United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-3375
(Investment Company Act File Number)
Federated GNMA Trust
_______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
4000 Ericsson Drive
Warrendale, Pennsylvania 15086-7561
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End: 01/31/14
Date of Reporting Period: 01/31/14
Item 1. Reports to Stockholders
![](https://capedge.com/proxy/N-CSR/0001318148-14-000537/fedregcovsmall.gif)
Share Class | Ticker |
Institutional | FGMAX |
Service | FGSSX |
1 | Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the BGNMA. |
2 | Please see the footnotes to the line graph under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the LGNMAFA. |
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 other 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 | The value of some mortgage-backed securities may be particularly sensitive to changes in the prevailing interest rates, and although the securities are generally supported by some form of government or private insurance, there is no assurance that private guarantors or insurers will meet their obligations. |
![](https://capedge.com/proxy/N-CSR/0001318148-14-000537/fgnmaar30068.jpg)
Federated GNMA Trust - | Institutional Shares | Service Shares | BGNMA | LGNMAFA |
F | F | I | I | |
1/31/2004 | 10,000 | 10,000 | 10,000 | 10,000 |
1/31/2005 | 10,390 | 10,373 | 10,442 | 10,328 |
1/31/2006 | 10,627 | 10,594 | 10,751 | 10,534 |
1/31/2007 | 11,000 | 10,949 | 11,210 | 10,907 |
1/31/2008 | 11,881 | 11,809 | 12,196 | 11,798 |
1/31/2009 | 12,474 | 12,380 | 12,926 | 12,240 |
1/31/2010 | 13,319 | 13,194 | 13,802 | 13,392 |
1/31/2011 | 13,917 | 13,763 | 14,537 | 14,045 |
1/31/2012 | 14,788 | 14,601 | 15,731 | 14,992 |
1/31/2013 | 14,945 | 14,745 | 15,973 | 15,242 |
1/31/2014 | 14,877 | 14,642 | 16,013 | 15,143 |
1 Year | 5 Years | 10 Years | |
Institutional Shares | -0.45% | 3.59% | 4.05% |
Service Shares | -0.70% | 3.41% | 3.89% |
BGNMA | 0.25% | 4.38% | 4.82% |
LGNMAFA | -0.65% | 4.34% | 4.23% |
1 | The Fund's performance assumes the reinvestment of all dividends and distributions. The BGNMA and the LGNMAFA have been adjusted to reflect reinvestment of dividends on securities in the index and the average. The BGNMA Index is an index comprised of all fixed securities mortgage pools by GNMA, including GNMA Graduated Payment Mortgages. The BGNMA is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The BGNMA is unmanaged, and unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index or average. |
2 | Lipper figures represent the average of the total returns reported by all mutual funds designated by Lipper, Inc., as falling into the respective category and is not adjusted to reflect any sales charges. These total returns are reported net of expenses and other fees that the SEC requires to be reflected in a mutual fund's performance. |
Type of Investment | Percentage of Total Net Assets |
GNMA Mortgage-Backed Securities | 108.2% |
Repurchase Agreement — Collateral2 | 2.3% |
Derivative Contracts3 | (0.2)% |
Other Assets and Liabilities — Net4 | (10.3)% |
TOTAL | 100.0% |
1 | See the Fund's Prospectus and Statement of Additional Information for a description of the types of securities in which the Fund invests. |
2 | Includes repurchase agreement purchased with cash collateral or proceeds received in dollar-roll transactions, as well as cash covering when-issued and delayed-delivery transactions. |
3 | Based upon net unrealized appreciation (depreciation) or value of the derivative contracts as applicable. Derivative contracts may consist of futures, forwards, options and swaps. The impact of a derivative contract on the Fund's performance may be larger than its unrealized appreciation (depreciation) or value may indicate. In many cases, the notional value or amount of a derivative contract may provide a better indication of the contract's significance to the portfolio. More complete information regarding the Fund's direct investments in derivative contracts, including unrealized appreciation (depreciation), value and notional values or amounts of such contracts, can be found in the table at the end of the Portfolio of Investments included in this Report. |
4 | Assets, other than investments in securities and derivative contracts, less liabilities. See Statement of Assets and Liabilities. |
Principal Amount | Value | ||
MORTGAGE-BACKED SECURITIES—98.3% | |||
Government National Mortgage Association—98.3%1 | |||
$39,167,661 | 2 | 3.000%, 9/15/2042 - 2/20/2044 | $38,895,475 |
77,626,673 | 3.500%, 12/15/2040 - 10/15/2042 | 79,996,037 | |
50,173,873 | 4.000%, 8/15/2041 - 3/15/2043 | 53,332,502 | |
85,413,740 | 2 | 4.500%, 6/15/2039 - 2/20/2044 | 92,753,882 |
39,123,219 | 5.000%, 10/15/2033 - 10/15/2041 | 43,024,720 | |
26,095,369 | 5.500%, 7/20/2033 - 7/20/2035 | 28,951,512 | |
13,763,990 | 6.000%, 8/15/2031 - 12/20/2038 | 15,468,324 | |
460,429 | 6.500%, 5/15/2027 - 1/20/2032 | 530,978 | |
2,483,646 | 7.000%, 6/15/2027 - 1/15/2033 | 2,922,330 | |
3,008,996 | 7.500%, 11/15/2027 - 5/15/2032 | 3,582,237 | |
1,222,126 | 8.000%, 11/15/2027 - 8/15/2032 | 1,477,420 | |
2,986 | 8.500%, 3/15/2030 | 3,171 | |
TOTAL MORTGAGE-BACKED SECURITIES (IDENTIFIED COST $355,634,191) | 360,938,588 | ||
COLLATERALIZED MORTGAGE OBLIGATIONS—9.9% | |||
Government National Mortgage Association—9.9% | |||
4,793,285 | 3 | REMIC 2009-106 FG, 0.557%, 8/20/2039 | 4,812,343 |
3,340,402 | 3 | REMIC 2009-87 AF, 0.807%, 3/20/2039 | 3,381,837 |
4,885,644 | 3 | REMIC 2013-H11 FA, 0.618%, 4/20/2063 | 4,848,308 |
23,333,830 | 3 | REMIC 2013-H15 FA, 0.708%, 6/20/2063 | 23,269,102 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (IDENTIFIED COST $36,354,824) | 36,311,590 | ||
REPURCHASE AGREEMENT—2.3% | |||
8,372,000 | 3 | Interest in $2,710,000,000 joint repurchase agreement 0.03%, dated 1/31/2014 under which Bank of America, N.A. will repurchase securities provided as collateral for $2,710,006,775 on 2/3/2014. The securities provided as collateral at the end of the period held with The Bank of New York Mellon, tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2042 and the market value of those underlying securities was $2,766,646,403. (AT COST) | 8,372,000 |
TOTAL INVESTMENTS—110.5% (IDENTIFIED COST $400,361,015)4 | 405,622,178 | ||
OTHER ASSETS AND LIABILITIES-NET—(10.5)%5 | (38,450,201) | ||
TOTAL NET ASSETS—100% | $367,171,977 |
Description | Number of Contracts | Notional Value | Expiration Date | Unrealized Appreciation (Depreciation) |
6United States Treasury Notes 2-Year Long Futures | 210 | $46,242,656 | March 2014 | $42,184 |
6United States Treasury Notes 5-Year Short Futures | 150 | $18,093,750 | March 2014 | $(155,416) |
6United States Treasury Notes 10-Year Short Futures | 400 | $50,300,000 | March 2014 | $(700,254) |
NET UNREALIZED DEPRECIATION ON FUTURES CONTRACTS | $(813,486) |
1 | Because of monthly principal payments, the average lives of the Government National Mortgage Association Modified Pass-Through Securities (based upon Federal Housing Authority/Veterans Administration historical experience) are less than the stated maturities. |
2 | All or a portion of these To Be Announced Securities (TBAs) are subject to dollar-roll transactions. |
3 | All or a portion of these securities are segregated pending settlement of dollar-roll transactions. |
4 | The cost of investments for federal tax purposes amounts to $399,490,514. |
5 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. A significant portion of this balance is the result of dollar-roll transactions as of January 31, 2014. |
6 | Non-income-producing security. |
Valuation Inputs | ||||
Level 1 — Quoted Prices and Investments in Investment Companies | Level 2 — Other Significant Observable Inputs | Level 3 — Significant Unobservable Inputs | Total | |
Debt Securities: | ||||
Mortgage-Backed Securities | $— | $360,938,588 | $— | $360,938,588 |
Collateralized Mortgage Obligations | — | 36,311,590 | — | 36,311,590 |
Repurchase Agreement | — | 8,372,000 | — | 8,372,000 |
TOTAL SECURITIES | $— | $405,622,178 | $— | $405,622,178 |
OTHER FINANCIAL INSTRUMENTS* | $(813,486) | $— | $— | $(813,486) |
* | Other financial instruments include futures contracts. |
REMIC | —Real Estate Mortgage Investment Conduit |
Year Ended January 31 | 2014 | 2013 | 2012 | 2011 | 2010 |
Net Asset Value, Beginning of Period | $11.36 | $11.55 | $11.27 | $11.24 | $11.02 |
Income From Investment Operations: | |||||
Net investment income | 0.211 | 0.271 | 0.361 | 0.421 | 0.491 |
Net realized and unrealized gain (loss) on investments and futures contracts | (0.26) | (0.15) | 0.33 | 0.08 | 0.24 |
TOTAL FROM INVESTMENT OPERATIONS | (0.05) | 0.12 | 0.69 | 0.50 | 0.73 |
Less Distributions: | |||||
Distributions from net investment income | (0.26) | (0.31) | (0.41) | (0.47) | (0.51) |
Net Asset Value, End of Period | $11.05 | $11.36 | $11.55 | $11.27 | $11.24 |
Total Return2 | (0.45)% | 1.06% | 6.26% | 4.49% | 6.77% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.67% | 0.67% | 0.66% | 0.68% | 0.65% |
Net investment income | 1.92% | 2.38% | 3.11% | 3.72% | 4.39% |
Expense waiver/reimbursement3 | 0.01% | 0.00%4 | 0.00%4 | 0.00%4 | 0.00%4 |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $326,994 | $435,289 | $447,739 | $432,317 | $393,046 |
Portfolio turnover | 265% | 257% | 181% | 173% | 81% |
Portfolio turnover (excluding purchases and sales from dollar-roll transactions) | 114% | 133% | 29% | 68% | 39% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
4 | Represents less than 0.01%. |
Year Ended January 31 | 2014 | 2013 | 2012 | 2011 | 2010 |
Net Asset Value, Beginning of Period | $11.37 | $11.55 | $11.27 | $11.24 | $11.02 |
Income From Investment Operations: | |||||
Net investment income | 0.201 | 0.251 | 0.341 | 0.411 | 0.471 |
Net realized and unrealized gain (loss) on investments and futures contracts | (0.28) | (0.14) | 0.34 | 0.07 | 0.24 |
TOTAL FROM INVESTMENT OPERATIONS | (0.08) | 0.11 | 0.68 | 0.48 | 0.71 |
Less Distributions: | |||||
Distributions from net investment income | (0.24) | (0.29) | (0.40) | (0.45) | (0.49) |
Net Asset Value, End of Period | $11.05 | $11.37 | $11.55 | $11.27 | $11.24 |
Total Return2 | (0.70)% | 0.99% | 6.09% | 4.32% | 6.58% |
Ratios to Average Net Assets: | |||||
Net expenses | 0.83% | 0.83% | 0.82% | 0.84% | 0.83% |
Net investment income | 1.76% | 2.21% | 2.96% | 3.57% | 4.19% |
Expense waiver/reimbursement3 | 0.05% | 0.02% | 0.00%4 | 0.01% | 0.07% |
Supplemental Data: | |||||
Net assets, end of period (000 omitted) | $40,178 | $58,819 | $54,080 | $57,165 | $84,946 |
Portfolio turnover | 265% | 257% | 181% | 173% | 81% |
Portfolio turnover (excluding purchases and sales from dollar-roll transactions) | 114% | 133% | 29% | 68% | 39% |
1 | Per share numbers have been calculated using the average shares method. |
2 | Based on net asset value. |
3 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
4 | Represents less than 0.01%. |
Assets: | ||
Total investment in securities, at value (identified cost $400,361,015) | $405,622,178 | |
Cash | 580 | |
Restricted cash (Note 2) | 665,675 | |
Income receivable | 1,164,232 | |
Receivable for shares sold | 69,097 | |
TOTAL ASSETS | 407,521,762 | |
Liabilities: | ||
Payable for investments purchased | $39,652,969 | |
Payable for shares redeemed | 294,890 | |
Payable for daily variation margin | 131,172 | |
Income distribution payable | 138,586 | |
Payable to adviser (Note 5) | 539 | |
Payable for shareholder services fee (Note 5) | 20,306 | |
Accrued expenses (Note 5) | 111,323 | |
TOTAL LIABILITIES | 40,349,785 | |
Net assets for 33,221,861 shares outstanding | $367,171,977 | |
Net Assets Consist of: | ||
Paid-in capital | $373,105,712 | |
Net unrealized appreciation of investments and futures contracts | 4,447,677 | |
Accumulated net realized loss on investments and futures contracts | (10,475,157) | |
Undistributed net investment income | 93,745 | |
TOTAL NET ASSETS | $367,171,977 | |
Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||
Institutional Shares: | ||
$326,993,804 ÷ 29,586,774 shares outstanding, no par value, unlimited shares authorized | $11.05 | |
Service Shares: | ||
$40,178,173 ÷ 3,635,087 shares outstanding, no par value, unlimited shares authorized | $11.05 |
Investment Income: | ||
Interest | $11,031,192 | |
Expenses: | ||
Investment adviser fee (Note 5) | $1,700,675 | |
Administrative fee (Note 5) | 331,820 | |
Custodian fees | 40,908 | |
Transfer agent fee | 329,915 | |
Directors'/Trustees' fees (Note 5) | 9,490 | |
Auditing fees | 25,450 | |
Legal fees | 8,419 | |
Portfolio accounting fees | 159,261 | |
Shareholder services fee (Note 5) | 286,848 | |
Account administration fee (Note 2) | 35,931 | |
Share registration costs | 22,181 | |
Printing and postage | 29,005 | |
Insurance premiums (Note 5) | 4,891 | |
Miscellaneous (Note 5) | 22,785 | |
TOTAL EXPENSES | 3,007,579 | |
Reimbursement of shareholder services fee (Note 5) | (61,527) | |
Net expenses | 2,946,052 | |
Net investment income | 8,085,140 | |
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts: | ||
Net realized loss on investments | (7,484,144) | |
Net realized gain on futures contracts | 1,633,655 | |
Net change in unrealized appreciation of investments | (5,051,900) | |
Net change in unrealized appreciation of futures contracts | (930,404) | |
Net realized and unrealized loss on investments and futures contracts | (11,832,793) | |
Change in net assets resulting from operations | $(3,747,653) |
Year Ended January 31 | 2014 | 2013 |
Increase (Decrease) in Net Assets | ||
Operations: | ||
Net investment income | $8,085,140 | $11,644,893 |
Net realized gain (loss) on investments and futures contracts | (5,850,489) | 14,755,913 |
Net change in unrealized appreciation/depreciation of investments and futures contracts | (5,982,304) | (21,254,512) |
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | (3,747,653) | 5,146,294 |
Distributions to Shareholders: | ||
Distributions from net investment income | ||
Institutional Shares | (8,612,366) | (11,845,711) |
Service Shares | (1,014,055) | (1,434,310) |
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (9,626,421) | (13,280,021) |
Share Transactions: | ||
Proceeds from sale of shares | 39,206,761 | 113,510,599 |
Net asset value of shares issued to shareholders in payment of distributions declared | 7,137,647 | 9,786,134 |
Cost of shares redeemed | (159,906,106) | (122,874,337) |
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | (113,561,698) | 422,396 |
Change in net assets | (126,935,772) | (7,711,331) |
Net Assets: | ||
Beginning of period | 494,107,749 | 501,819,080 |
End of period (including undistributed (distributions in excess of) net investment income of $93,745 and $(13,136), respectively) | $367,171,977 | $494,107,749 |
■ | Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Fund's Board of Trustees (the “Trustees”). |
■ | Fixed-income securities and repurchase agreements acquired with remaining maturities of 60 days or less are valued at their amortized cost (adjusted for the accretion of any discount or amortization of any premium), unless the issuer's creditworthiness is impaired or other factors indicate that amortized cost is not an accurate estimate of the investment's fair value, in which case it would be valued in the same manner as a longer-term security. |
■ | Derivative contracts listed on exchanges are valued at their reported settlement or closing price. |
■ | Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees. |
■ | Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. |
■ | For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded and public trading in similar securities of the issuer or comparable issuers. |
Account Administration Fees Incurred | |
Institutional Shares | $5,569 |
Service Shares | 30,362 |
TOTAL | $35,931 |
Fair Value of Derivative Instruments | ||
Liability | ||
Statement of Assets and Liabilities Location | Fair Value | |
Derivatives not accounted for as hedging instruments under ASC Topic 815 | ||
Interest rate contracts | Payable for daily variation margin | $813,486* |
* | Includes cumulative depreciation of futures contracts as reported in the footnotes to the Portfolio of Investments. Only the current day's variation margin is reported within the Statement of Assets and Liabilities. |
Amount of Realized Gain or (Loss) on Derivatives Recognized in Income | |
Futures | |
Interest rate contracts | $1,633,655 |
Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income | |
Futures | |
Interest rate contracts | $(930,404) |
Year Ended January 31 | 2014 | 2013 | ||
Institutional Shares: | Shares | Amount | Shares | Amount |
Shares sold | 3,274,277 | $36,756,438 | 8,786,365 | $101,268,210 |
Shares issued to shareholders in payment of distributions declared | 564,463 | 6,254,168 | 744,767 | 8,567,258 |
Shares redeemed | (12,553,569) | (139,440,366) | (10,002,361) | (115,102,809) |
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS | (8,714,829) | $(96,429,760) | (471,229) | $(5,267,341) |
Year Ended January 31 | 2014 | 2013 | ||
Service Shares: | Shares | Amount | Shares | Amount |
Shares sold | 219,774 | $2,450,323 | 1,061,882 | $12,242,389 |
Shares issued to shareholders in payment of distributions declared | 79,720 | 883,479 | 105,967 | 1,218,876 |
Shares redeemed | (1,839,808) | (20,465,740) | (675,664) | (7,771,528) |
NET CHANGE RESULTING FROM SERVICE SHARE TRANSACTIONS | (1,540,314) | $(17,131,938) | 492,185 | $5,689,737 |
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | (10,255,143) | $(113,561,698) | 20,956 | $422,396 |
Increase (Decrease) | |
Undistributed Net Investment Income (Loss) | Accumulated Net Realized Gain (Loss) |
$1,648,162 | $(1,648,162) |
2014 | 2013 | |
Ordinary income | $9,626,421 | $13,280,021 |
Undistributed ordinary income | $93,745 |
Net unrealized appreciation | $6,131,664 |
Capital loss carryforwards | $(12,159,144) |
Expiration Year | Short-Term | Long-Term | Total |
No Expiration | $7,959,363 | $442,290 | $8,401,653 |
2016 | $3,757,491 | NA | $3,757,491 |
Administrative Fee | Average Daily Net Assets of the Investment Complex |
0.150% | on the first $5 billion |
0.125% | on the next $5 billion |
0.100% | on the next $10 billion |
0.075% | on assets in excess of $20 billion |
Service Fees Incurred | Service Fees Reimbursed | |
Institutional Shares | $197,698 | $(39,583) |
Service Shares | 89,150 | (21,944) |
TOTAL | $286,848 | $(61,527) |
Purchases | $28,839,241 |
Sales | $— |
![](https://capedge.com/proxy/N-CSR/0001318148-14-000537/ernstyoungsig.jpg)
March 25, 2014
Beginning Account Value 8/1/2013 | Ending Account Value 1/31/2014 | Expenses Paid During Period1 | |
Actual: | |||
Institutional Shares | $1,000 | $1,023.50 | $3.42 |
Service Shares | $1,000 | $1,022.70 | $4.23 |
Hypothetical (assuming a 5% return before expenses): | |||
Institutional Shares | $1,000 | $1,021.83 | $3.41 |
Service Shares | $1,000 | $1,021.02 | $4.23 |
1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: |
Institutional Shares | 0.67% |
Service Shares | 0.83% |
Name | For | Withheld |
John T. Collins | 23,851,572.470 | 45,656.504 |
Maureen Lally-Green | 23,857,956.702 | 39,252.272 |
Thomas M. O'Neill | 23,857,956.702 | 39,252.272 |
P. Jerome Richey | 23,857,956.702 | 39,252.272 |
1 | The following Trustees continued their terms: John F. Donahue, J. Christopher Donahue, Maureen Lally-Green (having been previously appointed by the Board), Peter E. Madden, Charles F. Mansfield, Jr., Thomas M. O'Neill (having been previously appointed by the Board), and John S. Walsh. |
Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
John F. Donahue* Birth Date: July 28, 1924 Trustee Began serving: December 1981 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund Family's Executive Committee. Previous Positions: Chairman of the Federated Fund Family; Trustee, Federated Investment Management Company; Chairman and Director, Federated Investment Counseling. |
Name Birth Date Positions Held with Fund 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 Began serving: July 1999 | Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Federated Equity Management Company of Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd. |
* | Family relationships and reasons for “interested” status: John F. Donahue is the father of J. Christopher Donahue; both are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
John T. Collins Birth Date: January 24, 1947 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; Chairman and CEO, The Collins Group, Inc. (a private equity firm). Other Directorships Held: Chairman Emeriti, Bentley University; Director, Sterling Suffolk Downs, Inc.; Former Director, National Association of Printers and Lithographers. Previous Positions: Director and Audit Committee Member, Bank of America Corp. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Began serving: August 2009 | Principal Occupations: Director or Trustee of the Federated Fund Family; Associate General Secretary and Director, Office for Church Relations, Diocese of Pittsburgh; Adjunct Professor of Law, Duquesne University School of Law; Superior Court of Pennsylvania (service began 1998 and ended July 2009). Other Directorships Held: Director, Consol Energy (service started June 2013); Director, Auberle (service ended December 2013); Member, Pennsylvania State Board of Education; Director, Saint Vincent College; Director, Ireland Institute of Pittsburgh (service ended December 2013); Director and Chair, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society (service ended December 2013); Director, Our Campaign for the Church Alive!, Inc.; Director, Pennsylvania Bar Institute (2013-present); Director, Cardinal Wuerl North Catholic High School (2013-present). Previous Position: Professor of Law, Duquesne University School of Law, Pittsburgh (1983-1998). Qualifications: Legal and director experience. |
Peter E. Madden Birth Date: March 16, 1942 Trustee Began serving: August 1991 | Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Began serving: October 2006 | Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisano Children's Museum of Naples, Florida. Previous Positions: Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
P. Jerome Richey Birth Date: February 23, 1949 Trustee Began serving: October 2013 | Principal Occupations: Director or Trustee of the Federated Fund Family; General Counsel, University of Pittsburgh. Other Directorships Held: Board Chairman, Epilepsy Foundation of Western Pennsylvania; Board Member, World Affairs Council of Pittsburgh. Previous Positions: Chief Legal Officer and Executive Vice President, CONSOL Energy Inc.; Shareholder, Buchanan Ingersoll & Rooney PC (a law firm). Qualifications: Business management, legal and director experience. |
John S. Walsh Birth Date: November 28, 1957 Trustee Began serving: January 1999 | Principal Occupations: Director or Trustee, Chairman of the Audit Committee of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
John W. McGonigle Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT AND SECRETARY Officer since: December 1981 | Principal Occupations: Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Officer since: April 2013 | Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc. |
Richard B. Fisher Birth Date: May 17, 1923 VICE PRESIDENT Officer since: December 1981 | Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Family; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Family; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp. |
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER Officer since: January 2005 | Principal Occupations: Mr. Germain is Chief Legal Officer of the Federated Fund Family. He is General Counsel and Vice President, Federated Investors, Inc.; President, Federated Administrative Services and Federated Administrative Services, Inc.; Vice President, Federated Securities Corp.; Secretary, Federated Private Asset Management, Inc.; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated in 1984 and is a member of the Pennsylvania Bar Association. Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc. |
Name Birth Date Positions Held with Fund Date Service Began | Principal Occupation(s) for Past Five Years and Previous Position(s) |
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: August 2004 | Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. Previous Positions: Served in Senior Management positions with a large regional banking organization. |
Robert J. Ostrowski Birth Date: April 26, 1963 Chief Investment Officer Officer since: May 2004 | Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of Federated's taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University. |
Todd A. Abraham Birth Date: February 10, 1966 VICE PRESIDENT Officer since: November 1999 Portfolio Manager since: March 1999 | Principal Occupations: Todd A. Abraham has been the Fund's Portfolio Manager since March 1999. He is Vice President of the Trust with respect to the Fund. Mr. Abraham has been a Portfolio Manager since 1995, a Vice President of the Fund's Adviser since 1997 and a Senior Vice President of the Fund's Adviser beginning 2007. Mr. Abraham joined Federated in 1993 as an Investment Analyst and served as Assistant Vice President of the Fund's Adviser from 1995 to 1997. Mr. Abraham served as a Portfolio Analyst at Ryland Mortgage Co. from 1992-1993. Mr. Abraham has received the Chartered Financial Analyst designation and holds an M.B.A. in Finance from Loyola College. |
Liam O'Connell Birth Date: October 17, 1976 Vice President Officer since: June 2012 Portfolio Manager since: March 2011 | Principal Occupations: Liam O'Connell has been the Fund's Portfolio Manager since March 2011 . He is Vice President of the Trust with respect to the Fund. Mr. O'Connell joined Federated in September 2003 as an Investment Analyst of the Fund's Adviser. He was named an Assistant Vice President of the Adviser in January 2005 and Vice President in January 2013. From 2001 to 2003, Mr. O'Connell attended MIT's Sloan School of Management, receiving his M.B.A. Mr. O'Connell served as an engineer with the Naval Surface Warfare Center from 1998 to 2001. Mr. O'Connell has received the Chartered Financial Analyst designation and also holds a B.S. in Naval Architecture and Marine Engineering from the Webb Institute of Naval Architecture and an M.S. from the Johns Hopkins University. |
![](https://capedge.com/proxy/N-CSR/0001318148-14-000537/fedlogok.jpg)
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
or call 1-800-341-7400.
CUSIP 314184201
2014 ©Federated Investors, Inc.
Item 2. Code of Ethics
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.
(c) Not Applicable
(d) Not Applicable
(e) Not Applicable
(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3. Audit Committee Financial Expert
The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item: Charles F. Mansfield, Jr., Thomas M. O'Neill and John S. Walsh.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2014 - $26,450
Fiscal year ended 2013 - $25,450
(b) Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2014 - $0
Fiscal year ended 2013 - $36
Travel to Audit Committee Meeting.
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 2014 - $0
Fiscal year ended 2013 - $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 2014 - $0
Fiscal year ended 2013 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(e)(1) Audit Committee Policies regarding Pre-approval of Services.
The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.
Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
The Audit Committee has delegated pre-approval authority to its Chairman. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.
AUDIT SERVICES
The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.
In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.
AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.
TAX SERVICES
The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.
ALL OTHER SERVICES
With respect to the provision of services other than audit, review or attest services the pre-approval requirement is waived if:
(1) | The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided; |
(2) | Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant at the time of the engagement to be non-audit services; and |
(3) | Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee. |
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.
The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.
PRE-APPROVAL FEE LEVELS
Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.
PROCEDURES
Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.
(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrants audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2014 – 0%
Fiscal year ended 2013 - 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 2014 – 0%
Fiscal year ended 2013 – 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 2014 – 0%
Fiscal year ended 2013 – 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 2014 - $110,154
Fiscal year ended 2013 - $146,108
(h) The registrant’s Audit Committee has considered that the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants
Not Applicable
Item 6. Schedule of Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not Applicable |
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not Applicable |
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not Applicable |
Item 10. Submission of Matters to a Vote of Security Holders
No Changes to Report
Item 11. Controls and Procedures
(a) The registrant’s President and Treasurer have concluded that the
registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
(a)(1) Code of Ethics- Not Applicable to this Report.
(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.
(a)(3) Not Applicable.
(b) Certifications pursuant to 18 U.S.C. Section 1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Federated GNMA Trust
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date March 24, 2014
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /S/ J. Christopher Donahue
J. Christopher Donahue, Principal Executive Officer
Date March 24, 2014
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date March 24, 2014