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Federated Equity Funds
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Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
![](https://capedge.com/proxy/425/0001318148-12-001307/f017876img0.jpg)
Nearly $3 trillion is currently invested in money market funds, according to the Investment Company Institute. When you consider the expanding cash needs of corporations, businesses, government entities, highnet-worth individuals and the largest generation of retirees in history, expect the demand for money funds to grow.
For more than three decades, Federated has been an industry leader when it comes to money fund management. Federated’s strong presence within the industry enables us to provide one of the largest product menus among money market managers and targeted solutions that are among the most innovative in the industry.
Plus, Federated has relationships with hundreds of securities dealers, ranging from the largest names on Wall Street to regional firms across the country. Our broad network of counterparties also enables us to access a range of primary and secondary market deals around the country.
Federated Investors is one of the largest institutional investment managers in the United States with approximately $355 billion in assets, $265.5 billion of which is in money market products.
Our Investment Philosophy
- Highly defined and disciplined process of portfolio construction
- Intensive credit review
- Barbell structure consisting primarily of securities with maturities above and below the average portfolio maturity
- Managers seek competitive yields while avoiding the more speculative issues
![](https://capedge.com/proxy/425/0001318148-12-001307/f017876img1.jpg)
![](https://capedge.com/proxy/425/0001318148-12-001307/f017876img1a.jpg)
Industry Standings
- Fifty-seven years managing money
- Top 3% of all money market managers1
- One of the largest institutional money market fund managers2
- One of the largest selections of state-specific, tax-free money market funds2,3
- One of the largest managers of AAA-rated money market portfolios2
Industry Leadership
- Introduced one of the first institutional and retail money market funds.
- Helped pioneer the use of the amortized cost accounting method for valuing shares of money market funds at $1.00 — now common practice by all money market fund managers.
- Launched one of the first money market funds holding tax-free variable rate demand notes.
- Was the first U.S. mutual fund company to register in Dublin, Ireland for distribution of offshore money market funds to the European community.4
Federated knows...
Stability
Ranks as a leading global investment manager, managing approximately $355 billion in assets,* delivering competitive and consistent results since 1955 and fostering growth by reinvesting in the company
Offers broad product lines spanning domestic and international equity, fixed income, alternative and money market strategies with the goal of long-term, consistent, competitive performance
Takes the long view, believing that doing business the right way over time will present opportunity for future growth
* As of 6/30/2012.
An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although the money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds.1Strategic Insight, 5/31/12, based on assets under management in open-ended funds.
2iMoneyNet, Inc. 5/31/12. For more information on credit ratings, visit standardandpoors.com.
3Income may be subject to the federal alternative minimum tax and state and local taxes.
4Offshore money funds are available to qualified investors. Please contact your Federated representative for more information.
Current and future portfolio holdings are subject to risk.
For more complete information, visit FederatedInvestors.com or call 1-800-341-7400 for summary prospectuses or prospectuses. You should consider the fund’s investment objectives, risks, charges and expenses carefully before you invest. Information about these and other important subjects is in the fund’s summary prospectus or prospectus which you should read carefully before investing.
Not FDIC Insured • May Lose Value • No Bank Guarantee
![](https://capedge.com/proxy/425/0001318148-12-001307/f017876img2.jpg)
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
![](https://capedge.com/proxy/425/0001318148-12-001307/g4228401img0.jpg)
Experience
Federated has earned a well-deserved reputation as a strong fixed income manager.1Our track record in fixed income spans decades, and includes the development of several milestone funds: one of the first government bond funds in 1969; one of the first high yield bond funds in 1972; one of the first tax-free2municipal bond funds in 1976; and one of the first high yield municipal bond funds in 1996.We’ve been managing fixed income portfolios for more than 40 years. Our senior fixed income management team averages 24 years of experience; team members have worked together at Federated for 22 years.
Philosophy
Federated believes that optimum results in fixed income products are best achieved through a traditional value-based approach, using fundamental analysis with teams focused by sector to extract value from each step of the process. Our fixed income management combines top-down decision making with bottom-up security selection to build diversified, risk-managed portfolios.
Multiple Alpha Sources: The Alpha Pod Process
Federated fixed income teams make key decisions on various fixed income factors referred to as alpha pods.The alpha pod process consists of duration management, sector allocation, yield curve strategy and currency management.The culmination of this process occurs at the security selection level.
![](https://capedge.com/proxy/425/0001318148-12-001307/g4228401img1.jpg)
![](https://capedge.com/proxy/425/0001318148-12-001307/g4228401img2.jpg)
Federated knows...
Stability
Ranks as a leading global investment manager, managing approximately $360 billion1in assets, delivering competitive and consistent results since 1955 and fostering growth by reinvesting in the company
Offers broad product lines spanning domestic and international equity, fixed income, alternative and money market strategies with the goal of long-term, consistent, competitive performance
Takes the long view, believing that doing business the right way over time will present opportunity for future growth
1Assets under management as of 3/31/2012.Mutual funds are subject to risks and fluctuate in value.
International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.
High yield, lower-rated securities generally entail greater market, credit/default and liquidity risks, and may be more volatile than investment grade securities.
Alpha measures a fund’s risk-adjusted performance. It represents the difference between a fund’s actual returns and its expected performance, given its level of risk as measured by beta. A positive value for alpha implies that the fund has performed better than would have been expected given its volatility. The higher the alpha, the better the fund’s risk-adjusted performance.
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.
Yield Curve: Graph showing the comparative yields of securities in a particular class according to maturity. Securities on the long end of the yield curve have longer maturities.
Investors should carefully consider the fund’s investment objectives, risks, charges, and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information contact us or visit FederatedInvestors.com. Please carefully read the summary prospectus or prospectus before investing.
Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.
Diversification does not assure a profit nor protect against loss.
![](https://capedge.com/proxy/425/0001318148-12-001307/g4228401img3.jpg)
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
![](https://capedge.com/proxy/425/0001318148-12-001307/g4228402img1.jpg)
Experience
For more than three decades, Federated has been dedicated to delivering disciplined equity management to a wide variety of institutional and retail clients. Our diverse equity fund lineup includes domestic, international, global and alternative investment strategies, a result of both carefully cultivated homegrown initiatives as well as key strategic acquisitions.The stability of our investment teams allows us to deliver consistency in strategy and management, and to continue exploring new opportunities to meet the ever-changing and diverse needs of our clients.
Philosophy
Federated’s equity management philosophy is based on the belief that research discipline, dedicated risk management and a long-term outlook have the greatest potential to weather market movements and maximize each fund’s ability to reach its investment objective. For each fund, Federated’s experienced specialized investment teams seek to establish clear guidelines for portfolio management and to be systematic about making decisions. This approach is designed to provide each fund with a distinct, stable identity in its pursuit of superior and sustainable investment performance.
Process
Federated’s equity investment process originates with its commitment to proprietary research—both fundamental and quantitative. Using that information advantage, investment teams construct their portfolios using strict constraints specific to each fund’s investment style. Performance attribution is then used to review the portfolio’s performance and positioning.
![](https://capedge.com/proxy/425/0001318148-12-001307/g4228402img2.jpg)
Federated knows...
Stability
Ranks as a leading global investment manager, managing approximately $360 billion1in assets, delivering competitive and consistent results since 1955 and fostering growth by reinvesting in the company
Investment Solutions
Offers broad product lines spanning domestic and international equity, fixed income, alternative and money market strategies with the goal of long-term, consistent, competitive performance
Diligence
Takes the long view, believing that doing business the right way over time will present opportunity for future growth
1Assets under management as of 3/31/2012.Mutual funds are subject to risks and fluctuate in value.
International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.
Investors should carefully consider the fund’s investment objectives, risks, charges, and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information contact us or visit FederatedInvestors.com. Please carefully read the summary prospectus or prospectus before investing.
Diversification does not assure profit nor protect against loss.
![](https://capedge.com/proxy/425/0001318148-12-001307/g4228402img3.jpg)
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
![](https://capedge.com/proxy/425/0001318148-12-001307/image_001.jpg)
All information as of 6/30/2012 unless otherwise noted.
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2ndQuarter2012
ProductProfile
FUNDFACTS
Inception Date
3/30/2005
Benchmark
Dow Jones Select Dividend Index
Morningstar Category
LargeValue
Lipper Category
Equity IncomeFunds
Fund Assets
$6.4 billion
Ticker Symbols
Institutional Shares –SVAIX
Class A Shares –SVAAX
Class C Shares –SVACX
Morningstar Style Box™
![](https://capedge.com/proxy/425/0001318148-12-001307/image_003.jpg)
Foreign Holdings
28.44%
Portfolio Statistics
Weighted Median P/E (LTM) | 17.4x |
Weighted Median P/E (NTM) | 14.4x |
Number of Securities | 39 |
Weighted Median Market Cap | $60.7 b |
Weighted MedianPrice/Book | 3.0x |
AnnualPortfolioTurnover | 13.3% |
30-DayYield1 | 3.25% |
5-Year Statistics vs. S&P 500 Index
| FUND | INDEX |
Standard Deviation | 14.60 | 19.21 |
Beta | 0.65 | 1.00 |
Correlation | 0.85 | 1.00 |
R2 | 71.61 | 100.00 |
Sources: Federated Investors, Morningstar, Inc.
Past performance is no guarantee of future results.
See disclosure sectionfor important definitions.
PRODUCTHIGHLIGHTS
| · | Pursues income and long-term capital appreciation. |
| · | Invests primarily in high-yielding stocks of undervalued companies positioned to increase their dividends over time. |
| · | Seeks a substantially higher-than-market dividend yield and a growing stream of income to offset inflation. |
Investment Approach
The fund’s investment approach is bottom-up, striving to emphasize high-yielding dividend- growing stocks. The fund aims to participate in high-yielding market sectors, industries and companies in an effort to produce diversified portfolios. The approach seeks reliable dividend income growth and capital appreciation.
PERFORMANCE
Average Annual Total Returns (%)
| | | | | | | Expense Ratio* |
| Q2 | YTD | 1 Year | 3 Year | 5 Year | Since Inception | Before Waivers | After Waivers |
Class A Shares (NAV) | 3.98 | 5.11 | 10.73 | 17.01 | -0.10 | 5.12 | 1.25 | 1.06 |
Class A Shares (MOP) | -1.70 | -0.64 | 4.69 | 14.86 | -1.22 | 4.31 | 1.25 | 1.06 |
Institutional Shares | 4.02 | 5.22 | 10.96 | 17.33 | 0.17 | 5.41 | 0.95 | 0.81 |
Benchmark | 1.41 | 6.54 | 10.50 | 21.66 | -0.21 | N/A | -- | -- |
![](https://capedge.com/proxy/425/0001318148-12-001307/image_004.jpg)
Performance quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, and for after-tax returns, contact us or visit FederatedInvestors.com. Maximum Offering Price figures reflect the maximum sales charge of 5.5% for Class A Shares. See the prospectus for other fees and expenses that apply to a continued investment in the fund.
*The Adviser and its affiliates havevoluntarily agreed towaive theirfees and/orreimburse expenses so that total annual fund operating expenses (excluding acquired fundfees and expenses of 0.01%) paid by Class A andIS Shares (after thevoluntarywaivers and/orreimbursements) will not exceed 1.05% and 0.80%respectively, up to but not including the later of 1/1/13 or the date of the fund’s next effective prospectus.
Not FDIC Insured • May LoseValue • No Bank Guarantee
![](https://capedge.com/proxy/425/0001318148-12-001307/image_005.jpg)
KEYINVESTMENT TEAMMEMBERS
![](https://capedge.com/proxy/425/0001318148-12-001307/image_006.jpg) | Walter Bean, CFA Senior Vice President Senior Portfolio Manager Head of Income Management Team | ![](https://capedge.com/proxy/425/0001318148-12-001307/image_007.jpg) | Daniel Peris, PhD, CFA Vice President Senior Portfolio Manager | ![](https://capedge.com/proxy/425/0001318148-12-001307/image_008.jpg) | Deborah Bickerstaff Vice President Associate Portfolio Manager |
INVESTMENTPROCESS
![](https://capedge.com/proxy/425/0001318148-12-001307/image_009.jpg)
• All common stocks in developed markets, with a minimum market cap of $3.0 billion and yield greater than 3.0% • Rank stocks based on: - Dividend yield - Dividend growth - Valuation - Strong financial condition - Performance during periods of market weakness | • Focus on high-yielding stocks • Conduct fundamental risk/reward analysis at industry and company level • Evaluate management concern for shareholder value • Prepare cash flow and dividend forecasts • Construct disciplined valuation framework | • 40-50 stocks • Fully invested • Diversified across income producing sectors • Portfolio yield significantly higher than market average yield • Risk management • 5% maximum position size • Sell discipline | • Multi-factor analysis attributes style and characteristic exposures • Examine sector and stock selection impact • Rigorous and continuous feedback loop helps ensure all elements of process are adding value as expected |
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INVESTMENT REVIEW
Market Overview
A strong June rally wasn’t enough to save the second quarter of 2012 from May’s ugly sell-off, but the major indices posted their best June returns in more than a decade, fueled by late-breaking events in Europe that sent equities soaring on the last trading day. European Union leaders defied expectations at their 20th summit since the eurozone crisis broke by agreeing to the immediate and direct use of bailout funds to aid struggling European banks, as well as to treat rescue funds for banks equally to funds used to support sovereign debts and to create a central eurozone authority over banks. These moves were viewed for the most part as concessions to the more growth-first forces led by the European Union’s southern-tier countries, by the austerity-first forces led by Germany. While details about how all the measures would work remained sketchy, the outcome was enough to give the markets hope that the agreement bought Europe more time to get its house in order.
Back in the U.S., the news wasn’t as favorable. The economic soft patch continued into June, with sluggish retail sales and nonfarm payroll growth, a significant slowdown in manufacturing activity—the Institute for Supply Management’s gauge for the month actually fell into contraction territory for the first time in three years—and a spate of downward revisions to forecasted second-quarter corporate profits that will start appearing soon. Housing continued to be a bright spot, with sales, construction and prices all tilting to increases, indicating an industry that has been a drag on GDP likely may be a contributor this year.
On the political front, the U.S. Supreme Court surprised by essentially upholding the Patient Protection and Affordable Care Act, commonly known as Obamacare—though not for reasons most thought it would. The court upheld the mandate as a tax and, in so doing, effectively let Obamacare stand. The decision promises to sharpen the debate between President Obama and Republican challenger Mitt Romney in this fall’s presidential campaign, as well as to further the divisiveness between the two parties.
Performance and Strategy
Amidst the recent commotion in the markets, Federated Strategic Value Dividend Fund has remained focused, as always, on achieving its core objectives: to provide investors with income and long-term capital appreciation. The portfolio finished the quarter with a 30-day yield of 3.4% for Class A Shares and a weighted average stock dividend yield of 4.7%, maintaining its historically high yield. The portfolio’s dividend yield was not only greater than that of the Dow Jones Select Dividend Index (4.0%), a proxy of the domestic dividend-paying universe, but it has continued to be well above that of the 10-Year U.S. Treasury Bond (1.7%) and the broad market, represented by the S&P 500 Index (2.2%). Complementing its high yield, the fund also saw dividend growth within the second quarter of 2012. This dividend growth, which may provide investors with a hedge against inflation and may help the portfolio to sustain its high yield, came courtesy of 11 dividend increases announced by holdings within the portfolio. Among those 11 were an 11.1% increase from Chevron Corp., its 25th consecutive yearly dividend bump, and a 7.0% increase from Johnson & Johnson, its 50th consecutive yearly increase. Such milestones are not unexpected given the fund’s holdings and the solid foundations of their dividend histories. Year-to-date, the portfolio has now experienced 19 dividend increases, along with a special dividend from GlaxoSmithKline PLC, which was announced in February.
Providing investors with lower downside risk is an important goal for the fund. In a market where volatility has been an all-too-common occurrence, the portfolio aims to stay above the fray and short-term noise of the markets. Since its inception, the fund has consistently done just that, demonstrated by its low beta of 0.55 (Wilshire 3-year beta versus S&P 500 calculated using monthly return). By keeping the volatility of the portfolio low, the fund pursues lower downside risk in an environment of falling prices. Dividend stocks not only anchor a large portion of total return to their dividend distributions, but they also are commonly held by income investors. These income investors tend not to trade as frequently as other investors, since they buy stocks to collect the dividends that they generate. As a result, when the market rises and falls, the income investor is less likely to buy/sell due to their focus on the stock’s dividend distribution, not its price. Further, stocks that are dividend stalwarts are generally less sensitive to downward swings in the economy, since these companies are typically large, well-established global firms with diverse revenue streams and geographies. This, combined with the large portion of total return tied to the dividend and the less-frequent trading habits of income investors, results in the low volatility of dividend stocks.
During the second quarter of 2012, Federated Strategic Value Dividend Fund produced a total return of 4.0% (Class A Shares at net asset value). The Dow Jones Select Dividend Index and S&P 500 Index had returns of 1.4% and -2.8% respectively over the same time period.
Defensive stocks were in favor and consequently, the Utilities, Health Care, and Consumer Staples sectors produced attractive returns of 6.1%, 5.3%, and 4.3% for the portfolio. Telecom Services, another defensive sector, was the best performing sector for the fund, returning 7.4%.
Returns were led by Verizon Communications (17.8%) and AT&T, Inc. (15.8%). Additionally benefiting the portfolio was its avoidance of the cyclical and dividend-unfriendly Information Technology, Materials, and Industrials sectors which experienced losses of -6.7%, -4.2%, and -3.6%, respectively. A sector that did post a loss to the detriment of the fund was the Energy sector. The portfolio’s Energy holdings fell -3.2% on the quarter, driven by the fall in oil prices which have retreated -17.5% since the end of the first quarter.
Federated Strategic Value Dividend Fund’s objectives to provide investors with income and long-term capital appreciation and its goal of lower downside risk all contribute to the portfolio’s long-term goal to produce superior long-term total returns. While all of these are critical to the fund, the lower downside risk characteristics of the fund were in evidence in the second quarter as the markets gyrated. As Baby Boomers retire in larger and larger numbers, the need for lower downside risk is as great as ever.
Performance quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, and for after-tax returns, contact us or visit FederatedInvestors.com.
See disclosure section for important disclosures and definitions.
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TOPHOLDINGSSectorWeightings(%)
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Sector Weightings (%)
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Portfolio composition is based on net assets at the close of business on 6/30/12 and may not necessarily reflect adjustments that are routinely made when presenting net assets for formal financial statement purposes. Because this is a managed portfolio, the investment mix will change.
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ReasonstoOwnthisFund
The High-Dividend Advantage
An important potential benefit of dividend investing is that returns are linked tocash payments. Dividend income may provide a distinct advantage when fixed-income yields are low, the outlook for inflation is uncertain and the broader market is volatile.
APortfolio Built One Dividend-Paying Stock at aTime
Fund managersWalter C. Bean and DanielPeris bring 55 years of collective experience to building a portfolio of 40-50 stocks ranked according to their dividend yield, dividend growth, valuation, strong financials and performance regardless of market conditions.
A Balance of Risk and Reward
Dividend-paying companies:
| § | Tend to be solid and wellestablished |
| § | Issue stock whose prices have typically been less volatile than non-dividend- paying companies |
| § | Have historically paid a sizeable portion of their returns incash and, as a result, may help cushion a portfolio’s downside |
FEDERATEDKNOWS...
Stability
Ranks as a leading global investment manager, managing approximately $355 billion* in assets, delivering competitive and consistent results since 1955 and fostering growth by reinvesting in the company
Investment Solutions
Offers broad product lines spanning domestic and international equity, fixed income, alternative and money market strategies with the goal of long-term, consistent, competitive performance
Diligence
Takes the long view, believing that doing business the right way over time will present opportunity for future growth
* As of 6/30/2012
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Past performance is no guarantee of futureresults.
| 1 | The 30-day SEC yield for Class A Shares is calculated by dividing the net investment income per share for the 30 days ended on the date of calculation by the maximum offering price per share on that date. The figure is compounded and annualized. For an indefinite period of time, the investment adviser is waiving all or part of its fee and, in addition, may reimburse the fund for some of its expenses. Otherwise, the yield would have been 3.09%. |
A WORD ABOUT RISK
Mutual funds are subject to risks and fluctuate in value.
Asset allocation does not assure a profit nor protect against loss.
International investing involves special risks, including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.
There are no guarantees that dividend-paying stocks will continue to pay dividends. In addition, dividend paying stocks may not experience the same capital appreciation potential as non-dividend paying stocks.
Funds whose investments are concentrated in a specific industry, sector or geographic area may be subject to a higher degree of market risk than funds whose investments are diversified.
DEFINITIONS
Current Dividend Yield is based on the current yields of the individual securities within the portfolio, weighted for their respective share of the overall portfolio.
Dow Jones Select Dividend Index universe is defined as all dividend-paying companies in the Dow Jones U.S. Total Market Index that have a non-negative historical five-year dividend-per-share growth rate, a five-year average dividend earnings-per-share ratio of less than or equal to 60%, and three-month average daily trading volume of 200,000 shares. Current index components are included in the universe regardless of their dividend payout ratio. The Dow Jones U.S. Total Market Index is a rule-governed, broad-market benchmark that represents approximately 95% of the U.S market capitalization.
S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
Indexes are unmanaged and cannot be invested in directly.
Betameasures a portfolio’s volatility relative to the market. A Beta greater than 1.00 suggests the portfolio has historically been more volatile than the market as measured by the funds’ benchmark. A Beta less than 1.00 suggests the portfolio has historically had less volatility relative to the market.
Correlation is the degree to which one variable (here, the fund’s returns) fluctuates relative to another (the returns of the fund’s benchmark). Correlation ranges from 1.0 when two variables move identically in the same direction, to -1.0 when two variables move identically in the opposite direction.
R-Squared indicates what percentage of a portfolio’s movement in performance is explained by movement in performance of the market. R-squared ranges from 0 to 100, and a score of 100 suggests that all movements of a portfolio’s performance are completely explained by movements in the market as measured by the fund’s benchmark.
Standard Deviation is a historical measure of the variability of returns relative to the average annual return. A higher number indicates higher overall volatility.
Weighted Median P/E (LTM - Latest Twelve Months) is a ratio comparing share price to earnings per share using data from the previous twelve months.
Weighted Median P/E (NTM - Next Twelve Months) is a ratio comparing share price to earnings per share using estimated data for the next twelve months.
Weighted Median Price/Book is a ratio comparing share price to book value or assets minus liabilities.
Weighted Median Dividend Yield is a weighted average of the dividends of all the stocks in a portfolio.
RATINGS ANDRATING AGENCIES
Lipper Categories: Data Source: Lipper, A Reuters Company. Copyright 2012© Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
Morningstar Style Box™ reveals a fund’s investment strategy. For equity funds, the vertical axis shows the market capitalization of the long stocks owned, and the horizontal axis shows investment style (value, blend or growth).
Morningstar Category identifies funds based on their actual investment styles as measured by their underlying portfolio holdings over the past three years. If the fund is less than three years old, the category is based on the life of the fund. ©2012 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
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Federated Investors, Inc.
Federated Investors Tower
1001LibertyAvenue
Pittsburgh, PA 15222-3779
1-800-341-7400
FederatedInvestors.com
G42142-02 (7/12)
Federated Securities Corp., Distributor
This must be preceded or accompanied by a prospectus.
Federated is a registered trademark ofFederated Investors, Inc. 2012 ©Federated Investors, Inc.
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
![](https://capedge.com/proxy/425/0001318148-12-001307/image_011.gif)
In Need of Dividends?
FederatedStrategicValueDividendFund
FederatedStrategicValueDividendFundoffersinvestorsaportfolioofquality,dividend-payingcompanieswithstrong
dividendgrowthpotential.
| Ticker | Security | DividendsPaid | 2012DividendStatus: |
Holding | Symbol | Yield | ConsecutivelySince | Month/Increase% |
ConsumerDiscretionary | | | | |
McDonald'sCorp. | MCD | 3.16 | 1976 | |
ConsumerStaples | | | | |
AltriaGroup,Inc. | MO | 4.75 | 1928 | |
Coca-ColaCo. | KO | 2.61 | 1920 | Feb./8.5% |
GeneralMills,Inc. | GIS | 3.43 | 1899 | Jun./8.2% |
H.J.HeinzCo. | HNZ | 3.79 | 1946 | May/7.3% |
KelloggCo. | K | 3.57 | 1925 | Apr./2.3% |
Kimberly-ClarkCorp. | KMB | 3.53 | 1935 | Feb./5.7% |
Lorillard,Inc. | LO | 4.70 | 2008 | Feb./19.2% |
PepsiCo,Inc. | PEP | 3.04 | 1952 | Feb./4.4% |
PhilipMorrisInternationalInc. | PM | 3.53 | 1928 | |
Procter&GambleCo. | PG | 3.67 | 1890 | Apr./7.0% |
ReynoldsAmerican,Inc. | RAI | 5.26 | 1999 | May/5.4% |
UnileverPLC | ULVR | 3.61 | 1949 | Apr./5.9% |
Energy | | | | |
ChevronCorp. | CVX | 3.41 | 1912 | Apr./11.1% |
ConocoPhillips | COP | 4.72 | 1934 | |
RoyalDutchShellPLC | RDSB | 4.83 | 1943 | Feb./2.4% |
TotalSA | TOT | 5.46 | 1945 | |
Financials | | | | |
Ventas,Inc. | VTR | 3.93 | 1999 | |
Healthcare | | | | |
AbbottLaboratories | ABT | 3.16 | 1924 | Feb./6.3% |
AstraZenecaPLC | AZN | 6.17 | 1999 | |
Bristol-MyersSquibbCo. | BMY | 3.78 | 1933 | |
EliLilly&Co. | LLY | 4.57 | 1955 | |
GlaxoSmithKlinePLC | GSK | 4.91 | 1889 | Feb.1&Apr./15.2%2 |
Johnson&Johnson | JNJ | 3.61 | 1944 | Apr./7.0% |
Merck&Co.,Inc. | MRK | 4.02 | 1932 | |
TelecommunicationServices | | | | |
AT&T,Inc. | T | 4.94 | 1893 | |
BCE,Inc. | BCE | 4.39 | 1949 | |
CenturyLink,Inc. | CTL | 7.34 | 1978 | |
VerizonCommunications | VZ | 4.50 | 1893 | |
VodafoneGroupPLC | VOD | 5.31 | 1999 | |
WindstreamCorp. | WIN | 10.35 | 2006 | |
Utilities | | | | |
AmericanElectricPowerCo.,Inc. | AEP | 4.71 | 1910 | |
DominionResources,Inc. | D | 3.91 | 1925 | Jan./7.1% |
DukeEnergyCorp. | DUK | 4.42 | 1926 | Jun./2.0% |
NationalGridPLC | NGG | 5.81 | 1996 | |
PepcoHoldings,Inc. | POM | 5.52 | 1904 | |
PPLCorp. | PPL | 5.18 | 1946 | Feb./2.9% |
SouthernCo. | SO | 4.23 | 1948 | Apr./3.7% |
SSEPLC | SSE | 5.76 | 1992 | |
Holdingsareasof6/30/2012.TheFundisamanagedportfolioandholdingsaresubjecttochange.
Pastperformanceisnoguaranteeoffutureresults.Forcurrentfundperformance,visitFederatedInvestors.com.
NOTFDICINSURED • MAYLOSEVALUE •NOBANKGUARANTEE
AverageAnnualTotalReturn(%)asof6/30/12
TickerSymbol | Since Inception 1Year 5Year (3/30/2005) | Expenses * BeforeWaivers AfterWaivers | 30-DayYield |
ClassAShares(NAV)SVAAX | 10.73 -0.10 5.12 | 1.25 1.06 | 3.44 |
ClassAShares(MOP)SVAAX | 4.69 -1.22 4.31 | 1.25 1.06 | 3.25 |
ClassCShares(NAV)SVACX | 9.91 -0.83 4.38 | 1.95 1.81 | 2.71 |
ClassCShares(MOP)SVACX | 8.91 -0.83 4.38 | 1.95 1.81 | N/A |
InstitutionalSharesSVAIX | 10.96 0.17 5.41 | 0.95 0.81 | 3.68 |
Performance quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, and for after-tax returns, contact us or visit FederatedInvestors.com. Maximum Offering Price figures reflect the maximum sales charge of 5.5% for Class A Shares and the maximum contingent deferred sales charge of 1% for Class C Shares. See the prospectus for other fees and expenses that apply to a continued investment in the fund.
*TheAdviseranditsaffiliateshavevoluntarilyagreedtowaivetheirfeesand/orreimburseexpensessothatthetotalannualfundoperatingexpenses(excluding acquiredfundfeesandexpensesof0.01%)paidbythefund’sClassA,ClassCandInstitutionalShares(afterthevoluntarywaiversand/orreimbursements)will notexceed1.05%,1.80%and0.80%,respectively,throughthelaterofJanuary1,2013orthedateofthefund’snexteffectiveprospectus.
The30-dayyieldiscalculatedbydividingthenetinvestmentincomepershareforthe30daysendedonthedateofcalculationbythemaximumofferingprice (SECyield)ornetassetvaluepershareonthatdate.Thefigureiscompoundedandannualized.Intheabsenceoftemporaryexpensewaiversorreimbursements, the30-dayyieldwouldhavebeen3.09%atmaximumofferingpriceand3.28%atnetassetvalueforClassAShares,2.55%forClassCSharesand3.52%for InstitutionalShares.
Investorsshouldcarefullyconsiderthefund’sinvestmentobjectives,risks,chargesandexpensesbeforeinvesting.Toobtain asummaryprospectusorprospectuscontainingthisandotherinformation,contactusorvisitFederatedInvestors.com.Please carefullyreadthesummaryprospectusorprospectusbeforeinvesting.
Therearenoguaranteesthatdividend-payingstockswillcontinuetopaydividends.Inaddition,dividend-payingstocksmaynot experiencethesamecapitalappreciationpotentialasnon-dividendpayingstocks.
1 GlaxoSmithKlinePLCdeclaredaspecialdividendof5GBppershareon2/7/12.Thisspecialdividendisnotincludedinanyyieldcalculations.
2 Equalsthe6/30/12trailing12month(TTM)dividends,includingthespecialdividend,comparedtothe6/30/11TTMdividends.
Fundswhoseinvestmentsareconcentratedinaspecificindustry,sectororgeographicareamaybesubjecttoahigherdegreeofmarketriskthanfundswhose investmentsarediversified.
Internationalinvestinginvolvesspecialrisksincludingcurrencyrisk,increasedvolatility,politicalrisksanddifferencesinauditingandotherfinancialstandards.
43145(7/12)FederatedisaregisteredtrademarkofFederatedInvestors,Inc.FederatedSecuritiesCorp.,Distributor 2012©FederatedInvestors,Inc.
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
![](https://capedge.com/proxy/425/0001318148-12-001307/image_035.jpg)
August 2012 Money Market Commentary
FundName | Ratings | ShareClass | NASDAQ |
PRIME |
FederatedPrimeCashObligationsFund | AAAmS&P Aaa-mfMoody’s AAAmmfFitch NAICList*, | IS | PCOXX |
CAP | PCCXX |
SS | PRCXX |
FederatedPrimeManagementObligationsFund | N/A | IS | PMOXX |
CAP | PICXX |
SS | PSSXX |
FederatedPrimeObligationsFund | AAAmS&P Aaa-mfMoody’s AAAmmfFitch NAICList*, | IS | POIXX |
CAP | POPXX |
SS | PRSXX |
TR | POLXX |
FederatedPrimeValueObligationsFund | A-mfMoody’s NAICList*, | IS | PVOXX |
CAP | PVCXX |
SS | PVSXX |
GOVERNMENT |
FederatedGovernmentObligationsFund | AAAmS&P Aaa-mfMoody’s AAAmmfFitch NAICList** | IS | GOIXX |
CAP | GOCXX |
SS | GOSXX |
TR | GORXX |
FederatedGovernmentObligations Tax-ManagedFund | AAAmS&P Aaa-mfMoody’s NAICList**, | IS | GOTXX |
SS | GTSXX |
TREASURY |
FederatedTreasuryObligationsFund | AAAmS&P Aaa-mfMoody’s NAICList**, | IS | TOIXX |
CAP | TOCXX |
SS | TOSXX |
TR | TOTXX |
FederatedU.S.TreasuryCashReserves | AAAmS&P Aaa-mfMoody’s NAICList** | IS | UTIXX |
SS | TISXX |
MUNICIPAL |
FederatedMunicipalObligationsFund | AmmfFitch NAICList* | IS | MOFXX |
CAP | MFCXX |
SS | MOSXX |
FederatedTax-FreeObligationsFund | Aaa-mfMoody’s AAAmmfFitch NAICList* | IS | TBIXX |
SS | TBSXX |
Treasury Yields as of 7/31/12 | 3-Month | 6-Month | 2-Year | 5-Year |
0.11% | 0.14% | 0.23% | 0.60% |
Libor Rates as of 7/31/12 | 1-Month | 3-Month | 6-Year | 1-Year |
0.25% | 0.44% | 0.73% | 1.05% |
Pastperformanceisnoguaranteeoffutureresults.
Month in Cash: What might the Fed have in reserve?
August1,2012
TheFederalReserve’sJuneannouncementofanextensionof“OperationTwist”,underwhich theFedpurchaseslonger-termTreasurysecuritieswiththeproceedsfromthe saleofshort-termTreasuries,wasprobablythemostbenignchoiceforadditionalstimulusaftercomingunderintense pressureasaresultofsluggishdomesticeconomicgrowthandcontinuedconcernsoverEurope. Sincethen,ofcourse,speculationhasgrownthattheFedmight takefurtherstepsbeforelongto shoreuptheeconomy.FedChairmanBenBernankecontinuestoindicatethatwhiletheFedremains inwatchfulwaitingmode,itisofcoursepreparedtoacttoprovidemoreaccommodation—itsimply hasn’tdecidedtodosoyet,norhasitdeterminedwhatstepswouldbeappropriate,shoulditdecide togodownthatpath.
Bernankeidentifiedassetpurchasesandcommunicationsastheprimarytoolsunderconsideration, butthereareanumberofdifferentoptionstheFedmightpursue.ThecurrentOperationTwistfocusesonthree-yearandunderTreasurysecurities.TheFedcouldexpandthattoincludelonger-datedTreasuries,mortgage-backedsecurities,oragencies.Judgingfromtheirdiscussions,theyseemmost interestedinmortgages.Thatmightnot causemanyproblemsforthemoneymarketworld–we’dsee thebizarreeffectofaneasingthatwouldactuallyhelpstabilizerates,ifnotpushthemupafewbasis points,ifonlybecauseitwould takeidlesupplyjustsittingontheFed’sbalancesheetandputitback outintothemarketsforuse—maybenotbymoneyfundsdirectly,butinthe caseofmortgages,as collateralforrepo.AnotherideawouldbetoinitiateafullQuantitativeEasingIII,andresumepurchasingsecurities.Thatoptionmightbeapossibility,butitseemsitwouldbeadistantsecond.
Thereisathirdoption—loweringoreliminatingtheInterest RateonExcessReserves,or IOER, fromitscurrent25basispointlevel.Bernankebroughtupthisoptiononlyafterasecondwaveof questioningbycongressmen.Theseeminglyreluctantmentionof IOERwasabitofarelief,as speculationhadmountedinthepastseveraldaysthattheFedmightgothere.Thespeculation waspromptedbytherecentaction takenbytheEuropeanCentralBanktoloweritsdepositrate from25basispointstozero,whichwasaccompaniedbyareductioninitslendingratefrom1.0% to0.75%.TheFedhasprobablyobserved,however,thattheECB’scurrentzero-rateenvironment isn’tworkingoutinthewaythattheyhadhoped,pushingthisoptiontoanunlikelythird.
Atlanticcrossing?
There are, of course, concerns about European credit markets slowing down—they’re a major trade partner. But the slowdown on the European continent has already happened. It’s one of the reasons the U.S. pace has slowed. And it’s not as important of a sector for us as some other areas, such as Canada and Mexico, which are more significant trading partners. While there’s a good deal of headline risk concerning the potential for Europe’s economic problems to bleed into our markets, from a money markets perspective, we don’t see that happening just yet. They don’t have much supply – European rates are at such low levels, if not negative, that few are buying there. Europe does have the potential to impact demand. Buyers who are turned off by euro investments could swap those investments for there’s a finite supply – obviously rates would go down, as demand could outstrip supply. We haven’t seen that play out yet, but we’re keeping our own watchful, waiting eye on Europe.
Federated knows...
Stability
Ranksasaleadingglobalinvestmentmanagerwithapproximately$355billioninassetsundermanagement,1deliveringcompetitiveandconsistentresultssince1955andfostering growthbyreinvestinginthecompany
Investment Solutions
Offersbroadproductlinesspanningdomesticandinternationalequity,fixedincome,alternativeand moneymarketstrategieswiththegoaloflong-term,consistent,competitiveperformance
Diligence
Takesthelongview,believingthatdoingbusinesstherightwayovertimewillpresentopportunity forfuture growth
Views are subject to change based on market conditions and other factors. These views should not be construed as a recommendation for any specific security or sector.
London Interbank Offered Rate (Libor): The rate at which banks can borrow funds from other banks in the London interbank market. The Libor is fixed on a daily basis by the British Bankers Association and acts as a benchmark for other short-term interest rates.
Securities are considered to be “first tier” as follows: Standard & Poor’s: A-1+ and A-1, based on the obligor’s capacity to meet its financial commitment on the obligation; Moody’s: P-1, based on the issuer’s ability to repay short-term obligations; Fitch: F-1+ and F-1, based on the issuer’s liquidity necessary to meet financial commitments in a timely manner. Similarly, securities are considered to be “second tier” as follows: Standard & Poor’s: A-2; Moody’s: P-2 and Fitch: F-2.
*This fund is on the National Association of Insurance Commissioner’s list as a Class 1 listing. This designation denotes that the fund meets certain quality and pricing guidelines such as: a rating of A or better by a Nationally Recognized Statistical Rating Organization (NRSRO), maintains a constant NAV $1.00 at all times, allows a maximum seven-day redemption of proceeds, invests 95% in U.S. government securities or securities rated in the highestshort-term rating category by anNRSRO, or unrated securities determined by the fund’s board to be of comparable quality or other registered money market fundsor collateralized repurchase agreements with the remaining 5% in Second Tier securities from Rule 2a-7. This is subject to an annual review.
**This fund is on the National Association of Insurance Commissioner’s list as a U.S. Direct Obligations/Full Faith & Credit listing. This designation denotes that the fund meets certain quality and pricing guidelines such as: a rating of AAA or Aaa by a Nationally Recognized Statistical Rating Organization (NRSRO), maintains a constant NAV $1.00 at all times, allows a maximum seven-day redemption of proceeds, invests 100% in U.S. government securities. This is subject to an annual review.
1 As of 6/30/12.
An AAAm rating by Standard & Poor’s is obtained after S&P evaluates a number of factors, including credit quality,market price exposure, and management.
Money market funds rated Aaa-mf by Moody’s are judged to be of an investment quality similar to Aaa-rated fixed income obligations, that is, they are judged to be of the best quality. Money funds rated A-mf by Moody’s are judged to be of an investment quality similar to A-rated fixed income obligations; that is, they are judged to possess many favorable investment attributes and are considered as upper-medium-grade investment vehicles. Fitch’s money market ratings are an assessment of the safety of invested principal and the ability to maintain a stable value of the fund’s shares. Ratings are based on an evaluation of several factors, including credit quality,diversification, and maturity of assets in the portfolio, as well as management and operation capabilities. Ratings are subject to change and do not remove market risk. For more information on credit ratings, visit standardandpoors.com, v3.moodys.com and fitchratings.com.
AninvestmentinmoneymarketfundsisneitherinsurednorguaranteedbytheFederalDepositInsuranceCorporationoranyothergovernment agency.Althoughmoneymarketfundsseektopreservethevalueofyourinvestmentat$1.00pershare,itispossibletolosemoney byinvestingin thesefunds.
This must be preceded or accompanied by a prospectus for the funds named. Income from municipal funds may be subject to the federal alternative minimum tax and state and local taxes.
ForInstitutional/InvestmentProfessionalUseOnly.NotforDistributiontothePublic.
Federated Investors, Inc.
Federated InvestorsTower
1001LibertyAvenue
Pittsburgh,PA 15222-3779
Contact us atFederatedInvestors.com orcall 1-800-341-7400.
41805 ( 8/12)
Federated Securities Corp., Distributor
Federated is a registered trademark ofFederated Investors, Inc.
2012 ©Federated Investors, Inc.
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
An Investor’s Guide to Understanding
Federated’s MoneyFund Management
It’sachallengingtimetobeaninvestor,soit’snaturalthatyoumaybeconcernedabout thesecurityofyourinvestments.BeassuredthatFederatedmoneymarketfundsare amongthemostconservativeofinvestments.
Formorethan38years,thenameFederatedhasbeensynonymouswithexperienceand integrityinmoneyfundmanagement.Duringatimeofhistoricvolatilityforthemoney markets,investorscanturntoFederatedfordiligentcreditanalysis,broaddiversification andtimetestedcashmanagementservices.
LeadingFromaPositionofStrengthandExperience
Specifically,Federatedmoneymarketfunds:
- Havealwayssoldandredeemedtheirsharesata$1.00netassetvalue(NAV).Federated hasneverinfusedcapitaltomaintainastable$1.00NAV.(Notethat,whileFederated moneymarketfundshaveneverbrokenthe$1.00statedprice,thereisnoguaranteethat suchpricestabilitywillbemaintainedinthefuture.)
- HoldonlythosesecuritiesthatmeasureuptoFederated’sintensiveinternalrating standards.Ourintensivecreditanalysisconsidersbutdoesnotrelyontheratingsgivenbynationallyrecognizedratingorganizationsortheirequivalents.
- StrictlycomplywithRule2a-7oftheInvestmentCompanyActof1940,which seekstolimittheexposurethatafundwouldhavetoanyoneissuerorguarantor ofsecurities.1
- Aremanagedbyseasonedprofessionalswhohaveworkedtogetherfornearly25years andoverseenourfundsthroughavarietyofbusinessandeconomiccycles.
AtFederated,weunderstandtheimportanceofprotectingwhatisimportanttoyouwhileyouinvesttowardyourfinancialgoals. Weinviteyoutolearnmoreaboutourstructured, transparentanddisciplinedinvestmentprocess.
SeekingtoOptimizePerformanceWithoutCompromisingLiquidity andStability
FewmanagerscanmatchFederated’scombinationofassetsize,breadthofexperienceand depthofstaff.Withnearly$275billion2 inmoneymarketassetsundermanagement,we bringkeyadvantagesinpricingandmarketaccesstoourclients.
NotFDIC Insured • May LoseValue • No Bank Guarantee
Ourobjectivesinmanagingcasharethreefold: topreserveprincipal,thefoundationoffinancial stability;tomaintaindailyliquiditysoclients canmeettheircashflowobligations;andto offerinvestors acompetitiveyield.
Wepursuetheseobjectivesthroughanunwavering adherenceto astringentcredit reviewprocess,the experienceofourlong-tenuredteamofmoneyfundmanagersandcontinuedinvestmentin technologythatsupportsourdecisionmaking.
![](https://capedge.com/proxy/425/0001318148-12-001307/image_037.jpg)
A ProcessBuiltonIntensiveCreditAnalysis
Managingmoneymarketfundsrequiresattentivenessto many factors, includingdailycashflows, longer-termcash flowtrendsinvariousrateenvironments, andoverallmarket dynamics. Westrivetoaddvalueinavarietyofwaysand havebuiltourreputationonsoundportfoliostructureand athoroughcreditreviewprocess.
Asillustratedbelow,everyissuerconsideredforFederated’s approved issuer list is subject to stringent creditreview, includingtheassignmentofacreditratingbyFederated,in additionto,andindependentof,third-partyevaluations.In additiontoqualityconsiderations,ourintensivesecurity selectionprocessinvolvescarefulevaluationofinterestrate trendsanddeterminationofmaturitystructures.
Federated’s Credit ReviewProcess
![](https://capedge.com/proxy/425/0001318148-12-001307/image_038.jpg)
Credit ratings pertain only to the securities in the portfolio and do not protect fund shares against market risk.
Wemanageourmoneymarketfundsin accordancetoSECRule2a-7
- Quality
- <3% of total assets in second-tier securities
- <0.5% of total assets in second-tier securities of a single issuer
- <45 days to maturity for any single second-tier security
- Liquidity
- Know your client
- <5% of total assets in illiquid securities
- >10% of total assets with daily liquidity
- >30% of total assets in weekly liquidity
- Stresstesting
- Repurchaseagreement
- Weightedaveragematurity(WAM)reduced from 90daysto 60days
- Weightedaveragelife(WAL)mustbe amaximumof120days
- Monthlyportfoliowebsitedisclosure
- RequiredMonthlyreportingto SEC
ThePeopleBehindtheProcess
ThededicatedresearchteamssupportingFederated’staxable andtax-freesectorscomprisesomeofthemostexperienced andknowledgeablepeopleinthebusiness.
EachFederatedanalystisassignedtoaparticularsector orproductarea, suchasBanks, ConsumerProducts, Government Agencies, Asset-BackedCreditProgramsand Manufacturingonthetaxableside, and VariableRate DemandNotes, MunicipalCommercialPaperandother typesofmunicipalsecuritiesonthetax-freeside, aswellas specifictypesofcreditorindustriesavailablewithinthat sector/area. Thisstructuregiveseveryanalystanin-depth understandingofthecompaniesinagivensector, the impactofmonetaryandfiscalpolicyonanindustry, andthe behaviorofeachsectorwithinacreditcycle. Italsoallows teammemberstodeveloprelationshipswithintheindustry that facilitateanunderstanding of company management.
The combination of the analysts’ focus on sector with theoverarchingwork of the credit committee creates an environment in which analysts have the freedom to do theirownresearch,but are compelled to present only their best ideas to their peers and to senior management. This ensures the integrity and quality of theresearch process.
Rounding out the taxable and tax-free teams are dedicated, experienced traders. Working closely together,Federated’s team of managers, analysts and traders support and implementFederated’s intensive creditresearch process with an objective to successfully manage cash across all market cycles.
TechnologyDeliversAddedSupport
AlthoughFederated’screditresearchteamprovidesthe foundationofourfundselectionandmanagementprocess, theirworkisthoroughlyintegratedandsupportedthroughFedPorts,Federated’sproprietarytradingandportfolio managementsystem.FedPortsisavitaltooltotheportfolio managerandprovidesapowerfulcompliancescreenand audittrail.
AnyportfolioconstraintsareprogrammedintoFedPortsbyproductandportfolio. Thesystemflagsallquestionable tradesrelativetoinvestmentpolicyandpreventstradesthatwouldrendertheportfoliooutofcompliance. This approachfocusesnotonlyongeneratingcompetitivereturns,butalsoonmanagingriskandprovidingtransparencytotheentireinvestmentprocess.
ComprehensiveCashManagementSolutions
Federated’s money market funds allowyou to pursuerelative safety, liquidity and competitive income across money market sectors.
- Taxablemoneymarketfunds—prime,government andtreasury.
- Municipal money market funds —various national and 14 state-specific funds. Income may be subject to federal alternative minimum tax and state and local taxes (AMT). Some funds are managed to avoid AMT.
In addition, we offer qualified clients a variety of taxable money market funds, other types of mutual funds, separate accounts3 and offshore funds (not available in all countries and not available for sale either to U.S. citizens or to persons in any other jurisdiction in which such offer is unlawful).
CountonFederatedforTotalSupport
Whetherit’sourbroadselectionofproducts,unwavering creditstandards,experiencedfundmanagement,state-of- the-arttechnologyortheefficienciesandpricingadvantage thataccompaniesourscale,Federatedcontinuallystrives toprovideadditionalvaluetoinvestors. Welookforwardto sharingthebenefitofourexperiencewithyou.
FederatedKnows...
Stability
Ranksasaleadingglobalinvestmentmanager, managingapproximately$360billioninassets,2delivering competitiveandconsistentresultssince1955andfostering growthbyreinvestinginthecompany
InvestmentSolutions
Offersbroadproductlinesspanningdomesticandinternationalequity, fixedincome, alternativeand moneymarketstrategieswiththegoaloflong-termconsistent, competitiveperformance
Diligence
Takesthelongview, believingthatdoingbusinesstherightwayovertimewillpresentopportunity forfuture growth
![](https://capedge.com/proxy/425/0001318148-12-001307/image_039.jpg)
Federated Investors, Inc.
Federated InvestorsTower
1001LibertyAvenue Pittsburgh, PA
15222-3779
Contact us atFederatedInvestors.com or call 1-800-341-7400.
39049 (7/12)
Federated Securities Corp., Distributor
Federated is a registered trademark ofFederated Investors, Inc.
2012 ©Federated Investors, Inc.
For more information about Federated’s cash management solutions and how they can help you pursue your financial goals, please contact your investment advisor.
For more complete information, visit FederatedInvestors.com or contact your Federated representative by calling 1-800-341-7400 for a summary prospectus or prospectus.You should consider the fund's investment objectives, risks, charges and expenses carefully before you invest. Information about these and other important subjects is in the fund's summary prospectus or prospectus which you should read carefully before investing.
Aninvestmentinmoneymarketfundsisneitherinsurednor guaranteedbytheFederalDepositInsuranceCorporationorany othergovernmentagency.Althoughmoneymarketfundsseekto preservethevalueofyourinvestmentat$1.00pershare,itis possibletolosemoneybyinvestinginthesefunds.
Diversificationdoesnotassureaprofitnorprotectagainstaloss.
Securitiesareconsideredtobe“firsttier”asfollows:Standard&Poor’s:A-1+andA-1,basedon theobligor’scapacitytomeetitsfinancialcommitmentontheobligation;Moody’s:P-1,based ontheissuer’sabilitytorepayshort-termobligations;Fitch:F-1+andF-1,basedontheissuer’s liquiditynecessarytomeetfinancialcommitmentsinatimelymanner.
| 1 | Rule2a-7isaruleundertheInvestmentCompanyActof1940whichpermitsamoneymarket fundtouseamortizedcosttostabilizethevalueofitssharesat$1.00.Rule2a-7imposesvarious restrictionsonthemoneymarketfund'sportfolio,includingrestrictionsrelatedtodiversification, andcreditqualityandmaturityofportfoliosecurities. |
| 3 | SeparatelymanagedaccountsareavailablethroughFederatedInvestmentCounseling,aregistered investmentadvisor. |
Current and future portfolio holdings are subject to risk.
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
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Corporate Overview
June30,2012
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QuarterlyHighlights
| • | Increasedequityandfixed-incomeassetsby$1.4billionduring Q22012toarecord$90billion |
| • | Producedrecordgrosssalesinequityandfixed-incomefundsof$7.2billion inQ22012 |
| • | Reached$355.9billioninmanagedassetsat6/30/12,up$6.5billion or2percentfrom$349.4billionreportedat6/30/11 |
| • | Continuedtoseedemandforhigh-quality,income-orientedinvestmentstrategies |
| • | Generated52percentofQ22012revenuefromequityandfixed-incomeassets |
| • | Declared a quarterly dividend of $0.24 per share |
Federatedknows
Stability
| • | Ranksasaleadingglobalinvestmentmanager,managing$355.9billioninassets,deliveringcompetitiveandconsistentresultssince1955andfosteringgrowthby reinvestinginthecompany |
InvestmentSolutions
| • | Offersbroadproductlinesspanningdomesticandinternationalequity,fixed-income,alternativeandmoneymarketstrategieswiththegoalof long-term,consistent,competitiveperformanceovertime |
Diligence
| • | Takesthelongview,believingthatdoingbusinesstherightwayovertimewill presentopportunityforfuturegrowth |
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Federated managed $8.1 billion of fixed-income assets in liquidation portfolios as of June 30, 2012.
InvestorInformation
NYSE:FII
Q22012high/lowstockprice: $22.89/$18.75
Shares Outstanding:104.1 million
Market Capitalization: $2.3 billion
IndexListing: S&P500
CompanyContact
Investor Relations
(412) 288-1934
(800) 245-0242 x 1934
investors@federatedinv.com
FederatedInvestors.com
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1 Income may be subject to the federal alternative minimum tax and state and local taxes.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling and Federated MDTA LLC, each a registered investment advisor.
For complete financial results please see Federated’s Second Quarter Earnings Press Release dated July 26, 2012 and SEC Filings on Form 8-K, 10-Q and 10-K for further information. Links to each document are available on the About Federated section ofFederatedInvestors.com.
Investors should carefully consider the fund’s investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us or visit FederatedInvestors.com. Please carefully read the summary prospectus or the prospectus before investing.
Past performance is no guarantee of future results.
An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds.
Mutual funds are subject to risks and fluctuate in value.
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
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Reasons to Own
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Capturing Opportunities Across the Bond Market
For more than two decades, Federated Total Return Bond Fund has helped investors fortify their portfolios with an authentic core bond holding. Its diversified, disciplined and flexible approach seeks total return in ever-changing market environments.
Broad Bond Market Exposure
Fluctuating market conditions affect different bond market sectors differently. Federated Total Return Bond Fund offers a multi-sector approach and the versatility to quickly pursue opportunities by making security and sector selections in sync with a changing investment climate.
Well-Equipped to Seek Opportunities
| · | The fund represents the best thinking of Federated’s fixed-income managers, analysts and traders who work collectively to arrive at an optimum combination of bonds for the portfolio. |
| · | Fund management has a decades-long track record navigating through numerous market and economic cycles. |
Pursues Higher Total Return with Less Risk
The fund’s risk management process combines top-down evaluation of macroeconomic events with intensive bottom-up monitoring of individual securities and sectors. The continuous assessment of risk versus return at each decision point seeks to ensure that consistent value is added while managing performance volatility.
During Challenging Markets, the Fund Has Consistently Outperformed Its Peers
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Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, and for after-tax returns, contact us or visit FederatedInvestors.com. Performance for the fund does not reflect the maximum sales charge of 5.5% for Class A Shares. If reflected, such charges would reduce the performance quoted. See the prospectus for other fees and expenses that apply to a continued investment in the fund.
Source: Morningstar Direct
Investors should carefully consider the fund’s investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us or visit FederatedInvestors.com. Please carefully read the summary prospectus or the prospectus before investing.
Indexes are unmanaged, and it is not possible to invest directly into an index.
Not FDIC Insured • May Lose Value • No Bank Guarantee
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All information as of 6/30/2012 unless otherwise noted.
Sector Weightings (%)
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Quality Breakdown (%)*
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Key Investment Team Members
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Experienced, tenured fixed-income management team averages more than 20 years of industry experience; over 15 years together at Federated.
Nasdaq Symbols:
Class A Shares (A):TLRAX
Class C Shares (C):TLRCX
Institutional Shares (IS):FTRBX
Fund Characteristics:
Portfolio Assets:$7.4 billion
Benchmark:Barclays U.S. Aggregate Index
Weighted Average Effective Maturity:6.0 years
Weighted Average Effective Duration:4.1 years
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Performance data quoted represents past performance, which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, and for after-tax returns, contact us or visit FederatedInvestors.com. Maximum Offering Price figures reflect the maximum sales charge of 4.5% for Class A Shares. See the prospectus for other fees and expenses that apply to a continued investment in the fund. Total return would have been lower in the absence of expense waivers or reimbursements.
* The ratings agencies that provided the ratings are Standard and Poor’s, Moody’s and Fitch. When ratings vary, the highest rating is used. Credit ratings of A or better are considered to be high credit quality; credit ratings of BBB are good credit quality and the lowest category of investment grade; credit ratings BB and below are lower-rated securities (“junk bonds”); and credit ratings of CCC or below have high default risk. The credit quality breakdown does not give effect to the impact of any credit derivative investments made by the fund.
** The Adviser and its affiliates have voluntarily agreed to waive their fees and/or reimburse expenses so that total annual fund operating expenses (excluding acquired fund fees and expenses of 0.01% and expenses allocated from affiliated partnerships, if any) paid by Class A, B, C, R, IS and SS Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.90%, 1.45%, 1.45%, 1.10%, 0.35% and 0.65% respectively, up to but not including the later of 2/1/13 or the date of the fund’s next effective prospectus.
A Word About Risk
High-yield, lower-rated securities generally entail greater market, credit/default and liquidity risks, and may be more volatile than investment-grade securities.
Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.
The value of some mortgage-backed securities may be particularly sensitive to changes in 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.
International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.
Definitions
Weighted average effective maturity is the average time to maturity of debt securities held in the fund.
Weighted average effective duration is a measure of 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.
Barclays U.S. Aggregate Bond Index is an unmanaged index composed of securities from the Barclays Government/Corporate Bond Index, Mortgage-Backed Securities Index and the Asset-Backed Securities Index. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization. Indexes are unmanaged and cannot be invested in directly.
Holdings percentages are based on net assets at the close of business on 6/30/12 and may not necessarily reflect adjustments that are routinely made when presenting net assets for formal financial statement purposes. Because this is a managed portfolio, the investment mix will change.
Morningstar Category identifies funds based on their actual investment styles as measured by their underlying portfolio holdings over the past three years. If the fund is less than three years old, the category is based on the life of the fund. ©2012 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779, 1-800-341-7400, FederatedInvestors.com
Federated Securities Corp., Distributor
Federated is a registered trademark of Federated Investors, Inc. 2012 ©Federated Investors, Inc.
G42880-03 (7/12)
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
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2nd Quarter 2012
Product Profile
FUND FACTS
Inception Date
Class A Shares: 8/16/2001
Institutional Shares: 10/1/1996
Benchmark
Barclays U.S. Aggregate Bond Index
Morningstar Category
Intermediate-Term Bond
Lipper Category
Intermediate Investment Grade Debt Funds
Fund Assets
$7.4 billion
Ticker Symbols
Institutional Shares – FTRBX
Service Shares – FTRFX
Class A Shares – TLRAX
Class B Shares – TLRBX
Class C Shares – TLRCX
Class R Shares – FTRKX
Portfolio Statistics
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All information as of 6/30/2012 unless otherwise noted.
PRODUCT HIGHLIGHTS
| • | Invests in a broad, strategic mix of bond sectors: primarily U.S. government and investment-grade corporate; high-yield allocation limited to 25%. |
| • | Focuses on sectors management believes will benefit from anticipated changes in economic and market conditions. |
| • | Serves as a core multisector bond holding. |
PERFORMANCE
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Performance quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, and for after-tax returns, contact us or visit FederatedInvestors.com. Maximum Offering Price figures reflect the maximum sales charge of 4.5% for Class A Shares.See the prospectus for other fees and expenses that apply to a continued investment in the fund.
* The Adviser and its affiliates have voluntarily agreed to waive their fees and/or reimburse expenses so that total annual fund operating expenses (excluding acquired fund fees and expenses of 0.01% and expenses allocated from affiliated partnerships, if any) paid by Class A, B, C, R, IS and SS Shares (after the voluntary waivers and/or reimbursements) will not exceed 0.90%, 1.45%, 1.45%, 1.10%, 0.35% and 0.65% respectively, up to but not including the later of 2/1/13 or the date of the fund’s next effective prospectus.
Federated Total Return Bond Fund
Not FDIC Insured • May Lose Value • No Bank Guarantee
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INVESTMENT PROCESS
A proven investment process featuring multiple sources of alpha and broad bond market access
Federated’s belief is that optimum results in fixed income products are best achieved through traditional value-based approach, using fundamental analysis with teams focused by sector to extract value from each step of the process.
Federated’s fixed income investment process, with a 40-year heritage, combines top-down decision making with bottom-up security selection to provide a diversified, risk-managed portfolio. Teams make key decisions on various fixed income factors referred to as alpha pods. The alpha pod process consists of duration management, sector allocation, yield curve strategy and currency management. The culmination of this process occurs at the security selection level.
Duration Management
The duration decision team establishes the firm’s cyclical interest rate outlook and manages portfolio duration relative to the fund’s benchmark – typically +/- 20%.
Sector Allocation
The sector allocation team reviews spread relationships among sectors to identify relative value opportunities against the backdrop of Federated’s economic outlook. The economic overlay determines if the spread relationships are reasonable, while sector range limits are set against the fund’s benchmark.
Yield Curve Strategy
The yield curve decision team makes recommendations for positioning the portfolio along the yield curve. The team uses yield curve metrics to implement biases with regard to attractiveness and expected yield curve changes. Federal Reserve policy, inflation expectations and convexity/yield trade-off are among the factors used in this analysis.
Currency Management
The currency management team reviews variables such as interest rate differential, growth expectations and U.S. current account and fiscal conditions when determining non-dollar denominated fixed income exposure for the portfolio.
Security Selection
Each decision team delivers a model list of securities. Processes specific to each industry sector are then used to select the optimum securities for the fund’s portfolio.
Risk Management
Risk is managed during the portfolio construction process, with the portfolio then evaluated using attribution analysis. This feedback loop ensures continuous risk management and tests the assumptions made at each of the alpha decision points.
Duration Management
The portfolio is positioned to benefit from our interest rate outlook based on a thorough economic analysis of:
Sector Allocation
The portfolio is overweighted or underweighted relative to the benchmark after an intensive review of:
| • | Historical spread analysis |
Yield Curve Strategy
The portfolio is positioned along the yield curve based on assessment of:
Currency Management
The portfolio may gain exposure to non-dollar fixed income based upon:
| • | U.S. current account/fiscal conditions |
| • | Interest rate differential |
Security Selection
A model list of securities is identified through analysis of:
| • | Structural characteristics |
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INVESTMENT REVIEW
Market Overview
Risk aversion returned to the financial markets in the second quarter of 2012 for three predominant reasons: first, the ongoing European saga spread from Greece into Spain, as Spanish yields moved to historic highs, reflecting anxiety over the general European fiscal debt problem; second, the U.S. data trend steadily moved toward a much slower growth pattern, calling into question the sustainability of the recovery in the second half of 2012; third, China now appears to be in the midst of a growth slowdown. Chinese growth, as of the end of the second quarter, was in and around the 7 to 8 percent growth range, which is down from double digits over the past decade or more.
The immediate result of these three major developments was a large-scale flight to quality into the U.S. Treasury market and U.S. dollar-based assets in the second quarter. Interest rates fell across the yield curve, with most of the action occurring in the longer maturities. As several points of reference, five-year Treasuries were down 0.32% in yield over the course of the second quarter, while 30-year Treasuries were down 0.59%, no doubt in part due to the Federal Reserve’s “Operation Twist” program of selling short and buying long dated maturities.
In the second quarter of 2012, the easiest place to look for risk coming off was the stock market. The Standard & Poor’s 500 Index was down approximately 3.3% in total return. In the bond market, the higher quality/lower yielding bonds actually had the best returns during this period, significantly outperforming the medium- to lower-quality bonds. As several points of reference, the Barclays U.S. Treasury Index returned 2.83%. That compares to the Barclays Aggregate Bond Index return of 2.06%, the Barclays U.S. Corporate High Yield Bond Index return of 1.83%, and the Barclays Emerging Market Bond Index return of 1.37% in the second quarter.
Performance
Federated Total Return Bond Fund Institutional Shares returned 1.54% for the second quarter of 2012, underperforming its benchmark, the Barclays U.S. Aggregate Bond Index, which returned 2.06%. The primary reasons for the relative underperformance were a duration position that was short of its benchmark target for the entire quarter in a period where interest rates fell, a sector allocation positioning that was overweight to credit sectors and underweight to pure Treasuries and agencies, again in a market where higher-quality outperformed lower quality. Security selection brought somewhat mixed results, with positive security selection in the high yield sector and negative security selection from our mortgage backed securities position.
Performance quoted represents past performance which is no guarantee of future results. Investment return and principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, and for after-tax returns, contact us or visit FederatedInvestors.com.
Positioning and Strategy
The fund exited the second quarter of 2012 with a duration position that remained short of its benchmark and overweight to the credit sectors in a slight yield-curve steepening strategy, owning less of the very short and very long maturities in favor of owning more of the middle part of the yield curve.
See disclosure section for important disclosures and definitions.
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TOP HOLDINGS
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CATEGORY RANKINGS
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Portfolio composition is based on net assets at the close of business on 6/30/12 and may not necessarily reflect adjustments that are routinely made when presenting net assets for formal financial statement purposes. Because this is a managed portfolio, the investment mix will change.
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Reasons to Own this Fund
Broad bond market exposure
Fluctuating market conditions affect different bond market sectors differently. Federated Total Return Bond Fund offers a multi-sector approach and the versatility to quickly pursue opportunities by making security and sector selections in sync with a changing investment climate.
Well-equipped to seek opportunities
| • | Fund management has a decades-long track record navigating through numerous market and economic cycles. |
| • | The fund represents the best thinking of Federated’s fixed income managers, analysts and traders who work collectively to arrive at an optimum combination of bonds for the portfolio. |
Pursues higher total return with less risk
The fund’s risk management process combines a top-down evaluation of macroeconomic events with intensive bottom-up monitoring of individual securities and sectors. The continuous assessment of risk versus return at each decision point seeks to ensure that consistent value is added while managing performance volatility.
FEDERATED KNOWS...
Stability
Ranks as a leading global investment manager, managing approximately $355 billion* in assets, delivering competitive and consistent results since 1955 and fostering growth by reinvesting in the company
Investment Solutions
Offers broad product lines spanning domestic and international equity, fixed income, alternative and money market strategies with the goal of long-term, consistent, competitive performance
Diligence
Takes the long view, believing that doing business the right way over time will present opportunity for future growth
* As of 6/30/2012
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Past performance is no guarantee of future results.
1The 30-day yield for Class A Shares is calculated by dividing the net investment income per share for the 30 days ended on the date of calculation by the maximum offering price per share on that date. The figure is compounded and annualized. In the absence of temporary expense waivers or reimbursements, the 30-day yield would have been 2.62% for Class A Shares. Yields for other classes will vary.
2The ratings agencies that provided the ratings are Standard & Poor’s, Moody’s and Fitch. When ratings vary, the highest rating is used. Credit ratings of A or better are considered to be high credit quality; credit ratings of BBB are good credit quality and the lowest category of investment grade; credit ratings BB and below are lower-rated securities (“junk bonds”); and credit ratings of CCC or below have high default risk. The credit quality breakdown does not give effect to the impact of any credit derivative investments made by the fund.
A WORD ABOUT RISK
Mutual funds are subject to risks and fluctuate in value.
High-yield, lower-rated securities generally entail greater market, credit/default and liquidity risks, and may be more volatile than investment-grade securities.
Bond prices are sensitive to changes in interest rates and a rise in interest rates can cause a decline in their prices.
The value of some mortgage-backed securities may be particularly sensitive to changes in 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.
DEFINITIONS
Barclays U.S. Aggregate Bond Indexis an unmanaged index composed of securities from the Barclays Government/Corporate Bond Index, Mortgage-Backed Securities Index and the Asset-Backed Securities Index. Total return comprises price appreciation/depreciation and income as a percentage of the original investment. Indices are rebalanced monthly by market capitalization.
Indexes are unmanaged and cannot be invested in directly.
Betameasures a portfolio’s volatility relative to the market. A Beta greater than 1.00 suggests the portfolio has historically been more volatile than the market as measured by the funds’ benchmark. A Beta less than 1.00 suggests the portfolio has historically had less volatility relative to the market.
Alphashows how much or how little return is generated, given the risk a portfolio takes. A portfolio with an Alpha greater than 0 has earned more than expected given its Beta - meaning the portfolio has generated excess return without increasing risk. A portfolio with a negative Alpha is producing a lower return than would be expected given its risk.
Correlationis the degree to which one variable (here, the fund’s returns) fluctuates relative to another (the returns of the fund’s benchmark). Correlation ranges from 1.0 when two variables move identically in the same direction, to -1.0 when two variables move identically in the opposite direction.
Standard Deviationis a historical measure of the variability of returns relative to the average annual return. A higher number indicates higher overall volatility.
R-Squaredindicates what percentage of a portfolio’s movement in performance is explained by movement in performance of the market. R-squared ranges from 0 to 100, and a score of 100 suggests that all movements of a portfolio’s performance are completely explained by movements in the market as measured by the fund’s benchmark.
Weighted Average Effective Maturityis the average time to maturity of debt securities held in the fund.
Weighted Average Effective Durationis a measure of a security’s price sensitivity to changes in interest rates. Securities with longer duration are more sensitive to changes in interest rates than securities of shorter durations.
Weighted Average Couponis the weighted average interest payment of all individual debt securities within a portfolio.
Weighted Average Yield to Maturityis used to determine the rate of return an investor would receive if a long-term, interest-bearing investment, such as a bond, is held to its maturity date. It takes into account purchase price, redemption value, time to maturity, coupon yield and the time between interest payments.
Weighted Average Bond Priceis the weighted average of all individual bond prices within a portfolio.
Barclays Emerging Markets Bond Indextracks total returns for externalcurrency-denominated debt instruments of the emerging markets: Brady bonds, loans, Eurobonds, and U.S. dollar-denominated local market instruments. Countries covered are Argentina, Brazil, Bulgaria, Ecuador, Mexico, Morocco, Nigeria, Panama, Peru, the Philippines, Poland, Russia, and Venezuela.
Barclays U.S. Credit Bond Indexis composed of all publicly issued, fixed-rate, nonconvertible, investment-grade corporate debt. Issues are rated at least Baa by Moody’s Investors Service or BBB by Standard & Poor’s, if unrated by Moody’s. Collateralized Mortgage Obligations (CMOs) are not included. Total return comprises price appreciation/depreciation and income as a percentage of the original investment.
Barclays U.S. Treasury Indexis an unmanaged index of prices of U.S. Treasury bonds with maturities of one to thirty years. It is not possible to invest directly in an index.
Barclays High-Yield Bond Indexis an unmanaged index that includes all fixed income securities having a maximum quality rating of Ba1, a minimum amount outstanding of $150 million, and at least 1 year to maturity.
RATINGS AND RATING AGENCIES
Lipper Categories: Data Source: Lipper, A Reuters Company. Copyright 2012© Reuters. All rights reserved. Any copying, republication or redistribution of Lipper content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Lipper. Lipper shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
Morningstar Category identifies funds based on their actual investment styles as measured by their underlying portfolio holdings over the past three years. If the fund is less than three years old, the category is based on the life of the fund. ©2012 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no
guarantee of future results.
This must be preceded or accompanied by a prospectus.
Federated is a registered trademark of Federated Investors, Inc. 2012 ©Federated Investors, Inc.
![](https://capedge.com/proxy/425/0001318148-12-001307/image_083.jpg)
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
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Reasons to Own
Federated Strategic Value Dividend Fund
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A Focus on Dividend Growth
Federated StrategicValue DividendFund offers a portfolio ofcarefully selected high-dividend-paying stocks that offer the potential for reliable monthly income, broad diversification among income sectors and inflation protection through both dividend and equity growth opportunities.
The High-Dividend Advantage
An important potential benefit of dividend investing is that returns are linked tocash payments. Dividend income may provide a distinct advantage when fixed-income yields are low, the outlook for inflation is uncertain and the broader market is volatile.
A Portfolio Built One Dividend-Paying Stock at a Time
Fund managersWalter Bean and DanielPeris bring more than 55 years of collective experience to building a portfolio of40-50 stocks ranked according to their dividend yield, dividend growth, valuation, strong financials and performance regardless of market conditions.
A Balance of Risk and Reward
Dividend-paying companies:
| § | Tend to be solid and wellestablished |
| § | Issuestockwhosepriceshavetypicallybeenless volatilethannon-dividend-payingcompanies |
| § | Have historically paid a sizeable portion of their returns incash and, as a result, may help cushion a portfolio’s downside |
The Fund Delivered Higher Yield and Opportunities for Income
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Yields and InterestRates as of 6/30/2012.
6-MonthCD and 5-YearTreasury Bond figures are annualized. Index performance is for illustrative purposes only and not representative of an actual investment.
By contrast, it does not reflectsales charges or expenses associated with investing in a mutual fund. Investmentscannot be made directly in an index.
A Certificate of Deposit (CD) is a savings certificate entitling the bearer to receive interest. ACD bears a maturity date and a specified fixed interest rate and can be issued in any denomination.CDs, unlike many other investments including mutual funds, areFDIC insured and may offer fixed rates of return. U.S. government bonds andTreasury securities, unlike stocks and corporate bonds, are guaranteed as to the payment of principal and interest by the U.S. government, if held to maturity. Interest income earned on these bonds is exempt from state and local income taxes and postponed from federal taxes until redemption or maturity. In return for their higher growth potential, stock prices are more volatile than those of bonds,CDs orTreasury securities. Mutual fund principal value will fluctuate with market conditions.
Performance quoted represents past performance, which is no guarantee of future results. Investment return and principal value fluctuate so that an investor’s shares, when redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than what is stated. For performance current to the most recent month-end and after-tax returns, visit FederatedInvestors.com or call 1-800-341-7400. Performance for Class A Shares at NAV does not reflect the maximum sales charge of 5.5%.
Sources:Federal Reserve,Lipper, Inc.,Federated Investors, Inc., Bloomberg
Must be preceded or accompanied by a prospectus.
NotFDICInsured•MayLoseValue•NoBankGuarantee
Federated Strategic Value Dividend Fund
All information as of 6/30/2012 unless otherwise noted.
SectorWeightings (%)
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Top Holdings (%)
AT&T, Inc. 4.5
Verizon Communications 4.4
AstraZenecaPLC 4.2
Altria Group, Inc. 4.1
Vodafone GroupPLC 4.1
Lilly (Eli) & Co. 4.0
Royal Dutch ShellPLC, Class B 4.0
National GridPLC 3.7
Duke Energy Corp. 3.6
Kimberly-Clark Corp. 3.6
Key Investment Team Members
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Walter Bean,CFA
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DanielPeris, Ph.D.,CFA
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Deborah Bickerstaff
Investment team of industry veterans provides valuable insights and a consistent investment thesis for investors seeking income paired with potential dividend growth.
NasdaqSymbols:Class AShares (A):SVAAX |Class C Shares (C):SVACX |Institutional Shares (IS):SVAIX
FundCharacteristics:Portfolio Assets: $6.4 billion |Benchmark: Dow Jones Select Dividend Index |DividendsPaid: Monthly
Average Annual Total Returns Versus Benchmark (%)Performance shown is before tax.
ExpenseRatio* Performance Cumulative Since Before After Inception 3 Month 1 Year 5 Year InceptionWaiversWaivers |
A (Net AssetValue) 3/30/05 3.98 10.73 -0.10 5.12 1.25 1.06 |
A (Maximum OfferingPrice) 3/30/05 -1.70 4.69 -1.22 4.31 1.25 1.06 |
IS 3/30/05 4.02 10.96 0.17 5.41 0.95 0.81 |
Benchmark 1.41 10.50 -0.21 N/A N/A N/A |
Performance quotedrepresents past performance, which is no guarantee of futureresults. Investmentreturn and principalvalue will fluctuate so that an investor’s shares, whenredeemed, may beworth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the mostrecent month-end, andfor after-taxreturns, contact us or visitFederatedInvestors.com. Maximum OfferingPrice figuresreflect the maximum sales charge of 5.5%for Class A Shares.See the prospectus for other fees and expenses that apply to a continued investment in the fund.
*The Adviser and its affiliates havevoluntarily agreed towaive theirfees and/orreimburse expenses so that total annual fund operating expenses (excluding acquired fundfees and expenses of 0.01%) paid by Class A andIS Shares (after thevoluntarywaivers and/orreimbursements) will not exceed 1.05% and 0.80%respectively, up to but not including the later of 01/01/13 or the date of the fund’s next effective prospectus.
A Word About Risk
Funds whose investments are concentrated in a specific industry, sector or geographic area may be subject to a higher degree of market risk than funds whose investments are diversified.
International investing involves special risks including currency risk, increased volatility, political risks and differences in auditing and other financial standards.
There are no guarantees that dividend-paying stocks will continue to pay dividends. In addition, dividend-paying stocks may not experience thesamecapital appreciation potential as non-dividend-paying stocks.
Definitions
The30-day yield for Class A Shares iscalculated by dividing the net investment income per share for the30 days ended on the date ofcalculation by the maximum offering price per share on that date.The figure is compounded and annualized. In the absence of temporary expense waivers or reimbursements, the30-day yield would have been 3.09% for Class A Shares.Yields for other classes will vary.
The holdings percentages are based on net assets at the close of business on 6/30/12 and may not necessarily reflect adjustments that are routinely made when presenting net assets for formal financial statement purposes. Because this is a managed portfolio, the investment mix will change.
Dow Jones Select Dividend Index universe is defined as all dividend-paying companies in the Dow Jones U.S.Total Market Index that have a non-negative historical five-year dividend-per-share growth rate, a five-year average dividend earnings-per-share ratio of less than or equal to60%, and three-month average daily trading volume of 200,000 shares. Current index components are included in the universe regardless of their dividend payout ratio.The Dow Jones U.S.Total Market Index is a rule-governed, broad-market benchmark that represents approximately 95% of the U.S. marketcapitalization. Indexes are unmanaged and cannot be invested in directly.
LipperAverages represent the average yield reported by all mutual funds designated byLipper, Inc. as falling into the respectivecategories indicated and do not reflectsales charges. Data Source:Lipper, A Reuters Company. Copyright 2012© Reuters. All rights reserved. Any copying, republication or redistribution ofLipper content, including bycaching, framing or similar means, is expressly prohibited without the prior written consent ofLipper.Lipper shall not be liable for any errors or delays in the content, or for any actionstaken in reliance thereon.
S&P500 Index is an unmanagedcapitalization-weighted index of500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of500 stocks representing all major industries.
Federated InvestorsTower, 1001LibertyAvenue, Pittsburgh,PA 15222-3779, 1-800-341-7400,FederatedInvestors.comG42880-02 (7/12)
Federated Securities Corp., Distributor Federated is a registered trademark of Federated Investors, Inc.2012 ©Federated Investors, Inc.
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
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Stability
Investment Solutions
Diligence
Federated Overview and Talking Points for Trustmark
For Institutional/Investment Professional Use Only.Not for Distribution to the Public.
12-45237 (8/12)
About Federated Investors, Inc.
FIRM PROFILE
History of Quality and Innovation
| · | Founded and headquartered in Pittsburgh PA, 1955 |
| · | Offices in New York, Boston, Dublin, Frankfurt and London |
| · | 1,300+ employees worldwide including 219 investment professionals and 79 Chartered Financial Analysts |
| · | Pioneer of money market and fixed income funds |
Publicly Traded, S&P 500 Firm
| · | Employees share in approximately 20% of firm’s ownership |
Investment Management Singular Focus
| · | Committed to delivering long-term outperformance |
| · | Strategies utilize risk-managed process and maintain style consistency |
Well Resourced Investment Teams
| · | Experienced specialized teams committed to delivering long term outperformance |
| · | Deep historical commitment to proprietary research |
| · | Majority of investment professionals’ compensation directly tied to performance |
$355.9 BILLION IN AUM
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*Includes $8.1 billion in liquidation portfolios as of 6/30/12
FEDERATED KNOWS…
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STABILITY
Ranks as a leading global investment manager, managing approximately $355 billion* in assets, delivering competitive and consistent results since 1955 and fostering growth by reinvesting in the company.
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INVESTMENT SOLUTIONS
Offers broad product lines spanning domestic and international equity, fixed income, alternative and money market strategies with the goal of long-term consistent, competitive performance.
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DILIGENCE
Takes the long view, believing that doing business the right way over time will present opportunity for future growth.
*Asset breakdown as of 6/30/12
For Institutional/Investment Professional Use Only. Not for Distribution to the Public.
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Federated Fund Talking Points –Money Market Funds
Federated Prime Obligations Fund
| · | Pursues current income consistent with stability of principal. |
| · | Invests primarily in short-term, high-quality, fixed-income securities issued by banks, corporations and the U.S. government, rated in the highest short-term category or of comparable quality. |
| · | Invests solely in domestic sourced securities. |
| · | Holds AAAm, Aaa-mf and AAAmmf ratings from Standard & Poor’s, Moody’s and Fitch, respectively. |
| · | 100% First-tier securities. |
| · | On National Association of Insurance Commissioners (NAIC) List.* |
| · | Gives investors more time to complete daily cash processing and initiate late-day deposit transactions through 5 p.m. EST cut-off time for purchases and redemptions. |
Federated U.S. Treasury Cash Reserves**
| · | Pursues current income consistent with stability of principal and liquidity. |
| · | Invests exclusively in short-term U.S. Treasury securities. |
| · | Does not invest in repurchase agreements. |
| · | Holds AAAm and Aaa-mf ratings from Standard & Poor’s and Moody’s, respectively. |
| · | On National Association of Insurance Commissioners (NAIC) List.*** |
| · | Income may be exempt from state income taxes, depending on individual state tax laws. |
**Income is subject to federal income tax.
Institutional Sales Material. Not to be reproduced or shown to the public.
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Federated Fund Talking Points –Fixed Income Funds
Federated Total Return Bond Fund
| · | Invests in a broad, strategic mix of bond sectors: primarily U.S. government and investment-grade corporate; high-yield allocation limited to 25%. |
| · | Focuses on sectors management believes will benefit from anticipated changes in economic and market conditions. |
| · | Serves as a core multi sector bond holding. |
Federated U.S. Government Securities Fund: 1-3 Years
| · | Invests primarily in short-term obligations of the U.S. government and its agencies and instrumentalities. |
| · | Features a track record of more than 25 years. |
Institutional Sales Material. Not to be reproduced or shown to the public.
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Federated Fund Talking Points –Equity Funds
Federated Capital Appreciation Fund
| · | Pursues capital appreciation. |
| · | Invests primarily in growth and value stocks of large-and mid-cap U.S. companies. |
| · | Adjusts allocations between growth and value stocks and determines sector weightings using, among other things, fundamental top down macro analysis to determine anticipated economic and investment conditions. |
| · | Serves as a core large blend stock holding. |
| · | Features a 35-year track record. |
Federated Mid Cap Growth Strategies Fund
| · | Pursues capital appreciation. |
| · | Invests primarily in domestic stocks of midcap companies with positive growth characteristics, selected through an intensive, bottom-up process. |
| · | Offers the potential for greater growth than more conservative large-cap stocks, and less volatility than more aggressive small-cap stocks. |
Federated Strategic Value Dividend Fund
| · | Pursues income and long-term capital appreciation. |
| · | Invests primarily in high-yielding stocks of undervalued companies positioned to increase their dividends over time. |
| · | Seeks a substantially higher-than-market dividend yield and a growing stream of income to offset inflation. |
Institutional Sales Material. Not to be reproduced or shown to the public.
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Disclosures
| · | Mutual fund investing involves risk. Principal loss is possible. Diversification does not guarantee a profit or protect against loss. |
| · | An investment in money market funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these funds. |
| · | Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices. |
| · | Investors should carefully consider the fund's investment objectives, risks, charges and expenses before investing. To obtaina summary prospectus or prospectus containing this and other information, contact us or view the prospectus provided on this website. Please carefully read the summary prospectus or prospectus before investing. |
| · | *The Federated Prime Obligations Fund is on the National Association of Insurance Commissioner’s list as a Class 1 listing. This designation denotes that the fund meets certain quality and pricing guidelines such as: a rating of A or better by a Nationally Recognized Statistical Rating Organization (NRSRO), maintain a constant NAV $1.00 at all times, allow a maximum 7 day redemption of proceeds, invest 95% in US government securities or securities rated in the highest short-term rating category by an NRSRO, or unrated securities determined by the fund’s board to be of comparable quality or other registered money market funds or collateralized repurchase agreements with the remaining 5% in Second Tier securities from Rule 2a-7. This is subject to an annual review. |
| · | ***The Federated U.S. Treasury Cash Reserves is on the National Association of Insurance Commissioner’s list as a U.S. Direct Obligations/Full Faith & Credit listing. This designation denotes that the fund meets certain quality and pricing guidelines such as: a rating of AAA or Aaaby a Nationally Recognized Statistical Rating Organization (NRSRO), maintain a constant NAV $1.00 at all times, allow a maximum 7 day redemption of proceeds, invest 100% in US government securities. This is subject to an annual review. |
Institutional Sales Material. Not to be reproduced or shown to the public.
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Disclosures (continued)
| · | A money market fund rated AAAmby Standard & Poor’s is granted after evaluating a number of factors, including credit quality, market price, exposure and management. Money market funds rated Aaa-mf by Moody’s are judged to be of an investment quality similar to Aaa-rated fixed income obligations, that is, they are judged to be of the best quality. Fitch’s money market fund ratings are an assessment of the safety of invested principal and the ability to maintain a stable market value of the fund’s shares. For more information on credit ratings, visit standardandpoors.com, v3.moodys.com and fitchratings.com. |
| · | Ratings are subject to change and do not remove market risk. |
| · | Federated Securities Corp., Distributor |
Institutional Sales Material. Not to be reproduced or shown to the public.
![](https://capedge.com/proxy/425/0001318148-12-001307/image_108.jpg)
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.
Filed by: Federated Equity Funds
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Strategic Dividend Fund, Large Cap Equity Fund, Leaders Equity Fund, Mid Cap Equity Fund, each a portfolio of the Performance Funds Trust
Subject Company Commission File No. 811-0660
August 20, 2012
Name
Address
Address
Account Number
Dear Name:
Thank you for your continued investment in the Performance Family of Mutual Funds. We would like to notify you of an upcoming change in your Performance Funds investment and Individual Retirement Account (IRA). Pending shareholder approval, on September 21, 2012 your Performance Fund(s) will be reorganized into Federated Fund(s) and you will receive shares of the Federated Fund(s) in exchange for your Performance Fund(s).
Also, simultaneous with the reorganization, Fifth Third Bank will resign as the custodian of your IRA and State Street Bank and Trust Company will be the new custodian. This change of custodian does not require any action on your part.
You will receive additional information from the Federated Funds and/or State Street Bank and Trust Company regarding your IRA after the reorganization has occurred.
Due to the complexities of the laws governing distributions from IRAs, consult your tax advisor regarding proper tax planning with respect to the treatment of any distributionfrom your IRA.
If you do not want to participate in the reorganization, you may redeem your investment in the Performance Funds. Please call 1-800-737-3676 or contact your financial consultant to discuss alternatives or for any questions you may have regarding your account or this reorganization.
Sincerely,
Performance Funds
A prospectus/proxy statement with respect to the proposed transaction has been mailed to shareholders and filed with the Securities and Exchange Commission (SEC). Investors are urged to read the prospectus/proxy statement because it contains important information. The prospectus/proxy statement and other relevant documents are available free of charge on the SEC’s Web site atwww.sec.gov or by calling 1-800-341-7400.