Federated Equity Funds N-CSR Certified annual shareholder report (management investment company)

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form N-CSR

Certified Shareholder Report of Registered Management Investment Companies

811-4017

(Investment Company Act File Number)

Federated Equity Funds

_______________________________________________________________

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds

4000 Ericsson Drive

Warrendale, Pennsylvania 15086-7561

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

Peter J. Germain, Esquire

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

Date of Fiscal Year End:09/30/19

Date of Reporting Period:09/30/19

Item 1. Reports to Stockholders

Annual Shareholder Report

September 30, 2019

Share Class | Ticker	A | VSFAX	C | VSFCX	R | VSFRX
	Institutional | VSFIX	R6 | VSFSX

Federated Clover Small Value Fund

Successor to the Touchstone Diversified Small Cap Value Fund Established 1996

A Portfolio of Federated Equity Funds

IMPORTANT NOTICE REGARDING REPORT DELIVERY

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4.

You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4. Your election to receive reports in paper will apply to all funds held with the Fund complex or your financial intermediary.

Not FDIC Insured ■ May Lose Value ■ No Bank Guarantee

J. Christopher
Donahue

President

Federated Clover Small Value Fund

Letter from the President

Dear Valued Shareholder,

I am pleased to present the Annual Shareholder Report for your fund covering the period from October 1, 2018 through September 30, 2019. This report includes Management's Discussion of Fund Performance, a complete listing of your fund's holdings, performance information and financial statements along with other important fund information.

In addition, our website, FederatedInvestors.com, offers easy access to Federated resources that include timely fund updates, economic and market insights from our investment strategists, and financial planning tools.

Thank you for investing with Federated. I hope you find this information useful and look forward to keeping you informed.

Sincerely,

J. Christopher Donahue, President

CONTENTS

Management's Discussion of Fund Performance	1
Portfolio of Investments Summary Table	6
Portfolio of Investments	7
Financial Highlights	12
Statement of Assets and Liabilities	17
Statement of Operations	19
Statement of Changes in Net Assets	20
Notes to Financial Statements	21
Report of Independent Registered Public Accounting Firm	32
Shareholder Expense Example	34
Board of Trustees and Trust Officers	36
Evaluation and Approval of Advisory Contract–May 2019	42
Voting Proxies on Fund Portfolio Securities	49
Quarterly Portfolio Schedule	49

Management's Discussion of Fund Performance (unaudited)

The total return of Federated Clover Small Value Fund (the “Fund”), based on net asset value for the 12-month reporting period ended September 30, 2019, was -11.25% for Class A Shares, -11.94% for Class C Shares, -11.27% for Class R Shares, -11.05% for Institutional Shares and -11.00% for Class R6 Shares. The Russell 2000^® Value Index (R2000V),¹ a broad-based securities market index, returned -8.24% during the same period. The total return for the Morningstar Small Value Funds Average (MSVFA),² a peer group average for the Fund, was -9.38% during the same period. The Fund's and the MSVFA's total return for the most recent fiscal year reflected actual cash flows, transaction costs and other expenses which were not reflected in the total return of the R2000V.

The Fund's investment strategy seeks to achieve capital appreciation through careful analysis and selection of individual stocks. For the reporting period, stock selection was the most significant factor affecting the Fund's performance relative to the R2000V.

The following discussion will focus on the performance of the Fund's Class R6 Shares.

MARKET OVERVIEW

The trailing 12-month reporting period featured market volatility and dramatic price swings in both directions, yet many equity investors ended the year with little progress to show for it. Stocks of larger companies fared better than those of smaller capitalizations, with modest gains for broad U.S. equity indices like the S&P 500Index³ and declines for most small-cap indices. The stock market underwent a significant selloff during the final calendar quarter of 2018, as investors fretted that the U.S. Federal Reserve (the “Fed”) was tightening too fast and that the U.S./China trade conflict might impede economic growth. As the calendar turned to 2019, the mood changed as trade tensions appeared to ease and the Fed indicated it was done raising rates for the time being. Stocks responded by reversing course and climbing back to the vicinity of all-time highs by the summer months. But sentiment shifted once again to risk-off mode as trade tensions escalated, stock valuations rose and the yield curve inverted (i.e., the yield on 10-year Treasuries dipped below that of 3-month Treasuries), sparking debate over how close the economy was to a recession. September brought more troubling news with a drone attack that shut down half of Saudi Arabia's oil production, continued drama with the United Kingdom's long-running Brexit saga and the launch of an impeachment inquiry against President Trump. Softening economic data prompted the Fed to cut the federal funds target rate in July and then again in September. The end of the reporting period also saw a strong market rotation in which larger, momentum stocks struggled while small-cap value stocks outperformed them.

Annual Shareholder Report

1

STOCK SELECTION⁴

Stock selection in the Consumer Discretionary sector had the greatest positive impact on the Fund's benchmark-relative performance for the reporting period. Among the standout performers in this sector were auto dealership operator Asbury Automotive Group, Inc. and homebuilder LGI Homes, Inc. Discerning stock selection in the Health Care sector was another source of strength for the Fund. Pharmaceutical company Horizon Therapeutics PLC delivered notable performance for the Fund during the reporting period. Outside of these two sectors, notable contributions to performance were delivered by technology consulting firm Perficient, Inc., natural gas utility Spire Inc. and business process management firm WNS Holdings Limited. Detracting from relative performance over the period was stock selection in the Industrials sector. Within this area, Dycom Industries, Inc., a construction and engineering firm, had a negative impact on Fund performance. The Financials sector was also among the weaker performing sectors for the Fund relative to the R2000V. In particular, national bank holding company TCF Financial Corporation posted disappointing results that weighed on the Fund's return.

1	Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the R2000V.
2	Please see the footnotes to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the MSVFA.
3	The 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. The index is unmanaged, and it is not possible to invest directly in an index.
4	Since the Fund invests in smaller companies, it may be more volatile, and subject to greater short-term risk, than funds that invest in larger companies. Smaller companies may have limited resources, product lines and markets and their securities may trade less frequently and in more limited volumes than securities of larger companies. Value stocks may lag growth stocks in performance at times, particularly in late stages of a market advance.

Annual Shareholder Report

2

FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT

The graph below illustrates the hypothetical investment of $10,000¹ in the Federated Clover Small Value Fund from September 30, 2009 to September 30, 2019, compared to the Russell 2000^® Value Index (R2000V)² and the Morningstar Small Value Funds Average (MSVFA).³The Average Annual Total Return table below shows returns for each class averaged over the stated periods.

GROWTH OF A $10,000 INVESTMENT

Growth of $10,000 as of September 30, 2019

Federated Clover Small Value Fund -	Institutional Shares	Class C Shares	Class A Shares	R2000V	MSVFA
	F	F	F	I	I
9/30/2009	10,000	10,000	9,450	10,000	10,000
9/30/2010	11,443	11,328	10,788	11,184	11,341
9/30/2011	10,750	10,537	10,107	10,513	10,808
9/30/2012	13,816	13,408	12,955	13,944	13,998
9/30/2013	16,947	16,286	15,852	17,714	18,108
9/30/2014	18,924	18,003	17,660	18,445	19,229
9/30/2015	18,686	17,599	17,393	18,149	18,635
9/30/2016	20,469	19,089	19,006	21,563	21,306
9/30/2017	24,677	22,782	22,854	25,994	25,191
9/30/2018	26,126	23,881	24,142	28,418	27,308
9/30/2019	23,240	21,030	21,425	26,075	24,771

41 graphic description end -->

■	Total returns shown for Class C Shares include the maximum contingent deferred sales charge of 1.00% as applicable.
■	Total returns shown for Class A include the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450).

The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses. See the Average Annual Return table below for the returns of additional classes not shown in the line graph above.

Annual Shareholder Report

3

Average Annual Total Returnsfor the Period Ended 9/30/2019

(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #1)

	1 Year	5 Years	10 Years
Class A Shares	-16.13%	2.77%	7.92%
Class C Shares	-12.65%	3.16%	7.72%
Class R Shares4	-11.27%	3.89%	8.34%
Institutional Shares	-11.05%	4.19%	8.80%
Class R6 Shares4	-11.00%	4.14%	8.63%
R2000V	-8.24%	7.17%	10.06%
MSVFA	-9.38%	5.03%	9.36%

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

Annual Shareholder Report

4

1	Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: For Class A Shares, the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charges = $9,450); for Class C Shares, the maximum contingent deferred sales charge is 1.00% on any redemption less than one year from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The R2000V and MSVFA have been adjusted to reflect reinvestment of dividends on securities in the index and average.
2	The R2000V measures the performance of the small-cap value segment of the U.S. equity universe. It includes those Russell 2000® companies with lower price-to-book ratios and lower forecasted growth values. The R2000V is not adjusted to reflect sales charges, expenses or other fees that the Securities and Exchange Commission requires to be reflected in the Fund's performance. The index is unmanaged, and unlike the Fund, is not affected by cash flows. It is not possible to invest directly in an index.
3	Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.
4	The Fund's Class R Shares commenced operations on December 1, 2010. The Fund's Class R6 Shares commenced operations on March 29, 2016. For the period prior to the commencement of operations of Class R Shares and Class R6 Shares, the performance information shown is for the Fund's Class A Shares. In relation to Class R Shares, the performance of Class A Shares has been adjusted to reflect the expenses applicable to Class R Shares. In relation to Class R6 Shares, the performance of Class A Shares has not been adjusted to reflect expenses of Class R6 Shares since Class R6 Shares have a lower expense ratio than the expense ratio of the Class A Shares. The performance of Class A Shares has been adjusted to remove any voluntary waiver of Fund expenses related to the Class A Shares that may have occurred during the period prior to the commencement of operations of Class R6 Shares. Additionally, for the Class R Shares and Class R6 Shares, the performance information shown above has been adjusted to reflect the absence of sales charges applicable to Class A Shares.

Annual Shareholder Report

5

Portfolio of Investments Summary Table (unaudited)

At September 30, 2019, the Fund's portfolio composition¹ was as follows:

Sector Composition	Percentage of Total Net Assets
Financials	28.6%
Industrials	11.5%
Information Technology	10.5%
Real Estate	9.7%
Communication Services	6.3%
Utilities	6.3%
Consumer Discretionary	5.4%
Materials	5.3%
Energy	5.1%
Consumer Staples	3.9%
Health Care	3.5%
Exchange-Traded Fund	1.8%
Cash Equivalents2	2.9%
Other Assets and Liabilities—Net3	(0.8)%
TOTAL	100.0%

1	Except for Cash Equivalents and Other Assets and Liabilities, sector classifications are based upon, and individual portfolio securities are assigned to, the classifications of the Global Industry Classification Standard (GICS) except that the Adviser assigns a classification to securities not classified by the GICS and to securities for which the Adviser does not have access to the classification made by the GICS.
2	Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements.
3	Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Annual Shareholder Report

6

Portfolio of Investments

September 30, 2019

Shares			Value
		COMMON STOCKS—96.1%
		Communication Services—6.3%
318,350	1	Gray Television, Inc.	$5,195,472
42,675		Nexstar Media Group, Inc., Class A	4,366,079
573,450	1	Orbcomm, Inc.	2,729,622
575,275	1	Vonage Holdings Corp.	6,500,608
		TOTAL	18,791,781
		Consumer Discretionary—5.4%
31,450	1	Adtalem Global Education, Inc.	1,197,931
80,125	1	Asbury Automotive Group, Inc.	8,199,191
61,925	1	LGI Homes, Inc.	5,159,591
11,475		Lithia Motors, Inc., Class A	1,519,060
		TOTAL	16,075,773
		Consumer Staples—3.9%
276,950		Cott Corp.	3,453,566
356,425	1	Hostess Brands, Inc.	4,984,604
72,300	1	Performance Food Group Co.	3,326,523
		TOTAL	11,764,693
		Energy—5.1%
443,100	1	Helix Energy Solutions Group, Inc.	3,571,386
466,650		Kosmos Energy Ltd.	2,911,896
131,125	1	Magnolia Oil & Gas Corp.	1,455,488
114,475		PBF Energy, Inc.	3,112,575
663,950	1	SRC Energy, Inc.	3,094,007
96,650		US Silica Holdings, Inc.	923,974
		TOTAL	15,069,326
		Financials—28.6%
129,800		Ameris Bancorp	5,223,152
89,346		Argo Group International Holdings Ltd.	6,275,663
103,800		BancorpSouth Bank	3,073,518
263,300	1	Cowen Group, Inc.	4,052,187
459,675		First BanCorp	4,587,556
427,150		First Commonwealth Financial Corp.	5,672,552
229,525		First Interstate BancSystem, Inc., Class A	9,236,086
86,000		Flagstar Bancorp, Inc.	3,212,100
177,650		Hancock Whitney Corp.	6,803,107
100,925		Heritage Insurance Holdings, Inc.	1,508,829

Annual Shareholder Report

7

Shares			Value
		COMMON STOCKS—continued
		Financials—continued
59,675		Iberiabank Corp.	$4,507,849
419,175		Invesco Mortgage Capital, Inc.	6,417,569
242,650		Investors Bancorp, Inc.	2,756,504
42,425		Kemper Corp.	3,307,029
249,300		Radian Group, Inc.	5,694,012
77,375		Stifel Financial Corp.	4,439,778
64,589		TCF Financial Corp.	2,458,903
132,050		WSFS Financial Corp.	5,823,405
		TOTAL	85,049,799
		Health Care—3.5%
63,475	1	Avanos Medical, Inc.	2,377,774
38,625	1	Emergent BioSolutions, Inc.	2,019,315
156,775	1	Horizon Therapeutics PLC	4,268,983
90,016	1	Wright Medical Group, N.V.	1,857,030
		TOTAL	10,523,102
		Industrials—11.5%
152,050		Altra Holdings, Inc.	4,211,025
47,950		Barnes Group, Inc.	2,471,343
71,425	1	Colfax Corp.	2,075,610
54,200	1	Continental Building Products, Inc.	1,479,118
51,000	1	Gibraltar Industries, Inc.	2,342,940
83,700		Hillenbrand, Inc.	2,584,656
42,550		Hyster-Yale Materials Handling, Inc.	2,328,761
18,075		ICF International, Inc.	1,526,795
55,600		Knight-Swift Transportation Holdings, Inc.	2,018,280
35,025		MOOG, Inc., Class A	2,841,228
76,475	1	Navistar International Corp.	2,149,712
178,425	1	Rexnord Corp.	4,826,396
37,750	1	SPX Corp.	1,510,378
12,750	1	Saia, Inc.	1,194,675
16,025	1	Spirit Airlines, Inc.	581,708
		TOTAL	34,142,625
		Information Technology—10.5%
99,200	1	Diodes, Inc.	3,982,880
90,075	1	Insight Enterprises, Inc.	5,016,277
286,125		Kemet Corp.	5,201,753
25,925	1	Lumentum Holdings, Inc.	1,388,543
88,600	1	Perficient, Inc.	3,418,188

Annual Shareholder Report

8

Shares			Value
		COMMON STOCKS—continued
		Information Technology—continued
52,575		Synnex Corp.	$5,935,717
159,750	1	Ultra Clean Holdings, Inc.	2,337,941
67,075	1	WNS Holdings Ltd., ADR	3,940,656
		TOTAL	31,221,955
		Materials—5.3%
41,150		Ashland Global Holdings, Inc.	3,170,607
38,150	1	Berry Global Group, Inc.	1,498,151
213,850		Cleveland-Cliffs, Inc.	1,543,997
197,100	1	Constellium SE	2,505,141
259,575	1,2	Ferroglobe Representation & Warranty Insurance Trust	0
31,975		Innospec, Inc.	2,850,252
171,450		Louisiana-Pacific Corp.	4,214,241
		TOTAL	15,782,389
		Real Estate—9.7%
170,325		American Assets Trust, Inc.	7,960,990
285,650		Easterly Government Properties, Inc.	6,084,345
179,975		Healthcare Realty Trust, Inc.	6,029,163
688,325		Lexington Realty Trust	7,055,331
71,749		Park Hotels & Resorts, Inc.	1,791,573
		TOTAL	28,921,402
		Utilities—6.3%
93,775		Allete, Inc.	8,196,873
122,475		Spire, Inc.	10,684,719
		TOTAL	18,881,592
		TOTAL COMMON STOCKS (IDENTIFIED COST $257,458,468)	286,224,437
		EXCHANGE-TRADED FUND—1.8%
44,275		iShares Russell 2000 ETF (IDENTIFIED COST $5,321,111)	5,286,878
		INVESTMENT COMPANY—2.9%
8,549,729		Federated Institutional Prime Value Obligations Fund, Institutional Shares, 2.06%3 (IDENTIFIED COST $8,551,463)	8,551,439
		TOTAL INVESTMENT IN SECURITIES—100.8% (IDENTIFIED COST $271,331,042)4	300,062,754
		OTHER ASSETS AND LIABILITIES - NET—(0.8)%5	(2,246,873)
		TOTAL NET ASSETS—100%	$297,815,881

Annual Shareholder Report

9

Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended September 30, 2019, were as follows:

	Federated Institutional Prime Value Obligations Fund, Institutional Shares
Balance of Shares Held 9/30/2018	12,527,833
Purchases/Additions	205,373,471
Sales/Reductions	(209,351,575)
Balance of Shares Held 9/30/2019	8,549,729
Value	$8,551,439
Change in Unrealized Appreciation/Depreciation	$(1,303)
Net Realized Gain/(Loss)	$2,725
Dividend Income	$222,117

1	Non-income-producing security.
2	Market quotations and price evaluations are not available. Fair value determined using significant unobservable inputs in accordance with procedures established by and under the general supervision of the Fund's Board of Trustees (the “Trustees”).
3	7-day net yield.
4	The cost of investments for federal tax purposes amounts to $272,736,399.
5	Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Note: The categories of investments are shown as a percentage of total net assets at September 30, 2019.

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:

Level 1—quoted prices in active markets for identical securities.

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.

Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.

Annual Shareholder Report

10

The following is a summary of the inputs used, as of September 30, 2019, in valuing the Fund's assets carried at fair value:

Valuation Inputs
	Level 1— Quoted Prices	Level 2— Other Significant Observable Inputs	Level 3— Significant Unobservable Inputs	Total
Equity Securities:
Common Stocks
Domestic	$271,645,947	$—	$0	$271,645,947
International	14,578,490	—	—	14,578,490
Exchange-Traded Fund	5,286,878	—	—	5,286,878
Investment Company	8,551,439	—	—	8,551,439
TOTAL SECURITIES	$300,062,754	$—	$0	$300,062,754

The following acronym is used throughout this portfolio:

ADR —American Depositary Receipt

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

11

Financial Highlights–Class A Shares

(For a Share Outstanding Throughout Each Period)

Year Ended September 30	2019	2018	2017	2016	2015
Net Asset Value, Beginning of Period	$26.36	$29.16	$24.82	$23.20	$26.29
Income From Investment Operations:
Net investment income (loss)1	0.05	0.02	0.17	0.16	(0.03)
Net realized and unrealized gain (loss)	(3.03)	1.47	4.80	1.96	(0.19)
TOTAL FROM INVESTMENT OPERATIONS	(2.98)	1.49	4.97	2.12	(0.22)
Less Distributions:
Distributions from net investment income	(0.02)	(0.11)	(0.14)	(0.06)	(0.14)
Distributions from net realized gain	(4.13)	(4.18)	(0.49)	(0.44)	(2.73)
TOTAL DISTRIBUTIONS	(4.15)	(4.29)	(0.63)	(0.50)	(2.87)
Net Asset Value, End of Period	$19.23	$26.36	$29.16	$24.82	$23.20
Total Return2	(11.25)%	5.64%	20.24%	9.27%	(1.51)%
Ratios to Average Net Assets:
Net expenses	1.26%	1.27%	1.27%	1.26%	1.26%
Net investment income (loss)	0.26%	0.09%	0.64%	0.70%	(0.13)%
Expense waiver/reimbursement3	0.21%	0.16%	0.17%	0.15%	0.18%
Supplemental Data:
Net assets, end of period (000 omitted)	$62,463	$94,210	$102,606	$126,015	$149,579
Portfolio turnover	74%	84%	66%	89%	83%

1	Per share numbers have been calculated using the average shares method.
2	Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3	This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

12

Financial Highlights–Class C Shares

(For a Share Outstanding Throughout Each Period)

Year Ended September 30	2019	2018	2017	2016	2015
Net Asset Value, Beginning of Period	$24.95	$27.91	$23.83	$22.40	$25.55
Income From Investment Operations:
Net investment income (loss)1	(0.09)	(0.17)	(0.03)	(0.01)	(0.21)
Net realized and unrealized gain (loss)	(2.88)	1.39	4.60	1.88	(0.18)
TOTAL FROM INVESTMENT OPERATIONS	(2.97)	1.22	4.57	1.87	(0.39)
Less Distributions:
Distributions from net investment income	—	—	—	(0.00)2	(0.03)
Distributions from net realized gain	(4.13)	(4.18)	(0.49)	(0.44)	(2.73)
TOTAL DISTRIBUTIONS	(4.13)	(4.18)	(0.49)	(0.44)	(2.76)
Net Asset Value, End of Period	$17.85	$24.95	$27.91	$23.83	$22.40
Total Return3	(11.94)%	4.82%	19.34%	8.47%	(2.24)%
Ratios to Average Net Assets:
Net expenses	2.01%	2.02%	2.02%	2.01%	2.01%
Net investment income (loss)	(0.50)%	(0.68)%	(0.12)%	(0.05)%	(0.85)%
Expense waiver/reimbursement4	0.18%	0.15%	0.16%	0.18%	0.17%
Supplemental Data:
Net assets, end of period (000 omitted)	$9,446	$16,028	$22,462	$21,253	$23,961
Portfolio turnover	74%	84%	66%	89%	83%

1	Per share numbers have been calculated using the average shares method.
2	Represents less than $0.01.
3	Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
4	This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

13

Financial Highlights–Class R Shares

(For a Share Outstanding Throughout Each Period)

Year Ended September 30	2019	2018	2017	2016	2015
Net Asset Value, Beginning of Period	$25.93	$28.78	$24.51	$22.91	$25.99
Income From Investment Operations:
Net investment income (loss)1	0.05	0.02	0.16	0.15	(0.05)
Net realized and unrealized gain (loss)	(2.99)	1.43	4.74	1.93	(0.20)
TOTAL FROM INVESTMENT OPERATIONS	(2.94)	1.45	4.90	2.08	(0.25)
Less Distributions:
Distributions from net investment income	(0.03)	(0.12)	(0.14)	(0.04)	(0.10)
Distributions from net realized gain	(4.13)	(4.18)	(0.49)	(0.44)	(2.73)
TOTAL DISTRIBUTIONS	(4.16)	(4.30)	(0.63)	(0.48)	(2.83)
Net Asset Value, End of Period	$18.83	$25.93	$28.78	$24.51	$22.91
Total Return2	(11.27)%	5.58%	20.22%	9.23%	(1.63)%
Ratios to Average Net Assets:
Net expenses	1.32%	1.29%	1.28%	1.32%	1.38%
Net investment income (loss)	0.24%	0.08%	0.61%	0.67%	(0.19)%
Expense waiver/reimbursement3	0.40%	0.36%	0.36%	0.33%	0.28%
Supplemental Data:
Net assets, end of period (000 omitted)	$13,675	$16,013	$15,302	$13,010	$9,721
Portfolio turnover	74%	84%	66%	89%	83%

1	Per share numbers have been calculated using the average shares method.
2	Based on net asset value.
3	This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

14

Financial Highlights–Institutional Shares

(For a Share Outstanding Throughout Each Period)

Year Ended September 30	2019	2018	2017	2016	2015
Net Asset Value, Beginning of Period	$26.48	$29.30	$24.93	$23.31	$26.40
Income From Investment Operations:
Net investment income (loss)1	0.10	0.09	0.24	0.22	0.03
Net realized and unrealized gain (loss)	(3.06)	1.47	4.83	1.96	(0.19)
TOTAL FROM INVESTMENT OPERATIONS	(2.96)	1.56	5.07	2.18	(0.16)
Less Distributions:
Distributions from net investment income	(0.10)	(0.20)	(0.21)	(0.12)	(0.20)
Distributions from net realized gain	(4.13)	(4.18)	(0.49)	(0.44)	(2.73)
TOTAL DISTRIBUTIONS	(4.23)	(4.38)	(0.70)	(0.56)	(2.93)
Net Asset Value, End of Period	$19.29	$26.48	$29.30	$24.93	$23.31
Total Return2	(11.05)%	5.87%	20.56%	9.54%	(1.26)%
Ratios to Average Net Assets:
Net expenses	1.01%	1.01%	1.02%	1.01%	1.01%
Net investment income	0.50%	0.32%	0.87%	0.95%	0.14%
Expense waiver/reimbursement3	0.16%	0.12%	0.13%	0.12%	0.11%
Supplemental Data:
Net assets, end of period (000 omitted)	$203,935	$333,887	$467,881	$468,727	$498,468
Portfolio turnover	74%	84%	66%	89%	83%

1	Per share numbers have been calculated using the average shares method.
2	Based on net asset value.
3	This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

15

Financial Highlights–Class R6 Shares

(For a Share Outstanding Throughout Each Period)

	Year Ended September 30,			Period Ended 9/30/20161
	2019	2018	2017
Net Asset Value, Beginning of Period	$26.39	$29.19	$24.84	$21.94
Income From Investment Operations:
Net investment income (loss)2	0.08	0.14	0.25	0.13
Net realized and unrealized gain (loss)	(3.02)	1.44	4.80	2.77
TOTAL FROM INVESTMENT OPERATIONS	(2.94)	1.58	5.05	2.90
Less Distributions:
Distributions from net investment income	(0.11)	(0.20)	(0.21)	—
Distributions from net realized gain	(4.13)	(4.18)	(0.49)	—
TOTAL DISTRIBUTIONS	(4.24)	(4.38)	(0.70)	—
Net Asset Value, End of Period	$19.21	$26.39	$29.19	$24.84
Total Return3	(11.00)%	5.98%	20.58%	13.22%
Ratios to Average Net Assets:
Net expenses	0.94%	0.95%	0.95%	0.94%4
Net investment income	0.37%	0.52%	0.94%	1.07%4
Expense waiver/reimbursement5	0.14%	0.11%	0.11%	0.11%4
Supplemental Data:
Net assets, end of period (000 omitted)	$8,297	$56,657	$11,006	$7,207
Portfolio turnover	74%	84%	66%	89%6

1	Reflects operations for the period from March 29, 2016 (date of initial investment) to September 30, 2016.
2	Per share numbers have been calculated using the average shares method.
3	Based on net asset value. Total returns for periods of less than one year are not annualized.
4	Computed on an annualized basis.
5	This expense decrease is reflected in both the net expense and the net investment income ratios shown above.
6	Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the year ended September 30, 2016.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

16

Statement of Assets and Liabilities

September 30, 2019

Assets:
Investment in securities, at value including $8,551,439 of investment in an affiliated holding (identified cost $271,331,042)		$300,062,754
Income receivable		471,988
Income receivable from an affiliated holding		13,049
Receivable for investments sold		774,975
Receivable for shares sold		223,549
TOTAL ASSETS		301,546,315
Liabilities:
Payable for investments purchased	$2,471,957
Payable for shares redeemed	1,076,878
Payable for investment adviser fee (Note 5)	5,922
Payable for administrative fee (Note 5)	645
Payable for distribution services fee (Note 5)	8,640
Payable for other service fees (Notes 2 and 5)	16,429
Accrued expenses (Note 5)	149,963
TOTAL LIABILITIES		3,730,434
Net assets for 15,505,860 shares outstanding		$297,815,881
Net Assets Consist of:
Paid-in capital		$302,202,978
Total distributable earnings (loss)		(4,387,097)
TOTAL NET ASSETS		$297,815,881

Annual Shareholder Report

17

Statement of Assets and Liabilities–continued

Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Class A Shares:
Net asset value per share ($62,462,887 ÷ 3,248,516 shares outstanding), no par value, unlimited shares authorized	$19.23
Offering price per share (100/94.50 of $19.23)	$20.35
Redemption proceeds per share	$19.23
Class C Shares:
Net asset value per share ($9,445,744 ÷ 529,060 shares outstanding), no par value, unlimited shares authorized	$17.85
Offering price per share	$17.85
Redemption proceeds per share (99.00/100 of $17.85)	$17.67
Class R Shares:
Net asset value per share ($13,675,156 ÷ 726,301 shares outstanding), no par value, unlimited shares authorized	$18.83
Offering price per share	$18.83
Redemption proceeds per share	$18.83
Institutional Shares:
Net asset value per share ($203,935,055 ÷ 10,570,120 shares outstanding), no par value, unlimited shares authorized	$19.29
Offering price per share	$19.29
Redemption proceeds per share	$19.29
Class R6 Shares:
Net asset value per share ($8,297,039 ÷ 431,863 shares outstanding), no par value, unlimited shares authorized	$19.21
Offering price per share	$19.21
Redemption proceeds per share	$19.21

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

18

Statement of Operations

Year Ended September 30, 2019

Investment Income:
Dividends (including $222,117 received from an affiliated holding* and net of foreign taxes withheld of $23,925)			$5,818,992
Expenses:
Investment adviser fee (Note 5)		$3,483,574
Administrative fee (Note 5)		308,332
Custodian fees		21,828
Transfer agent fee (Note 2)		431,901
Directors'/Trustees' fees (Note 5)		4,198
Auditing fees		33,270
Legal fees		11,524
Portfolio accounting fees		137,507
Distribution services fee (Note 5)		160,124
Other service fees (Notes 2 and 5)		210,854
Share registration costs		74,237
Printing and postage		34,620
Miscellaneous (Note 5)		29,779
TOTAL EXPENSES		4,941,748
Waivers and Reimbursements:
Waiver/reimbursement of investment adviser fee (Note 5)	$(568,939)
Waiver/reimbursement of other operating expenses (Notes 2 and 5)	(124,292)
TOTAL WAIVERS AND REIMBURSEMENTS		(693,231)
Net expenses			4,248,517
Net investment income			1,570,475
Realized and Unrealized Gain (Loss) on Investments:
Net realized loss on investments (including net realized gain of $2,725 on sales of investments in an affiliated holding*)			(33,462,256)
Net change in unrealized appreciation of investments (including net change in unrealized appreciation of $(1,303) on investments in an affiliated holding*)			(23,726,794)
Net realized and unrealized gain (loss) on investments			(57,189,050)
Change in net assets resulting from operations			$(55,618,575)

* See information listed after the Fund's Portfolio of Investments.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

19

Statement of Changes in Net Assets

Year Ended September 30	2019	2018
Increase (Decrease) in Net Assets
Operations:
Net investment income	$1,570,475	$1,527,016
Net realized gain (loss)	(33,462,256)	94,869,125
Net change in unrealized appreciation/depreciation	(23,726,794)	(61,072,844)
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS	(55,618,575)	35,323,297
Distributions to Shareholders (Note 2):
Class A Shares	(13,650,057)	(14,745,909)
Class C Shares	(2,464,699)	(3,225,244)
Class R Shares	(2,584,571)	(2,265,097)
Institutional Shares	(53,544,277)	(63,748,725)
Class R6 Shares	(7,710,867)	(7,437,096)
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS	(79,954,471)	(91,422,071)
Share Transactions:
Proceeds from sale of shares	78,460,676	144,327,860
Net asset value of shares issued to shareholders in payment of distributions declared	72,936,048	83,637,768
Cost of shares redeemed	(234,802,033)	(274,328,925)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS	(83,405,309)	(46,363,297)
Change in net assets	(218,978,355)	(102,462,071)
Net Assets:
Beginning of period	516,794,236	619,256,307
End of period	$297,815,881	$516,794,236

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

20

Notes to Financial Statements

September 30, 2019

1. ORGANIZATION

Federated Equity Funds (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of 10 portfolios. The financial statements included herein are only those of Federated Clover Small Value Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers five classes of shares: Class A Shares, Class C Shares, Class R Shares, Institutional Shares and Class R6 Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to seek capital appreciation.

On March 30, 2017, the Fund's T Share class became effective with the Securities and Exchange Commission (SEC), but is not yet offered for sale.

Effective August 1, 2018, an automatic conversion feature for Class C Shares was implemented. Pursuant to this automatic conversion feature, after Class C Shares have been held for ten years from the date of purchase, they will automatically convert to Class A Shares on the next monthly conversion processing date.

2. SIGNIFICANT ACCOUNTING POLICIES

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

Investment Valuation

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

■	Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■	Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■	Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■	Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
■	Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■	For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered, such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.

Annual Shareholder Report

21

If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund's valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.

Fair Valuation and Significant Events Procedures

The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated Global Investment Management Corp. (the “Adviser”) and certain of the Adviser's affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services' policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services, and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.

Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.

Annual Shareholder Report

22

The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

■	With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■	Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;
■	Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

The Trustees have adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.

Repurchase Agreements

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a “securities entitlement” and exercises “control” as those terms are defined in the Uniform Commercial Code. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Annual Shareholder Report

23

Investment Income, Gains and Losses, Expenses and Distributions

Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Distributions of net investment income, if any, are declared and paid annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretion of premium and discount is included in investment income. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waivers and reimbursements of $693,231 is disclosed in various locations in this Note 2 and Note 5. For the year ended September 30, 2019, transfer agent fees for the Fund were as follows:

	Transfer Agent Fees Incurred	Transfer Agent Fees Reimbursed
Class A Shares	$109,819	$(42,678)
Class C Shares	14,515	(3,427)
Class R Shares	20,425	—
Institutional Shares	280,327	(42,743)
Class R6 Shares	6,815	—
TOTAL	$431,901	$(88,848)

Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses. The distributions disclosed on the Statement of Changes in Net Assets for the year ended September 30, 2018, were from the following sources:

Net investment income
Class A Shares	$436,859
Class R Shares	75,434
Institutional Shares	3,218,423
Class R6 Shares	391,929

Net realized gain
Class A Shares	$14,309,050
Class C Shares	3,225,244
Class R Shares	2,189,663
Institutional Shares	60,530,302
Class R6 Shares	7,045,167

Undistributed net investment income for the year ended September 30, 2018, was $1,085,913.

Annual Shareholder Report

24

Other Service Fees

The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund's Class A Shares and Class C Shares to unaffiliated financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts. Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. This reimbursement can be modified or terminated at any time. For the year ended September 30, 2019, other service fees for the Fund were as follows:

	Other Service Fees Incurred
Class A Shares	$181,230
Class C Shares	29,624
TOTAL	$210,854

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended September 30, 2019, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of September 30, 2019, tax years 2016 through 2019 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.

The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.

When-Issued and Delayed-Delivery Transactions

The Fund may engage in when-issued or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Annual Shareholder Report

25

Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal period end, resulting from changes in the exchange rate.

Other

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

3. SHARES OF BENEFICIAL INTEREST

The following tables summarize share activity:

Year Ended September 30	2019		2018
Class A Shares:	Shares	Amount	Shares	Amount
Shares sold	483,781	$9,425,555	841,548	$22,010,914
Shares issued to shareholders in payment of distributions declared	682,955	13,086,019	555,218	14,178,190
Shares redeemed	(1,492,704)	(30,271,181)	(1,340,780)	(35,391,255)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS	(325,968)	$(7,759,607)	55,986	$797,849

Year Ended September 30	2019		2018
Class C Shares:	Shares	Amount	Shares	Amount
Shares sold	89,899	$1,652,787	99,924	$2,521,646
Shares issued to shareholders in payment of distributions declared	132,754	2,374,981	128,712	3,114,820
Shares redeemed	(336,073)	(6,309,531)	(391,078)	(9,803,315)
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS	(113,420)	$(2,281,763)	(162,442)	$(4,166,849)

Year Ended September 30	2019		2018
Class R Shares:	Shares	Amount	Shares	Amount
Shares sold	130,794	$2,597,618	165,668	$4,289,143
Shares issued to shareholders in payment of distributions declared	135,548	2,544,624	88,232	2,218,821
Shares redeemed	(157,492)	(3,108,529)	(168,129)	(4,394,004)
NET CHANGE RESULTING FROM CLASS R SHARE TRANSACTIONS	108,850	$2,033,713	85,771	$2,113,960

Annual Shareholder Report

26

Year Ended September 30	2019		2018
Institutional Shares:	Shares	Amount	Shares	Amount
Shares sold	3,070,873	$61,904,839	2,539,695	$66,924,952
Shares issued to shareholders in payment of distributions declared	2,459,600	47,274,603	2,206,306	56,688,861
Shares redeemed	(7,570,410)	(149,669,408)	(8,107,038)	(218,737,667)
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS	(2,039,937)	$(40,489,966)	(3,361,037)	$(95,123,854)

Year Ended September 30	2019		2018
Class R6 Shares:	Shares	Amount	Shares	Amount
Shares sold	143,690	$2,879,877	1,709,517	$48,581,205
Shares issued to shareholders in payment of distributions declared	399,937	7,655,821	290,461	7,437,076
Shares redeemed	(2,258,724)	(45,443,384)	(229,998)	(6,002,684)
NET CHANGE RESULTING FROM CLASS R6 SHARE TRANSACTIONS	(1,715,097)	$(34,907,686)	1,769,980	$50,015,597
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS	(4,085,572)	$(83,405,309)	(1,611,742)	$(46,363,297)

4. FEDERAL TAX INFORMATION

The accounting treatment of certain items in accordance with income tax regulations may differ from the accounting treatment in accordance with GAAP which may result in permanent differences. In the case of the Fund, such differences primarily result from an overdistribution of income necessary to meet excise tax distribution requirements.

For the year ended September 30, 2019, permanent differences identified and reclassified among the components of net assets were as follows:

Increase (Decrease)
Paid-In Capital	Total Distributable Earnings (Loss)
$(4,042,201)	$4,042,201

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended September 30, 2019 and 2018, was as follows:

	2019	2018
Ordinary income1	$20,905,357	$31,933,915
Long-term capital gains	$59,049,114	$59,488,156

1 For tax purposes, short-term capital gains are considered ordinary income distributions.

Annual Shareholder Report

27

As of September 30, 2019, the components of distributable earnings on a tax-basis were as follows:

Undistributed ordinary income	$902,370
Net unrealized appreciation	$27,326,353
Capital loss carryforwards	$(32,615,820)

The difference between book-basis and tax-basis net unrealized appreciation is attributable to differing treatments for deferral of losses on wash sales.

At September 30, 2019, the cost of investments for federal tax purposes was $272,736,399. The net unrealized appreciation of investments for federal tax purposes was $27,326,355. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $40,002,909 and net unrealized depreciation from investments for those securities having an excess of cost over value of $12,676,554.

As of September 30, 2019, the Fund had a capital loss carryforward of $32,615,820 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code, thereby reducing the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. Pursuant to the Code, these net capital losses retain their character as either short-term or long-term and do not expire.

The following schedule summarizes the Fund's capital loss carryforwards:

Short-Term	Long-Term	Total
$24,175,273	$8,440,547	$32,615,820

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 0.90% of the Fund's average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee. For the year ended September 30, 2019, the Adviser voluntarily waived $562,319 of its fee. In addition, for the year ended September 30, 2019, an affiliate of the Adviser reimbursed $88,848 of transfer agent fees.

The Adviser has agreed to reimburse the Fund for certain investment adviser fees as a result of transactions in other affiliated investment companies. For the year ended September 30, 2019, the Adviser reimbursed $6,620.

Annual Shareholder Report

28

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below:

Administrative Fee	Average Daily Net Assets of the Investment Complex
0.100%	on assets up to $50 billion
0.075%	on assets over $50 billion

Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended September 30, 2019, the annualized fee paid to FAS was 0.080% of average daily net assets of the Fund.

In addition, FAS may charge certain out-of-pocket expenses to the Fund.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Class A Shares, Class C Shares and Class R Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:

Share Class Name	Percentage of Average Daily Net Assets of Class
Class A Shares	0.05%
Class C Shares	0.75%
Class R Shares	0.50%

Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. For the year ended September 30, 2019, distribution services fees for the Fund were as follows:

	Distribution Services Fees Incurred	Distribution Services Fees Waived
Class C Shares	$89,236	$—
Class R Shares	70,888	(35,444)
TOTAL	$160,124	$(35,444)

When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended September 30, 2019, FSC retained $4,276 of fees paid by the Fund. For the year ended September 30, 2019, the Fund's Class A Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.

Annual Shareholder Report

29

Sales Charges

Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended September 30, 2019, FSC retained $1,204 in sales charges from the sale of Class A Shares. FSC also retained $340 relating to redemptions of Class C Shares.

Other Service Fees

For the year ended September 30, 2019, FSSC received $11,876 of the other service fees disclosed in Note 2.

Expense Limitation

The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Effective December 1, 2019, total annual fund operating expenses (as shown in the financial highlights, excluding interest expense, extraordinary expenses, and proxy-related expenses paid by the Fund, if any) paid by the Fund's Class A Shares, Class C Shares, Class R Shares, Institutional Shares and Class R6 Shares (after the voluntary waivers and/or reimbursements) will not exceed 1.26%, 2.07%, 1.40%, 1.01% and 0.94% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) December 1, 2020; or (b) the date of the Fund's next effective Prospectus. Prior to December 1, 2019, the Fee limits disclosed above for the referenced share classes were 1.26%, 2.01%, 1.40%, 1.01% and 0.94%. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.

Interfund Transactions

During the year ended September 30, 2019, the Fund engaged in sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These sale transactions complied with Rule 17a-7 under the Act and amounted to $251,101.

Directors'/Trustees' and Miscellaneous Fees

Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of certain of the above companies. To efficiently facilitate payment, Independent Directors'/Trustees' fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended September 30, 2019, were as follows:

Purchases	$278,879,233
Sales	$430,539,005

Annual Shareholder Report

30

7. LINE OF CREDIT

The Fund participates with certain other Federated Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to finance temporarily the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund's ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, (ii) the one month London Interbank Offered Rate (LIBOR), and (iii) 0.0%, plus (b) a margin. The LOC also requires the Fund to pay, quarterly in arrears and at maturity, its pro rata share of a commitment fee based on the amount of the lenders' commitment that has not been utilized. As of September 30, 2019, the Fund had no outstanding loans. During the year ended September 30, 2019, the Fund did not utilize the LOC.

8. CONCENTRATION OF RISK

A substantial part of the Fund's portfolio may be comprised of entities in the Financial sector. As a result, the Fund may be more susceptible to any economic, business, political or other developments which generally affect these entities.

9. INTERFUND LENDING

Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other funds advised by subsidiaries of Federated Investors, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of September 30, 2019, there were no outstanding loans. During the year ended September 30, 2019, the program was not utilized.

10. FEDERAL TAX INFORMATION (UNAUDITED)

For the year ended September 30, 2019, the amount of long-term capital gains designated by the Fund was $59,049,114.

For the fiscal year ended September 30, 2019, 25.16% of total ordinary income (including short-term capital gain) distributions made by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information is reported in conjunction with the reporting of your distributions on Form 1099-DIV.

Of the ordinary income (including short-term capital gain) distributions made by the Fund during the year ended September 30, 2019, 22.54% qualify for the dividend received deduction available to corporate shareholders.

Annual Shareholder Report

31

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF TRUSTEES OF THE FEDERATED EQUITY FUNDS AND SHAREHOLDERS OF FEDERATED CLOVER SMALL VALUE FUND:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Federated Clover Small Value Fund (the “Fund”), a portfolio of Federated Equity Funds, as of September 30, 2019, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years or periods in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of September 30, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years or periods in the five year period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Annual Shareholder Report

32

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more of Federated Investors' investment companies since 2006.

Boston, Massachusetts
November 21, 2019

Annual Shareholder Report

33

Shareholder Expense Example (unaudited)

As a shareholder of the Fund, you incur ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2019 to September 30, 2019.

ACTUAL EXPENSES

The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, toestimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and anassumed rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you shouldnot use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Annual Shareholder Report

34

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

	Beginning Account Value 4/1/2019	Ending Account Value 9/30//2019	Expenses Paid During Period1
Actual:
Class A Shares	$1,000	$994.30	$6.30
Class C Shares	$1,000	$990.00	$10.03
Class R Shares	$1,000	$994.20	$6.65
Institutional Shares	$1,000	$995.40	$5.05
Class R6 Shares	$1,000	$995.30	$4.70
Hypothetical (assuming a 5% return before expenses):
Class A Shares	$1,000	$1,018.80	$6.38
Class C Shares	$1,000	$1,015.00	$10.15
Class R Shares	$1,000	$1,018.40	$6.73
Institutional Shares	$1,000	$1,020.00	$5.11
Class R6 Shares	$1,000	$1,020.40	$4.76

1 Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows:

Class A Shares	1.26%
Class C Shares	2.01%
Class R Shares	1.33%
Institutional Shares	1.01%
Class R6 Shares	0.94%

Annual Shareholder Report

35

Board of Trustees and Trust Officers

The Board of Trustees is responsible for managing the Trust's business affairs and for exercising all the Trust's powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2018, the Trust comprised 10 portfolio(s), and the Federated Fund Family consisted of 40 investment companies (comprising 102 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Fund Family and serves for an indefinite term. The Fund's Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.

Interested TRUSTEES Background

Name Birth Date Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)

J. Christopher Donahue* Birth Date: April 11, 1949 President and Trustee Indefinite Term Began serving: September 1999

Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.

Annual Shareholder Report

36

Name Birth Date Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)

John B. Fisher* Birth Date: May 16, 1956 Trustee Indefinite Term Began serving: May 2016

Principal Occupations:Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of certain of the Funds in the Federated Fund Family; Vice President, Federated Investors, Inc.; President, Director/Trustee and CEO, Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company; President of some of the Funds in the Federated Fund Complex and Director, Federated Investors Trust Company. Previous Positions: President and Director of the Institutional Sales Division of Federated Securities Corp.; President and Director of Federated Investment Counseling; President and CEO of Passport Research, Ltd.; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc. and President, Technology, Federated Services Company.

* Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Investors, Inc. and due to positions they hold with Federated and its subsidiaries.

INDEPENDENT TRUSTEES Background

Name Birth Date Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications

John T. Collins Birth Date: January 24, 1947 Trustee Indefinite Term Began serving: October 2013

Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Chairman of the Compensation Committee, KLX Energy Services Holdings, Inc. (oilfield services); former Director of KLX Corp. (aerospace). Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO of The Collins Group, Inc. (a private equity firm) and as a Director of KLX Corp. Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital).

Annual Shareholder Report

37

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough Birth Date: February 28, 1955 Trustee Indefinite Term Began serving: August 2015	Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Member of Governance and Compensation Committees, Publix Super Markets, Inc.; Director, Chair of the Audit Committee, Equifax, Inc.; Director, Member of the Audit Committee, Haverty Furniture Companies, Inc. Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama and is on the Business School Board of Visitors for Wake Forest University. Mr. Hough previously served as an Executive Committee member of the United States Golf Association.
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Indefinite Term Began serving: August 2009	Principal Occupations: Director or Trustee of the Federated Fund Family; Adjunct Professor of Law, Duquesne University School of Law; formerly, Dean of the Duquesne University School of Law and Professor of Law and Interim Dean of the Duquesne University School of Law; formerly, Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously held the position of Dean of the School of Law of Duquesne University (as well as Interim Dean). Judge Lally-Green previously served as a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green also currently holds the positions on not for profit or for profit boards of directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Regent, Saint Vincent Seminary; Member, Pennsylvania State Board of Education (public); and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director, St. Vincent College; and Director and Chair, North Catholic High School, Inc.
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Indefinite Term Began serving: January 1999	Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant and Author. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant and Author.

Annual Shareholder Report

38

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Indefinite Term Began serving: August 2006	Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber).
P. Jerome Richey Birth Date: February 23, 1949 Trustee Indefinite Term Began serving: October 2013	Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant; Retired; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.); and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm).
John S. Walsh Birth Date: November 28, 1957 Trustee Indefinite Term Began serving: January 1999	Principal Occupations: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors).

Annual Shareholder Report

39

OFFICERS

Name Birth Date Address Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years and Previous Position(s)
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Officer since: April 2013	Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc.
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT Officer since: January 2005	Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Fund Family. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Investors, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated in 1984 and is a member of the Pennsylvania Bar Association. Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc.
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: July 2015	Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement.

Annual Shareholder Report

40

Name Birth Date Address Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years and Previous Position(s)

Stephen F. Auth Birth Date: September 13, 1956 101 Park Avenue 41st Floor New York, NY 10178 CHIEF INVESTMENT OFFICER Officer since: November 2002

Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments.

Annual Shareholder Report

41

Evaluation and Approval of Advisory Contract–May 2019

Federated Clover Small Value Fund (the “Fund”)

At its meetings in May 2019, the Fund's Board of Trustees (the “Board”), including a majority of those Trustees who are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940 (the “Independent Trustees”), reviewed and unanimously approved the continuation of the Fund's investment advisory contract for an additional one-year term. The Board's decision regarding the contract reflects the exercise of its business judgment after considering all of the information received on whether to continue the existing arrangements.

At the request of the Independent Trustees, the Fund's Chief Compliance Officer (the CCO) furnished to the Board in advance of its May 2019 meetings an independent written evaluation presenting on the topics discussed below. The Board considered the CCO's independent written evaluation (the “CCO Fee Evaluation Report”), along with other information, in evaluating the reasonableness of the Fund's management fee and in deciding to approve the continuation of the investment advisory contract. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer,” prior to the elimination of the Senior Officer position in December 2017.

The Board also considered judicial decisions concerning allegedly excessive investment advisory fees in making its decision. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by an adviser to a fund and its shareholders (including the performance of the fund, its benchmark, and comparable funds); (2) an adviser's cost of providing the services (including the profitability to an adviser of providing advisory services to a fund); (3) the extent to which an adviser may realize “economies of scale” as a fund grows larger and, if such economies of scale exist, whether they have been shared with a fund and its shareholders or the family of funds; (4) any “fall-out” financial benefits that accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund); (5) comparative fee and expense structures (including a comparison of fees paid to an adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the

Annual Shareholder Report

42

adviser for what might be viewed as like services); and (6) the extent of care, conscientiousness and independence with which the fund's board members perform their duties and their expertise (including whether they are fully informed about all facts the board deems relevant to its consideration of an adviser's services and fees). The Board noted that the Securities and Exchange Commission (SEC) disclosure requirements regarding the basis for the Board's approval of the Fund's investment advisory contract generally align with the factors listed above. The Board was aware of these factors and was guided by them in its review of the Fund's investment advisory contract to the extent it considered them to be appropriate and relevant, as discussed further below.

The Board considered and weighed these factors in light of its substantial accumulated experience in governing the Fund and working with Federated Global Investment Management Corp. (the “Adviser”) and its affiliates (collectively, “Federated”) on matters relating to the funds advised by Federated (each, a “Federated Fund”). The Independent Trustees were assisted in their deliberations by independent legal counsel.

In addition to the extensive materials that comprise and accompany the CCO Fee Evaluation Report, the Board received detailed information about the Fund and the Federated organization throughout the year, and in connection with its May meetings at which the Board's formal approval of the advisory and subadvisory contracts occurred. In this regard, Federated provided much of this information at each regular meeting of the Board, and furnished additional information specifically in connection with the May meetings. In the months preceding the May meetings, the Board requested and reviewed written materials prepared by Federated in response to requests on behalf of the Independent Trustees encompassing a wide variety of topics. At the May meetings, in addition to meeting in separate sessions of the Independent Trustees without management present, senior management of the Adviser also met with the Independent Trustees and their counsel to discuss the materials presented and such additional matters as the Independent Trustees deemed reasonably necessary to evaluate the advisory and subadvisory contracts. Between regularly scheduled meetings, the Board also received information on particular matters as the need arose.

The Board's consideration of the investment advisory contract included review of the CCO Fee Evaluation Report, accompanying data and additional information covering the following matters, among others: the Adviser's investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund's short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, as well as in terms relative to its particular investment program and certain competitor or “peer group” funds and/or other benchmarks, as appropriate) and comments on the reasons for performance; the Fund's investment objectives; the Fund's expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to similar and/or competing funds), with due

Annual Shareholder Report

43

regard for contractual or voluntary expense limitations; the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial and other risks assumed by the Adviser in sponsoring the Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund's relationship to the Federated Funds which include a comprehensive array of funds with different investment objectives, policies and strategies which are generally available for exchange without the incurrence of additional sales charges; compliance and audit reports concerning the Federated Funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated's responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated Funds and/or Federated are responding to them. The Board's evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace.

While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board has found the use of such comparisons to be relevant to its deliberations. In this regard, the Board was presented with, and considered, information regarding the contractual advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund's total expense ratio (i.e., gross and net advisory fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated using data supplied by independent fund ranking organizations (the “Peer Group”). The Board received a description of the composition and methodology used to select the Peer Group. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because it is believed that they are more relevant. For example, other mutual funds are the products most like the Fund, in that they are readily available to Fund shareholders as alternative investment vehicles. Also, they are the type of investment vehicle, in fact, chosen and maintained by the Fund's investors. The range of their fees and expenses, therefore, appears to be a relevant indicator of what consumers have found to be reasonable in the marketplace in which the Fund competes.

Annual Shareholder Report

44

The Board reviewed the contractual advisory fee rate, net advisory fee rate and other expenses of the Fund and noted the position of the Fund's fee rates relative to its Peer Group. In this regard, the Board noted that the contractual advisory fee rate was above the median of the relevant Peer Group, but the Board noted the applicable waivers and reimbursements, and that the overall expense structure of the Fund remained competitive in the context of other factors considered by the Board.

For comparison, the CCO reviewed the fees charged by Federated for providing advisory services to products other than the Federated Funds (e.g., institutional separate accounts and third-party unaffiliated mutual funds for which Federated serves as sub-adviser) (referenced to as “Comparable Funds/Accounts”). With respect to Comparable Funds/Accounts other than third-party mutual funds, the CCO concluded that they are inherently different products. Those differences include, but are not limited to, different types of targeted investors; different applicable laws and regulations; different legal structures; different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; and the time spent by portfolio managers and their teams, as well as personnel in the Funds Financial Services, Legal, Compliance and Risk Management departments, in reviewing securities pricing, addressing different administrative responsibilities, addressing different degrees of risk associated with management and a variety of different costs. The CCO also reviewed the differences in the nature of the services required for Federated to manage its proprietary mutual fund business versus managing a discrete pool of assets as a sub-adviser to another institution's mutual fund, and that Federated generally performs significant additional services and assumes substantially greater risks in managing the Fund and other Federated Funds than in its role as sub-adviser to an unaffiliated third-party mutual fund. The CCO did not consider the fees for providing advisory services to Comparable Funds/Accounts to be determinative in judging the appropriateness of the Federated Funds' advisory fees.

The CCO noted that the services, administrative responsibilities and risks associated with such relationships are quite different than serving as a primary adviser to a fund.

Following such evaluation, and full deliberations, the Board concluded that the fees and expenses of the Fund are reasonable and supported renewal of the Fund's investment advisory contract.

The Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of the Adviser and its affiliates dedicated to the Fund. In this regard, the Board evaluated, among other things, the Adviser's personnel, experience, track record, financial resources, overall reputation and willingness to invest in personnel and infrastructure that benefit the Fund. In addition, the Board reviewed the qualifications, backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund and the Adviser's ability and experience in

Annual Shareholder Report

45

attracting and retaining qualified personnel to service the Fund. The Board noted the investment research and company engagement capabilities of the Adviser and its affiliates. The Board also noted the compliance program of the Adviser and the compliance-related resources provided to the Fund by the Adviser, including the Adviser's commitment to respond to rulemaking initiatives of the SEC. The Fund's ability to deliver competitive performance when compared to its Peer Group was also deemed to be relevant by the Board as a useful indicator of how the Adviser is executing the Fund's investment program. The Adviser's ability to execute this program was one of the Board's considerations in reaching a conclusion that the nature, extent and quality of the Adviser's investment management services warrant the continuation of the investment advisory contract.

In evaluating the Fund's investment performance, the Board considered performance results in light of the Fund's investment objective, strategies and risks, as disclosed in the Fund's prospectus. The Board considered detailed investment reports on the Fund's performance that were provided to the Board throughout the year and in connection with the May meetings. The CCO also reviewed information regarding the performance of other mutual funds in the Peer Group, noting the CCO's view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Adviser in managing the Fund. The Board considered, in evaluating such comparisons, that in some cases there may be differences in the funds' objectives or investment management techniques, or the costs to implement the funds, even within the same Peer Group.

The Fund's performance fell below the median of the relevant Peer Group for the one-year, three-year and five-year periods covered by the CCO Fee Evaluation Report. The Board discussed the Fund's performance with the Adviser and recognized the efforts being taken by the Adviser in the context of other factors considered relevant by the Board.

Following such evaluation, and full deliberations, the Board concluded that the performance of the Fund supported renewal of the Fund's investment advisory contract.

The Board also received financial information about Federated, including information regarding the compensation and ancillary (or “fall-out”) benefits Federated derived from its relationships with the Federated Funds. This information covered not only the fees under the investment advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated Funds under separate contracts (e.g., for serving as the Federated funds' administrator and distributor). In this regard, the Board considered that certain Federated subsidiaries provide distribution and shareholder services to the Federated Funds, for which they may be compensated through distribution and servicing fees paid pursuant to Rule 12b-1 plans or otherwise. The information also detailed any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated Fund trades. In

Annual Shareholder Report

46

addition, the Board considered the fact that, in order for a Federated Fund to be competitive in the marketplace, the Adviser and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to Federated Fund investors and/or indicated to the Board their intention to do so in the future. Moreover, the Board receives regular reporting as to the institution, adjustment or elimination of these voluntary waivers. The Board considered Federated's previous reductions in contractual management fees to certain Federated Funds in response to the CCO's recommendations in the prior year's CCO Fee Evaluation Report.

Federated furnished information, requested by the CCO, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses on a fund-by-fund basis, using allocation methodologies specified by the CCO. The CCO noted that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs continues to cause the CCO to question the precision of the process and to conclude that such reports may be unreliable, since a single change in an allocation estimate may dramatically alter the resulting estimate of cost and/or profitability of a Federated Fund and may produce unintended consequences. The allocation information, including the CCO's view that fund-by-fund estimations may be unreliable, was considered in the evaluation by the Board.

The Board and the CCO also reviewed information compiled by Federated comparing its profitability information to other publicly held fund management companies, including information regarding profitability trends over time. In this regard, the CCO concluded that Federated's profit margins did not appear to be excessive. The CCO also noted that Federated appeared financially sound, with the resources necessary to fulfill its obligations under its contracts with the Fund.

The CCO Fee Evaluation Report also discussed the notion of possible realization of “economies of scale” as a fund grows larger, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated has made significant and long-term investments in areas that support all of the Federated Funds, such as personnel and processes for the portfolio management, shareholder services, compliance, internal audit and risk management functions, as well as systems technology (including technology relating to cybersecurity) and that the benefits of these investments (as well as any economies of scale, should they exist) were likely to be shared with the Federated Fund family as a whole. The Board noted that Federated's investments in these areas are extensive. In addition, the Board considered that the Adviser and its affiliates have frequently waived fees and/or reimbursed expenses and that this has allowed potential economies of scale to be shared with shareholders. The Board also considered that such waivers and reimbursements can provide protection from an increase in expenses if a Federated Fund's assets decline. Federated, as it does throughout the year, and

Annual Shareholder Report

47

specifically in connection with the Board's review of the advisory and subadvisory contracts, furnished information relative to revenue sharing or adviser-paid fees. Federated and the CCO noted that this information should be viewed to determine if there was an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, and should not be viewed to determine the appropriateness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which (as discussed in the CCO Fee Evaluation Report) is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fee as a fund attains a certain size.

The CCO stated that his observations and the information accompanying the CCO Fee Evaluation Report supported a finding by the Board that the management fee for the Fund was reasonable. Under these circumstances, no changes were recommended to, and no objection was raised to the continuation of, the Fund's investment advisory contract. The CCO also recognized that the Board's evaluation of the Federated Funds' advisory and subadvisory arrangements is a continuing and on-going process that is informed by the information that the Board requests and receives from management throughout the course of the year and, in this regard, the CCO noted certain items for future reporting to the Board or further consideration by management as the Board continues its on-going oversight of the Federated Funds.

In its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an investment advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the investment advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund. The Board concluded that, in light of the factors summarized above, including the nature, quality and scope of the services provided to the Fund by the Adviser and its affiliates, continuation of the investment advisory contract was appropriate.

The Board based its decision to approve the investment advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the continuation of the contract reflects its view that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangement.

Annual Shareholder Report

48

Voting Proxies on Fund Portfolio Securities

A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at www.FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC's website at www.sec.gov.

Quarterly Portfolio Schedule

Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund's holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC's website at www.sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at www.FederatedInvestors.com.

Annual Shareholder Report

49

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

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

Federated Clover Small Value Fund

Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561

Contact us at FederatedInvestors.com
or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 314172289
CUSIP 314172271
CUSIP 314172172
CUSIP 314172263
CUSIP 31421N808

41198 (11/19)

Federated is a registered trademark of Federated Investors, Inc.
2019 ©Federated Investors, Inc.

Annual Shareholder Report

September 30, 2019

Share Class | Ticker A | BEARX C | PBRCX Institutional | PBRIX

Federated Prudent Bear Fund

Successor to the Prudent Bear Fund Established 1995

A Portfolio of Federated Equity Funds

IMPORTANT NOTICE REGARDING REPORT DELIVERY

Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.

If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4.

You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4. Your election to receive reports in paper will apply to all funds held with the Fund complex or your financial intermediary.

Not FDIC Insured ■ May Lose Value ■ No Bank Guarantee

J. Christopher
Donahue

President

Federated Prudent Bear Fund

Letter from the President

Dear Valued Shareholder,

I am pleased to present the Annual Shareholder Report for your fund covering the period from October 1, 2018 through September 30, 2019. This report includes Management's Discussion of Fund Performance, a complete listing of your fund's holdings, performance information and financial statements along with other important fund information.

In addition, our website, FederatedInvestors.com, offers easy access to Federated resources that include timely fund updates, economic and market insights from our investment strategists, and financial planning tools.

Thank you for investing with Federated. I hope you find this information useful and look forward to keeping you informed.

Sincerely,

J. Christopher Donahue, President

CONTENTS

Management's Discussion of Fund Performance	1
Portfolio of Investments Summary Tables	6
Portfolio of Investments	8
Financial Highlights	16
Statement of Assets and Liabilities	19
Statement of Operations	21
Statement of Changes in Net Assets	22
Notes to Financial Statements	23
Report of Independent Registered Public Accounting Firm	35
Shareholder Expense Example	37
Board of Trustees and Trust Officers	39
Evaluation and Approval of Advisory Contract–May 2019	45
Voting Proxies on Fund Portfolio Securities	52
Quarterly Portfolio Schedule	52

Management's Discussion of Fund Performance (unaudited)

The total return of Federated Prudent Bear Fund (the “Fund”), based on net asset value for the 12-month reporting period ended September 30, 2019, was -5.20% for Class A Shares, -5.91% for Class C Shares and -4.93% for Institutional Shares. The total return of the Standard & Poor's 500 Index (S&P 500),¹ a broad-based securities market index, was 4.25% for the same period. The total return for the Fund's market benchmark, the S&P 500 Inverse Daily Index (S&P 500 Inverse),² was -2.26% for the same period. The total return of the Morningstar Bear Market Funds Average (MBMFA)³a peer group average for the Fund, was -2.77%. The Fund's and MBMFA's total returns for the most recently completed fiscal year reflected actual cash flows, transaction costs and other expenses, which were not reflected in the total return of the S&P 500 or S&P 500 Inverse.

During the reporting period, the Fund's performance relative to the S&P 500 Inverse was most affected by the positioning and strategy⁴of the Fund.

The following discussion will focus on the performance of the Fund's Institutional Shares.

MARKET OVERVIEW

During the reporting period, U.S. equity markets declined significantly in the fourth quarter of 2018, rebounded in the first and second quarters of 2019, and were mixed in the third quarter of 2019. Amidst concerns of slowing global growth and trade disputes between the U.S. and China, increasing accommodation from global central banks facilitated modest positive returns in U.S. stocks for the reporting period. The Federal Reserve raised the federal funds target interest rate once, in December 2018, and lowered the target rate twice, in July 2019 and September 2019. Additionally, the reporting period ended with approximately $16 trillion in negative yielding debt globally, facilitated partially by renewed quantitative easing measures from the European Central Bank.

U.S. 10-year Treasury bond yields decreased materially for the reporting period from 3.06% at the start of the reporting period to 1.66% at the end of the reporting period. The decrease in 10-year yields was due to the net federal funds' target interest rate decrease and a significant lowering of the longer term federal funds rate expectations by market participants during the reporting period.

The U.S. dollar appreciated during the reporting period with the U.S. Dollar Index⁵ increasing 4.5%. Commodities were generally weak for the reporting period with the dramatic decrease in the price of crude oil as the most noteworthy performance. For the year ended September 30, 2019, Brent crude oil decreased 27%, natural gas declined 23% and copper declined 8%. Gold was a bright spot during the reporting period, advancing 24%.

Annual Shareholder Report

1

Volatility in equity prices was relatively high for the first quarter of the reporting period, as market declines and a federal funds target rate increase in December 2018 caused concern for market participants. For the remainder of the reporting period, volatility remained largely subdued. The CBOE Volatility Index^® (VIX^® Index)⁶ began the reporting period at 12, ended the reporting period at 16 and averaged approximately 17.

POSITIONING AND STRATEGY

The underperformance of the Fund versus the S&P 500 Inverse (the inverse of the total return of the S&P 500) for the reporting period was primarily due to the Fund's positioning and strategy.

Total net short exposure varied between 60% and 100% throughout much of the reporting period. The Fund commenced the reporting period with net short exposure at approximately 60%. This was comprised of gross short equity exposure of 103% and gross long equity exposure of 43%. Throughout the reporting period, the Fund increased gross short equity exposure and decreased gross long equity exposure. The Fund increased gross short equity exposure by 10% to 113% in the reporting period, and the Fund decreased gross long equity exposure by 19% to 24% in the reporting period, resulting in period-ending net short exposure of approximately 89%.

Throughout the reporting period, the Fund purchased and owned shares in equity securities that Fund management believed were trading below their intrinsic value and sold short equity securities that Fund management believed were trading at higher prices than were warranted. Additionally, the Fund utilized derivatives⁷ positions when appropriate throughout the reporting period.

1	Please see the footnote to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the S&P 500.
2	Please see the footnote to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the S&P 500 Inverse.
3	Please see the footnote to the line graphs under “Fund Performance and Growth of a $10,000 Investment” below for the definition of, and more information about, the MBMFA.
4	The Fund regularly makes short sales of securities, which involves unlimited risk including the possibility that losses may exceed the original amount invested. The Fund may also use options and futures contracts, which have risks associated with unlimited losses of the underlying holdings due to unanticipated market movements and failure to correctly predict the direction of securities prices, interest rates and currency exchange rates. However, a mutual fund investor's risk is limited to the amount of investment in a mutual fund. The Fund may also hold restricted securities purchased through private placements. Such securities may be difficult to sell without experiencing delays or additional costs. Please see the Prospectus for further details. Considering the increased risks, the Fund may not be suitable for all investors.

Annual Shareholder Report

2

5	The U.S. Dollar Index indicates the general international value of the U.S. dollar by averaging the exchange rates between the U.S. dollar and six major world currencies.*
6	The CBOE Volatility Index® (VIX® Index) is a leading measure of market expectations of near-term volatility conveyed by S&P 500 Index (SPX) option prices.*
7	The Fund's use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional instruments.
*	The index is unmanaged, and it is not possible to invest directly in an index.

Annual Shareholder Report

3

FUND PERFORMANCE AND GROWTH OF A $10,000 INVESTMENT

The graph below illustrates the hypothetical investment of $10,000¹ in the Federated Prudent Bear Fund from September 30, 2009 to September 30, 2019, compared to the Standard & Poor's 500 Index (S&P 500),² S&P 500 Inverse Daily Index (S&P 500 Inverse)³ and the Morningstar Bear Market Funds Average (MBMFA).⁴ The Average Annual Total Return table below shows returns for each class averaged over the stated periods.

Growth of $10,000 as of September 30, 2019

Federated Prudent Bear Fund -	Institutional Shares	Class C Shares	Class A Shares	S&P 500	S&P 500 Inverse	MBMFA
	F	F	F	I	I	I
9/30/2009	10,000	10,000	9,450	10,000	10,000	10,000
9/30/2010	8,872	8,796	8,380	11,016	8,798	7,829
9/30/2011	8,698	8,537	8,199	11,142	8,390	7,221
9/30/2012	6,545	6,370	6,157	14,507	6,271	5,067
9/30/2013	5,156	4,963	4,824	17,313	5,199	3,640
9/30/2014	4,219	4,019	3,935	20,730	4,304	2,848
9/30/2015	3,993	3,778	3,737	20,603	4,240	2,733
9/30/2016	3,451	3,224	3,212	23,782	3,622	2,068
9/30/2017	2,887	2,670	2,679	28,208	3,089	1,542
9/30/2018	2,359	2,161	2,185	33,260	2,663	1,255
9/30/2019	2,243	2,033	2,071	34,674	2,603	1,237

41 graphic description end -->

■	Total returns shown for Class C Shares include the maximum contingent deferred sales charge of 1.00% as applicable.
■	Total returns shown for Class A Shares include the maximum sales charge of 5.50% ($10,000 investment minus $550 sales charge = $9,450).

The Fund offers multiple share classes whose performance may be greater than or less than its other share class(es) due to differences in sales charges and expenses.

Average Annual Total Returnsfor the Period Ended 9/30/2019

(returns reflect all applicable sales charges and contingent deferred sales charges as specified below in footnote #2)

	1 Year	5 Years	10 Years
Class A Shares	-10.41%	-13.04%	-14.57%
Class C Shares	-6.85%	-12.74%	-14.73%
Institutional Shares	-4.93%	-11.87%	-13.88%
S&P 500	4.25%	10.84%	13.24%
S&P 500 Inverse	-2.26%	-9.56%	-12.59%
MBMFA4	-2.77%	-16.20%	-20.53%

Annual Shareholder Report

4

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

1	Represents a hypothetical investment of $10,000 in the Fund after deducting applicable sales charges: For Class A Shares, the maximum sales charge is 5.50%; for Class C Shares, the maximum contingent deferred sales charge is 1.00% on any redemption less than one year from the purchase date. The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500, S&P 500 Inverse and MBMFA have been adjusted to reflect reinvestment of dividends on securities in the indexes and average.
2	The S&P 500 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. The S&P 500 is not adjusted to reflect taxes, sales charges, expenses or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The S& P 500 is unmanaged and, unlike the Fund, are not affected by cash flows. It is not possible to invest directly in an index.
3	The S&P 500 Inverse is designed to provide the inverse performance of the S&P 500, representing a short position in the index. The S&P 500 Inverse is not adjusted to reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. The S&P 500 Inverse is unmanaged and, unlike the Fund, are not affected by cash flows. It is not possible to invest directly in an index.
4	Morningstar figures represent the average of the total returns reported by all the funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges. The Morningstar figures in the Growth of $10,000 line graph are based on historical return information published by Morningstar and reflect the return of the funds comprising the category in the year of publication. Because the funds designated by Morningstar as falling into the category can change over time, the Morningstar figures in the line graph may not match the Morningstar figures in the Average Annual Total Returns table, which reflect the return of the funds that currently comprise the category.

Annual Shareholder Report

5

Portfolio of Investments Summary Tables (unaudited)

At September 30, 2019, the Fund's portfolio composition was as follows:

	Percentage of Total Net Assets
Securities Sold Short	(64.4)%
Derivative Contracts—Short (notional value)1	(44.4)%
U.S. Treasury Securities	37.3%
Common Stocks	23.0%
Exchange-Traded Fund	1.0%
Other Security Type2	0.3%
Cash Equivalents3	39.9%
Adjustment for Derivative Contracts (notional value)1	45.5%
Collateral on Deposit for Securities Sold Short	63.3%
Other Assets and Liabilities—Net4	(1.5)%
TOTAL	100.0%

1	Derivative contracts may consist of futures, forwards, written options and swaps. More complete information regarding the Fund's direct investments in derivative contracts, including unrealized appreciation (depreciation), value and notional values or amounts of such contracts, can be found in the table at the end of the Portfolio of Investments included in this Report.
2	Other Security Type consists of purchased put options.
3	Cash Equivalents include any investments in money market mutual funds and/or overnight repurchase agreements.
4	Assets, other than investments in securities, securities sold short, derivative contracts and collateral on deposit for securities sold short, less liabilities. See Statement of Assets and Liabilities.

Annual Shareholder Report

6

At September 31, 2019, the Fund's sector composition⁵for its short positions was as follows:

Sector Composition	Percentage of Total Securities Sold Short6
Broad Equity Index	74.9%
Information Technology	5.2%
Financials	3.4%
Industrials	3.3%
Consumer Discretionary	3.1%
Consumer Staples	2.4%
Communication Services	1.9%
Health Care	1.7%
Materials	1.5%
Energy	1.4%
Real Estate	0.6%
Utilities	0.6%
TOTAL	100.0%

5	Sector classifications are based upon, and individual portfolio securities are assigned to, the classifications of the Global Industry Classification Standard (GICS) except that the Adviser assigns a classification to securities not classified by the GICS and to securities for which the Adviser does not have access to the classification made by the GICS.
6	Includes any short positions on futures contracts.

Annual Shareholder Report

7

Portfolio of Investments

September 30, 2019

Shares, Principal Amount or Contracts			Value
		COMMON STOCKS—23.0%
		Communication Services—2.0%
600	1	Alphabet, Inc., Class A	$732,684
4,000	1	Facebook, Inc.	712,320
10,000	1	Twitter, Inc.	412,000
15,000		Verizon Communications, Inc.	905,400
		TOTAL	2,762,404
		Consumer Discretionary—3.6%
450	1	Amazon.com, Inc.	781,160
300	1	AutoZone, Inc.	325,386
5,000		Darden Restaurants, Inc.	591,100
10,000		eBay, Inc.	389,800
2,000		Home Depot, Inc.	464,040
20,000	1	Kura Sushi USA, Inc.	392,400
4,800		Nike, Inc., Class B	450,816
10,000		Pulte Group, Inc.	365,500
10,000	1	Revolve Group LLC	233,700
3,000		Ross Stores, Inc.	329,550
5,000		Starbucks Corp.	442,100
6,000		TJX Cos., Inc.	334,440
		TOTAL	5,099,992
		Consumer Staples—1.7%
6,000		Colgate-Palmolive Co.	441,060
5,000		PepsiCo, Inc.	685,500
7,000		Procter & Gamble Co.	870,660
6,000		Sysco Corp.	476,400
		TOTAL	2,473,620
		Energy—0.5%
6,000		Chevron Corp.	711,600
		Financials—2.8%
20,000		Ally Financial, Inc.	663,200
6,000		CIT Group Holdings, Inc.	271,860
10,000		Citigroup, Inc.	690,800
4,000		Discover Financial Services	324,360
20,000		First Horizon National Corp.	324,000

Annual Shareholder Report

8

Shares, Principal Amount or Contracts			Value
		COMMON STOCKS—continued
		Financials—continued
40,000	1	Oportun Financial Corp.	$648,800
20,000	1	ProSight Global, Inc.	387,200
16,000		Sterling Bancorp	320,960
10,000		Synchrony Financial	340,900
		TOTAL	3,972,080
		Health Care—4.3%
2,000		Amgen, Inc.	387,020
2,000	1	Biogen, Inc.	465,640
40,000	1	Change Healthcare, Inc.	483,200
6,000		Eli Lilly & Co.	670,980
14,875	1	Envista Holdings Corp.	414,715
3,000	1	Incyte Genomics, Inc.	222,690
40,000	1	Inmode Ltd.	860,400
3,000	1	Jazz Pharmaceuticals PLC.	384,420
20,000	1	Livongo Health, Inc.	348,800
10,000		Merck & Co., Inc.	841,800
29,232	1	Mirum Pharmaceuticals, Inc.	294,074
15,000	1	Personalis, Inc.	220,125
10,714	1	SmileDirectClub, Inc.	148,710
5,000	1	Stoke Therapeutics, Inc.	107,450
2,000	1	Veeva Systems, Inc.	305,380
		TOTAL	6,155,404
		Industrials—1.7%
6,000		Alaska Air Group, Inc.	389,460
10,000		Delta Air Lines, Inc.	576,000
1,000		Lockheed Martin Corp.	390,060
15,000	1	Parsons Corp.	494,700
10,000		Southwest Airlines Co.	540,100
		TOTAL	2,390,320
		Information Technology—4.6%
2,000		Accenture PLC	384,700
4,600	1	Akamai Technologies, Inc.	420,348
3,000		Apple, Inc.	671,910
1,000		Broadcom, Inc.	276,070
25,000	1	Cambium Networks Corp.	242,500
12,000		Cisco Systems, Inc.	592,920

Annual Shareholder Report

9

Shares, Principal Amount or Contracts			Value
		COMMON STOCKS—continued
		Information Technology—continued
6,429	1	CloudFlare, Inc.	$119,387
5,000	1	Fortinet, Inc.	383,800
1,400		Intuit, Inc.	372,316
4,000	1	Keysight Technologies, Inc.	389,000
5,000		Microsoft Corp.	695,150
2,000		NXP Semiconductors NV	218,240
7,000		Oracle Corp.	385,210
3,400	1	PayPal Holdings, Inc.	352,206
12,801	1	Ping Identity Holding Corp.	220,817
3,000	1	Proofpoint, Inc.	387,150
1,500	1	ServiceNow, Inc.	380,775
		TOTAL	6,492,499
		Real Estate—1.0%
6,000		EPR Properties	461,160
6,000		Lamar Advertising Co.	491,580
2,600		Simon Property Group, Inc.	404,690
		TOTAL	1,357,430
		Utilities—0.8%
14,000		Exelon Corp.	676,340
10,000		FirstEnergy Corp.	482,300
		TOTAL	1,158,640
		TOTAL COMMON STOCKS (IDENTIFIED COST $31,287,662)	32,573,989
		EXCHANGE-TRADED FUND—1.0%
50,000		Financial Select Sector SPDR Fund (IDENTIFIED COST $1,419,097)	1,400,000
		U.S. TREASURIES—37.3%
		U.S. Treasury Bills—7.0%
$10,000,000	2	United States Treasury Bills, 2.468%, 1/30/2020	9,940,144
		U.S. Treasury Notes—30.3%
43,000,000	3	United States Treasury Note, 1.375%, 1/15/2020	42,931,974
		TOTAL U.S. TREASURIES (IDENTIFIED COST $52,831,776)	52,872,118
		PURCHASED PUT OPTIONS—0.3%
800	1	SPDR S&P 500 ETF Trust, Notional Amount $23,741,600, Exercise Price $250.00, Expiration Date 1/17/2020	128,400

Annual Shareholder Report

10

Shares, Principal Amount or Contracts			Value
		PURCHASED PUT OPTIONS—continued
800	1	SPDR S&P 500 ETF Trust, Notional Amount $23,741,600, Exercise Price $270.00, Expiration Date 1/17/2020	$295,200
		TOTAL PURCHASED PUT OPTIONS (IDENTIFIED COST $1,345,141)	423,600
		INVESTMENT COMPANY—39.9%
56,671,448		Federated Government Obligations Fund, Premier Shares, 1.89%4 (IDENTIFIED COST $56,671,448)	56,671,448
		TOTAL INVESTMENT IN SECURITIES—101.5% (IDENTIFIED COST $143,555,124)5	143,941,155
		OTHER ASSETS AND LIABILITIES - NET—(1.5)%6	(2,088,750)
		TOTAL NET ASSETS—100%	$141,852,405

SECURITIES SOLD SHORT—(64.4)%

Shares		Value
	Broad Equity Index—(37.1)%
8,000	iShares Russell 2000 Value ETF	$1,210,720
173,000	S&P Depositary Receipts Trust	51,341,210
	TOTAL	52,551,930
	Communication Services—(2.1)%
3,200	IAC Interactive Corp.	697,504
1,350	NetFlix, Inc.	361,287
2,700	Spotify Technology SA	307,800
6,000	Walt Disney Co.	781,920
139,000	Zynga, Inc.	808,980
	TOTAL	2,957,491
	Consumer Discretionary—(3.4)%
14,000	Brunswick Corp.	729,680
8,000	CarMax, Inc.	704,000
3,500	Grand Canyon Education, Inc.	343,700
12,000	GrubHub, Inc.	674,520
9,100	Hyatt Hotels Corp.	670,397
26,000	Macy's, Inc.	404,040
5,700	Marriott International, Inc., Class A	708,909
6,700	Tiffany & Co.	620,621
	TOTAL	4,855,867
	Consumer Staples—(2.6)%
16,100	Archer-Daniels-Midland Co.	661,227

Annual Shareholder Report

11

Shares		Value
	Consumer Staples—continued
2,000	Constellation Brands, Inc., Class A	$414,560
16,500	Energizer Holdings, Inc.	719,070
17,000	Hormel Foods Corp.	743,410
6,500	Kellogg Co.	418,275
25,500	Keurig Dr Pepper, Inc.	696,660
	TOTAL	3,653,202
	Energy—(1.6)%
11,000	Cheniere Energy, Inc.	693,660
12,400	Exxon Mobil Corp.	875,564
32,000	National Oilwell Varco, Inc.	678,400
	TOTAL	2,247,624
	Financials—(3.7)%
17,500	Bank of New York Mellon Corp.	791,175
3,800	Berkshire Hathaway, Inc., Class B	790,476
3,800	CME Group, Inc.	803,092
7,000	First Republic Bank	676,900
13,300	Interactive Brokers Group, Inc., Class A	715,274
610	Markel Corp.	720,959
12,200	State Street Corp.	722,118
	TOTAL	5,219,994
	Health Care—(1.8)%
16,500	Boston Scientific Corp.	671,385
5,050	ICU Medical, Inc.	805,980
740	Intuitive Surgical, Inc.	399,548
3,400	UnitedHealth Group, Inc.	738,888
	TOTAL	2,615,801
	Industrials—(3.6)%
6,200	Fortive Corp.	425,072
25,000	Lyft, Inc.	1,021,000
3,100	Nordson Corp.	453,406
33,000	Uber Technologies, Inc.	1,005,510
10,300	Wabtec Corp.	740,158
4,300	Watsco, Inc.	727,474
8,800	Xylem, Inc.	700,656
	TOTAL	5,073,276
	Information Technology—(5.7)%
12,500	Advanced Micro Devices, Inc.	362,375
7,300	Anaplan, Inc.	343,100
3,600	Ansys, Inc.	796,896

Annual Shareholder Report

12

Shares		Value
	Information Technology—continued
16,000	CoreLogic, Inc.	$740,320
9,300	Elastic N.V.	765,762
11,400	First Solar, Inc.	661,314
7,400	Guidewire Software, Inc.	779,812
5,600	Henry Jack & Associates, Inc.	817,432
33,000	Marvell Technology Group Ltd.	824,010
9,000	Paychex, Inc.	744,930
6,200	Square, Inc.	384,090
3,000	Tyler Technologies, Inc.	787,500
	TOTAL	8,007,541
	Materials—(1.6)%
6,800	Albemarle Corp.	472,736
6,000	DuPont de Nemours, Inc.	427,860
5,500	International Flavors & Fragrances, Inc.	674,795
3,900	Linde PLC	755,508
	TOTAL	2,330,899
	Real Estate—(0.6)%
3,000	Alexandria Real Estate Equities, Inc.	462,120
4,900	WP Carey, Inc.	438,550
	TOTAL	900,670
	Utilities—(0.6)%
3,900	Atmos Energy Corp.	444,171
15,000	NiSource, Inc.	448,800
	TOTAL	892,971
	TOTAL SECURITIES SOLD SHORT (PROCEEDS $83,445,454)	91,307,266

Annual Shareholder Report

13

Affiliated fund holdings are investment companies which are managed by the Adviser or an affiliate of the Adviser. Transactions with affiliated fund holdings during the period ended September 30, 2019, were as follows:

	Federated Government Obligations Fund, Premier Shares
Balance of Shares Held 9/30/2018	43,754,068
Purchases/Additions	300,275,846
Sales/Reductions	(287,358,466)
Balance of Shares Held 9/30/2019	56,671,448
Value	$56,671,448
Change in Unrealized Appreciation/Depreciation	N/A
Net Realized Gain/(Loss)	N/A
Dividend Income	$1,153,507

At September 30, 2019, the Fund had the following outstanding futures contracts:

Description	Number of Contracts	Notional Value	Expiration Date	Value and Unrealized Appreciation
1E-Mini Russel 2000 Index Short Futures	485	$36,981,250	December 2019	$1,307,924
1S&P 500 E-Mini Index Short Futures	175	$26,061,875	December 2019	$216,681
NET UNREALIZED APPRECIATION ON FUTURES CONTRACTS				$1,524,605

Net Unrealized Appreciation on Futures Contracts and on the Value of Securities Sold Short is included in “Other Assets and Liabilities—Net.”

1	Non-income-producing security.
2	Discount rate at time of purchase.
3	All or a portion of this security is pledged as collateral to ensure the Fund is able to satisfy the obligations of its outstanding short futures and securities sold short contracts.
4	7-day net yield.
5	The cost of investments for federal tax purposes amounts to $231,017,458.
6	Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities.

Note: The categories of investments are shown as a percentage of total net assets at September 30, 2019.

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:

Level 1—quoted prices in active markets for identical securities.

Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.

Level 3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.

Annual Shareholder Report

14

The following is a summary of the inputs used, as of September 30, 2019, in valuing the Fund's assets carried at fair value:

Valuation Inputs
	Level 1— Quoted Prices	Level 2— Other Significant Observable Inputs	Level 3— Significant Unobservable Inputs	Total
Equity Securities:
Common Stocks
Domestic	$30,483,729	$—	$—	$30,483,729
International	2,090,260	—	—	2,090,260
Debt Securities:
U.S. Treasuries	—	52,872,118	—	52,872,118
Exchange-Traded Fund	1,400,000	—	—	1,400,000
Purchased Put Options	423,600	—	—	423,600
Investment Company	56,671,448	—	—	56,671,448
TOTAL SECURITIES	$91,069,037	$52,872,118	$—	$143,941,155
Other Financial Instruments
Assets
Securities Sold Short	$—	$—	$—	$—
Futures Contracts	1,524,605	—	—	1,524,605
Liabilities
Securities Sold Short	(91,307,266)	—	—	(91,307,266)
Futures Contracts	—	—	—	—
TOTAL OTHER FINANCIAL INSTRUMENTS	$(89,782,661)	$—	$—	$(89,782,661)

The following acronyms are used throughout this portfolio:

ETF	—Exchange-Traded Fund
SPDR	—Standard & Poor's Depositary Receipt

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

15

Financial Highlights–Class A Shares

(For a Share Outstanding Throughout Each Period)¹

Year Ended September 30	2019	2018	2017	2016	2015
Net Asset Value, Beginning of Period	$13.27	$16.27	$19.50	$22.70	$23.90
Income From Investment Operations:
Net investment income (loss)2	0.10	(0.11)	(0.25)	(0.26)	(0.50)
Net realized and unrealized gain (loss)	(0.79)	(2.89)	(2.98)	(2.94)	(0.70)
TOTAL FROM INVESTMENT OPERATIONS	(0.69)	(3.00)	(3.23)	(3.20)	(1.20)
Net Asset Value, End of Period	$12.58	$13.27	$16.27	$19.50	$22.70
Total Return3	(5.20)%	(18.44)%	(16.56)%	(14.10)%	(5.02)%
Ratios to Average Net Assets:
Net expenses	2.84%	3.54%	3.34%	3.23%4	3.23%4
Net expenses excluding dividends and other expenses related to short sales	1.78%	1.89%	1.78%	1.76%4	1.76%4
Net investment income (loss)	0.74%	(0.74)%	(1.40)%	(1.22)%	(2.10)%
Expense waiver/reimbursement5	0.09%	0.10%	0.07%	0.04%	0.05%
Supplemental Data:
Net assets, end of period (000 omitted)	$53,827	$57,253	$82,782	$151,943	$176,614
Portfolio turnover	313%	284%	315%	430%	394%

1	On February 5, 2016, the Fund effected a 1 for 10 reverse share split. As a result of the reverse share split: (1) the number of outstanding Shares of the Fund decreased by a factor of 10; and (2) since the Fund's total number of shares outstanding decreased, the net asset value per Fund Share (NAV/Share) increased. The reverse share split did not affect the value of the Fund's net assets or each shareholders proportional ownership interest in those assets. Per share data has been restated where applicable.
2	Per share numbers have been calculated using the average shares method.
3	Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
4	The net expense ratios are calculated without reduction for fees paid indirectly for expense offset arrangements. The net expense ratios are 3.23% and 3.23%, after taking into account these expense reductions for the years ended September 30, 2016 and 2015, respectively. The net expense ratios excluding dividends and other expenses related to short sales are also calculated without reduction for these fees paid indirectly for expense offset arrangements.
5	This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

16

Financial Highlights–Class C Shares

(For a Share Outstanding Throughout Each Period)¹

Year Ended September 30	2019	2018	2017	2016	2015
Net Asset Value, Beginning of Period	$11.67	$14.42	$17.41	$20.40	$21.70
Income From Investment Operations:
Net investment income (loss)2	0.003	(0.20)	(0.34)	(0.37)	(0.60)
Net realized and unrealized gain (loss)	(0.69)	(2.55)	(2.65)	(2.62)	(0.70)
TOTAL FROM INVESTMENT OPERATIONS	(0.69)	(2.75)	(2.99)	(2.99)	(1.30)
Net Asset Value, End of Period	$10.98	$11.67	$14.42	$17.41	$20.40
Total Return4	(5.91)%	(19.07)%	(17.17)%	(14.66)%	(5.99)%
Ratios to Average Net Assets:
Net expenses	3.59%	4.28%	4.09%	3.98%5	3.98%5
Net expenses excluding dividends and other expenses related to short sales	2.53%	2.63%	2.53%	2.51%5	2.51%5
Net investment income (loss)	0.01%	(1.49)%	(2.16)%	(1.98)%	(2.84)%
Expense waiver/reimbursement6	0.09%	0.10%	0.07%	0.04%	0.05%
Supplemental Data:
Net assets, end of period (000 omitted)	$10,422	$12,090	$18,278	$29,624	$35,556
Portfolio turnover	313%	284%	315%	430%	394%

1	On February 5, 2016, the Fund effected a 1 for 10 reverse share split. As a result of the reverse share split: (1) the number of outstanding Shares of the Fund decreased by a factor of 10; and (2) since the Fund's total number of shares outstanding decreased, the net asset value per Fund Share (NAV/Share) increased. The reverse share split did not affect the value of the Fund's net assets or each shareholders proportional ownership interest in those assets. Per share data has been restated where applicable.
2	Per share numbers have been calculated using the average shares method.
3	Represents less than $0.01.
4	Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
5	The net expense ratios are calculated without reduction for fees paid indirectly for expense offset arrangements. The net expense ratios are 3.98% and 3.98%, after taking into account these expense reductions for the years ended September 30, 2016 and 2015, respectively. The net expense ratios excluding dividends and other expenses related to short sales are also calculated without reduction for these fees paid indirectly for expense offset arrangements.
6	This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

17

Financial Highlights–Institutional Shares

(For a Share Outstanding Throughout Each Period)¹

Year Ended September 30	2019	2018	2017	2016	2015
Net Asset Value, Beginning of Period	$13.59	$16.63	$19.88	$23.00	$24.30
Income From Investment Operations:
Net investment income (loss)2	0.14	(0.07)	(0.20)	(0.20)	(0.40)
Net realized and unrealized gain (loss)	(0.81)	(2.97)	(3.05)	(2.92)	(0.90)
TOTAL FROM INVESTMENT OPERATIONS	(0.67)	(3.04)	(3.25)	(3.12)	(1.30)
Net Asset Value, End of Period	$12.92	$13.59	$16.63	$19.88	$23.00
Total Return3	(4.93)%	(18.28)%	(16.35)%	(13.57)%	(5.35)%
Ratios to Average Net Assets:
Net expenses	2.56%	3.26%	3.04%	2.93%4	2.97%4
Net expenses excluding dividends and other expenses related to short sales	1.53%	1.63%	1.53%	1.51%4	1.51%4
Net investment income (loss)	1.03%	(0.48)%	(1.09)%	(0.92)%	(1.85)%
Expense waiver/reimbursement5	0.09%	0.10%	0.06%	0.04%	0.05%
Supplemental Data:
Net assets, end of period (000 omitted)	$77,603	$86,727	$107,720	$172,765	$181,811
Portfolio turnover	313%	284%	315%	430%	394%

1	On February 5, 2016, the Fund effected a 1 for 10 reverse share split. As a result of the reverse share split: (1) the number of outstanding Shares of the Fund decreased by a factor of 10; and (2) since the Fund's total number of shares outstanding decreased, the net asset value per Fund Share (NAV/Share) increased. The reverse share split did not affect the value of the Fund's net assets or each shareholders proportional ownership interest in those assets. Per share data has been restated where applicable.
2	Per share numbers have been calculated using the average shares method.
3	Based on net asset value.
4	The net expense ratios are calculated without reduction for fees paid indirectly for expense offset arrangements. The net expense ratios are 2.93% and 2.97%, after taking into account these expense reductions for the years ended September 30, 2016 and 2015, respectively. The net expense ratios excluding dividends and other expenses related to short sales are also calculated without reduction for these fees paid indirectly for expense offset arrangements.
5	This expense decrease is reflected in both the net expense and the net investment income (loss) ratios shown above.

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

18

Statement of Assets and Liabilities

September 30, 2019

Assets:
Investment in securities, at value including $56,671,448 of investment in an affiliated holding (identified cost $143,555,124)		$143,941,155
Cash denominated in foreign currencies (identified cost $112)		112
Deposit at broker for short sales		89,720,070
Income receivable		140,730
Income receivable from an affiliated holding		101,648
Interest receivable on short positions		101,221
Receivable for investments sold		2,841,902
Receivable for shares sold		121,391
TOTAL ASSETS		236,968,229
Liabilities:
Securities sold short, at value (proceeds $83,445,454)	$91,307,266
Dividends payable on short positions	238,137
Payable for investments purchased	2,137,528
Payable for shares redeemed	331,681
Bank overdraft	816,958
Payable for daily variation margin on futures contracts	150,415
Payable for investment adviser fee (Note 5)	4,204
Payable for administrative fees (Note 5)	309
Payable for distribution services fee (Note 5)	6,285
Payable for other service fees (Notes 2 and 5)	19,788
Accrued expenses (Note 5)	103,253
TOTAL LIABILITIES		95,115,824
Net assets for 11,232,774 shares outstanding		$141,852,405
Net Assets Consist of:
Paid-in capital		$964,690,749
Total distributable earnings (loss)		(822,838,344)
TOTAL NET ASSETS		$141,852,405

Annual Shareholder Report

19

Statement of Assets and Liabilities–continued

Net Asset Value, Offering Price and Redemption Proceeds Per Share
Class A Shares:
Net asset value per share ($53,827,449 ÷ 4,278,005 shares outstanding), no par value, unlimited shares authorized	$12.58
Offering price per share (100/94.50 of $12.58)	$13.31
Redemption proceeds per share	$12.58
Class C Shares:
Net asset value per share ($10,421,681 ÷ 948,913 shares outstanding), no par value, unlimited shares authorized	$10.98
Offering price per share	$10.98
Redemption proceeds per share (99.00/100 of $10.98)	$10.87
Institutional Shares:
Net asset value per share ($77,603,275 ÷ 6,005,856 shares outstanding), no par value, unlimited shares authorized	$12.92
Offering price per share	$12.92
Redemption proceeds per share	$12.92

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

20

Statement of Operations

Year Ended September 30, 2019

Investment Income:
Interest		$4,961,207
Dividends (including $1,153,507 received from an affiliated holding* and net of foreign taxes withheld of $2,869)		1,256,731
TOTAL INCOME		6,217,938
Expenses:
Investment adviser fee (Note 5)	$2,164,554
Administrative fee (Note 5)	139,763
Custodian fees	33,908
Transfer agent fee	226,740
Directors'/Trustees' fees (Note 5)	1,931
Auditing fees	37,570
Legal fees	11,524
Portfolio accounting fees	75,210
Distribution services fee (Note 5)	92,619
Other service fees (Notes 2 and 5)	172,098
Share registration costs	52,942
Printing and postage	41,772
Miscellaneous (Note 5)	29,181
Expenses related to short positions	1,802,372
TOTAL EXPENSES	4,882,184
Waiver/reimbursement of investment adviser fee (Note 5)	(160,144)
Net expenses		4,722,040
Net investment income		1,495,898
Realized and Unrealized Gain (Loss) on Investments, Futures Contracts, Short Sales and Foreign Currency Transactions:
Net realized gain on investments		415,638
Net realized loss on foreign currency transactions		(7,361)
Net realized loss on futures contracts		(2,795,840)
Net realized loss on short sales		(9,468,968)
Net change in unrealized depreciation of investments		694,671
Net change in unrealized appreciation/depreciation of translation of assets and liabilities in foreign currency		(297)
Net change in unrealized depreciation of futures contracts		1,699,305
Net change in unrealized depreciation of securities sold short		(3,762,985)
Net realized and unrealized loss on investments, futures contracts, short sales and foreign currency transactions		(13,225,837)
Change in net assets resulting from operations		$(11,729,939)

* See information listed after the Fund's Portfolio of Investments

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

21

Statement of Changes in Net Assets

Year Ended September 30	2019	2018
Increase (Decrease) in Net Assets
Operations:
Net investment income (loss)	$1,495,898	$(1,172,706)
Net realized loss	(11,856,531)	(31,972,504)
Net change in unrealized appreciation/depreciation	(1,369,306)	78,921
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS	(11,729,939)	(33,066,289)
Share Transactions:
Proceeds from sale of shares	190,366,433	153,327,029
Cost of shares redeemed	(192,854,252)	(172,971,225)
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS	(2,487,819)	(19,644,196)
Change in net assets	(14,217,758)	(52,710,485)
Net Assets:
Beginning of period	156,070,163	208,780,648
End of period	$141,852,405	$156,070,163

See Notes which are an integral part of the Financial Statements

Annual Shareholder Report

22

Notes to Financial Statements

September 30, 2019

1. ORGANIZATION

Federated Equity Funds (the “Trust”) is registered under the Investment Company Act of 1940, as amended (the “Act”), as an open-end management investment company. The Trust consists of 10 portfolios. The financial statements included herein are only those of Federated Prudent Bear Fund (the “Fund”), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. Each portfolio pays its own expenses. The Fund offers three classes of shares: Class A Shares, Class C Shares and Institutional Shares. All shares of the Fund have equal rights with respect to voting, except on class-specific matters. The investment objective of the Fund is to seek capital appreciation.

On March 30, 2017, the Fund's T Share Class became effective with the Securities and Exchange Commission (SEC), but is not yet offered for sale.

2. SIGNIFICANT ACCOUNTING POLICIES

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

Investment Valuation

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

■	Equity securities including shares of exchange traded funds listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■	Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Fund's Board of Trustees (the “Trustees”).
■	Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs.
■	Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
■	Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
■	For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered, such as: the last traded or purchase price of the security, information obtained by contacting the issuer or dealers, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded, public trading in similar securities or derivative contracts of the issuer or comparable issuers, movement of a relevant index, or other factors including but not limited to industry changes and relevant government actions.

If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund's valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the valuation committee (“Valuation Committee”), is deemed not

Annual Shareholder Report

23

representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.

Fair Valuation and Significant Events Procedures

The Trustees have ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Trustees have appointed a Valuation Committee comprised of officers of the Fund, Federated Equity Management Company of Pennsylvania (the “Adviser”) and certain of the Adviser's affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Trustees have also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services' policies, procedures and valuation methods (including key inputs, methods, models and assumptions), transactional back-testing, comparisons of evaluations of different pricing services, and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the Valuation Committee and any changes made to the procedures.

Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts. In the event that market quotations and price evaluations are not available for an investment, the fair value of the investment is determined in accordance with procedures adopted by the Trustees.

The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

■	With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■	Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded;

Annual Shareholder Report

24

■  Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.

The Trustees have adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Fund will determine the fair value of the investment in accordance with the fair valuation procedures approved by the Trustees. The Trustees have ultimate responsibility for any fair valuations made in response to a significant event.

Repurchase Agreements

The Fund may invest in repurchase agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which the Fund holds a “securities entitlement” and exercises “control” as those terms are defined in the Uniform Commercial Code. The Fund has established procedures for monitoring the market value of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.

The insolvency of the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.

The Fund may enter into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of proceeds from any repurchase or other disposition of such securities.

Investment Income, Gains and Losses, Expenses and Distributions

Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Foreign dividends are recorded on the ex-dividend date or when the Fund is informed of the ex-dividend date. Distributions of net investment income, if any, are declared and paid annually. Non-cash dividends included in dividend income, if any, are recorded at fair value. Amortization/accretion of premium and discount is included in

Annual Shareholder Report

25

investment income. Investment income, realized and unrealized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that select classes will bear certain expenses unique to those classes. The detail of the total fund expense waiver and reimbursement of $160,144 is disclosed in various locations in this Note 5.

Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses. Accumulated net investment income (loss) at September 30, 2018, was $(998,956).

Other Service Fees

The Fund may pay other service fees up to 0.25% of the average daily net assets of the Fund's Class A Shares and Class C Shares to unaffiliated financial intermediaries or to Federated Shareholder Services Company (FSSC) for providing services to shareholders and maintaining shareholder accounts.

Subject to the terms described in the Expense Limitation note, FSSC may voluntarily reimburse the Fund for other service fees. For the year ended September 30, 2019, other service fees for the Fund were as follows:

	Other Service Fees Incurred
Class A Shares	$141,605
Class C Shares	30,493
TOTAL	$172,098

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended September 30, 2019, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of September 30, 2019, tax years 2016 through 2019 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America and the Commonwealth of Massachusetts.

The Fund may be subject to taxes imposed by governments of countries in which it invests. Such taxes are generally based on either income or gains earned or repatriated. The Fund accrues and applies such taxes to net investment income, net realized gains and net unrealized gains as income and/or gains are earned.

When-Issued and Delayed-Delivery Transactions

The Fund may engage in when-issued or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Annual Shareholder Report

26

Futures Contracts

The Fund purchases and sells financial futures contracts to manage market risk and sector/asset class risk. Upon entering into a financial futures contract with a broker, the Fund is required to deposit in a segregated account, either U.S. government securities or a specified amount of Restricted cash, which is shown in the Statement of Assets and Liabilities. Futures contracts are valued daily and unrealized gains or losses are recorded in a “variation margin” account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with the changes in the value of the underlying securities. There is minimal counterparty risk to the Fund since futures contracts are exchange traded and the exchange's clearinghouse, as counterparty to all exchange traded futures contracts, guarantees the futures contracts against default.

Futures contracts outstanding at period end are listed after the Fund's Portfolio of Investments.

The average notional value of short futures contracts held by the Fund throughout the period was $67,671,187. This is based on amounts held as of each month-end throughout the fiscal period.

Foreign Exchange Contracts

The Fund enters into foreign exchange contracts to manage currency risk and market risk. Purchased contracts are used to acquire exposure to foreign currencies, whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering into these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date.

At September 30, 2019, the Fund had no outstanding foreign exchange contracts.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

Annual Shareholder Report

27

Option Contracts

The Fund buys or sells put and call options to seek to manage individual security risk, market risk and sector/asset class risk. The seller (“writer”) of an option receives a payment or premium, from the buyer, which the writer keeps regardless of whether the buyer exercises the option. When the Fund writes a put or call option, an amount equal to the premium received is recorded as a liability and subsequently marked to market to reflect the current value of the option written. Premiums received from writing options which expire are treated as realized gains. The Fund, as a writer of an option, bears the market risk of an unfavorable change in the price of the underlying reference instrument. When the Fund purchases a put or call option, an amount equal to the premium paid is recorded as an increase to the cost of the investment and subsequently marked to market to reflect the current value of the option purchased. Premiums paid for purchasing options which expire are treated as realized losses. Premiums received/paid for writing/purchasing options which are exercised or closed are added to the proceeds or offset against amounts paid on the underlying reference instrument to determine the realized gain or loss. The risk associated with purchasing put and call options is limited to the premium paid. Options can trade on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. This protects investors against potential defaults by the counterparty.

Purchased option contracts outstanding at period-end are listed in the Fund's Portfolio of Investments.

The average market value of purchased put and call options held by the Fund throughout the period was $914,831 and $54,623, respectively. This is based on amounts held as of each month-end throughout the fiscal period.

Short Sales

In a short sale, the Fund sells a security it does not own in anticipation of a decline in the fair market value of the security. When the Fund sells a security short, it must borrow the security in order to deliver it at the completion of the sale. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of the short sale.

The Fund has an obligation to replace the borrowed security (e.g., to purchase the security at a future date and deliver it to the lender of the security). While the security is borrowed, the proceeds from the sale are deposited with the lender (“Prime Broker”). The Fund may incur two types of expenses from short sales: borrowing expenses and dividend expenses. Borrowing expenses may occur because the Fund may be obligated to pay fees to the Prime Broker on borrowed securities. This fee is normally based upon the market value of the borrowed security and is dependent upon the availability of the security. Dividend expenses may occur because the Fund has to pay the Prime Broker the equivalent of any dividends earned on the borrowed security.

For the fiscal year ended September 30, 2019, the net realized gain (loss) and the net change in unrealized appreciation/(depreciation) on short sales was $(9,468,968) and $(3,762,985), respectively.

Annual Shareholder Report

28

Restricted Securities

The Fund may purchase securities which are considered restricted. Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer's expense, either upon demand by the Fund or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. The Fund's restricted securities, like other securities, are priced in accordance with procedures established by and under the general supervision of the Trustees.

Additional Disclosure Related to Derivative Instruments

Fair Value of Derivative Instruments
	Assets		Liabilities
	Statement of Assets and Liabilities Location	Fair Value	Statement of Assets and Liabilities Location	Fair Value
Derivatives not accounted for as hedging instruments under ASC Topic 815
Equity contracts	Purchased options, within Investment in securities at value	$423,600		$—
Equity contracts		$—	Payable for daily variation margin on futures contracts	$(1,524,605)*
Total derivatives not accounted for as hedging instruments under ASC Topic 815		$423,600		$(1,524,605)

* Fund net assets includes the cumulative appreciation of futures contracts as reported in the footnotes to the Portfolio of Investments. Only the current day's unsettled variation margin is reported as a liability within the Statement of Assets and Liabilities.

Annual Shareholder Report

29

The Effect of Derivative Instruments on the Statement of Operations for the Year Ended September 30, 2019

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income
	Futures Contracts	Purchased Options Contracts1	Total
Equity contracts	$(2,795,840)	$(1,166,534)	$(3,962,374)

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income
	Futures Contracts	Purchased Options Contracts2	Total
Equity contracts	$1,699,305	$(932,591)	$766,714

1	The net realized loss on Purchased Options Contracts is found within the Net realized loss on investments on the Statement of Operations.
2	The net change in unrealized appreciation of Purchased Options Contracts is found within the Net change in unrealized depreciation of investments on the Statement of Operations.

Other

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

3. SHARES OF BENEFICIAL INTEREST

The following tables summarize share activity:

Year Ended September 30	2019		2018
Class A Shares:	Shares	Amount	Shares	Amount
Shares sold	2,047,603	$27,790,183	1,811,221	$27,376,914
Shares redeemed	(2,084,099)	(27,983,338)	(2,584,040)	(39,123,065)
NET CHANGE RESULTING FROM CLASS A SHARE TRANSACTIONS	(36,496)	$(193,155)	(772,819)	$(11,746,151)

Year Ended September 30	2019		2018
Class C Shares:	Shares	Amount	Shares	Amount
Shares sold	348,159	$4,133,549	207,471	$2,791,842
Shares redeemed	(435,192)	(5,014,883)	(439,286)	(5,784,336)
NET CHANGE RESULTING FROM CLASS C SHARE TRANSACTIONS	(87,033)	$(881,334)	(231,815)	$(2,992,494)

Annual Shareholder Report

30

Year Ended September 30	2019		2018
Institutional Shares:	Shares	Amount	Shares	Amount
Shares sold	11,279,048	$158,442,701	8,192,497	$123,158,273
Shares redeemed	(11,653,191)	(159,856,031)	(8,291,664)	(128,063,824)
NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS	(374,143)	$(1,413,330)	(99,167)	$(4,905,551)
NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS	(497,672)	$(2,487,819)	(1,103,801)	$(19,644,196)

4. FEDERAL TAX INFORMATION

The accounting treatment of certain items in accordance with income tax regulations may differ from the accounting treatment in accordance with GAAP, which may result in permanent differences. In the case of the Fund, such differences primarily result from differing treatments from expiration of capital loss carryforwards.

For the year ended September 30, 2019, permanent differences identified and reclassified among the components of net assets were as follows:

Increase (Decrease)
Paid-In Capital	Total Distributable Earnings (Loss)
$(356,311,337)	$356,311,337

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

As of September 30, 2019, the components of distributable earnings on a tax-basis were as follows:

Undistributed ordinary income	$928,084
Net unrealized depreciation	$(11,492,860)
Capital loss carryforwards	$(812,273,568)

The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable to differing treatments for deferral of losses on wash sales and mark to market of futures contracts.

At September 30, 2019, the cost of investments for federal tax purposes was $231,017,458. The net unrealized depreciation of investments for federal tax purposes was $11,492,661. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $3,760,844 and net unrealized depreciation from investments for those securities having an excess of cost over value of $15,253,505. The amounts presented are inclusive of derivative contracts.

At September 30, 2019, the Fund had a capital loss carryforward of $812,273,568 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code, thereby reducing the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal income tax. Pursuant to the Code, these net capital losses retain their character as either short-term or long-term and do not expire.

Annual Shareholder Report

31

The following schedule summarizes the Fund's capital loss carryforwards:

Short-Term	Long-Term	Total
$632,731,787	$179,541,781	$812,273,568

Capital loss carryforwards of $356,311,337 expired during the year ended September 30, 2019.

5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

The advisory agreement between the Fund and the Adviser provides for an annual fee equal to 1.25% of the Fund's average daily net assets. Subject to the terms described in the Expense Limitation note, the Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended September 30, 2019, the Adviser voluntarily waived $123,919 of its fee.

The Adviser has agreed to reimburse the Fund for certain investment adviser fees as a result of transactions in other affiliated investment companies. For the year ended September 30, 2019, the Adviser reimbursed $36,225.

Administrative Fee

Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Funds subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below:

Administrative Fee	Average Daily Net Assets of the Investment Complex
0.100%	on assets up to $50 billion
0.075%	on assets over $50 billion

Subject to the terms described in the Expense Limitation note, FAS may voluntarily choose to waive any portion of its fee. For the year ended September 30, 2019, the annualized fee paid to FAS was 0.081% of average daily net assets of the Fund.

In addition, FAS may charge certain out-of-pocket expenses to the Fund.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. (FSC), the principal distributor, from the daily net assets of the Fund's Class A Shares and Class C Shares to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses at the following percentages of average daily net assets annually, to compensate FSC:

	Percentage of Average Daily Net Assets of Class
Class A Shares	0.05%
Class C Shares	0.75%

Annual Shareholder Report

32

Subject to the terms described in the Expense Limitation note, FSC may voluntarily choose to waive any portion of its fee. For the year ended September 30, 2019, distribution services fees for the Fund were as follows:

	Distribution Services Fees Incurred
Class C Shares	$92,619

When FSC receives fees, it may pay some or all of them to financial intermediaries whose customers purchase shares. For the year ended September 30, 2019, FSC retained $16,715 of fees paid by the Fund. For the year ended September 30, 2019, the Fund's Class A Shares did not incur a distribution services fee; however, it may begin to incur this fee upon approval of the Trustees.

Sales Charges

Front-end sales charges and contingent deferred sales charges (CDSC) do not represent expenses of the Fund. They are deducted from the proceeds of sales of Fund shares prior to investment or from redemption proceeds prior to remittance, as applicable. For the year ended September 30, 2019, FSC retained $11,057 in sales charges from the sale of Class A Shares. For the year ended September 30, 2019, FSC also retained $2,816 of CDSC relating to redemptions of Class C Shares.

Other Service Fees

For the year ended September 30, 2019, FSSC received $22,720 of the other service fees disclosed in Note 2.

Expense Limitation

The Adviser and certain of its affiliates (which may include FSC, FAS and FSSC) on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (as shown in the financial highlights, excluding dividends and other expenses related to short sales, interest expense, extraordinary expenses and proxy-related expenses paid by the Fund, if any) paid by the Fund's Class A Shares, Class C Shares and Institutional Shares (after the voluntary waivers and/or reimbursements) will not exceed 1.78%, 2.53% and 1.53% (the “Fee Limit”), respectively, up to but not including the later of (the “Termination Date”): (a) December 1, 2020; or (b) the date of the Fund's next effective Prospectus. While the Adviser and its applicable affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.

Interfund Transactions

During the year ended September 30, 2019, the Fund engaged in sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees and/or common Officers. These sale transactions complied with Rule 17a-7 under the Act and amounted to $1,050,506.

Annual Shareholder Report

33

Directors'/Trustees' and Miscellaneous Fees

Certain Officers and Trustees of the Fund are Officers and Directors or Trustees of certain of the above companies. To efficiently facilitate payment, Independent Directors'/Trustees' fees and certain expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. These expenses related to conducting meetings of the Directors/Trustees and other miscellaneous expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets and Liabilities and Statement of Operations, respectively.

6. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended September 30, 2019, were as follows:

Purchases	$764,788,303
Sales	$769,308,265

7. CONCENTRATION OF RISK

A substantial portion of the Fund's portfolio may be comprised of securities deemed by the Adviser to be in similar sectors. As a result, the Fund may be more susceptible to any economic, business, political or other developments which generally affect these entities.

8. LINE OF CREDIT

The Fund participates with certain other Federated Funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to finance temporarily the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund's ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, (ii) the one month London Interbank Offered Rate (LIBOR), and (iii) 0.0%, plus (b) a margin. The LOC also requires the Fund to pay, quarterly in arrears and at maturity, its pro rata share of a commitment fee based on the amount of the lenders' commitment that has not been utilized. As of September 30, 2019, the Fund had no outstanding loans. During the year ended September 30, 2019, the Fund did not utilize the LOC.

9. INTERFUND LENDING

Pursuant to an Exemptive Order issued by the SEC, the Fund, along with other funds advised by subsidiaries of Federated Investors, Inc., may participate in an interfund lending program. This program provides an alternative credit facility allowing the Fund to borrow from other participating affiliated funds. As of September 30, 2019, there were no outstanding loans. During the year ended September 30, 2019, the program was not utilized.

Annual Shareholder Report

34

Report of Independent Registered Public Accounting Firm

TO THE BOARD OF TRUSTEES OF THE FEDERATED EQUITY FUNDS AND SHAREHOLDERS OF FEDERATED PRUDENT BEAR FUND:

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of the Federated Prudent Bear Fund (the “Fund”), a portfolio of Federated Equity Funds, as of September 30, 2019, the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the related notes (collectively, the “financial statements”) and the financial highlights for each of the years in the five year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of September 30, 2019, the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the five year period then ended, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Annual Shareholder Report

35

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of September 30, 2019, by correspondence with the custodian and brokers, or by other appropriate auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.

We have served as the auditor of one or more of Federated Investors' investment companies since 2006.

Boston, Massachusetts
November 21, 2019

Annual Shareholder Report

36

Shareholder Expense Example (unaudited)

As a shareholder of the Fund, you incur ongoing costs, including management fees and to the extent applicable, distribution (12b-1) fees and/or other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2019 to September 30, 2019.

ACTUAL EXPENSES

The first section of the table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.

HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES

The second section of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Annual Shareholder Report

37

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase or redemption payments. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relativetotal costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

	Beginning Account Value 4/1/2019	Ending Account Value 9/30/2019	Expenses Paid During Period1
Actual:
Class A Shares	$1,000	$950.90	$14.18
Class C Shares	$1,000	$947.40	$17.87
Institutional Shares	$1,000	$952.10	$12.67
Hypothetical (assuming a 5% return before expenses):
Class A Shares	$1,000	$1,010.60	$14.62
Class C Shares	$1,000	$1,006.70	$18.41
Institutional Shares	$1,000	$1,012.10	$13.06

1 Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows:

Class A Shares	2.90%
Class C Shares	3.66%
Institutional Shares	2.59%

Annual Shareholder Report

38

Board of Trustees and Trust Officers

The Board of Trustees is responsible for managing the Trust's business affairs and for exercising all the Trust's powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2018, the Trust comprised 10 portfolio(s), and the Federated Fund Family consisted of 40 investment companies (comprising 102 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Fund Family and serves for an indefinite term. The Fund's Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.

Interested TRUSTEES Background

Name Birth Date Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)

J. Christopher Donahue* Birth Date: April 11, 1949 President and Trustee Indefinite Term Began serving: September 1999

Principal Occupations: Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman and Trustee, Federated Equity Management Company of Pennsylvania; Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd; Chairman, Passport Research, Ltd.

Annual Shareholder Report

39

Name Birth Date Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s)

John B. Fisher* Birth Date: May 16, 1956 Trustee Indefinite Term Began serving: May 2016

Principal Occupations:Principal Executive Officer and President of certain of the Funds in the Federated Fund Family; Director or Trustee of certain of the Funds in the Federated Fund Family; Vice President, Federated Investors, Inc.; President, Director/Trustee and CEO, Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company; President of some of the Funds in the Federated Fund Complex and Director, Federated Investors Trust Company. Previous Positions: President and Director of the Institutional Sales Division of Federated Securities Corp.; President and Director of Federated Investment Counseling; President and CEO of Passport Research, Ltd.; Director, Edgewood Securities Corp.; Director, Federated Services Company; Director, Federated Investors, Inc.; Chairman and Director, Southpointe Distribution Services, Inc. and President, Technology, Federated Services Company.

* Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Investors, Inc. and due to positions they hold with Federated and its subsidiaries.

INDEPENDENT TRUSTEES Background

Name Birth Date Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications

John T. Collins Birth Date: January 24, 1947 Trustee Indefinite Term Began serving: October 2013

Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Chairman and CEO, The Collins Group, Inc. (a private equity firm) (Retired). Other Directorships Held: Director, Chairman of the Compensation Committee, KLX Energy Services Holdings, Inc. (oilfield services); former Director of KLX Corp. (aerospace). Qualifications: Mr. Collins has served in several business and financial management roles and directorship positions throughout his career. Mr. Collins previously served as Chairman and CEO of The Collins Group, Inc. (a private equity firm) and as a Director of KLX Corp. Mr. Collins serves as Chairman Emeriti, Bentley University. Mr. Collins previously served as Director and Audit Committee Member, Bank of America Corp.; Director, FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical Center (Harvard University Affiliate Hospital).

Annual Shareholder Report

40

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications
G. Thomas Hough Birth Date: February 28, 1955 Trustee Indefinite Term Began serving: August 2015	Principal Occupations: Director or Trustee of the Federated Fund Family; formerly, Vice Chair, Ernst & Young LLP (public accounting firm) (Retired). Other Directorships Held: Director, Member of Governance and Compensation Committees, Publix Super Markets, Inc.; Director, Chair of the Audit Committee, Equifax, Inc.; Director, Member of the Audit Committee, Haverty Furniture Companies, Inc. Qualifications: Mr. Hough has served in accounting, business management and directorship positions throughout his career. Mr. Hough most recently held the position of Americas Vice Chair of Assurance with Ernst & Young LLP (public accounting firm). Mr. Hough serves on the President's Cabinet and Business School Board of Visitors for the University of Alabama and is on the Business School Board of Visitors for Wake Forest University. Mr. Hough previously served as an Executive Committee member of the United States Golf Association.
Maureen Lally-Green Birth Date: July 5, 1949 Trustee Indefinite Term Began serving: August 2009	Principal Occupations: Director or Trustee of the Federated Fund Family; Adjunct Professor of Law, Duquesne University School of Law; formerly, Dean of the Duquesne University School of Law and Professor of Law and Interim Dean of the Duquesne University School of Law; formerly, Associate General Secretary and Director, Office of Church Relations, Diocese of Pittsburgh. Other Directorships Held: Director, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Qualifications: Judge Lally-Green has served in various legal and business roles and directorship positions throughout her career. Judge Lally-Green previously held the position of Dean of the School of Law of Duquesne University (as well as Interim Dean). Judge Lally-Green previously served as a member of the Superior Court of Pennsylvania and as a Professor of Law, Duquesne University School of Law. Judge Lally-Green also currently holds the positions on not for profit or for profit boards of directors as follows: Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our Campaign for the Church Alive!, Inc.; Regent, Saint Vincent Seminary; Member, Pennsylvania State Board of Education (public); and Director CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Judge Lally-Green has held the positions of: Director, Auberle; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint Thomas More Society; Director and Chair, Catholic High Schools of the Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director, St. Vincent College; and Director and Chair, North Catholic High School, Inc.
Charles F. Mansfield, Jr. Birth Date: April 10, 1945 Trustee Indefinite Term Began serving: January 1999	Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant and Author. Other Directorships Held: None. Qualifications: Mr. Mansfield has served as a Marine Corps officer and in several banking, business management, educational roles and directorship positions throughout his long career. He remains active as a Management Consultant and Author.

Annual Shareholder Report

41

Name Birth Date Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications
Thomas M. O'Neill Birth Date: June 14, 1951 Trustee Indefinite Term Began serving: October 2006	Principal Occupations: Director or Trustee, Chair of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: None. Qualifications: Mr. O'Neill has served in several business, mutual fund and financial management roles and directorship positions throughout his career. Mr. O'Neill serves as Director, Medicines for Humanity and Director, The Golisano Children's Museum of Naples, Florida. Mr. O'Neill previously served as Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber).
P. Jerome Richey Birth Date: February 23, 1949 Trustee Indefinite Term Began serving: October 2013	Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant; Retired; formerly, Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh and Executive Vice President and Chief Legal Officer, CNX Resources Corporation (formerly known as CONSOL Energy Inc.). Other Directorships Held: None. Qualifications: Mr. Richey has served in several business and legal management roles and directorship positions throughout his career. Mr. Richey most recently held the positions of Senior Vice Chancellor and Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey previously served as Chief Legal Officer and Executive Vice President, CNX Resources Corporation (formerly known as CONSOL Energy Inc.); and Board Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC (a law firm).
John S. Walsh Birth Date: November 28, 1957 Trustee Indefinite Term Began serving: January 1999	Principal Occupations: Director or Trustee, and Chair of the Board of Directors or Trustees, of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Other Directorships Held: None. Qualifications: Mr. Walsh has served in several business management roles and directorship positions throughout his career. Mr. Walsh previously served as Vice President, Walsh & Kelly, Inc. (paving contractors).

Annual Shareholder Report

42

OFFICERS

Name Birth Date Address Positions Held with Trust Date Service Began	Principal Occupation(s) for Past Five Years and Previous Position(s)
Lori A. Hensler Birth Date: January 6, 1967 TREASURER Officer since: April 2013	Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp. and Edgewood Services, Inc.; and Assistant Treasurer, Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation. Previous Positions: Controller of Federated Investors, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services, Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp., Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd., and Federated MDTA, LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution Services, Inc.
Peter J. Germain Birth Date: September 3, 1959 CHIEF LEGAL OFFICER, SECRETARY and EXECUTIVE VICE PRESIDENT Officer since: January 2005	Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Fund Family. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Investors, Inc.; Trustee and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company; and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated in 1984 and is a member of the Pennsylvania Bar Association. Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Investors, Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Investors, Inc.
Stephen Van Meter Birth Date: June 5, 1975 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Officer since: July 2015	Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of certain of its subsidiaries. Mr. Van Meter joined Federated in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66. Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Investors, Inc. Prior to joining Federated, Mr. Van Meter served at the United States Securities and Exchange Commission in the positions of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement.

Annual Shareholder Report

43

Name Birth Date Address Positions Held with Trust Date Service Began

Principal Occupation(s) for Past Five Years and Previous Position(s)

Stephen F. Auth Birth Date: September 13, 1956 101 Park Avenue 41st Floor New York, NY 10178 CHIEF INVESTMENT OFFICER Officer since: November 2002

Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Fund Family; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated Equity Management Company of Pennsylvania. Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd. (investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio Manager, Prudential Investments.

Annual Shareholder Report

44

Evaluation and Approval of Advisory Contract–May 2019

Federated Prudent Bear Fund (the “Fund”)

At its meetings in May 2019, the Fund's Board of Trustees (the “Board”), including a majority of those Trustees who are not “interested persons” of the Fund, as defined in the Investment Company Act of 1940 (the “Independent Trustees”), reviewed and unanimously approved the continuation of the Fund's investment advisory contract for an additional one-year term. The Board's decision regarding the contract reflects the exercise of its business judgment after considering all of the information received on whether to continue the existing arrangements.

At the request of the Independent Trustees, the Fund's Chief Compliance Officer (the CCO) furnished to the Board in advance of its May 2019 meetings an independent written evaluation presenting on the topics discussed below. The Board considered the CCO's independent written evaluation (the “CCO Fee Evaluation Report”), along with other information, in evaluating the reasonableness of the Fund's management fee and in deciding to approve the continuation of the investment advisory contract. The CCO, in preparing the CCO Fee Evaluation Report, has the authority to retain consultants, experts or staff as reasonably necessary to assist in the performance of his duties, reports directly to the Board, and can be terminated only with the approval of a majority of the Independent Trustees. At the request of the Independent Trustees, the CCO Fee Evaluation Report followed the same general approach and covered the same topics as that of the report that had previously been delivered by the CCO in his capacity as “Senior Officer,” prior to the elimination of the Senior Officer position in December 2017.

The Board also considered judicial decisions concerning allegedly excessive investment advisory fees in making its decision. Using these judicial decisions as a guide, the Board observed that the following factors may be relevant to an adviser's fiduciary duty with respect to its receipt of compensation from a fund: (1) the nature and quality of the services provided by an adviser to a fund and its shareholders (including the performance of the fund, its benchmark, and comparable funds); (2) an adviser's cost of providing the services (including the profitability to an adviser of providing advisory services to a fund); (3) the extent to which an adviser may realize “economies of scale” as a fund grows larger and, if such economies of scale exist, whether they have been shared with a fund and its shareholders or the family of funds; (4) any “fall-out” financial benefits that accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund); (5) comparative fee and expense structures (including a comparison of fees paid to an adviser with those paid by similar funds both internally and externally as well as management fees charged to institutional and other advisory clients of the

Annual Shareholder Report

45

adviser for what might be viewed as like services); and (6) the extent of care, conscientiousness and independence with which the fund's board members perform their duties and their expertise (including whether they are fully informed about all facts the board deems relevant to its consideration of an adviser's services and fees). The Board noted that the Securities and Exchange Commission (SEC) disclosure requirements regarding the basis for the Board's approval of the Fund's investment advisory contract generally align with the factors listed above. The Board was aware of these factors and was guided by them in its review of the Fund's investment advisory contract to the extent it considered them to be appropriate and relevant, as discussed further below.

The Board considered and weighed these factors in light of its substantial accumulated experience in governing the Fund and working with Federated Equity Management Company of Pennsylvania (the “Adviser”) and its affiliates (collectively, “Federated”) on matters relating to the funds advised by Federated (each, a “Federated Fund”). The Independent Trustees were assisted in their deliberations by independent legal counsel.

In addition to the extensive materials that comprise and accompany the CCO Fee Evaluation Report, the Board received detailed information about the Fund and the Federated organization throughout the year, and in connection with its May meetings at which the Board's formal approval of the advisory and subadvisory contracts occurred. In this regard, Federated provided much of this information at each regular meeting of the Board, and furnished additional information specifically in connection with the May meetings. In the months preceding the May meetings, the Board requested and reviewed written materials prepared by Federated in response to requests on behalf of the Independent Trustees encompassing a wide variety of topics. At the May meetings, in addition to meeting in separate sessions of the Independent Trustees without management present, senior management of the Adviser also met with the Independent Trustees and their counsel to discuss the materials presented and such additional matters as the Independent Trustees deemed reasonably necessary to evaluate the advisory and subadvisory contracts. Between regularly scheduled meetings, the Board also received information on particular matters as the need arose.

The Board's consideration of the investment advisory contract included review of the CCO Fee Evaluation Report, accompanying data and additional information covering the following matters, among others: the Adviser's investment philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund's short-term and long-term performance (in absolute terms, both on a gross basis and net of expenses, as well as in terms relative to its particular investment program and certain competitor or “peer group” funds and/or other benchmarks, as appropriate) and comments on the reasons for performance; the Fund's investment objectives; the Fund's expenses, including the advisory fee and the overall expense structure of the Fund (both in absolute terms and relative to similar and/or competing funds), with due

Annual Shareholder Report

46

regard for contractual or voluntary expense limitations; the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any); and the nature, quality and extent of the advisory and other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial and other risks assumed by the Adviser in sponsoring the Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund's relationship to the Federated Funds which include a comprehensive array of funds with different investment objectives, policies and strategies which are generally available for exchange without the incurrence of additional sales charges; compliance and audit reports concerning the Federated Funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated's responses to any issues raised therein; and relevant developments in the mutual fund industry and how the Federated Funds and/or Federated are responding to them. The Board's evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition of changing circumstances in the mutual fund marketplace.

While mindful that courts have cautioned against giving too much weight to comparative information concerning fees charged by other advisers for managing funds with comparable investment programs, the Board has found the use of such comparisons to be relevant to its deliberations. In this regard, the Board was presented with, and considered, information regarding the contractual advisory fee rates, net advisory fee rates, total expense ratios and each element of the Fund's total expense ratio (i.e., gross and net advisory fees, custody fees, portfolio accounting fees and transfer agency fees) relative to an appropriate group of peer funds compiled by Federated using data supplied by independent fund ranking organizations (the “Peer Group”). The Board received a description of the composition and methodology used to select the Peer Group. The Board focused on comparisons with other similar mutual funds more heavily than non-mutual fund products or services because it is believed that they are more relevant. For example, other mutual funds are the products most like the Fund, in that they are readily available to Fund shareholders as alternative investment vehicles. Also, they are the type of investment vehicle, in fact, chosen and maintained by the Fund's investors. The range of their fees and expenses, therefore, appears to be a relevant indicator of what consumers have found to be reasonable in the marketplace in which the Fund competes.

The Board reviewed the contractual advisory fee rate, net advisory fee rate and other expenses of the Fund and noted the position of the Fund's fee rates relative to its Peer Group. In this regard, the Board noted that the contractual advisory fee rate was below the median of the relevant Peer Group and the Board was satisfied that the overall expense structure of the Fund remained competitive.

Annual Shareholder Report

47

For comparison, the CCO reviewed the fees charged by Federated for providing advisory services to products other than the Federated Funds (e.g., institutional separate accounts and third-party unaffiliated mutual funds for which Federated serves as sub-adviser) (referenced to as “Comparable Funds/Accounts”). With respect to Comparable Funds/Accounts other than third-party mutual funds, the CCO concluded that they are inherently different products. Those differences include, but are not limited to, different types of targeted investors; different applicable laws and regulations; different legal structures; different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; and the time spent by portfolio managers and their teams, as well as personnel in the Funds Financial Services, Legal, Compliance and Risk Management departments, in reviewing securities pricing, addressing different administrative responsibilities, addressing different degrees of risk associated with management and a variety of different costs. The CCO also reviewed the differences in the nature of the services required for Federated to manage its proprietary mutual fund business versus managing a discrete pool of assets as a sub-adviser to another institution's mutual fund, and that Federated generally performs significant additional services and assumes substantially greater risks in managing the Fund and other Federated Funds than in its role as sub-adviser to an unaffiliated third-party mutual fund. The CCO did not consider the fees for providing advisory services to Comparable Funds/Accounts to be determinative in judging the appropriateness of the Federated Funds' advisory fees.

Following such evaluation, and full deliberations, the Board concluded that the fees and expenses of the Fund are reasonable and supported renewal of the Fund's investment advisory contract.

The Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of the Adviser and its affiliates dedicated to the Fund. In this regard, the Board evaluated, among other things, the Adviser's personnel, experience, track record, financial resources, overall reputation and willingness to invest in personnel and infrastructure that benefit the Fund. In addition, the Board reviewed the qualifications, backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund and the Adviser's ability and experience in attracting and retaining qualified personnel to service the Fund. The Board noted the investment research and company engagement capabilities of the Adviser and its affiliates. The Board also noted the compliance program of the Adviser and the compliance-related resources provided to the Fund by the Adviser, including the Adviser's commitment to respond to rulemaking initiatives of the SEC. The Fund's ability to deliver competitive performance when compared to its Peer Group was also deemed to be relevant by the Board as a useful indicator of how the Adviser is executing the Fund's investment

Annual Shareholder Report

48

program. The Adviser's ability to execute this program was one of the Board's considerations in reaching a conclusion that the nature, extent and quality of the Adviser's investment management services warrant the continuation of the investment advisory contract.

In evaluating the Fund's investment performance, the Board considered performance results in light of the Fund's investment objective, strategies and risks, as disclosed in the Fund's prospectus. The Board considered detailed investment reports on the Fund's performance that were provided to the Board throughout the year and in connection with the May meetings. The CCO also reviewed information regarding the performance of other mutual funds in the Peer Group, noting the CCO's view that comparisons to fund peer groups may be helpful, though not conclusive, in evaluating the performance of the Adviser in managing the Fund. The Board considered, in evaluating such comparisons, that in some cases there may be differences in the funds' objectives or investment management techniques, or the costs to implement the funds, even within the same Peer Group.

For the periods covered by the CCO Fee Evaluation Report, the Fund's performance for the three-year period was above the median of the relevant Peer Group, the Fund's performance for the five-year period was at the median of the relevant Peer Group, and the Fund's performance fell below the median of the relevant Peer Group for the one-year period. The Board discussed the Fund's performance with the Adviser and recognized the efforts being taken by the Adviser in the context of other factors considered relevant by the Board.

Following such evaluation, and full deliberations, the Board concluded that the performance of the Fund supported renewal of the Fund's investment advisory contract.

The Board also received financial information about Federated, including information regarding the compensation and ancillary (or “fall-out”) benefits Federated derived from its relationships with the Federated Funds. This information covered not only the fees under the investment advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated Funds under separate contracts (e.g., for serving as the Federated funds' administrator and distributor). In this regard, the Board considered that certain Federated subsidiaries provide distribution and shareholder services to the Federated Funds, for which they may be compensated through distribution and servicing fees paid pursuant to Rule 12b-1 plans or otherwise. The information also detailed any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated Fund trades. In addition, the Board considered the fact that, in order for a Federated Fund to be competitive in the marketplace, the Adviser and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to Federated Fund investors and/or indicated to the Board their intention to do so in the future. Moreover, the Board receives regular reporting as to the institution, adjustment or

Annual Shareholder Report

49

elimination of these voluntary waivers. The Board considered Federated's previous reductions in contractual management fees to certain Federated Funds in response to the CCO's recommendations in the prior year's CCO Fee Evaluation Report.

Federated furnished information, requested by the CCO, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses on a fund-by-fund basis, using allocation methodologies specified by the CCO. The CCO noted that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs continues to cause the CCO to question the precision of the process and to conclude that such reports may be unreliable, since a single change in an allocation estimate may dramatically alter the resulting estimate of cost and/or profitability of a Federated Fund and may produce unintended consequences. The allocation information, including the CCO's view that fund-by-fund estimations may be unreliable, was considered in the evaluation by the Board.

The Board and the CCO also reviewed information compiled by Federated comparing its profitability information to other publicly held fund management companies, including information regarding profitability trends over time. In this regard, the CCO concluded that Federated's profit margins did not appear to be excessive. The CCO also noted that Federated appeared financially sound, with the resources necessary to fulfill its obligations under its contracts with the Fund.

The CCO Fee Evaluation Report also discussed the notion of possible realization of “economies of scale” as a fund grows larger, the difficulties of calculating economies of scale at an individual fund level, and the extent to which potential scale benefits are shared with shareholders. In this regard, the Board considered that Federated has made significant and long-term investments in areas that support all of the Federated Funds, such as personnel and processes for the portfolio management, shareholder services, compliance, internal audit and risk management functions, as well as systems technology (including technology relating to cybersecurity) and that the benefits of these investments (as well as any economies of scale, should they exist) were likely to be shared with the Federated Fund family as a whole. The Board noted that Federated's investments in these areas are extensive. In addition, the Board considered that the Adviser and its affiliates have frequently waived fees and/or reimbursed expenses and that this has allowed potential economies of scale to be shared with shareholders. The Board also considered that such waivers and reimbursements can provide protection from an increase in expenses if a Federated Fund's assets decline. Federated, as it does throughout the year, and specifically in connection with the Board's review of the advisory and subadvisory contracts, furnished information relative to revenue sharing or adviser-paid fees. Federated and the CCO noted that this information should be viewed to determine if there was an incentive to either not apply breakpoints, or to apply breakpoints at higher levels, and should not be viewed to determine the

Annual Shareholder Report

50

appropriateness of advisory fees. The Board also noted the absence of any applicable regulatory or industry guidelines on this subject, which (as discussed in the CCO Fee Evaluation Report) is compounded by the lack of any common industry practice or general pattern with respect to structuring fund advisory fees with “breakpoints” that serve to reduce the fee as a fund attains a certain size.

The CCO stated that his observations and the information accompanying the CCO Fee Evaluation Report supported a finding by the Board that the management fee for the Fund was reasonable. Under these circumstances, no changes were recommended to, and no objection was raised to the continuation of, the Fund's investment advisory contract. The CCO also recognized that the Board's evaluation of the Federated Funds' advisory and subadvisory arrangements is a continuing and on-going process that is informed by the information that the Board requests and receives from management throughout the course of the year and, in this regard, the CCO noted certain items for future reporting to the Board or further consideration by management as the Board continues its on-going oversight of the Federated Funds.

In its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an investment advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the investment advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund. The Board concluded that, in light of the factors summarized above, including the nature, quality and scope of the services provided to the Fund by the Adviser and its affiliates, continuation of the investment advisory contract was appropriate.

The Board based its decision to approve the investment advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the continuation of the contract reflects its view that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangement.

Annual Shareholder Report

51

Voting Proxies on Fund Portfolio Securities

A description of the policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at www.FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC's website at www.sec.gov.

Quarterly Portfolio Schedule

Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund's holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC's website at www.sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at www.FederatedInvestors.com.

Annual Shareholder Report

52

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

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

Federated Prudent Bear Fund

Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561

Contact us at FederatedInvestors.com
or call 1-800-341-7400.

Federated Securities Corp., Distributor

CUSIP 31421N709
CUSIP 31421N600
CUSIP 31421N501

41202 (11/19)

Federated is a registered trademark of Federated Investors, Inc.
2019 ©Federated Investors, Inc.

Item 2. Code of Ethics

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

(c) There was no amendment to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.

(d) There was no waiver granted, either actual or implicit, from a provision to the registrant’s code of ethics described in Item 2(a) above during the period covered by the report.

(e) Not Applicable

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

Item 3. Audit Committee Financial Expert

The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” and is "independent," for purposes of this Item:   John T. Collins, G. Thomas Hough and Thomas M. O'Neill.

Item 4. Principal Accountant Fees and Services

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

Fiscal year ended 2019 - $379,113

Fiscal year ended 2018 - $376,160

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

Fiscal year ended 2019 - $0

Fiscal year ended 2018 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $4,815 and $0 respectively. Fiscal year ended 2019- Audit consent for N-14 merger document.

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

Fiscal year ended 2019 - $0

Fiscal year ended 2018 - $0

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

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

Fiscal year ended 2019 - $0

Fiscal year ended 2018 - $0

Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $35,229 and $41,823 respectively. Fiscal year ended 2019- Service fees for analysis of potential Passive Foreign Investment Company holdings. Fiscal year ended 2018- Service fees for analysis of potential Passive Foreign Investment Company holdings.

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

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

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

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

AUDIT SERVICES

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

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

AUDIT-RELATED SERVICES

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

TAX SERVICES

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

ALL OTHER SERVICES

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

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

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

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

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

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

PRE-APPROVAL FEE LEVELS

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

PROCEDURES

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

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

4(b)

Fiscal year ended 2019 – 0%

Fiscal year ended 2018 - 0%

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

4(c)

Fiscal year ended 2019 – 0%

Fiscal year ended 2018 – 0%

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

4(d)

Fiscal year ended 2019 – 0%

Fiscal year ended 2018 – 0%

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

(f) NA

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

Fiscal year ended 2019 - $795,417

Fiscal year ended 2018 - $1,600,502

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

The registrant’s management and Audit Committee continue to believe that the registrant’s registered public accounting firms, Ernst & Young LLP (“EY”) and KPMG LLP (“KPMG”) (as applicable, “EY/KPMG”), have the ability to exercise objective and impartial judgment on all issues encompassed within their audit services. EY/KPMG is required to make a determination that it satisfies certain independence requirements under the federal securities laws. Like other registrants, there is a risk that activities or relationships of EY/KPMG, or its partners or employees, can prevent a determination from being made that it satisfies such independence requirements with respect to the registrant, which could render it ineligible to serve as the registrant’s independent public accountant.

In their respective required communications to the Audit Committee of the registrant’s Board, EY/KPMG informed the Audit Committee that EY/KPMG and/or covered person professionals within EY/KPMG maintain lending relationships with certain owners of greater than 10% of the shares of the registrant and/or certain investment companies within the “investment company complex” as defined under Rule 2-01(f)(14) of Regulation S-X, which are affiliates of the registrant. EY/KPMG has advised the Audit Committee that these lending relationships implicate Rule 2-01(c)(1)(ii)(A) of Regulation S-X (referred to as the “Loan Rule”). The Loan Rule prohibits an independent public accountant, or covered person professionals at such firm, from having a financial relationship (such as a loan) with a lender that is a record or beneficial owner of more than 10% of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the registrant, as well as all registered investment companies advised by advisory subsidiaries of Federated Investors, Inc., the Adviser (for which EY serves as independent public accountant), and their respective affiliates (collectively, the “Federated Fund Complex”).

EY/KPMG informed the Audit Committee that EY/KPMG believes that these lending relationships described above do not and will not impair EY/KPMG’s ability to exercise objective and impartial judgment in connection with financial statement audits of their respective funds of the registrant and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY/KPMG has been and is capable of objective and impartial judgment on all issues encompassed within EY/KPMG’s audits.

On June 20, 2016, the Division of Investment Management of the Securities and Exchange Commission (“SEC”) issued a no-action letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to similar Loan Rule matters as those described above (the “Letter”). In the Letter, the SEC Staff confirmed that it would not recommend enforcement action against an investment company that relied on the audit services performed by an independent public accountant where the Loan Rule was implicated in certain specified circumstances provided that: (1) the auditor has complied with PCAOB Rule 3526(b)(1) and 3526(b)(2); (2) the Loan Rule is implicated because of lending relationships; and (3) notwithstanding such lending relationships that implicate the Loan Rule, the auditor has concluded that it is objective and impartial with respect to the issues encompassed within its engagement as auditor of the funds. The circumstances described in the Letter are substantially similar to the circumstances that implicated the Loan Rule with respect to EY/KPMG and the registrant. On September 22, 2017, the SEC extended the expiration of the Letter until the effectiveness of any amendments to the Loan Rule designed to address the concerns in the Letter. On June 18, 2019, the SEC adopted amendments to the Loan Rule, which, refocus the analysis that must be conducted to determine whether an auditor is independent when the auditor has a lending relationship with certain shareholders of an audit client at any time during an audit or professional engagement period.

Additionally, on July 18, 2018, EY informed the registrant that Rule 2-01(c)(1)(i)(A) of Regulation S-X (“Investment Rule”) also has been implicated since July 2, 2018. The Investment Rule prohibits public accounting firms, or covered person professionals and their immediate family members, from having certain direct financial investments in their audit clients and affiliated entities. EY informed the registrant that a pension trust of a non-US affiliated entity of EY had previously made, and as of July 18, 2018 maintained, an investment in a fund (“Hermes Fund”) managed by Hermes Alternative Investment Management Limited (“HAIML”), which is a wholly owned subsidiary of Hermes Fund Managers Limited (“HFML”). The pension trust’s investment in the Hermes Fund involves the Investment Rule because an indirect wholly owned subsidiary of Federated Investors, Inc. (an affiliate of the registrant’s adviser), acquired a 60% majority interest in HFML on July 2, 2018, effective July 1, 2018 (“Hermes Acquisition”). The pension trust first invested in the Hermes Fund in 2007, well prior to the Hermes Acquisition. The pension trust’s investment represented less than 3.3% of the Hermes Fund’s assets as of July 18, 2018. EY subsequently informed the registrant that EY’s affiliated entity’s pension trust had submitted an irrevocable redemption notice to redeem its investment in the Hermes Fund. Pursuant to the redemption terms of the Hermes Fund, the pension trust’s redemption would not be effected until December 26, 2018 at the earliest. The redemption notice could not be revoked by the pension trust. The redemption notice would only be revoked by HAIML, as the adviser for Hermes Fund, if, and to the extent, the pension trust successfully sold its interest in the Hermes Fund in a secondary market transaction. EY also informed the registrant that the pension trust simultaneously submitted a request to HAIML to conduct a secondary market auction for the pension trust’s interests in the Hermes Fund. In addition, the only voting rights shareholders of the Hermes Fund had under the Hermes Fund’s governing documents relate to key appointments, including the election of the non-executive members of the Hermes Fund’s committee, the appointment of the Hermes Fund’s trustee and the adoption of the Hermes Fund’s financial statements. The next meeting of the Hermes Fund at which shareholders can vote on the election of members to the Hermes Fund’s committee is not until June 2019, and the size of the pension trust’s investment in the Hermes Fund would not allow it to unilaterally elect a committee member or the trustee. EY does not audit the Hermes Fund and the Hermes Fund’s assets and operations are not consolidated in the registrant’s financial statements that are subject to audit by EY. Finally, no member of EY’s audit team that provides audit services to the registrant is a beneficiary of EY’s affiliated entity’s pension trust. Management reviewed this matter with the registrant’s Audit Committee, and, based on that review, as well as a letter from EY to the registrant dated July 26, 2018, in which EY indicated that it had determined that this matter does not impair EY’s ability to exercise objective and impartial judgment in connection with the audit of the financial statements for the registrant and the belief that a reasonable investor with knowledge of all relevant facts and circumstances would conclude that EY has been and is capable of exercising objective and impartial judgment on all issues encompassed within EY’s audit, the registrant’s management and Audit Committee made a determination that such matter does not impair EY’s ability to exercise objective and impartial judgment in connection with the audit of the financial statements for the registrant. On August 29, 2018, EY informed the registrant that EY’s affiliated entity’s pension trust sold its entire interest in the Hermes Fund, effective as of August 28, 2018.

If it were to be determined that, with respect to the Loan Rule, the relief available under the Letter was improperly relied upon, or that the independence requirements under the federal securities laws were not complied with regarding the registrant, for certain periods, and/or given the implication of the Investment Rule for certain periods, any of the registrant’s filings with the SEC which contain financial statements of the registrant for such periods may be determined not to be consistent with or comply with applicable federal securities laws, the registrant’s ability to offer shares under its current registration statement may be impacted, andcertain financial reporting and/or other covenants with, and representations and warranties to, the registrant’s lender under its committed line of credit may be impacted. Such eventscould have a material adverse effect on the registrant and the Federated Fund Complex.

Item 5. Audit Committee of Listed Registrants

Not Applicable

Item 6. Schedule of Investments

(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.

(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.

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

Not Applicable

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

Not Applicable

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

Not Applicable

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

No Changes to Report

Item 11. Controls and Procedures

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

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

(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the registrant’s most recent fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies

Not Applicable

Item 13. Exhibits

(a)(1) Code of Ethics- Not Applicable to this Report.

(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.

(a)(3) Not Applicable.

(b) Certifications pursuant to 18 U.S.C. Section 1350.

SIGNATURES

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

RegistrantFederated Equity Funds

By/S/ Lori A. Hensler

Lori A. Hensler, Principal Financial Officer

DateNovember 21, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By/S/ J. Christopher Donahue

J. Christopher Donahue, Principal Executive Officer

DateNovember 21, 2019

By/S/ Lori A. Hensler

Lori A. Hensler, Principal Financial Officer

DateNovember 21, 2019