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
4000 Ericsson Drive
Warrendale, Pennsylvania 15086-7561
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
Peter J. Germain, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End:11/30/19
Date of Reporting Period:11/30/19
Item 1. | Reports to Stockholders |
Ticker | FIBPX |
1 | The Blended Index is a custom blended index comprised of 50% of the Bloomberg Barclays Emerging Markets USD Aggregate Index and 50% of the J.P. Morgan Global (ex-U.S.) Government Bond Index. Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the Blended Index. |
2 | Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the BBEMAI. |
3 | Duration is a measure of a security's price sensitivity to changes in interest rates. Securities with longer durations are more sensitive to changes in interest rates than securities of shorter durations. |
4 | Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. |
5 | International investing involves special risks including currency risk, increased volatility, political risks and differences in auditing and other financial standards. Prices of emerging market securities can be significantly more volatile than the prices of securities in developed countries, and currency risk and political risks are accentuated in emerging markets. |
Federated International Bond Strategy Portfolio | NA | BBEMAI | JPMGXUS | Blended Index | |
F | NA | I | I | I | |
11/30/2009 | 10,000 | 10,000 | 10,000 | 10,000 | |
11/30/2010 | 10,811 | 11,365 | 9,755 | 10,541 | |
11/30/2011 | 11,736 | 11,923 | 10,540 | 11,229 | |
11/30/2012 | 13,139 | 14,124 | 10,880 | 12,424 | |
11/30/2013 | 12,482 | 13,635 | 10,300 | 11,882 | |
11/30/2014 | 13,020 | 14,698 | 10,011 | 12,167 | |
11/30/2015 | 12,459 | 14,718 | 9,310 | 11,749 | |
11/30/2016 | 13,102 | 15,767 | 9,728 | 12,440 | |
11/30/2017 | 14,274 | 17,182 | 10,583 | 13,548 | |
11/30/2018 | 13,632 | 16,598 | 10,140 | 13,039 | |
11/30/2019 | 14,984 | 18,745 | 10,868 | 14,350 |
1 Year | 5 Years | 10 Years | |
Fund | 9.92% | 2.85% | 4.13% |
BBEMAI | 12.94% | 4.98% | 6.49% |
JPMGXUS | 7.18% | 1.66% | 0.84% |
Blended Index | 10.05% | 3.36% | 3.68% |
1 | Represents a hypothetical investment of $10,000 in the Fund. The Fund's performance assumes the reinvestment of all dividends and distributions. The BBEMAI and the JPMGXUS have been adjusted to reflect reinvestment of dividends on securities in the indexes. |
2 | The BBEMAI tracks total returns for external-currency-denominated debt instruments of the emerging markets. The JPMGXUS is a broad measure of bond performance in developed countries, excluding the U.S. The indexes are not adjusted to reflect sales loads, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. The indexes are unmanaged and, unlike the Fund, are not affected by cash flows. It is not possible to invest directly in an index. |
Country | Country Exposure as a Percentage of Total Net Assets2 | Currency Exposure as a Percentage of Total Net Assets3,4 |
China | 10.2% | — |
Japan | 7.1% | 16.8% |
France | 7.0% | — |
Mexico | 5.9% | 2.6% |
Brazil | 4.2% | — |
United Kingdom | 4.1% | 5.8% |
Russia | 3.8% | 0.2% |
Italy | 3.5% | — |
Saudi Arabia | 3.2% | — |
Indonesia | 3.0% | — |
Spain | 3.0% | — |
Turkey | 2.5% | — |
Germany | 2.0% | — |
Netherlands | 1.9% | — |
Colombia | 1.8% | — |
Belgium | 1.7% | — |
India | 1.6% | — |
Chile | 1.5% | — |
United States | 1.5% | 43.8% |
South Korea | 1.5% | — |
United Arab Emirates | 1.5% | — |
Qatar | 1.5% | — |
Peru | 1.4% | — |
Ukraine | 1.4% | — |
Egypt | 1.3% | 0.4% |
Argentina | 1.3% | — |
South Africa | 1.2% | 0.1% |
Canada | 1.2% | 1.3% |
Oman | 1.1% | — |
Kazakhstan | 1.0% | — |
Australia | 1.0% | 1.2% |
Poland | — | 0.4% |
Euro | — | 22.2% |
New Zealand | — | 1.6% |
Norway | — | 0.2% |
Other Countries5 | 11.7% | — |
SUB-TOTAL | 96.6% | 96.6% |
Cash Equivalents6 | 2.9% | 2.9% |
Derivative Contracts7 | 0.2% | 0.2% |
Other Assets and Liabilities—Net8 | 0.3% | 0.3% |
TOTAL | 100.0% | 100.0% |
1 | The fixed-income securities of some issuers may not be denominated in the currency of the issuer's designated country. Therefore, the two columns above “Country Exposure as a Percentage of Total Net Assets” and “Currency Exposure as a Percentage of Total Net Assets” may not be equal. |
2 | This column depicts the Fund's exposure to various countries through its investment in foreign fixed-income securities, along with the Fund's holdings of cash equivalents and other assets and liabilities. With respect to foreign corporate fixed-income securities, country allocations are based primarily on the country in which the issuing company has registered the security. However, the Fund's Adviser may allocate the company to a country based on other factors such as the location of the company's head office, the jurisdiction of the company's incorporation, the location of the principal trading market for the company's securities or the country from which a majority of the company's revenue is derived. |
3 | As of the date specified above, the Fund owned shares of one or more affiliated investment companies. For purposes of this table, the affiliated investment company (other than an affiliated money market 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. |
4 | This column depicts the Fund's exposure to various currencies through its investment in foreign fixed-income securities, currency derivative contracts and foreign exchange contracts (which for purposes of this report includes any currency options sold by the Fund and currency forward contracts). |
5 | This line depicts the Fund's exposure to various countries, each of which represents less than 1.0% of the Fund's Total Net Assets. |
6 | Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements. This does not include cash held in the Fund that is denominated in foreign currencies. See the Statement of Assets and Liabilities for information regarding the Fund's foreign cash position. |
7 | Based upon net unrealized appreciation (depreciation) or value of the derivative contracts as applicable. Derivative contracts may consist of futures, forwards, options and swaps. The impact of a derivative contract on the Fund's performance may be larger than its unrealized appreciation (depreciation) or value may indicate. In many cases, the notional value or amount of a derivative contract may provide a better indication of the contract's significance to the portfolio. More complete information regarding the Fund's direct investment in derivative contracts, including unrealized appreciation (depreciation), value and notional values or amounts of such contracts, can be found in the table at the end of the Portfolio of Investments included in this Report. |
8 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
Foreign Currency Par Amount, Principal Amount or Shares | Value in U.S. Dollars | ||
BONDS—34.9% | |||
AUSTRALIAN DOLLAR—0.9% | |||
Sovereign—0.9% | |||
120,000 | Australia, Government of, Series 128, 5.750%, 7/15/2022 | $91,892 | |
100,000 | Australia, Government of, Series 137, 2.750%, 4/21/2024 | 73,623 | |
75,000 | Australia, Government of, Sr. Unsecd. Note, Series 148, 2.750%, 11/21/2027 | 57,670 | |
TOTAL | 223,185 | ||
BRITISH POUND—4.2% | |||
Sovereign—4.2% | |||
100,000 | United Kingdom, Government of, 2.750%, 9/7/2024 | 142,899 | |
95,000 | United Kingdom, Government of, 3.250%, 1/22/2044 | 175,387 | |
49,500 | United Kingdom, Government of, 4.750%, 3/7/2020 | 64,695 | |
190,000 | United Kingdom, Government of, Unsecd. Note, 1.500%, 7/22/2047 | 262,636 | |
180,000 | United Kingdom, Government of, Unsecd. Note, 4.250%, 6/7/2032 | 327,050 | |
TOTAL | 972,667 | ||
CANADIAN DOLLAR—1.2% | |||
Sovereign—1.2% | |||
145,000 | Canada, Government of, 1.500%, 6/1/2023 | 108,988 | |
155,000 | Canada, Government of, Series WL43, 5.750%, 6/1/2029 | 161,013 | |
TOTAL | 270,001 | ||
EURO—20.2% | |||
Consumer Products—1.0% | |||
190,000 | Philip Morris International, Inc., Sr. Unsecd. Note, 2.875%, 5/14/2029 | 244,184 | |
Sovereign—19.2% | |||
110,000 | Belgium, Government of, Series 68, 2.250%, 6/22/2023 | 133,366 | |
230,000 | Belgium, Government of, Series 74, 0.800%, 6/22/2025 | 269,761 | |
495,000 | France, Government of, 0.500%, 5/25/2025 | 572,494 | |
220,000 | France, Government of, 2.750%, 10/25/2027 | 300,308 | |
300,000 | France, Government of, 4.250%, 10/25/2023 | 393,052 | |
220,000 | France, Government of, O.A.T., 5.500%, 4/25/2029 | 371,431 | |
210,000 | Germany, Government of, Bond, Series 03, 4.750%, 7/4/2034 | 401,775 | |
55,000 | Germany, Government of, Unsecd. Note, 1.000%, 8/15/2024 | 65,214 | |
150,000 | Italy, Government of, Sr. Unsecd. Note, 0.650%, 10/15/2023 | 167,191 | |
185,000 | Italy, Government of, Sr. Unsecd. Note, 4.750%, 9/1/2028 | 265,410 | |
340,000 | Italy, Government of, Unsecd. Note, 1.600%, 6/1/2026 | 392,147 | |
45,000 | Italy, Government of, Unsecd. Note, 3.250%, 9/1/2046 | 59,620 | |
240,000 | Netherlands, Government of, Unsecd. Note, 0.250%, 7/15/2025 | 275,142 | |
100,000 | Netherlands, Government of, Unsecd. Note, 2.500%, 1/15/2033 | 147,490 | |
335,000 | Spain, Government of, Sr. Unsecd. Note, 1.950%, 7/30/2030 | 425,014 | |
25,000 | Spain, Government of, Sr. Unsecd. Note, 2.750%, 10/31/2024 | 31,364 | |
97,000 | Spain, Government of, Sr. Unsub., 4.000%, 4/30/2020 | 108,828 | |
90,000 | Spain, Government of, Unsecd. Note, 1.600%, 4/30/2025 | 107,779 | |
TOTAL | 4,487,386 | ||
JAPANESE YEN—7.2% | |||
Sovereign—7.2% | |||
16,400,000 | Japan, Government of, Series 313, 1.300%, 3/20/2021 | 152,699 |
Foreign Currency Par Amount, Principal Amount or Shares | Value in U.S. Dollars | ||
BONDS—continued | |||
JAPANESE YEN—continued | |||
Sovereign—continued | |||
20,000,000 | Japan, Government of, Series 65, 1.900%, 12/20/2023 | $198,258 | |
36,000,000 | Japan, Government of, Sr. Unsecd. Note, Series 122, 1.800%, 9/20/2030 | 394,523 | |
55,000,000 | Japan, Government of, Sr. Unsecd. Note, Series 153, 1.300%, 6/20/2035 | 593,152 | |
28,000,000 | Japan, Government of, Sr. Unsecd. Note, Series 44, 1.700%, 9/20/2044 | 338,805 | |
TOTAL | 1,677,437 | ||
MEXICAN PESO—0.8% | |||
Sovereign—0.8% | |||
3,600,000 | Mexico, Government of, Sr. Unsecd. Note, Series M, 5.000%, 12/11/2019 | 183,521 | |
POLISH ZLOTY—0.4% | |||
Sovereign—0.4% | |||
350,000 | Poland, Government of, Unsecd. Note, Series 0726, 2.500%, 7/25/2026 | 92,634 | |
TOTAL BONDS (IDENTIFIED COST $7,892,176) | 8,151,015 | ||
PURCHASED CALL OPTION—0.0% | |||
Foreign Currency—0.0% | |||
1,000,000 | EUR CALL/JPY PUT, BNP Paribas, Notional Amount $1,000,000, Exercise Price $122.430, Expiration Date 1/30/2020 (IDENTIFIED COST $8,259) | 3,233 | |
PURCHASED PUT OPTION—0.0% | |||
Foreign Currency—0.0% | |||
25,000 | USD PUT/CAD CALL, Morgan Stanley, Notional Amount $25,000, Exercise Price $1.375, Expiration Date 12/4/2019 (IDENTIFIED COST $66) | 32 | |
REPURCHASE AGREEMENT—1.9% | |||
449,000 | Interest in $29,000,000 joint repurchase agreement, 1.650% dated 11/29/2019 under which BNP Paribas Securities Corp. will repurchase the securities provided as collateral for $29,003,988 on 12/2/2019. The securities provided as collateral at the end of the period held with BNY Mellon, tri-party agent, were U.S. Treasury Notes with various maturities to 10/15/2021 and the market value of those underlying securities was $29,584,137. | 449,000 | |
INVESTMENT COMPANY—63.6% | |||
1,494,857 | Emerging Markets Core Fund (IDENTIFIED COST $15,148,198) | 14,858,881 | |
TOTAL INVESTMENT IN SECURITIES—100.4% (IDENTIFIED COST $23,497,699)1 | 23,462,161 | ||
OTHER ASSETS AND LIABILITIES - NET—(0.4)%2 | (93,382) | ||
TOTAL NET ASSETS—100% | $23,368,779 |
Counterparty | Description | Notional Amount | Expiration Date | Exercise Price | Value in U.S Dollar |
Call Options: | |||||
3Barclays | NZD CALL/USD PUT | $277,500 | 12/11/2019 | $0.644 | $(414) |
Put Options: | |||||
3Bank of America Merril Lynch | USD PUT/CAD CALL | $25,000 | 12/12/2019 | $1.30 | $0 |
3BNP Paribas | EUR PUT/JPY CALL | $1,000,000 | 1/31/2020 | $119.30 | $(5,713) |
(PREMIUM RECEIVED $8,886) | $(6,127) |
Settlement Date | Counterparty | Foreign Currency Units to Receive/Deliver | In Exchange For | Unrealized Appreciation (Depreciation) |
Contracts Purchased: | ||||
2/3/2020 | Citibank | 300,000 NZD | $191,206 | $1,594 |
2/3/2020 | Citibank | $1,100,000 | 10,044,537 NOK | $10,086 |
2/3/2020 | Credit Agricole | 500,000 EUR | 60,299,400 JPY | $(147) |
2/3/2020 | Goldman Sachs | 1,000,000 EUR | 120,564,280 JPY | $23 |
2/3/2020 | Goldman Sachs | $1,150,000 | 10,479,053 NOK | $12,937 |
2/3/2020 | HSBC | $200,000 | 21,608,490 JPY | $1,589 |
2/3/2020 | JPMorgan | 1,000,000 EUR | 121,063,980 JPY | $(4,566) |
2/3/2020 | JPMorgan | $200,000 | 21,557,170 JPY | $2,060 |
2/3/2020 | JPMorgan | $900,000 | 97,829,118 JPY | $1,725 |
2/3/2020 | Morgan Stanley | $500,000 | 4,568,759 NOK | $4,252 |
2/3/2020 | Morgan Stanley | $1,100,000 | 4,246,205 PLN | $15,628 |
2/3/2020 | State Street | 450,000 EUR | $503,709 | $(5,534) |
2/3/2020 | State Street | 295,000 GBP | $380,918 | $1,535 |
2/4/2020 | State Street | $200,000 | 3,884,804 MXN | $3,385 |
2/28/2020 | Bank of America | 50,000 AUD | $33,995 | $(95) |
2/28/2020 | Barclays | 300,000 NOK | $32,733 | $(180) |
2/28/2020 | Barclays | 500,000 NZD | $321,457 | $(13) |
2/28/2020 | Morgan Stanley | 55,000 NZD | $35,382 | $(24) |
Contracts Sold: | ||||
2/3/2020 | Barclays | $500,000 | 4,590,268 NOK | $(1,918) |
2/3/2020 | BNP Paribas | 300,000 NZD | $191,657 | $(1,142) |
2/3/2020 | Credit Agricole | $1,100,000 | 119,020,770 JPY | $(7,141) |
2/3/2020 | Goldman Sachs | 1,000,000 EUR | 120,814,690 JPY | $2,276 |
2/3/2020 | HSBC | $1,100,000 | 4,264,911 PLN | $(10,851) |
2/3/2020 | JPMorgan | $200,000 | 21,657,880 JPY | $(1,135) |
2/3/2020 | Morgan Stanley | $1,150,000 | 10,582,863 NOK | $(1,673) |
2/3/2020 | State Street | 1,500,000 EUR | 181,233,030 JPY | $3,516 |
2/3/2020 | State Street | $2,185,000 | 236,415,120 JPY | $(14,216) |
2/3/2020 | State Street | $1,100,000 | 9,996,785 NOK | $(15,267) |
2/4/2020 | Citibank | $100,000 | 1,942,270 MXN | $(1,699) |
2/4/2020 | Goldman Sachs | $100,000 | 1,945,457 MXN | $(1,538) |
2/18/2020 | Goldman Sachs | $65,000 | 85,569 CAD | $(549) |
2/18/2020 | Goldman Sachs | $50,000 | 970,172 MXN | $(991) |
2/18/2020 | JPMorgan | $30,000 | 29,387 CHF | $(414) |
2/18/2020 | JPMorgan | $100,000 | 10,732,768 JPY | $(1,371) |
2/18/2020 | Morgan Stanley | $30,000 | 43,313 AUD | $(641) |
2/18/2020 | State Street | $150,000 | 133,522 EUR | $(2,051) |
2/18/2020 | State Street | $60,000 | 46,166 GBP | $(124) |
2/28/2020 | Barclays | $230,000 | 4,493,671 MXN | $(3,305) |
2/28/2020 | JPMorgan | $25,000 | 33,006 CAD | $(140) |
NET UNREALIZED DEPRECIATION ON FOREIGN EXCHANGE CONTRACTS | $(16,119) |
Emerging Markets Core Fund | |
Balance of Shares Held 11/30/2018 | 1,143,080 |
Purchases/Additions | 804,094 |
Sales/Reductions | (452,317) |
Balance of Shares Held 11/30/2019 | 1,494,857 |
Value | $14,858,881 |
Change in Unrealized Appreciation/(Depreciation) | $707,177 |
Net Realized Gain/(Loss) | $ 132,107 |
Dividend Income | $ 644,742 |
1 | The cost of investments for federal tax purposes amounts to $23,457,939. |
2 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities |
3 | Non-income-producing security. |
Valuation Inputs | ||||
Level 1— Quoted Prices | Level 2— Other Significant Observable Inputs | Level 3— Significant Unobservable Inputs | Total | |
Debt Securities: | ||||
Bonds | $— | $8,151,015 | $— | $8,151,015 |
Purchased Call Options | — | 3,233 | — | 3,233 |
Purchased Put Options | — | 32 | — | 32 |
Repurchase Agreement | — | 449,000 | — | 449,000 |
Investment Company | 14,858,881 | — | — | 14,858,881 |
TOTAL SECURITIES | $14,858,881 | $8,603,280 | $— | $23,462,161 |
Other Financial Instruments: | ||||
Assets | ||||
Written Call Options | $— | $— | $— | $— |
Written Put Options | — | — | — | — |
Foreign Exchange Contracts | — | 60,606 | — | 60,606 |
Liabilities | ||||
Written Call Options | — | (414) | — | (414) |
Written Put Options | — | (5,713) | — | (5,713) |
Foreign Exchange Contracts | — | (76,725) | — | (76,725) |
TOTAL OTHER FINANCIAL INSTRUMENTS | $— | $(22,246) | $— | $(22,246) |
AUD | —Australian Dollar |
CAD | —Canadian Dollar |
CHF | —Swiss Franc |
EUR | —Euro |
GBP | —Great British Pound |
JPY | —Japanese Yen |
MXN | —Mexican Peso |
NOK | —Norwegian Krone |
NZD | —New Zealand Dollar |
PLN | —Polish Zloty |
USD | —United States Dollar |
Year Ended November 30 | 2019 | 2018 | 2017 | 2016 | 2015 |
Net Asset Value, Beginning of Period | $14.01 | $15.08 | $14.48 | $13.77 | $15.00 |
Income From Investment Operations: | |||||
Net investment income1 | 0.53 | 0.54 | 0.47 | 0.51 | 0.49 |
Net realized and unrealized gain (loss) | 0.81 | (1.20) | 0.77 | 0.20 | (1.13) |
TOTAL FROM INVESTMENT OPERATIONS | 1.34 | (0.66) | 1.24 | 0.71 | (0.64) |
Less Distributions: | |||||
Distributions from net investment income | (0.60) | (0.41) | (0.64) | — | (0.54) |
Distributions from net realized gain | — | — | — | — | (0.05) |
TOTAL DISTRIBUTIONS | (0.60) | (0.41) | (0.64) | — | (0.59) |
Net Asset Value, End of Period | $14.75 | $14.01 | $15.08 | $14.48 | $13.77 |
Total Return2 | 9.92% | (4.50)% | 8.95% | 5.16% | (4.31)% |
Ratios to Average Net Assets: | |||||
Net expenses3 | 0.00% | 0.00% | 0.00% | 0.02% | 0.03% |
Net investment income | 3.66% | 3.76% | 3.24% | 3.50% | 3.49% |
Expense waiver/reimbursement4 | 1.24% | 1.55% | 1.65% | 1.80% | 2.01% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $23,369 | $18,179 | $14,229 | $12,911 | $11,488 |
Portfolio turnover | 52% | 20% | 55% | 33% | 85% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. |
3 | See Note 5, Investment Adviser Fee and Other Transactions with Affiliates. |
4 | This expense decrease is reflected in both the net expense and net investment income ratios shown above. |
Assets: | ||
Investment in securities, at value including $14,858,881 of investment in an affiliated holding* (identified cost $23,497,699) | $23,462,161 | |
Cash | 598 | |
Income receivable | 64,114 | |
Unrealized appreciation on foreign exchange contracts | 60,606 | |
Due from broker | 19,263 | |
Receivable for shares sold | 3,757 | |
TOTAL ASSETS | 23,610,499 | |
Liabilities: | ||
Unrealized depreciation on foreign exchange contracts | $76,725 | |
Cash denominated in foreign currencies | 19,181 | |
Written options outstanding, at value (premiums received $8,886) | 6,127 | |
Payable for portfolio accounting fees | 90,507 | |
Payable for auditing fees | 31,000 | |
Payable for custodian fees | 4,530 | |
Payable to adviser (Note 5) | 1,216 | |
Payable for administrative fee (Note 5) | 1,161 | |
Accrued expenses (Note 5) | 11,273 | |
TOTAL LIABILITIES | 241,720 | |
Net assets for 1,584,530 shares outstanding | $23,368,779 | |
Net Assets Consists of: | ||
Paid-in capital | $23,269,633 | |
Total distributable earnings (loss) | 99,146 | |
TOTAL NET ASSETS | $23,368,779 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share: | ||
$23,368,779 ÷ 1,584,530 shares outstanding, no par value, unlimited shares authorized | $14.75 |
* | See information listed after the Fund's Portfolio of Investments |
Investment Income: | |||
Dividends received from an affiliated holding* | $644,742 | ||
Interest | 112,903 | ||
TOTAL INCOME | 757,645 | ||
Expenses: | |||
Administrative fee (Note 5) | $19,332 | ||
Custodian fees | 12,584 | ||
Transfer agent fees | 3,473 | ||
Directors'/Trustees' fees (Note 5) | 1,531 | ||
Auditing fees | 31,570 | ||
Legal fees | 9,467 | ||
Portfolio accounting fees | 133,696 | ||
Share registration costs | 23,134 | ||
Printing and postage | 16,453 | ||
Miscellaneous (Note 5) | 6,317 | ||
TOTAL EXPENSES | 257,557 | ||
Reimbursement of other operating expenses (Note 5) | $(257,557) | ||
Net expenses | — | ||
Net investment income | 757,645 | ||
Realized and Unrealized Gain (Loss) on Investments, Foreign Exchange Contracts, Futures Contracts, Written Options, Swap Contracts and Foreign Currency Transactions: | |||
Net realized gain on investments (including realized gain of $132,107 on sales of investments in an affiliated holding*) and foreign currency transactions | 133,507 | ||
Net realized loss on foreign exchange contracts | (178,699) | ||
Net realized loss on futures contracts | (39,170) | ||
Net realized gain on written options | 19,119 | ||
Net realized gain on swap contracts | 3,233 | ||
Net change in unrealized depreciation of investments and translation of assets and liabilities in foreign currency (including net change in unrealized depreciation of $707,177 of investments in an affiliated holding*) | 1,103,075 | ||
Net change in unrealized depreciation of foreign exchange contracts | 24,835 | ||
Net change in unrealized depreciation of futures contracts | 3,919 | ||
Net change in unrealized appreciation of written options | 2,759 | ||
Net realized and unrealized gain on investments, foreign exchange contracts, futures contracts, written options, swap contracts and foreign currency transactions | 1,072,578 | ||
Change in net assets resulting from operations | $1,830,223 |
* | See information listed after the fund's Portfolio of Investments |
Year Ended November 30 | 2019 | 2018 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $757,645 | $608,921 |
Net realized gain (loss) | (62,010) | 5,049 |
Net change in unrealized appreciation/depreciation | 1,134,588 | (1,369,471) |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 1,830,223 | (755,501) |
Distributions to Shareholders: | ||
Distribution to shareholders | (788,294) | (391,460) |
Share Transactions: | ||
Proceeds from sale of shares | 6,139,788 | 7,042,811 |
Net asset value of shares issued to shareholders in payment of distributions declared | 27,046 | 10,286 |
Cost of shares redeemed | (2,019,290) | (1,955,578) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 4,147,544 | 5,097,519 |
Change in net assets | 5,189,473 | 3,950,558 |
Net Assets: | ||
Beginning of period | 18,179,306 | 14,228,748 |
End of period | $23,368,779 | $18,179,306 |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market. |
■ | Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund's Board of Trustees (the “Trustees”). |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered, such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions. |
■ | With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts; |
■ | Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; |
■ | Announcements concerning matters such as acquisitions, recapitalizations, litigation developments or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry. |
Fair Value of Derivative Instruments | ||||
Asset | Liability | |||
Statement of Assets and Liabilities Location | Fair Value | Statement of Assets and Liabilities Location | Fair Value | |
Derivatives not accounted for as hedging instruments under ASC Topic 815 | ||||
Foreign exchange contracts | Unrealized appreciation on foreign exchange contracts | $60,606 | Unrealized depreciation on foreign exchange contracts | $76,725 |
Foreign exchange contracts | Purchased options, Investments in securities, at value | $3,265 | ||
Foreign exchange contracts | Written Options outstanding, at value | $6,127 | ||
Total derivatives not accounted for as hedging instruments under ASC Topic 815 | $63,871 | $82,852 |
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | ||||||
Purchased Options1 | Credit Default Swap Contracts | Written Options | Foreign Exchange Contracts | Futures Contracts | Total | |
Foreign exchange contracts | $(24,317) | $— | $19,119 | $(178,699) | $— | $(183,897) |
Credit contracts | — | 3,233 | — | — | — | 3,233 |
Interest rate contracts | — | — | — | — | (32,734) | (32,734) |
Equity contracts | — | — | — | — | (6,436) | (6,436) |
TOTAL | $(24,317) | $3,233 | $19,119 | $(178,699) | $(39,170) | $(219,834) |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |||||
Purchased Options2 | Written Option Contracts | Foreign Exchange Contracts | Futures Contracts | Total | |
Foreign exchange contracts | $(5,060) | $2,759 | $24,835 | $— | $22,534 |
Interest rate contracts | — | — | — | 3,919 | 3,919 |
TOTAL | $(5,060) | $2,759 | $24,835 | $3,919 | $26,453 |
1 | The net realized gain (loss) on Purchased Options is found within the Net realized gain on investments and foreign currency transactions on the Statement of Operations. |
2 | The net change in unrealized depreciation of Purchased Options is found within the Net change in unrealized depreciation of investments and translation of assets and liabilities in foreign currency on the Statement of Operations. |
Gross Amounts Not Offset in the Statement of Assets and Liabilities | ||||
Transaction | Gross Asset Derivatives Presented in Statement of Assets and Liabilities | Financial Instruments | Collateral Received | Net Amount |
Foreign Exchange Contracts | $60,606 | $(20,925) | $— | $39,681 |
TOTAL | $60,606 | $(20,925) | $— | $39,681 |
Transaction | Gross Liability Derivatives Presented in Statement of Assets and Liabilities | Financial Instruments | Collateral Pledged | Net Amount |
Foreign Exchange Contracts | $76,725 | $(20,925) | $— | $55,800 |
TOTAL | $76,725 | $(20,925) | $— | $55,800 |
Year Ended November 30 | 2019 | 2018 |
Shares sold | 424,736 | 489,238 |
Shares issued to shareholders in payment of distributions declared | 1,980 | 700 |
Shares redeemed | (139,924) | (135,616) |
NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | 286,792 | 354,322 |
2019 | 2018 | |
Ordinary income | $788,294 | $391,460 |
Undistributed ordinary income | $757,952 |
Net unrealized appreciation | $6,732 |
Capital loss carryforwards | $(665,538) |
Short-Term | Long-Term | Total |
$515,347 | $150,191 | $665,538 |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.100% | on assets up to $50 billion |
0.075% | on assets over $50 billion |
Purchases | $14,235,542 |
Sales | $10,563,520 |
January 23, 2020
Beginning Account Value 6/1/2019 | Ending Account Value 11/30/2019 | Expenses Paid During Period1 | |
Actual | $1,000 | $1,030.70 | $0.00 |
Hypothetical (assuming a 5% return before expenses) | $1,000 | $1,025.07 | $0.00 |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
J. Christopher Donahue* Birth Date: April 11, 1949 President and Trustee Indefinite Term Began serving: October 2005 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd. |
John B. Fisher* Birth Date: May 16, 1956 Trustee Indefinite Term Began serving: May 2016 | Principal Occupations:Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of certain of the Funds in the Federated Fund Family; Vice President, Federated Investors, Inc.; President, Director/Trustee and CEO, Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company; President of some of the Funds in the Federated Fund Complex and Director, Federated Investors Trust Company. Previous Positions: President and Director of the Institutional Sales Division of Federated Securities Corp.; President and Director of Federated Investment Counseling; President and CEO of Passport Research, Ltd.; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc. and President, Technology, Federated Services Company. |
* | Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Investors, Inc. and due to positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
John T. Collins Birth Date: January 24, 1947 Trustee Indefinite Term Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Chairman of the Compensation Committee, KLX Energy Services Holdings, Inc. (oilfield services); former Director of KLX Corp. (aerospace). Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO of The Collins Group, Inc. (a private equity firm) and as a Director of KLX Corp. Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital). |
Name Birth Date Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
G. Thomas Hough Birth Date: February 28, 1955 Trustee Indefinite Term Began serving: August 2015 | Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Family; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Member of Governance and Compensation Committees, Publix Super Markets, Inc.; Director, Chair of the Audit Committee, Equifax, Inc.; Director, Member of the Audit Committee, Haverty Furniture Companies, Inc. Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama. Mr. Hough previously served on the Business School Board of Visitors for Wake Forest University, and he previously served as an Executive Committee member of the United States Golf Association. |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Indefinite Term Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Adjunct Professor of Law, Duquesne University School of Law; formerly, Dean of the Duquesne University School of Law and Professor of Law and Interim Dean of the Duquesne University School of Law; formerly, Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously held the position of Dean of the School of Law of Duquesne University (as well as Interim Dean). Judge Lally-Green previously served as a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green was appointed by the Supreme Court of Pennsylvania to serve on the Supreme Court's Board of Continuing Judicial Education and the Supreme Court's Appellate Court Procedural Rules Committee. Judge Lally-Green also currently holds the positions on not for profit or for profit boards of directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Regent, Saint Vincent Seminary; Member, Pennsylvania State Board of Education (public); Director, Catholic Charities, Pittsburgh; and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director, St. Vincent College; and Director and Chair, North Catholic High School, Inc. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Indefinite Term Began serving: November 2005 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant and Author. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant and Author. |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Indefinite Term Began serving: October 2006 | Principal Occupations: Director or Trustee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Indefinite Term Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant; Retired; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.); and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). |
John S. Walsh Birth Date: November 28, 1957 Trustee Indefinite Term Began serving: November 2005 | Principal Occupations: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors). |
Name Birth Date Address Positions Held with Trust Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Officer since: April 2013 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. |
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Fund Family. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Investors, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated in 1984 and is a member of the Pennsylvania Bar Association. Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc. |
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: July 2015 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement. |
Robert J. Ostrowski Birth Date: April 26, 1963 Chief Investment Officer Officer since: September 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 Federated's taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University. |
Stephen F. Auth Birth Date: September 13, 1956 101 Park Avenue 41st Floor New York, NY 10178 CHIEF INVESTMENT OFFICER Officer since: February 2015 | Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments. |
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
2020 ©Federated Investors, Inc.
Item 2. | Code of Ethics |
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.
(c) There was no amendment to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(d) There was no waiver granted, either actual or implicit, from a provision to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.
(e) Not Applicable
(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3. Audit Committee Financial Expert
The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item: John T. Collins, G. Thomas Hough and Thomas M. O'Neill.
Item 4. | Principal Accountant Fees and Services |
(a) Audit Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2019 - $148,300
Fiscal year ended 2018 - $146,962
(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2019 - $0
Fiscal year ended 2018 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(c) Tax Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2019 - $0
Fiscal year ended 2018 - $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 2019 - $0
Fiscal year ended 2018 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $31,866 and $38,903 respectively. Fiscal year ended 2019- Service fee for analysis of potential Passive Foreign Investment Company holdings. Fiscal year ended 2018- Service fee for analysis of potential Passive Foreign Investment Company holdings.
(e)(1) Audit Committee Policies regarding Pre-approval of Services.
The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.
Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
The Audit Committee has delegated pre-approval authority to its Chairman. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.
AUDIT SERVICES
The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.
In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.
AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.
TAX SERVICES
The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.
ALL OTHER SERVICES
With respect to the provision of services other than audit, review or attest services the pre-approval requirement is waived if:
(1) | The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided; |
(2) | Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant at the time of the engagement to be non-audit services; and |
(3) | Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee. |
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.
The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.
PRE-APPROVAL FEE LEVELS
Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.
PROCEDURES
Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.
(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2019 – 0%
Fiscal year ended 2018 - 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 2019 – 0%
Fiscal year ended 2018 – 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 2019 – 0%
Fiscal year ended 2018 – 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 2019 - $671,787
Fiscal year ended 2018 - $1,498,150
(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. |
The registrant’s management and Audit Committee continue to believe that the registrant’s registered public accounting firm, Ernst & Young LLP (“EY”), has the ability to exercise objective and impartial judgment on all issues encompassed within their audit services. EY is required to make a determination that it satisfies certain independence requirements under the federal securities laws. Like other registrants, there is a risk that activities or relationships of EY, or its partners or employees, can prevent a determination from being made that it satisfies such independence requirements with respect to the registrant, which could render it ineligible to serve as the registrant’s independent public accountant.
In its required communications to the Audit Committee of the registrant’s Board, EY informed the Audit Committee that EY and/or covered person professionals within EY maintain lending relationships with certain owners of greater than 10% of the shares of certain investment companies within the “investment company complex” as defined under Rule 2-01(f)(14) of Regulation S-X, which are affiliates of the registrant. EY has advised the Audit Committee that these lending relationships implicate Rule 2-01(c)(1)(ii)(A) of Regulation S-X (referred to as the “Loan Rule”). The Loan Rule prohibits an independent public accountant, or covered person professionals at such firm, from having a financial relationship (such as a loan) with a lender that is a record or beneficial owner of more than 10% of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the registrant, as well as all registered investment companies advised by advisory subsidiaries of Federated Investors, Inc., the Adviser (for which EY serves as independent public accountant), and their respective affiliates (collectively, the “Federated Fund Complex”).
EY informed the Audit Committee that EY believes that these lending relationships described above do not and will not impair EY’s ability to exercise objective and impartial judgment in connection with financial statement audits of their respective funds of the registrant and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY has been and is capable of objective and impartial judgment on all issues encompassed within EY’s audits.
On June 20, 2016, the Division of Investment Management of the Securities and Exchange Commission (“SEC”) issued a no-action letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to similar Loan Rule matters as those described above (the “Letter”). In the Letter, the SEC Staff confirmed that it would not recommend enforcement action against an investment company that relied on the audit services performed by an independent public accountant where the Loan Rule was implicated in certain specified circumstances provided that: (1) the auditor has complied with PCAOB Rule 3526(b)(1) and 3526(b)(2); (2) the Loan Rule is implicated because of lending relationships; and (3) notwithstanding such lending relationships that implicate the Loan Rule, the auditor has concluded that it is objective and impartial with respect to the issues encompassed within its engagement as auditor of the funds. The circumstances described in the Letter are substantially similar to the circumstances that implicated the Loan Rule with respect to EY and the registrant. On September 22, 2017, the SEC extended the expiration of the Letter until the effectiveness of any amendments to the Loan Rule designed to address the concerns in the Letter. On June 18, 2019, the SEC adopted amendments (effective October 3, 2019) to the Loan Rule, which, refocus the analysis that must be conducted to determine whether an auditor is independent when the auditor has a lending relationship with certain shareholders of an audit client at any time during an audit or professional engagement period.
If it were to be determined that, with respect to the Loan Rule, the relief available under the Letter was improperly relied upon, or that the independence requirements under the federal securities laws were not complied with regarding the registrant, for certain periods, and/or given the implication of the Investment Rule for certain periods, any of the registrant’s filings with the SEC which contain financial statements of the registrant for such periods may be determined not to be consistent with or comply with applicable federal securities laws, the registrant’s ability to offer shares under its current registration statement may be impacted, andcertain financial reporting and/or other covenants with, and representations and warranties to, the registrant’s lender under its committed line of credit may be impacted. Such eventscould have a material adverse effect on the registrant and the Federated Fund Complex.
Item 5. | Audit Committee of Listed Registrants |
Not Applicable
Item 6. | Schedule of Investments |
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies |
Not Applicable
Item 8. | Portfolio Managers of Closed-End Management Investment Companies |
Not Applicable
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers |
Not Applicable
Item 10. | Submission of Matters to a Vote of Security Holders |
No Changes to Report
Item 11. | Controls and Procedures |
(a) The registrant’s President and Treasurer have concluded that the
registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the registrant’s most recent fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies |
Not Applicable
Item 13. | Exhibits |
(a)(1) Code of Ethics- Not Applicable to this Report.
(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.
(a)(3) Not Applicable.
(b) Certifications pursuant to 18 U.S.C. Section 1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RegistrantFederated Managed Pool Series
By/S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
DateJanuary 23, 2020
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By/S/ J. Christopher Donahue
J. Christopher Donahue, Principal Executive Officer
DateJanuary 23, 2020
By/S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
DateJanuary 23, 2020