000		HSBC Finance Capital Trust IX, Note, 5.911%, 11/30/2035		93,083
	75,000		J.P. Morgan Chase & Co., Sub. Deb., 8.00%, 4/29/2027		89,360
	75,000		Popular North America, Inc., 5.65%, 4/15/2009		74,744
	75,000		Sovereign Bancorp, Inc., Sr. Note, 4.80%, 9/1/2010		73,747
	75,000		Washington Mutual Bank, 5.125%, 1/15/2015		62,709
			TOTAL		572,712
			Financial Institution - Brokerage—6.5%
	60,000		Blackrock, Inc., 6.25%, 9/15/2017		61,350
	10,000		Eaton Vance Corp., 6.50%, 10/2/2017		9,999
	75,000	1,2	FMR Corp., 4.75%, 3/1/2013		75,265
	75,000		Goldman Sachs Group, Inc., 6.125%, 2/15/2033		74,652
	75,000		Invesco Ltd., Note, 4.50%, 12/15/2009		74,784
	50,000		Janus Capital Group, Inc., Sr. Note, 6.25%, 6/15/2012		51,243
	50,000		Janus Capital Group, Inc., Sr. Note, 6.70%, 6/15/2017		51,586
	45,000		Lehman Brothers Holdings, Inc., Sub. Deb., 6.50%, 7/19/2017		45,800
	50,000		Lehman Brothers Holdings, Inc., Sub. Deb., 6.875%, 7/17/2037		49,362
	15,000		Morgan Stanley, Sr. Unsecd. Note, 5.95%, 12/28/2017		15,112
			TOTAL		509,153
			Financial Institution - Finance Noncaptive—0.7%
	75,000	1,2	Capmark Financial Group, Inc., Note, 6.30%, 5/10/2017		56,000
			Financial Institution - Insurance - Health—1.0%
	75,000		Aetna US Healthcare, 5.75%, 6/15/2011		77,014
			Financial Institution - Insurance - Life—1.2%
	75,000		AXA-UAP, Sub. Note, 8.60%, 12/15/2030		91,733
			Financial Institution - Insurance - P&C—4.3%
	9,000		ACE INA Holdings, Inc., Sr. Note, 5.70%, 2/15/2017		8,906
	70,000		CNA Financial Corp., 6.50%, 8/15/2016		71,561
	75,000		Horace Mann Educators Corp., Sr. Note, 6.85%, 4/15/2016		78,904
	75,000	1,2	Liberty Mutual Group, Inc., Unsecd. Note, 5.75%, 3/15/2014		75,345
	25,000		The Travelers Cos., Inc., Bond, 6.25%, 3/15/2067		23,629
	75,000		The Travelers Cos., Inc., Sr. Unsecd. Note, 5.50%, 12/1/2015		74,991
			TOTAL		333,336
			Financial Institution - REITs—3.0%
	75,000		Equity One, Inc., Bond, 6.00%, 9/15/2017		70,519
	10,000		Liberty Property LP, 6.625%, 10/1/2017		10,204
	75,000		Prologis, Sr. Note, 5.50%, 4/1/2012		74,129
	75,000		Simon Property Group, Inc., 6.35%, 8/28/2012		77,692
			TOTAL		232,544
			Sovereign—0.8%
	56,000		United Mexican States, Series MTNA, 6.75%, 9/27/2034		62,006
			Technology—2.6%
	75,000		Dell Computer Corp., Deb., 7.10%, 4/15/2028		81,957
	25,000		Fiserv, Inc., Sr. Note, 6.80%, 11/20/2017		25,777
	45,000		Harris Corp., 5.95%, 12/1/2017		44,931
	50,000		Intuit, Inc., Sr. Note, 5.40%, 3/15/2012		50,830
			TOTAL		203,495
			Transportation - Airlines—1.1%
	75,000		Southwest Airlines Co., Deb., 7.375%, 3/1/2027		82,272
			Transportation - Railroads—1.8%
	75,000		Burlington Northern Santa Fe Corp., 4.875%, 1/15/2015		71,466
	75,000		Union Pacific Corp., 4.875%, 1/15/2015		71,258
			TOTAL		142,724
			Transportation - Services—1.6%
	50,000	1,2	Enterprise Rent-A-Car USA Finance Co., 6.375%, 10/15/2017		48,500
	75,000		Ryder System, Inc., 5.95%, 5/2/2011		78,056
			TOTAL		126,556
			Utility - Electric—7.1%
	75,000		Cleveland Electric Illuminating Co., Sr. Unsecd. Note, 5.95%, 12/15/2036		68,855
	75,000		Consolidated Natural Gas Co., 5.00%, 12/1/2014		72,236
	50,000		Dominion Resources, Inc., Unsecd. Note, 5.95%, 6/15/2035		47,238
	75,000		Duke Capital Corp., Sr. Note, 6.25%, 2/15/2013		77,605
	75,000		FirstEnergy Corp., 6.45%, 11/15/2011		77,512
	75,000		MidAmerican Energy Co., Unsecd. Note, 6.75%, 12/30/2031		80,969
	50,000		PPL Energy Supply LLC, Sr. Unsecd. Note, 6.00%, 12/15/2036		45,686
	75,000		PSEG Power LLC, Company Guarantee, 7.75%, 4/15/2011		80,664
	5,000		Virginia Electric & Power Co., Sr. Unsecd. Note, 5.10%, 11/30/2012		5,029
			TOTAL		555,794
			Utility - Natural Gas Distributor—0.9%
	75,000		Atmos Energy Corp., 4.95%, 10/15/2014		72,889
			Utility - Natural Gas Pipelines—0.9%
	75,000		Kinder Morgan Energy Partners LP, Sr. Unsecd. Note, 5.80%, 3/15/2035		67,657
			TOTAL CORPORATE BONDS (IDENTIFIED COST $6,350,387)		6,449,717
			U.S. TREASURY—12.8%
	1,000,000		United States Treasury Note, 3.375%, 11/30/2012 (IDENTIFIED COST $990,925)		995,951
			MUTUAL FUND—3.0%
	237,667	3,4	Prime Value Obligations Fund, Institutional Shares, 4.86% (AT NET ASSET VALUE)		237,667
			TOTAL INVESTMENTS—98.5% (IDENTIFIED COST $7,578,979)5		7,683,335
			OTHER ASSETS AND LIABILITIES – NET—1.5%6		113,604
			TOTAL NET ASSETS—100%	$	7,796,939

1Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At December 31, 2007, these restricted securities amounted to $491,265, which represented 6.3% of total net assets.

2Denotes 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. At December 31, 2007, these liquid restricted securities amounted to $491,265, which represented 6.3% of total net assets.

3Affiliated company.

47-Day net yield.

5Also represents cost for federal tax purposes.

6Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Note: The categories of investments are shown as a percentage of total net assets at December 31, 2007.

The following acronym is used throughout this portfolio:

REITs —Real Estate Investment Trusts

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

December 31, 2007

Assets:
Total investments in securities, at value including $237,667 of investments in an affiliated issuer (Note 5) (identified cost $7,578,979)			$	7,683,335
Income receivable				103,254
Receivable for shares sold				95,696
TOTAL ASSETS				7,882,285
Liabilities:
Payable for shares redeemed	$	3,244
Income distribution payable		27,358
Payable for administrative personnel and services fee (Note 5)		10,622
Payable for transfer and dividend disbursing agent fees and expenses		4,224
Payable for auditing fees		22,200
Payable for portfolio accounting fees		8,226
Payable for share registration costs		3,792
Payable for insurance premiums		4,711
Accrued expenses		969
TOTAL LIABILITIES				85,346
Net assets for 763,806 shares outstanding			$	7,796,939
Net Assets Consist of:
Paid-in capital			$	7,683,112
Net unrealized appreciation of investments				104,356
Accumulated net realized gain on investments				8,175
Undistributed net investment income				1,296
TOTAL NET ASSETS			$	7,796,939
Net Asset Value, Offering Price and Redemption Proceeds Per Share
$7,796,939 ÷ 763,806 shares outstanding, no par value, unlimited shares authorized				$10.21

See Notes which are an integral part of the Financial Statements

Statement of Operations

Year Ended December 31, 2007

Investment Income:
Interest							$	341,645
Dividends received from an affiliated issuer (Note 5)								4,165
TOTAL INCOME								345,810
Expenses:
Administrative personnel and services fee (Note 5)				$	150,000
Custodian fees					3,333
Transfer and dividend disbursing agent fees and expenses					13,765
Directors’/Trustees’ fees					9,335
Auditing fees					22,200
Legal fees					10,717
Portfolio accounting fees					47,380
Share registration costs					14,727
Printing and postage					249
Insurance premiums					4,710
Miscellaneous					1,178
TOTAL EXPENSES					277,594
Waiver and Reimbursement (Note 5):
Waiver of administrative personnel and services fee	$	(24,942	)
Reimbursement of other operating expenses		(252,652	)
TOTAL WAIVER AND REIMBURSEMENT					(277,594	)
Net expenses								—-
Net investment income								345,810
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments								22,234
Net change in unrealized appreciation of investments								(59,416	)
Net realized and unrealized loss on investments								(37,182	)
Change in net assets resulting from operations							$	308,628

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

		Year Ended 12/31/2007			Period Ended 12/31/2006	1
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	345,810		$	165,542
Net realized gain on investments		22,234			6,765
Net change in unrealized appreciation/depreciation of investments		(59,416	)		163,772
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS		308,628			336,079
Distributions to Shareholders:
Distributions from net investment income		(345,614	)		(165,379	)
Distributions from net realized gain on investments		(14,057	)		(5,830	)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS		(359,671	)		(171,209	)
Share Transactions:
Proceeds from sale of shares		2,689,572			5,000,000
Net asset value of shares issued to shareholders in payment of distributions declared		22,286			175
Cost of shares redeemed		(28,921	)		—-
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS		2,682,937			5,000,175
Change in net assets		2,631,894			5,165,045
Net Assets:
Beginning of period		5,165,045			—-
End of period (including undistributed net investment income of $1,296 and $163, respectively)	$	7,796,939		$	5,165,045

1Reflects operations for the period from December 2, 2005 (date of initial capital contribution) to December 31, 2006.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

December 31, 2007

1. ORGANIZATION

Federated Managed Pool Series (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of four portfolios. The financial statements included herein are only those of Federated Corporate Bond Strategy Portfolio (the “Fund”), a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The investment objective of the Fund is to provide total return.

The Fund received initial capital on December 2, 2005. The Fund registered its shares on June 5, 2006 and the first shares were sold on June 20, 2006, the date from which the Fund has presented its financial highlights for the period ended December 31, 2006. Distributions of $280 were made to the Fund’s Adviser prior to the registration of fund shares on June 5, 2006.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.

Investment Valuation

In calculating its net asset value (NAV), the Fund generally values investments as follows:

·   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 Board of Trustees (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.

If the Fund cannot obtain a price or price evaluation from a pricing service for an investment, the Fund may attempt to value the investment based upon the mean of bid and asked quotations or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund’s NAV.

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.

Repurchase Agreements

It 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.

With respect to agreements to repurchase U.S. government securities and cash items, the Fund treats the repurchase agreement as an investment in the underlying securities and not as an obligation of the other party to the repurchase agreement. Other repurchase agreements are treated as obligations of the other party secured by the underlying securities. Nevertheless, 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, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared daily and paid monthly. Non-cash dividends included in dividend income, if any, are recorded at fair value.

Premium and Discount Amortization/Paydown Gains and Losses

All premiums and discounts on fixed-income securities are amortized/accreted. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income.

Federal Taxes

It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary.The Fund adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes”, on June 29, 2007.  As of and during the period ended December 31, 2007, the Fund did not have a liability for any unrecognized tax expenses. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of December 31, 2007, tax years 2004 through 2007 remain subject to examination by the fund's major tax jurisdictions, which include the United States of America and the state of Massachusetts.

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.

Restricted Securities

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.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.

3. SHARES OF BENEFICIAL INTEREST

The following table summarizes share activity:

Year Ended December 31	2007		2006 1
Shares sold	264,444		500,000
Shares issued to shareholders in payment of distributions declared	2,184		18
Shares redeemed	(2,840	)	—-
NET CHANGE RESULTING FROM SHARE TRANSACTIONS	263,788		500,018

1 Reflects operations for the period from December 2, 2005 (date of initial capital contribution) to December 31, 2006.

4. FEDERAL TAX INFORMATION

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due to differing treatments of short-term gain distributions.

For the year ended December 31, 2007, permanent differences identified and reclassified among the components of net assets were as follows:

	Increase (Decrease)
Undistributed Net Investment Income (Loss)		Accumulated Net Realized Gains (Losses)
$935		$(935)

Net investment income (loss), net realized gains (losses), and net assets were not affected by this reclassification.

The tax character of distributions as reported on the Statement of Changes in Net Assets for the year ended December 31, 2007 and the period ended December 31, 2006, was as follows:

	2007	20061
Ordinary income2	$359,671	$171,209

1Reflects operations for the period from December 2, 2005 (date of initial capital contribution) to December 31, 2006.

2For tax purposes, short-term capital gain distributions are considered ordinary income distributions.

As of December 31, 2007, the components of distributable earnings on a tax basis were as follows:

Undistributed ordinary income	$	3,503
Undistributed long-term capital gain	$	5,970
Net unrealized appreciation	$	104,356

At December 31, 2007, the cost of investments for federal tax purposes was $7,578,979. The net unrealized appreciation of investments for federal tax purposes was $104,356. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $152,915 and net unrealized depreciation from investments for those securities having an excess of cost over value of $48,559.

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company is the Fund’s investment adviser (the “Adviser”). The advisory agreement between the Fund and Adviser provides the Adviser will not charge a fee for its advisory services to the Fund, because all eligible investors are (1) in separately managed or wrap fee programs, who often pay a single aggregate fee to the wrap program sponsor for all costs and expenses of the wrap-fee programs, (2) in certain other separately managed accounts and discretionary investment accounts or (3) to the extent permitted under applicable law, other Federated funds. The Adviser has contractually agreed to reimburse all operating expenses, excluding extraordinary expenses, incurred by the Fund. For the year ended December 31, 2007, the Adviser reimbursed $252,652 of other operating expenses.

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of 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. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended December 31, 2007, the net fee paid to FAS was 2.201% of average daily net assets of the Fund. The Fund currently accrues the minimum administrative fee; therefore the percentage of average aggregate daily net assets is greater than the amounts presented in the chart above. FAS waived $24,942 of its fee. For the year ended December 31, 2007, the Fund’s Adviser reimbursed the Fund for any fee paid to FAS.

General

Certain of the Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.

Transactions with Affiliated Companies

Affiliated holdings are mutual funds which are managed by the Adviser or an affiliate of the Adviser. Transactions with the affiliated company during the year ended December 31, 2007 are as follows:

Affiliate	Balance of Shares Held 12/31/2006	Purchases/ Additions	Sales/ Reductions	Balance of Shares Held 12/31/2007	Value	Dividend Income
Prime Value Obligations Fund, Institutional Shares	—-	3,557,413	3,319,746	237,667	$237,667	$4,165

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended December 31, 2007, were as follows:

Purchases	$	2,831,775
Sales	$	1,537,399

7. LINE OF CREDIT

The Fund participates in a $150,000,000 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 of 0.65% over the federal funds rate. As of December 31, 2007, there were no outstanding loans. During the year ended December 31, 2007, the Fund did not utilize the LOC.

8. INTERFUND LENDING

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (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 funds to borrow from other participating affiliated funds. As of December 31, 2007, there were no outstanding loans. During the year ended December 31, 2007, the program was not utilized.

9. LEGAL PROCEEDINGS

Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, “Federated”), along with various investment companies sponsored by Federated (“Funds”) were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. These lawsuits began to be filed shortly after Federated’s first public announcement that it had received requests for information on shareholder trading activities in the Funds from the SEC, the Office of the New York State Attorney General (“NYAG”), and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay for the benefit of fund shareholders additional disgorgement and a civil money penalty in the aggregate amount of an additional $72 million. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees. The Board of the Funds has retained the law firm of Dickstein Shapiro LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and intend to defend this litigation. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys’ fees and expenses, and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

10. RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board released Statement on Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157), which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management has concluded that the adoption of FAS 157 is not expected to have a material impact on the Fund’s net assets or results of operations.

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF TRUSTEES OF FEDERATED MANAGED POOL SERIES AND SHAREHOLDERS OF FEDERATED CORPORATE BOND STRATEGY PORTFOLIO

We have audited the accompanying statement of assets and liabilities of Federated Corporate Bond Strategy Portfolio (one of the portfolios constituting Federated Managed Pool Series), (the “Fund”), including the portfolio of investments, as of December 31, 2007, and the related statement of operations for the year then ended and the statements of changes in net assets and the financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Federated Corporate Bond Strategy Portfolio, a portfolio of Federated Managed Pool Series, at December 31, 2007, the results of its operations for the year then ended and its changes in its net assets and its financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 18, 2008

Board of Trustees and Trust Officers

The Board is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Board member and the senior officers of the Fund. Where required, the tables separately list Board members who are “interested persons” of the Fund (i.e., “Interested” Board members) and those who are not (i.e., “Independent” Board members). Unless otherwise noted, the address of each person listed is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222. The address of all Independent Board members listed is 5800 Corporate Drive, Pittsburgh, PA 15237-7000; Attention: Mutual Fund Board.  As of December 31, 2007, the Trust comprised four portfolios, and the Federated Fund Complex consisted of40 investment companies (comprising 148 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees all portfolios in the Federated Fund Complex and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.

INTERESTED TRUSTEES BACKGROUND

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John F. Donahue* Birth Date: July 28, 1924 CHAIRMAN and TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Complex’s Executive Committee. Previous Positions: Chairman of the Federated Fund Complex; Trustee, Federated Investment Management Company and Chairman and Director, Federated Investment Counseling.
J. Christopher Donahue* Birth Date: April 11, 1949 PRESIDENT and TRUSTEE Began serving: October 2005	Principal Occupations: Principal Executive Officer and President of the Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (Investment advisory subsidiary of Federated); Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd.

*Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to the positions they hold with Federated Investors, Inc. and its subsidiaries.

INDEPENDENT TRUSTEES BACKGROUND

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
Thomas G. Bigley Birth Date: February 3, 1934 TRUSTEE Began serving: October 2005	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Director, Member of Executive Committee, Children’s Hospital of Pittsburgh; Director, University of Pittsburgh. Previous Position: Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr. Birth Date: June 23, 1937 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida. Previous Positions: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village Development Corporation.
Nicholas P. Constantakis Birth Date: September 3, 1939 TRUSTEE Began serving: October 2005	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Director and Chairman of the Audit Committee, Michael Baker Corporation (engineering and energy services worldwide). Previous Position: Partner, Andersen Worldwide SC.
John F. Cunningham Birth Date: March 5, 1943 TRUSTEE Began serving: October 2005	Principal Occupation: Director or Trustee of the Federated Fund Complex; Director, QSGI, Inc. (technology services company). Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting); Trustee Associate, Boston College. Previous Positions: Director, Redgate Communications and EMC Corporation (computer storage systems); Chairman of the Board and Chief Executive Officer, Computer Consoles, Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First National Bank of Boston; Director, Apollo Computer, Inc.
Peter E. Madden Birth Date: March 16, 1942 TRUSTEE Began serving: October 2005	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Board of Overseers, Babson College. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange.
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President DVC Group, Inc. (marketing, communications and technology).
John E. Murray, Jr., J.D., S.J.D. Birth Date: December 20, 1932 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Complex; Chancellor and Law Professor, Duquesne University; Partner, Murray, Hogue & Lannis. Other Directorships Held: Director, Michael Baker Corp. (engineering, construction, operations and technical services). Previous Positions: President, Duquesne University; Dean and Professor of Law, University of Pittsburgh School of Law; Dean and Professor of Law, Villanova University School of Law.
R. James Nicholson Birth Date: February 4, 1938 TRUSTEE Began serving: January 2008	Principal Occupations: Director or Trustee of the Federated Fund Complex; Former Secretary of the U.S. Dept. of Veterans Affairs; Former U.S. Ambassador to the Holy See; Former Chairman of the Republican National Committee. Other Directorships Held: Director, Horatio Alger Association. Previous Positions: Colonel, U.S. Army Reserve; Partner, Calkins, Kramer, Grimshaw and Harring, P.C.; General Counsel, Colorado Association of Housing and Building; Chairman and CEO, Nicholson Enterprises, Inc.; Chairman and CEO, Renaissance Homes of Colorado.
Thomas M. O’Neill Birth Date: June 14, 1951 TRUSTEE Began serving: October 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; Managing Director and Partner, Navigator Management Company, L.P. (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children’s Hospital of Boston; Visiting Committee on Athletics, Harvard College. Previous Positions: Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; and Credit Analyst and Lending Officer, Fleet Bank.
Marjorie P. Smuts Birth Date: June 21, 1935 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Public Relations/Marketing Consultant/Conference Coordinator. Previous Positions: National Spokesperson, Aluminum Company of America; television producer; President, Marj Palmer Assoc.; Owner, Scandia Bord.
John S. Walsh Birth Date: November 28, 1957 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Previous Position: Vice President, Walsh & Kelly, Inc.
J James F. Will Birth Date: October 12, 1938 TRUSTEE Began serving: April 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Vice Chancellor and President, Saint Vincent College. Other Directorships Held: Trustee, Saint Vincent College; Alleghany Corporation. Previous Positions: Chairman, President and Chief Executive Officer, Armco, Inc.; President and Chief Executive Officer, Cyclops Industries; President and Chief Operating Officer, Kaiser Steel Corporation.

OFFICERS

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) and Previous Position(s)
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Began serving: October 2005	Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp.
Richard A. Novak Birth Date: December 25, 1963 TREASURER Began serving: January 2006	Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. Previous Positions: Controller of Federated Investors, Inc.; Vice President, Finance of Federated Services Company; held various financial management positions within The Mercy Hospital of Pittsburgh; Auditor, Arthur Andersen & Co.
Richard B. Fisher Birth Date: May 17, 1923 VICE CHAIRMAN Began serving: October 2005	Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc. and Director and Chief Executive Officer, Federated Securities Corp.
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER and SENIOR VICE PRESIDENT Began serving: October 2005	Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Complex; Vice President and Chief Compliance Officer of Federated Investors, Inc.; and Chief Compliance Officer of its subsidiaries. Mr. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin.
Robert J. Ostrowski Birth Date: April 26, 1963 CHIEF INVESTMENT OFFICER Began serving: August 2006	Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. He has been a Senior Vice President of the Fund’s Adviser since 1997. Mr. Ostrowski is a Chartered Financial Analyst. He received his M.S. in Industrial Administration from Carnegie Mellon University.
Joseph M. Balestrino Birth Date: November 3, 1954 VICE PRESIDENT Began serving: October 2005	Principal Occupations: Joseph M. Balestrino is Vice President of the Trust. Mr. Balestrino joined Federated in 1986 and has been a Senior Portfolio Manager and Senior Vice President of the Fund’s Adviser since 1998. He was a Portfolio Manager and a Vice President of the Fund’s Adviser from 1995 to 1998. Mr. Balestrino served as a Portfolio Manager and an Assistant Vice President of the Adviser from 1993 to 1995. Mr. Balestrino is a Chartered Financial Analyst and received his Master’s Degree in Urban and Regional Planning from the University of Pittsburgh.

Evaluation and Approval of Advisory Contract

FEDERATED CORPORATE BOND STRATEGY PORTFOLIO (THE “FUND”)

The Fund’s Board reviewed the Fund’s investment advisory contract at meetings held in May 2007. The Board’s decision regarding the contract reflects the exercise of its business judgment on whether to continue the existing arrangements. The Fund is distinctive in that it: is used to implement particular investment strategies that are offered to investors in certain separately managed or wrap fee accounts or programs or certain other discretionary investments accounts; and may also be offered to other Federated funds. In addition, the Adviser does not charge an investment advisory fee for its services although it or its affiliates may receive compensation for managing assets invested in the Fund.

The Federated funds 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 contract.

As previously noted, the Adviser does not charge an investment advisory fee for its services; however, the Board did consider compensation and benefits received by the Adviser, including fees received for services provided to the Fund by other entities in the Federated organization and research services received by the Adviser from brokers that execute Federated fund trades. 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 the Fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser’s relationship with the 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 for what might be viewed as like services, and costs 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 from supplying such services. The Board was aware of these factors and was guided by them in its review of the Fund’s advisory contract to the extent it considered them to be appropriate and relevant, as discussed further below.

The Board considered and weighed these circumstances in light of its substantial accumulated experience in governing the Fund and working with Federated on matters relating to the Federated funds, and was assisted in its deliberations by the advice of independent legal counsel. Throughout the year, the Board has requested and received substantial and detailed information about the Fund and the Federated organization that was in addition to the extensive materials that comprise and accompany the Senior Officer’s evaluation. Federated provided much of this information at each regular meeting of the Board, and furnished additional reports in connection with the particular meeting at which the Board’s formal review of the advisory contract occurred. Between regularly scheduled meetings, the Board has received information on particular matters as the need arose. Thus, the Board’s consideration of the advisory contract included review of the Senior Officer’s evaluation, accompanying data and additional reports covering such matters as: the Adviser’s investment philosophy, personnel and processes; investment and operating strategies; the Fund’s short- and long-term performance, and comments on the reasons for performance; the Fund’s investment objectives; the Fund’s overall expense structure; the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders and their relative sophistication; the continuing state of competition in the mutual fund industry and market practices; the Fund’s relationship to the Federated family of funds which include a comprehensive array of funds with different investment objectives, policies and strategies which are available for exchange without the incurrence of additional sales charges; compliance and audit reports concerning the Federated funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated’s responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated funds and/or Federated are responding to them. The Board’s evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace.

Because the Adviser does not charge the Fund an investment advisory fee the Fund’s Board does not consider fee comparisons to other mutual funds or other institutional or separate accounts to be relevant.

The Board also received financial information about Federated, including reports on the compensation and benefits Federated derived from its relationships with the Federated funds. Because the Adviser does not charge an investment advisory fee for its services, these reports generally cover 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 services from brokers who execute Federated fund trades. In addition, the Board considered the fact that, in order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waive non-advisory fees and/or reimburse other expenses and have disclosed to fund investors and/or indicated to the Board their intention to do so in the future, where appropriate.

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 Board based its decision to approve the advisory contract 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. In particular, due to the unusual nature of the Fund as primarily an internal product with no advisory fee, the Board does not consider the assessment of whether economies of scale would be realized if the Fund were to grow to some sufficient size to be relevant. 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 arrangement.

Voting 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, as well as a report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30, are available, without charge and upon request, by calling 1-800-341-7400. These materials 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.)

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund’s prospectus, which contains facts concerning its objective and policies, management fees, expenses, and other information.

Cusip 31421P100

36217 (2/08)

Federated Mortgage Strategy Portfolio

A Portfolio of Federated Managed Pool Series

ANNUAL SHAREHOLDER REPORT

December 31, 2007

FINANCIAL HIGHLIGHTS

SHAREHOLDER EXPENSE EXAMPLE

PORTFOLIO OF INVESTMENTS SUMMARY TABLE

PORTFOLIO OF INVESTMENTS

STATEMENT OF ASSETS AND LIABILITIES

STATEMENT OF OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS

NOTES TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

BOARD OF TRUSTEES AND TRUST OFFICERS

EVALUATION AND APPROVAL OF ADVISORY CONTRACT

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

QUARTERLY PORTFOLIO SCHEDULE

not fdic insured  *  may lose value  *  no bank guarantee

Financial Highlights

(For a Share Outstanding Throughout the Period)

	Period Ended
	12/31/2007	1
Net Asset Value, Beginning of Period	$10.00
Income From Investment Operations:
Net investment income	0.02
Net unrealized gain on investments	0.05
TOTAL FROM INVESTMENT OPERATIONS	0.07
Less Distributions:
Distributions from net investment income	(0.02	)
Net Asset Value, End of Period	$10.05
Total Return2	0.68	%
Ratios to Average Net Assets:
Expenses	0.00	%3
Net investment income	4.32	%3
Supplemental Data:
Net assets, end of period (000 omitted)	$580
Portfolio turnover	0	%

1Reflects operations for the period from December 20, 2007 (date of initial public investment) to December 31, 2007.

2Based 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.

3Computed on an annualized basis.

See Notes which are an integral part of the Financial Statements

Shareholder Expense Example

As a shareholder of the Fund, you incur ongoing costs, including to the extent applicable, management fees, 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 July 1, 2007 to December 31, 2007.

ACTUAL EXPENSES

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.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

	Beginning Account Value 7/1/2007	Ending Account Value 12/31/2007	Expenses Paid During Period1
Actual	$1,000	$1,006.80	$0.00
Hypothetical (assuming a 5% return before expenses)	$1,000	$1,025.21	$0.00

1   “Actual” expense information for the Fund is for the period from December 20, 2007 (date of initial public investment) to December 31, 2007. Actual expenses are equal to the annualized net expense ratio of 0.00%, multiplied by 12/365 (to reflect the period from initial public investment to December 31, 2007). “Hypothetical” expense information is presented on the basis of the full one-half year period to enable comparison to other funds. It is based on assuming the same net expense ratio and average account value over the period, but it is multiplied by 184/365 (to reflect the full half-year period).

Portfolio of Investments Summary Table

At December 31, 2007, the Fund’s portfolio composition1 was as follows:

Type of Investment	Percentage of Total Net Assets2
U.S. Government Agency Mortgage-Backed Securities	81.4%
Non-Agency Mortgage-Backed Securities	8.3%
U.S. Government Agency Adjustable Rate Mortgage Securities	6.0%
Derivative Contracts3,4	0.0%
Repurchase Agreements – Cash	7.5%
Repurchase Agreements – Collateral5	1.4%
Other Assets and Liabilities – Net6	(4.6)%
TOTAL	100.0%

1See the Fund’s Prospectus and Statement of Additional Information for a description of the types of securities in which the Fund invests.

2As 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 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 Based upon net unrealized appreciation (depreciation) on the derivative contracts. 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 net unrealized appreciation (depreciation) may indicate.  In many cases, the notional value or notional principal 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) 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 Annual Report.

4Represents less than 0.1%.

5Includes repurchase agreements purchased with proceeds received in dollar-roll transactions, as well as cash covering when-issued and delayed delivery transactions.

6Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities.

Portfolio of Investments

December 31, 2007

Shares				Value
		MUTUAL FUND—88.8%
51,850	1	Federated Mortgage Core Portfolio (IDENTIFIED COST $511,982)	$	514,871
		TOTAL INVESTMENTS —- 88.8% (IDENTIFIED COST $511,982)2		514,871
		OTHER ASSETS AND LIABILITIES —- NET —- 11.2%3		64,841
		TOTAL NET ASSETS —- 100%	$	579,712

1Affiliated company.

2Also represents cost for federal tax purposes.

3Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Note: The categories of investments are shown as a percentage of total net assets at December 31, 2007.

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

December 31, 2007

Assets:
Investment in an affiliated issuer, at value (Note 5) (identified cost $511,982)			$	514,871
Receivable for shares sold				95,422
TOTAL ASSETS				610,293
Liabilities:
Income distribution payable	$	6
Bank overdraft		30,575
TOTAL LIABILITIES				30,581
Net assets for 57,677 shares outstanding			$	579,712
Net Assets Consist of:
Paid-in capital			$	576,640
Net unrealized appreciation of investments				2,889
Undistributed net investment income				183
TOTAL NET ASSETS			$	579,712
Net Asset Value, Offering Price and Redemption Proceeds Per Share
($579,712 ÷ 57,677 shares outstanding), no par value, unlimited shares authorized				$10.05

See Notes which are an integral part of the Financial Statements

Statement of Operations

Period Ended December 31, 20071

Investment Income:
Dividends received from an affiliated issuer (Note 5)							$	557
Expenses:
Administrative personnel and services fee (Note 5)				$	4,521
Custodian fees					100
Transfer and dividend disbursing agent fees and expenses					6,539
Auditing fees					15,000
Legal fees					3,386
Portfolio accounting fees					200
Share registration costs					16,371
Printing and postage					18
Insurance premiums					4,691
Miscellaneous					11
TOTAL EXPENSES					50,837
Waiver and Reimbursement (Note 5):
Waiver of administrative personnel and services fee	$	(753	)
Reimbursement of other operating expenses		(50,084	)
TOTAL WAIVER AND REIMBURSEMENTS					(50,837	)
Net expenses								-
Net investment income								557
Realized and Unrealized Gain (Loss) on Investments:
Net change in unrealized appreciation of investments								2,889
Change in net assets resulting from operations							$	3,446

1 Reflects operations for the period from December 20, 2007 (date of initial public investment) to December 31, 2007.

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

		Period Ended  12/31/2007	1
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	557
Net change in unrealized appreciation of investments		2,889
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS		3,446
Distributions to Shareholders:
Distributions from net investment income		(374	)
Share Transactions:
Proceeds from sale of shares		576,271
Net asset value of shares issued to shareholders in payment of distributions declared		369
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS		576,640
Change in net assets		579,712
Net Assets:
Beginning of period		-
End of period (including undistributed net investment income of $183)	$	579,712

1Reflects operations for the period from December 20, 2007 (date of initial public investment) to December 31, 2007.

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

December 31, 2007

1. ORGANIZATION

Federated Managed Pool Series (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of four portfolios. The financial statements included herein are only those of Federated Mortgage Strategy Portfolio (the “Fund”), a non-diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The investment objective of the Fund is to provide total return.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.

Investment Valuation

In calculating its net asset value (NAV), the Fund generally values investments as follows:

·   Shares of other mutual funds are valued based upon their reported NAVs.

·   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 Board of Trustees (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).

·   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 Trustees.

If the Fund cannot obtain a price or price evaluation from a pricing service for an investment, the Fund may attempt to value the investment based upon the mean of bid and asked quotations or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund’s NAV.

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 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 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.

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (SEC), the Fund may invest in the Federated Mortgage Core Portfolio (Mortgage Core), a portfolio of Federated Core Trust (Core Trust), which is managed by Federated Investment Management Company, the Fund’s Adviser.  Core Trust is an open-end management investment company, registered under the Act, available only to registered investment companies and other institutional investors.  The investment objective of Mortgage Core is to provide total return.  Federated receives no advisory or administrative fees from Mortgage Core.  Income distributions from Mortgage Core are declared daily and paid monthly.  All income distributions are recorded by the Fund as dividend income.  Capital gain distributions of Mortgage Core, if any, are declared and paid annually, and are recorded by the Fund as capital gains received.  The performance of the Fund is directly affected by the performance of Mortgage Core.  The financial statements of Mortgage Core are included within this report to illustrate the security holdings, financial condition, results of operations and changes in net assets of the Portfolio in which the Fund invested 88.8% of its net assets at December 31, 2007.  The financial statements of Mortgage Core should be read in conjunction with the Fund’s financial statements.  The valuation of securities held by Mortgage Core is discussed in the notes to its financial statements.

Repurchase Agreements

It 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.

With respect to agreements to repurchase U.S. government securities and cash items, the Fund treats the repurchase agreement as an investment in the underlying securities and not as an obligation of the other party to the repurchase agreement. Other repurchase agreements are treated as obligations of the other party secured by the underlying securities. Nevertheless, 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, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared and paid monthly.

Premium and Discount Amortization/Paydown Gains and Losses

All premiums and discounts on fixed-income securities, other than mortgage-backed securities, are amortized/accreted. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income.

Federal Taxes

It is the Fund’s policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary.  The Fund adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 (FIN48), “Accounting for Uncertainty in Income Taxes”, on June 29, 2007.  As of and during the period ended December 31, 2007, the Fund did not have a liability for any unrecognized tax expenses.  The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations.  As of December 31, 2007, tax years 2004 through 2007 remain subject to examination by the fund’s major tax jurisdictions, which include the United States of America and the state of Massachusetts.

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.

The Fund may transact in To Be Announced Securities (TBAs). As with other delayed delivery transactions, a seller agrees to issue TBAs at a future date. However, the seller does not specify the particular securities to be delivered. Instead, the Fund agrees to accept any security that meets specified terms such as issuer, interest rate and terms of underlying mortgages. The Fund records TBAs on the trade date utilizing information associated with the specified terms of the transaction as opposed to the specific mortgages. TBAs are marked to market daily and begin earning interest on the settlement date. Losses may occur due to the fact that the actual underlying mortgages received may be less favorable than those anticipated by the Fund.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.

3. SHARES OF BENEFICIAL INTEREST

The following table summarizes share activity:

	Period Ended 12/31/20071
		Shares
Shares sold		57,640
Shares issued to shareholders in payment of distributions declared		37
NET CHANGE RESULTING  FROM SHARE TRANSACTIONS		57,677

1 Reflects operations for the period from December 20, 2007 (date of initial public investment) to December 31, 2007.

4. FEDERAL TAX INFORMATION

The tax character of distributions as reported on the Statement of Changes in Net Assets for the period ended December 31, 2007, was as follows:

	20071
Ordinary income	$374

1 Reflects operations for the period from December 20, 2007 (date of initial public investment) to December 31, 2007.

As of December 31, 2007, the components of distributable earnings on a tax basis were as follows:

Undistributed ordinary income	$	183
Net unrealized appreciation	$	2,889

At December 31, 2007, the cost of investments for federal tax purposes was $511,982. The net unrealized appreciation of investments for federal tax purposes was $2,889. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $2,889.

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company is the Fund’s investment adviser (the “Adviser”). The Adviser provides investment adviser services at no fee, because all eligible investors are (1) in separately managed or wrap fee programs, who often pay a single aggregate fee to the wrap program sponsor for all costs and expenses of the wrap-fee programs, or (2) in certain other separately managed accounts and discretionary investment accounts. The Adviser has contractually agreed to reimburse all operating expenses, excluding extraordinary expenses, incurred by the Fund. For the period ended December 31, 2007, the Adviser reimbursed $50,084 of other operating expenses.

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of 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. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the period ended December 31, 2007, the net fee paid to FAS was 29.225% of average daily net assets of the Fund. The Fund currently accrues the minimum administrative fee; therefore the percentage of average aggregate daily net assets is greater than the amounts presented in the chart above. FAS waived $753 of its fee. For the period ended December 31, 2007 the Fund’s Adviser reimbursed the Fund for any fee paid to FAS.

General

Certain of the Officers and Directors of the Fund are Officers and Directors or Trustees of the above companies.

Transactions with Affiliated Companies

Affiliated holdings are mutual funds which are managed by the Adviser or an affiliate of the Adviser. Transactions with the affiliated company during the period ended December 31, 2007 are as follows:

Affiliate	Balance of Shares Held 12/20/2007	Purchases/ Additions	Sales/ Reductions	Balance of Shares Held 12/31/2007	Value	Dividend Income
Federated Mortgage Core Portfolio	—-	51,850	—-	51,850	$514,871	$557

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations for the period ended December 31, 2007, were as follows:

Purchases	$	511,425
Sales	$	—-

7.  LINE OF CREDIT

The Fund participates in a $150,000,000 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 of 0.65% over the federal funds rate. As of December 31, 2007, there were no outstanding loans. During the year ended December 31, 2007, the Fund did not utilize the LOC.

8. INTERFUND LENDING

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 funds to borrow from other participating affiliated funds. As of December 31, 2007, there were no outstanding loans. During the period ended December 31, 2007, the program was not utilized.

9. LEGAL PROCEEDINGS

Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, “Federated”), along with various investment companies sponsored by Federated (“Funds”) were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. These lawsuits began to be filed shortly after Federated’s first public announcement that it had received requests for information on shareholder trading activities in the Funds from the SEC, the Office of the New York State Attorney General (“NYAG”), and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay for the benefit of fund shareholders additional disgorgement and a civil money penalty in the aggregate amount of an additional $72 million. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees. The Board of the Funds has retained the law firm of Dickstein Shapiro LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and intend to defend this litigation. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys’ fees and expenses, and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

10. RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board released Statement on Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157), which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management has concluded that the adoption of FAS 157 is not expected to have a material impact on the Fund’s net assets or results of operations.

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF TRUSTEES OF FEDERATED MANAGED POOL SERIES AND SHAREHOLDERS OF FEDERATEDMORTGAGESTRATEGY PORTFOLIO

We have audited the accompanying statement of assets and liabilities of Federated Mortgage Strategy Portfolio (one of the portfolios constituting Federated Managed Pool Series), (the “Fund”), including the portfolio of investments, as of December 31, 2007, and the related statement of operations, statement of changes in net assets, and financial highlights for the period from December 20, 2007 (commencement of operations) to December 31, 2007. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Federated Mortgage Strategy Portfolio, a portfolio of Federated Managed Pool Series, at December 31, 2007, the results of its operations, changes in its net assets, and its financial highlights for the period from December 20, 2007 (commencement of operations) to December 31, 2007, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 18, 2008

Financial Highlights – Federated Mortgage Core Portfolio

(For a Share Outstanding Throughout Each Period)

Year Ended December 31	2007		2006		2005		2004		2003
Net Asset Value, Beginning of Period	$9.88		$9.91		$10.18		$10.19		$10.32
Income From Investment Operations:
Net investment income	0.57		0.56		0.50		0.50		0.48
Net realized and unrealized gain (loss) on investments and futures contracts	0.05		(0.03	)	(0.25	)	(0.01	)	(0.13	)
TOTAL FROM INVESTMENT OPERATIONS	0.62		0.53		0.25		0.49		0.35
Less Distributions:
Distributions from net investment income	(0.57	)	(0.56	)	(0.52	)	(0.50	)	(0.48	)
Distributions from net realized gain on investments	—		—		—		—		(0.00	)1
TOTAL DISTRIBUTIONS	(0.57	)	(0.56	)	(0.52	)	(0.50	)	(0.48	)
Net Asset Value, End of Period	$9.93		$9.88		$9.91		$10.18		$10.19
Total Return2	6.48	%	5.49	%	2.48	%	4.95	%	3.52	%
Ratios to Average Net Assets:
Net expenses	0.02	%	0.03	%	0.03	%	0.03	%	0.03	%
Net investment income	5.66	%	5.55	%	4.96	%	4.93	%	4.67	%
Expense waiver/reimbursement3	0.08	%	0.08	%	0.08	%	0.08	%	0.08	%
Supplemental Data:
Net assets, end of period (000 omitted)	$1,879,760		$1,230,612		$949,405		$790,927		$767,012
Portfolio turnover4	55	%	109	%	111	%	47	%	90	%

1Represents less than $0.01.

2Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.

3This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

4This calculation excludes purchases and sales from dollar-roll transactions.

See Notes which are an integral part of the Financial Statements

Shareholder Expense Example –

As a shareholder of the Fund, you incur ongoing costs, including to the extent applicable, management fees, 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 July 1, 2007 to December 31, 2007.

ACTUAL EXPENSES

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.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

	Beginning Account Value 7/1/2007	Ending Account Value 12/31/2007	Expenses Paid During Period1
Actual	$1,000	$1,055.00	$0.10
Hypothetical (assuming a 5% return before expenses)	$1,000	$1,025.10	$0.10

1Expenses are equal to the Fund’s annualized net expense ratio of 0.02%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).

Management’s Discussion of Fund Performance – Federated Mortgage Core Portfolio

The fund’s total return for the 12-month reporting period was 6.48%. The Lehman Brothers Mortgage-Backed Securities Index,1 a performance benchmark for the fund, returned 6.90%.

Yield curve strategy and security selection were the most significant factors affecting fund performance relative to the unmanaged index. The fund’s total return reflects actual cash flows and transaction costs, factors which do not impact the index’s performance.

YIELD CURVE

After a protracted period of minimal yield differential between 2-year and 10-year Treasuries, the yield curve underwent a reshaping. Shorter maturity yields decreased to a significantly greater degree relative to longer maturity yields. Specifically, the 2- to 10-year yield spread increased from negative 0.11%—an inverted yield curve—to positive 0.97%. Investments designed to take advantage of the reshaping positively contributed to fund performance, including the fund’s focus on securities with shorter maturities.

SECURITY SELECTION

Security selection did not positively impact fund performance. For a significant portion of the year, the portfolio maintained an above-benchmark exposure to current coupon mortgage-backed securities. While current coupons—defined as those mortgage securities close to par prices—typically offer incremental yield relative to higher- and lower-priced coupons, the coupons are also more negatively convex. As market yields moved dramatically during the course of the year, the negative convexity caused the current coupon sector to lag relative to surrounding coupons.

In addition, the fund utilized dollar roll transactions in order to increase fund income and potential return. A portion of the dollar roll proceeds were invested in monthly adjustable agency floaters. As mortgage security spreads widened during the year, the increased exposure via the monthly adjustable floating rate agency securities acted as a drag on performance.

Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400.

1The Lehman Brothers Mortgage-Backed Securities Index is an unmanaged index composed of all fixed securities mortgage pools by Government National Mortgage Association (GNMA), Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, including GNMA Graduated Payment Mortgages. Investments cannot be made in an index.

GROWTH OF A $10,000 INVESTMENT – FEDERATED MORTGAGE CORE PORTFOLIO

The graph below illustrates the hypothetical investment of $10,0001 in the Federated Mortgage Core Portfolio (the “Fund”) from February 22, 1999 (start of performance) to December 31, 2007, compared to the Lehman Brothers Mortgage-Backed Securities Index (LBMSI).2

Average Annual Total Returns for the Period Ended 12/31/2007
1 Year	6.48%
5 Years	4.58%
Start of Performance (2/22/1999)	5.93%

Performance data quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Mutual fund performance changes over time and current performance may be lower or higher than what is stated. For current to the most recent month-end performance and after-tax returns, call 1-800-341-7400. Returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1Represents a hypothetical investment of $10,000. The Fund’s performance assumes the reinvestment of all dividends and distributions. The LBMSI has been adjusted to reflect reinvestment of dividends on securities in the index.

2The LBMSI is not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission requires to be reflected in the Fund’s performance. The index is unmanaged, and unlike the Fund, is not affected by cashflows. It is not possible to invest directly in an index.

Portfolio of Investments Summary Table – Federated Mortgage Core Portfolio

At December 31, 2007, the Fund’s portfolio composition1 was as follows:

Type of Investment	Percentage of Total Net Assets
U.S. Government Agency Mortgage-Backed Securities	91.7%
Non-Agency Mortgage-Backed Securities	9.4%
U.S. Government Agency Adjustable Rate Mortgage Securities	6.7%
Derivative Contracts2,3	0.0%
Repurchase Agreements – Cash	8.4%
Repurchase Agreements – Collateral4	1.6%
Other Assets and Liabilities – Net5	(17.8)%
TOTAL	100.0%

1See the Fund’s Confidential Private Offering Memorandum for a description of the principal types of securities in which the Fund invests.

2Based upon net unrealized appreciation (depreciation) on the derivative contracts. 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) may indicate. In many cases, the notional value or notional principal 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) 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.

3Represents less than 0.1%.

4Includes repurchase agreements purchased with cash collateral or proceeds received in securities lending and/or dollar-roll transactions, as well as cash covering when-issued and delayed delivery transactions.

5Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities.

Portfolio of Investments – Federated Mortgage Core Portfolio

December 31, 2007

	Principal Amount				Value
			ADJUSTABLE RATE MORTGAGES—6.7%
			Federal Home Loan Mortgage Corporation—2.3%
$	8,296,195		ARM, 5.768%, 1/1/2037	$	8,409,438
	19,929,360		ARM, 5.806%, 5/1/2037		20,227,463
	13,657,483		ARM, 5.889%, 2/1/2037		13,849,261
			TOTAL		42,486,162
			Federal National Mortgage Association—4.4%
	1,710,128		ARM, 5.280%, 1/1/2037		1,727,227
	12,735,308		ARM, 5.550%, 2/1/2047		12,919,843
	9,999,131		ARM, 5.560%, 8/1/2036		10,141,129
	5,295,257		ARM, 5.600%, 2/1/2037		5,374,341
	16,050,790		ARM, 5.630%, 4/1/2036		16,300,958
	14,829,463		ARM, 5.720%, 2/1/2037		15,082,098
	9,072,476		ARM, 5.910%, 10/1/2036		9,241,632
	11,687,540		ARM, 5.990%, 7/1/2036		11,934,919
			TOTAL		82,722,147
			TOTAL ADJUSTABLE RATE MORTGAGES (IDENTIFIED COST $124,087,518)		125,208,309
			COLLATERALIZED MORTGAGE OBLIGATIONS—20.8%
			Federal Home Loan Mortgage Corporation—6.3%
	21,624,802		REMIC 3144 FB, 5.378%, 4/15/2036		21,502,358
	17,634,968		REMIC 3160 FD, 5.358%, 5/15/2036		17,517,140
	12,901,287		REMIC 3175 FE, 5.338%, 6/15/2036		12,809,637
	30,601,279		REMIC 3179 FP, 5.408%, 7/15/2036		30,556,234
	5,186,718		REMIC 3206 FE, 5.428%, 8/15/2036		5,161,583
	18,514,000		REMIC 3260 PF, 5.328%, 1/15/2037		18,376,061
	12,933,216		REMIC 3296 YF, 5.428%, 3/15/2037		12,718,655
			TOTAL		118,641,668
			Federal National Mortgage Association—5.1%
	3,314,689		REMIC 2005-63 FC, 5.033%, 10/25/2031		3,279,133
	16,686,052		REMIC 2006-104 FY, 5.123%, 11/25/2036		16,566,281
	21,741,161		REMIC 2006-115 EF, 5.143%, 12/25/2036		21,608,587
	4,554,794		REMIC 2006-43 FL, 5.183%, 6/25/2036		4,536,586
	12,051,644		REMIC 2006-58 FP, 5.083%, 7/25/2036		11,996,829
	20,585,975		REMIC 2006-81 FB, 5.133%, 9/25/2036		20,526,947
	18,061,225		REMIC 2006-85 PF, 5.163%, 9/25/2036		17,991,229
			TOTAL		96,505,592
			Non-Agency Mortgage—9.4%
	14,742,075		Bank of America Mortgage Securities 2007-3, Class 1A1, 6.000%, 9/25/2037		14,696,006
	14,970,142		Chase Mortgage Finance Corp. 2004-S3, Class 1A1, 5.000%, 3/25/2034		14,134,668
	15,595,442		Citicorp Mortgage Securities, Inc. 2007-4, Class 2A1, 5.500%, 5/25/2022		15,414,991
	7,506,256		Countrywide Home Loans 2005-21, Class A2, 5.500%, 10/25/2035		7,271,994
	15,881,421		Countrywide Home Loans 2007-14, Class A18, 6.000%, 9/25/2037		15,782,470
	15,226,264		Countrywide Home Loans 2007-17, Class 3A1, 6.750%, 10/25/2037		15,368,712
	15,892,720		Countrywide Home Loans 2007-18, Class 2A1, 6.500%, 9/25/2037		16,212,323
	9,961,558		Credit Suisse Mortgage Capital Certificate 2007-4, Class 4A2, 5.500%, 6/25/2037		9,941,285
	14,659,586		Indymac IMJA Mortgage Loan Trust 2007-A2, Class 2A1, 6.500%, 10/25/2037		14,667,605
	14,593,516		Lehman Mortgage Trust 2007-8, Class 2A2, 6.500%, 8/25/2037		14,680,489
	16,882,471		Lehman Mortgage Trust 2007-9, Class 1A1, 6.000%, 10/25/2037		16,688,620
	7,440,992		Residential Funding Mortgage Securities I 2005-SA3, Class 3A, 5.235%, 8/25/2035		7,318,825
	15,155,534		Structured Asset Securities Corp. 2005-17, Class 5A1, 5.500%, 10/25/2035		14,837,106
			TOTAL		177,015,094
			TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $392,208,937)		392,162,354
			MORTGAGE-BACKED SECURITIES—80.3%
			Federal Home Loan Mortgage Corporation—49.6%
	51,890,301	1	4.500%, 6/1/2019 - 9/1/2021		51,109,867
	240,554,391		5.000%, 7/1/2019 - 8/1/2037		235,771,161
	278,088,572	2	5.500%, 3/1/2021 - 1/1/2038		278,272,734
	274,667,233	2	6.000%, 5/1/2014 - 1/1/2038		279,236,352
	77,820,281	2	6.500%, 7/1/2014 - 1/1/2038		80,036,246
	6,503,250		7.000%, 12/1/2011 - 9/1/2037		6,775,171
	916,915		7.500%, 12/1/2022 - 7/1/2031		984,572
	813,388		8.000%, 11/1/2009 - 3/1/2031		858,199
	19,593		8.500%, 9/1/2025		21,685
	43,258		9.000%, 5/1/2017		47,080
	2,156		9.500%, 4/1/2021		2,441
			TOTAL		933,115,508
			Federal National Mortgage Association—29.5%
	10,124,139		4.500%, 12/1/2019		9,989,222
	68,188,971		5.000%, 7/1/2034 - 2/1/2036		66,581,638
	263,698,291		5.500%, 2/1/2009 - 9/1/2036		263,550,557
	148,251,745	2	6.000%, 12/1/2013 - 1/1/2038		150,676,405
	31,615,252		6.500%, 2/1/2009 - 12/1/2036		32,569,254
	27,213,735	2	7.000%, 7/1/2010 - 1/1/2038		28,370,039
	1,277,080		7.500%, 6/1/2011 - 6/1/2033		1,347,924
	439,274		8.000%, 7/1/2023 - 3/1/2031		476,041
	20,352		9.000%, 11/1/2021 - 6/1/2025		22,307
			TOTAL		553,583,387
			Government National Mortgage Association—1.2%
	15,808,975		6.000%, 10/15/2028 - 6/15/2037		16,194,705
	1,945,587		6.500%, 10/15/2028 - 2/15/2032		2,039,220
	1,746,486		7.000%, 11/15/2027 - 2/15/2032		1,833,212
	682,271		7.500%, 4/15/2029 - 1/15/2031		721,764
	987,687		8.000%, 2/15/2010 - 11/15/2030		1,071,612
	134,090		8.500%, 3/15/2022 - 11/15/2030		148,549
	2,164		9.500%, 10/15/2020		2,483
	261,239		12.000%, 4/15/2015 - 6/15/2015		305,107
			TOTAL		22,316,652
			TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $1,477,323,990)		1,509,015,547
			REPURCHASE AGREEMENTS—10.0%
	157,800,000		Interest in $2,108,000,000 joint repurchase agreement 4.85%, dated 12/31/2007 under which BNP Paribas Securities Corp. will repurchase U.S. Government Agency securities with various maturities to 1/1/2038 for $2,108,567,989 on 1/2/2008. The market value of the underlying securities at the end of the period was $2,150,739,349.		157,800,000
	30,555,000	3	Interest in $63,146,000 joint repurchase agreement 4.46%, dated 12/12/2007 under which Credit Suisse First Boston Corp. will repurchase U.S. Government Agency securities and a U.S. Treasury security with various maturities to 7/20/2037 for $63,404,162 on 1/14/2008. The market value of the underlying securities at the end of the period was $66,039,887 (segregated pending settlement of dollar-roll transactions).		30,555,000
			TOTAL REPURCHASE AGREEMENTS (AT COST)		188,355,000
			TOTAL INVESTMENTS—117.8% (IDENTIFIED COST $2,181,975,445)4		2,214,741,210
			OTHER ASSETS AND LIABILITIES – NET—(17.8)%5		(334,981,377)
			TOTAL NET ASSETS—100%	$	1,879,759,833

At December 31, 2007, the Fund had the following open futures contracts:

Description	Number of Contracts	Notional Value	Expiration Date	Unrealized Appreciation/ (Depreciation)
6U.S. Treasury Notes 2 Year Long Futures	354	$74,428,500	March 2008	$214,450
6U.S. Treasury Notes 10 Year Short Futures	220	$24,945,938	March 2008	$9,525
6U.S. Treasury Notes 5 Year Short Futures	140	$15,439,375	March 2008	$(18,001)
6U.S. Treasury Bond Short Futures	117	$13,615,875	March 2008	$71,246
NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS				$277,220

1Pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding futures contracts.

2All or a portion of these securities may be subject to dollar-roll transactions.

3Although the repurchase date is more than seven days after the date of purchase, the Fund has the right to terminate the repurchase agreement at any time with seven-days’ notice.

4The cost of investments for federal tax purposes amounts to $2,179,987,445.

5Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

6Non-income producing security.

Note: The categories of investments are shown as a percentage of total net assets at December 31, 2007.

The following acronyms are used throughout this portfolio:

ARM	—Adjustable Rate Mortgage
REMIC	—Real Estate Mortgage Investment Conduit

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities – Federated Mortgage Core Portfolio

December 31, 2007

Assets:
Investments in repurchase agreements	$	188,355,000
Investments in securities		2,026,386,210
Total investments in securities, at value (identified cost $2,181,975,445)				2,214,741,210
Cash				787
Income receivable				8,281,622
TOTAL ASSETS				2,223,023,619
Liabilities:
Payable for investments purchased		342,602,795
Income distribution payable		457,783
Payable for daily variation margin		122,313
Accrued expenses		80,895
TOTAL LIABILITIES				343,263,786
Net assets for 189,269,758 shares outstanding			$	1,879,759,833
Net Assets Consist of:
Paid-in capital			$	1,882,870,912
Net unrealized appreciation of investments and futures contracts				33,042,985
Accumulated net realized loss on investments and futures contracts				(36,259,655	)
Undistributed net investment income				105,591
TOTAL NET ASSETS			$	1,879,759,833
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
$1,879,759,833 ÷ 189,269,758 shares outstanding, no par value, unlimited shares authorized				$9.93

See Notes which are an integral part of the Financial Statements

Statement of Operations – Federated Mortgage Core Portfolio

Year Ended December 31, 2007

Investment Income:
Interest							$	87,611,027
Expenses:
Administrative personnel and services fee (Note 5)				$	1,217,347
Custodian fees					78,386
Transfer and dividend disbursing agent fees and expenses					18,344
Directors’/Trustees’ fees					17,546
Auditing fees					24,061
Legal fees					10,597
Portfolio accounting fees					161,210
Insurance premiums					12,368
Miscellaneous					13,957
TOTAL EXPENSES					1,553,816
Waiver and Reimbursement (Note 5):
Waiver of administrative personnel and services fee	$	(1,217,347	)
Reimbursement of other operating expenses		(13,500	)
TOTAL WAIVER AND REIMBURSEMENT					(1,230,847	)
Net expenses								322,969
Net investment income								87,288,058
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:
Net realized loss on investments								(7,274,658	)
Net realized gain on futures contracts								901,140
Net change in unrealized appreciation of investments								19,120,773
Net change in unrealized appreciation of futures contracts								277,220
Net realized and unrealized gain on investments and futures contracts								13,024,475
Change in net assets resulting from operations							$	100,312,533

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets – Federated Mortgage Core Portfolio

Year Ended December 31		2007			2006
Increase (Decrease) in Net Assets
Operations:
Net investment income	$	87,288,058		$	62,072,380
Net realized loss on investments and futures contracts		(6,373,518	)		(9,018,349	)
Net change in unrealized appreciation/depreciation of investments and futures contracts		19,397,993			14,668,403
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS		100,312,533			67,722,434
Distributions to Shareholders:
Distributions from net investment income		(89,466,830	)		(63,565,744	)
Share Transactions:
Proceeds from sale of shares		726,641,657			472,210,000
Net asset value of shares issued to shareholders in payment of distributions declared		82,501,277			61,327,124
Cost of shares redeemed		(170,840,790	)		(256,487,303	)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS		638,302,144			277,049,821
Change in net assets		649,147,847			281,206,511
Net Assets:
Beginning of period		1,230,611,986			949,405,475
End of period (including undistributed net investment income of $105,591 and $131,213, respectively)	$	1,879,759,833		$	1,230,611,986

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements – Federated Mortgage Core Portfolio

December 31, 2007

1. ORGANIZATION

Federated Core Trust (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of three diversified portfolios. The financial statements included herein are only those of Federated Mortgage Core Portfolio (the “Fund”). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder’s interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund’s investment objective is to provide total return. The Fund is an investment vehicle used by the other Federated funds that invest some of their assets in mortgage-backed securities. Currently, the Fund is only available for purchase by other Federated funds and their affiliates, or insurance company separate accounts, common or commingled trust funds or similar organizations or entities that are “accredited investors” within the meaning of Regulation D of the Securities Act of 1933.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.

Investment Valuation

In calculating its net asset value (NAV), the Fund generally values investments as follows:

·   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 Board of Trustees (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.

If the Fund cannot obtain a price or price evaluation from a pricing service for an investment, the Fund may attempt to value the investment based upon the mean of bid and asked quotations or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund’s NAV.

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 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 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.

Repurchase Agreements

It 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.

With respect to agreements to repurchase U.S. government securities and cash items, the Fund treats the repurchase agreement as an investment in the underlying securities and not as an obligation of the other party to the repurchase agreement. Other repurchase agreements are treated as obligations of the other party secured by the underlying securities. Nevertheless, 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, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared daily and paid monthly.

Premium and Discount Amortization/Paydown Gains and Losses

All premiums and discounts on fixed-income securities are amortized/accreted. Gains and losses realized on principal payment of mortgage-backed securities (paydown gains and losses) are classified as part of investment income.

Federal Taxes

It is the Fund’s policy to comply with subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute each year substantially all of its income.  Accordingly, no provision for federal income tax is necessary.  The Fund adopted the provisions of Financial Accounting Standards Board Interpretation No. 48 (FIN 48), “Accounting for Uncertainty in Income Taxes”, on June 29, 2007.  As of and during the period ended December 31, 2007, the Fund did not have a liability for any unrecognized tax expenses.  The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations.   As of December 31, 2007, tax years 2004 through 2007 remain subject to examination by the fund's major tax jurisdictions, which include the United States of America and the state of Massachusetts.

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.

The Fund may transact in To Be Announced Securities (TBAs). As with other delayed delivery transactions, a seller agrees to issue TBAs at a future date. However, the seller does not specify the particular securities to be delivered. Instead, the Fund agrees to accept any security that meets specified terms such as issuer, interest rate and terms of underlying mortgages. The Fund records TBAs on the trade date utilizing information associated with the specified terms of the transaction as opposed to the specific mortgages. TBAs are marked to market daily and begin earning interest on the settlement date. Losses may occur due to the fact that the actual underlying mortgages received may be less favorable than those anticipated by the Fund.

Futures Contracts

The Fund purchases financial futures contracts to manage cashflows, 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. For the year ended December 31, 2007, the Fund had net realized gains on futures contracts of $901,140.

Futures contracts outstanding at period end are listed after the Fund’s portfolio of investments.

Dollar-Roll Transactions

The Fund enters into dollar-roll transactions with respect to mortgage securities issued by Government National Mortgage Association, Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, in which the Fund sells mortgage securities to financial institutions and simultaneously agrees to accept substantially similar (same type, coupon and maturity) securities at a later date at an agreed-upon price. Dollar-roll transactions, which are treated as purchase and sales, will not exceed 12 months. The Fund will use the proceeds generated from the transaction to invest in short-term investments or mortgage-backed securities which may enhance the Fund’s current yield and total return. Dollar-rolls are subject to interest rate and credit risks.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.

3. SHARES OF BENEFICIAL INTEREST

The following table summarizes share activity:

Year Ended December 31	2007		2006
Shares sold	73,800,201		48,368,579
Shares issued to shareholders in payment of distributions declared	8,388,050		6,241,796
Shares redeemed	(17,411,893	)	(25,892,604	)
NET CHANGE RESULTING FROM SHARE TRANSACTIONS	64,776,358		28,717,771

4. FEDERAL TAX INFORMATION

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due to differing treatments for dollar-roll transactions.

For the year ended December 31, 2007, permanent differences identified and reclassified among the components of net assets were as follows:

Increase (Decrease)
Undistributed Net Investment Income (Loss)	Accumulated Net Realized Gains (Losses)
$2,153,150	$(2,153,150)

Net investment income (loss), net realized gains (losses), and net assets were not affected by this reclassification.

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended December 31, 2007 and 2006, was as follows:

	2007	2006
Ordinary income	$89,466,830	$63,565,744

As of December 31, 2007, the components of distributable earnings on a tax basis were as follows:

Undistributed ordinary income	$	105,591
Net unrealized appreciation	$	34,753,765
Capital loss carryforwards	$	(37,970,435)

The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable in part to differing treatments for the deferral of losses on wash sales and dollar-roll adjustments.

At December 31, 2007, the cost of investments for federal tax purposes was $2,179,987,445. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation resulting from futures contracts was $34,753,765. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $38,472,683 and net unrealized depreciation from investments for those securities having an excess of cost over value of $3,718,918.

At December 31, 2007, the Fund had a capital loss carryforward of $37,970,435 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
2012	$6,069,029
2013	$6,890,426
2014	$18,701,202
2015	$6,309,778

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company is the Fund’s investment adviser (the “Adviser”), subject to direction of the Trustees. The Adviser provides investment adviser services at no fee, because all investors in the Fund are other Federated funds, insurance company separate accounts, common or commingled trust funds or similar organizations or entities that are “accredited investors” within the meaning of Regulation D of the 1933 Act. The Adviser may voluntarily choose to reimburse certain operating expenses of the Fund. The Adviser can modify or terminate this voluntary reimbursement at any time. For the year ended December 31, 2007, the Adviser voluntarily reimbursed $13,500 of other operating expenses.

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of 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. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended December 31, 2007, FAS waived its entire fee.

General

Certain of the Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended December 31, 2007, were as follows:

Purchases	$	186,658,146
Sales	$	19,373,563

7. LINE OF CREDIT

The Fund participates in a $150,000,000 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 of 0.65% over the federal funds rate. As of December 31, 2007, there were no outstanding loans. During the year ended December 31, 2007, the Fund did not utilize the LOC.

8. INTERFUND LENDING

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (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 funds to borrow from other participating affiliated funds. As of December 31, 2007, there were no outstanding loans. During the year ended December 31, 2007, the program was not utilized.

9. LEGAL PROCEEDINGS

Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, “Federated”), along with various investment companies sponsored by Federated (“Funds”) were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. These lawsuits began to be filed shortly after Federated’s first public announcement that it had received requests for information on shareholder trading activities in the Funds from the SEC, the Office of the New York State Attorney General (“NYAG”), and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay for the benefit of fund shareholders additional disgorgement and a civil money penalty in the aggregate amount of an additional $72 million. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees. The Board of the Funds has retained the law firm of Dickstein Shapiro LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and intend to defend this litigation. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys’ fees and expenses, and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

10. RECENT ACCOUNTING PRONOUNCEMENTS

In September 2006, the Financial Accounting Standards Board released Statement on Financial Accounting Standards No. 157, “Fair Value Measurements” (FAS 157), which is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management has concluded that the adoption of FAS 157 is not expected to have a material impact on the Fund’s net assets or results of operations.

Report of Independent Registered Public Accounting Firm – Federated Mortgage Core Portfolio

TO THE BOARD OF TRUSTEES OF FEDERATED CORE TRUST AND SHAREHOLDERS OF FEDERATED MORTGAGE CORE PORTFOLIO

We have audited the accompanying statement of assets and liabilities of Federated Mortgage Core Portfolio (one of the portfolios constituting Federated Core Trust), (the “Fund”), including the portfolio of investments, as of December 31, 2007, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Federated Mortgage Core Portfolio, a portfolio of Federated Core Trust, at December 31, 2007, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.

Boston, Massachusetts

February 18, 2008

Board of Trustees and Trust Officers

The Board is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Board member and the senior officers of the Fund. Where required, the tables separately list Board members who are “interested persons” of the Fund (i.e., “Interested” Board members) and those who are not (i.e., “Independent” Board members). Unless otherwise noted, the address of each person listed is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222. The address of all Independent Board members listed is 5800 Corporate Drive, Pittsburgh, PA 15237-7000; Attention: Mutual Fund Board. As of December 31, 2007, the Trust comprised four portfolios, and the Federated Fund Complex consisted of40 investment companies (comprising 148 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees all portfolios in the Federated Fund Complex and serves for an indefinite term. The Fund’s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.

INTERESTED TRUSTEES BACKGROUND

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
John F. Donahue* Birth Date: July 28, 1924 CHAIRMAN and TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Complex’s Executive Committee. Previous Positions: Chairman of the Federated Fund Complex; Trustee, Federated Investment Management Company and Chairman and Director, Federated Investment Counseling.
J. Christopher Donahue* Birth Date: April 11, 1949 PRESIDENT and TRUSTEE Began serving: October 2005	Principal Occupations: Principal Executive Officer and President of the Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (Investment advisory subsidiary of Federated); Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd.

*Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to the positions they hold with Federated Investors, Inc. and its subsidiaries.

INDEPENDENT TRUSTEES BACKGROUND

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)
Thomas G. Bigley Birth Date: February 3, 1934 TRUSTEE Began serving: October 2005	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Director, Member of Executive Committee, Children’s Hospital of Pittsburgh; Director, University of Pittsburgh. Previous Position: Senior Partner, Ernst & Young LLP.
John T. Conroy, Jr. Birth Date: June 23, 1937 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida. Previous Positions: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village Development Corporation.
Nicholas P. Constantakis Birth Date: September 3, 1939 TRUSTEE Began serving: October 2005	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Director and Chairman of the Audit Committee, Michael Baker Corporation (engineering and energy services worldwide). Previous Position: Partner, Andersen Worldwide SC.
John F. Cunningham Birth Date: March 5, 1943 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; Director, QSGI, Inc. (technology services company). Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting); Trustee Associate, Boston College. Previous Positions: Director, Redgate Communications and EMC Corporation (computer storage systems); Chairman of the Board and Chief Executive Officer, Computer Consoles, Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First National Bank of Boston; Director, Apollo Computer, Inc.
Peter E. Madden Birth Date: March 16, 1942 TRUSTEE Began serving: October 2005	Principal Occupation: Director or Trustee of the Federated Fund Complex. Other Directorships Held: Board of Overseers, Babson College. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange.
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President DVC Group, Inc. (marketing, communications and technology).
John E. Murray, Jr., J.D., S.J.D. Birth Date: December 20, 1932 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Complex; Chancellor and Law Professor, Duquesne University; Partner, Murray, Hogue & Lannis. Other Directorships Held: Director, Michael Baker Corp. (engineering, construction, operations and technical services). Previous Positions: President, Duquesne University; Dean and Professor of Law, University of Pittsburgh School of Law; Dean and Professor of Law, Villanova University School of Law.
R. James Nicholson Birth Date: February 4, 1938 TRUSTEE Began serving: January 2008	Principal Occupations: Director or Trustee of the Federated Fund Complex; Senior Counsel, Brownstein Hyatt Farber Schrek, P.C.; Former Secretary of the U.S. Dept. of Veterans Affairs; Former U.S. Ambassador to the Holy See; Former Chairman of the Republican National Committee. Other Directorships Held: Director, Horatio Alger Association. Previous Positions: Colonel, U.S. Army Reserve; Partner, Calkins, Kramer, Grimshaw and Harring, P.C.; General Counsel, Colorado Association of Housing and Building; Chairman and CEO, Nicholson Enterprises, Inc.; Chairman and CEO, Renaissance Homes of Colorado.
Thomas M. O’Neill Birth Date: June 14, 1951 TRUSTEE Began serving: October 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; Managing Director and Partner, Navigator Management Company, L.P. (investment and strategic consulting). Other Directorships Held: Board of Ovcerseers, Children’s Hospital of Boston; Visiting Committee on Athletics, Harvard College. Previous Positions: Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; and Credit Analyst and Lending Officer, Fleet Bank.
Marjorie P. Smuts Birth Date: June 21, 1935 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Public Relations/Marketing Consultant/Conference Coordinator. Previous Positions: National Spokesperson, Aluminum Company of America; television producer; President, Marj Palmer Assoc.; Owner, Scandia Bord.
John S. Walsh Birth Date: November 28, 1957 TRUSTEE Began serving: October 2005	Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Previous Position: Vice President, Walsh & Kelly, Inc.
J James F. Will Birth Date: October 12, 1938 TRUSTEE Began serving: April 2006	Principal Occupations: Director or Trustee of the Federated Fund Complex; formerly, Vice Chancellor and President, Saint Vincent College. Other Directorships Held: Trustee, Saint Vincent College; Alleghany Corporation. Previous Positions: Chairman, President and Chief Executive Officer, Armco, Inc.; President and Chief Executive Officer, Cyclops Industries; President and Chief Operating Officer, Kaiser Steel Corporation.

OFFICERS

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) and Previous Position(s)
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Began serving: October 2005	Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp.
Richard A. Novak Birth Date: December 25, 1963 TREASURER Began serving: January 2006	Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. Previous Positions: Controller of Federated Investors, Inc.; Vice President, Finance of Federated Services Company; held various financial management positions within The Mercy Hospital of Pittsburgh; Auditor, Arthur Andersen & Co.
Richard B. Fisher Birth Date: May 17, 1923 VICE CHAIRMAN Began serving: October 2005	Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc. and Director and Chief Executive Officer, Federated Securities Corp.
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER and SENIOR VICE PRESIDENT Began serving: October 2005	Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Complex; Vice President and Chief Compliance Officer of Federated Investors, Inc.; and Chief Compliance Officer of its subsidiaries. Mr. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin.
Robert J. Ostrowski Birth Date: April 26, 1963 Chief Investment Officer Began serving: August 2006	Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. He has been a Senior Vice President of the Fund’s Adviser since 1997. Mr. Ostrowski is a Chartered Financial Analyst. He received his M.S. in Industrial Administration from Carnegie Mellon University.
Joseph M. Balestrino Birth Date: November 3, 1954 VICE PRESIDENT Began serving: October 2005	Principal Occupations: Joseph M. Balestrino is Vice President of the Trust. Mr. Balestrino joined Federated in 1986 and has been a Senior Portfolio Manager and Senior Vice President of the Fund’s Adviser since 1998. He was a Portfolio Manager and a Vice President of the Fund’s Adviser from 1995 to 1998. Mr. Balestrino served as a Portfolio Manager and an Assistant Vice President of the Adviser from 1993 to 1995. Mr. Balestrino is a Chartered Financial Analyst and received his Master’s Degree in Urban and Regional Planning from the University of Pittsburgh.

Evaluation and Approval of Advisory Contract

FEDERATED MORTGAGE STRATEGY PORTFOLIO (THE “FUND”)

The Fund’s Board reviewed the Fund’s investment advisory contract at meetings held in May 2007. The Board’s decision regarding the contract reflects the exercise of its business judgment on whether to continue the existing arrangements. The Fund is distinctive in that it: is used to implement particular investment strategies that are offered to investors in certain separately managed or wrap fee accounts or programs or certain other discretionary investments accounts; and may also be offered to other Federated funds. In addition, the Adviser does not charge an investment advisory fee for its services although it or its affiliates may receive compensation for managing assets invested in the Fund.

The Federated funds 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 contract.

As previously noted, the Adviser does not charge an investment advisory fee for its services; however, the Board did consider compensation and benefits received by the Adviser, including fees received for services provided to the Fund by other entities in the Federated organization and research services received by the Adviser from brokers that execute Federated fund trades. 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 the Fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser’s relationship with the 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 for what might be viewed as like services, and costs 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 from supplying such services. The Board was aware of these factors and was guided by them in its review of the Fund’s advisory contract to the extent it considered them to be appropriate and relevant, as discussed further below.

The Board considered and weighed these circumstances in light of its substantial accumulated experience in governing the Fund and working with Federated on matters relating to the Federated funds, and was assisted in its deliberations by the advice of independent legal counsel. Throughout the year, the Board has requested and received substantial and detailed information about the Fund and the Federated organization that was in addition to the extensive materials that comprise and accompany the Senior Officer’s evaluation. Federated provided much of this information at each regular meeting of the Board, and furnished additional reports in connection with the particular meeting at which the Board’s formal review of the advisory contract occurred. Between regularly scheduled meetings, the Board has received information on particular matters as the need arose. Thus, the Board’s consideration of the advisory contract included review of the Senior Officer’s evaluation, accompanying data and additional reports covering such matters as: the Adviser’s investment philosophy, personnel and processes; investment and operating strategies; the Fund’s short- and long-term performance, and comments on the reasons for performance; the Fund’s investment objectives; the Fund’s overall expense structure; the use and allocation of brokerage commissions derived from trading the Fund’s portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders and their relative sophistication; the continuing state of competition in the mutual fund industry and market practices; the Fund’s relationship to the Federated family of funds which include a comprehensive array of funds with different investment objectives, policies and strategies which are available for exchange without the incurrence of additional sales charges; compliance and audit reports concerning the Federated funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated’s responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated funds and/or Federated are responding to them. The Board’s evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace.

Because the Adviser does not charge the Fund an investment advisory fee the Fund’s Board does not consider fee comparisons to other mutual funds or other institutional or separate accounts to be relevant.

The Board also received financial information about Federated, including reports on the compensation and benefits Federated derived from its relationships with the Federated funds. Because the Adviser does not charge an investment advisory fee for its services, these reports generally cover 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 services from brokers who execute Federated fund trades. In addition, the Board considered the fact that, in order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waive non-advisory fees and/or reimburse other expenses and have disclosed to fund investors and/or indicated to the Board their intention to do so in the future, where appropriate.

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 Board based its decision to approve the advisory contract 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. In particular, due to the unusual nature of the Fund as primarily an internal product with no advisory fee, the Board does not consider the assessment of whether economies of scale would be realized if the Fund were to grow to some sufficient size to be relevant. 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 arrangement.

Voting 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, as well as a report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30, are available, without charge and upon request, by calling 1-800-341-7400. These materials 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.)

Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund’s prospectus, which contains facts concerning its objective and policies, management fees, expenses, and other information.

Cusip 31421P407

38011 (2/08)

Item 2.                      Code of Ethics

(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.

(c) Not Applicable

(d) Not Applicable

(e) Not Applicable

(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics.  To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3.                      Audit Committee Financial Expert

The registrant’s Board has determined that each of the following members of the Board’s Audit Committee is an “audit committee financial expert,” and is “independent,” for purposes of this Item:  Thomas G. Bigley, Nicholas P. Constantakis and Charles F. Mansfield, Jr.

Item 4.                      Principal Accountant Fees and Services

(a)                      Audit Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2007 - $37,200

Fiscal year ended 2006 - $21,000

(b)                      Audit-Related Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2007 - $0

Fiscal year ended 2006 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $11,581 respectively.  Fiscal year end 2006 – Seed audit and consent fees.

(c)                       Tax Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2007 - $0

Fiscal year ended 2006 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.

(d)                      All Other Fees billed to the registrant for the two most recent fiscal years:

Fiscal year ended 2007 - $0

Fiscal year ended 2006 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $9,858 and $0 respectively.  Fiscal year end 2007 - Discussions related to accounting for swaps.

(e)(1)                      Audit Committee Policies regarding Pre-approval of Services.

The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence.  Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee.  Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.

Certain services have the general pre-approval of the Audit Committee.  The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period.  The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services.  The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations.  The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.

The Audit Committee has delegated pre-approval authority to its Chairman.  The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting.  The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.

AUDIT SERVICES

The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee.  The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.

In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide.  The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.

AUDIT-RELATED SERVICES

Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor.  The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.

TAX SERVICES

The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence.  However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations.  The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.

ALL OTHER SERVICES

With respect to the provision of services other than audit, review or attest services the pre-approval requirement is waived if:

(1)   The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided;

(2)   Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant  at the time of the engagement to be non-audit services; and

(3)   Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee.

The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.

The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.

PRE-APPROVAL FEE LEVELS

Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee.  Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.

PROCEDURES

Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.

(e)(2)                      Percentage of services identified in items 4(b) through 4(d) that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:

4(b)

Fiscal year ended 2007 – 0%

Fiscal year ended 2006 - 0%

Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

4(c)

Fiscal year ended 2007 – 0%

Fiscal year ended 2006 – 0%

Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

4(d)

Fiscal year ended 2007 – 0%

Fiscal year ended 2006 – 0%

Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.

(f)   NA

(g)   Non-Audit Fees billed to the registrant, the registrant’s investment adviser, and certain entities controlling, controlled by or under common control with the investment adviser:

Fiscal year ended 2007 - $160,155

Fiscal year ended 2006 - $179,997

(h)                      The registrant’s Audit Committee has considered that the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.

Item 5.                      Audit Committee of Listed Registrants

Not Applicable

Item 6.                      Schedule of Investments

Not Applicable

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not Applicable

Item 8. Portfolio Managers of Closed-End Management Investment Companies

Not Applicable

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not Applicable

Item 10.                      Submission of Matters to a Vote of Security Holders

Not Applicable

Item 11.                      Controls and Procedures

(a) The registrant’s President and Treasurer have concluded that the

registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12.                      Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant                                Federated Managed Pool Series

By	/S/ Richard A. Novak
	Richard A. Novak
	Principal Financial Officer
Date	February 21, 2008

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 Donanhue
	Principal Executive Officer
Date	February 20, 2008
By	/S/ Richard A. Novak
	Richard A. Novak
	Principal Financial Officer
Date	February 21, 2008