United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-6269
(Investment Company Act File Number)
Cash Trust Series II
---------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7000
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End: 5/31/05
Date of Reporting Period: Six months ended 11/30/04
Item 1. Reports to Stockholders
Federated
World-Class Investment Manager
Municipal Cash Series II
A Portfolio of Cash Trust Series II
SEMI-ANNUAL SHAREHOLDER REPORT
November 30, 2004
FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
PORTFOLIO OF INVESTMENTS SUMMARY TABLES
FINANCIAL STATEMENTS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE
Not FDIC Insured * May Lose Value * No Bank Guarantee
Federated Investors 50 Years of Growth & Innovation
Financial Highlights
(For a Share Outstanding Throughout Each Period)
| | Six Months
Ended
(unaudited) | | Year Ended May 31,
|
|
| 11/30/2004
|
|
| 2004
|
|
| 2003
|
|
| 2002
|
|
| 2001
|
|
| 2000
|
|
Net Asset Value, Beginning of Period
| | $1.00 | | | $1.00 | | | $1.00 | | | $1.00 | | | $1.00 | | | $1.00 | |
Income From Investment Operations:
| | | | | | | | | | | | | | | | | | |
Net investment income
| | 0.003 | | | 0.003 | | | 0.007 | | | 0.014 | | | 0.034 | | | 0.031 | |
Less Distributions:
| | | | | | | | | | | | | | | | | | |
Distributions from net investment income
|
| (0.003
| )
|
| (0.003
| )
|
| (0.007
| )
|
| (0.014
| )
|
| (0.034
| )
|
| (0.031
| )
|
Net Asset Value, End of Period
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
Total Return 1
|
| 0.31
| %
|
| 0.35
| %
|
| 0.75
| %
|
| 1.46
| %
|
| 3.44
| %
|
| 3.14
| %
|
| | | | | | | | | | | | | | | | | | |
Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
| 0.81
| % 2
|
| 0.81
| %
|
| 0.81
| %
|
| 0.81
| %
|
| 0.81
| %
|
| 0.81
| %
|
Net investment income
|
| 0.60
| % 2
|
| 0.35
| %
|
| 0.74
| %
|
| 1.44
| %
|
| 3.35
| %
|
| 3.12
| %
|
Expense waiver/reimbursement 3
|
| 0.03
| % 2
|
| 0.02
| %
|
| 0.03
| %
|
| 0.03
| %
|
| 0.04
| %
|
| 0.06
| %
|
Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
| $427,855
|
| $480,002
|
| $407,992
|
| $451,767
|
| $460,244
|
| $364,467
|
|
1 Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
2 Computed on an annualized basis.
3 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Shareholder Expense Example
As a shareholder of the Fund, you incur ongoing costs, including management fees; to the extent applicable, distribution (12b-1) fees and/or shareholder services fees; and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2004 to November 30, 2004.
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 provided to enable you to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
|
| Beginning
Account Value
6/1/2004
|
| Ending
Account Value
11/30/2004
|
| Expenses Paid
During Period 1
|
Actual
|
| $1,000
|
| $1,003.10
|
| $4.07
|
Hypothetical (assuming a 5% return before expenses)
|
| $1,000
|
| $1,021.01
|
| $4.10
|
1 Expenses are equal to the Fund's annualized expense ratio of 0.81%, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Portfolio of Investments Summary Tables
At November 30, 2004, the Fund's portfolio composition 1 was as follows:
|
| Percentage of
Total Investments 2
|
Variable Rate Demand Instruments
|
| 77.1%
|
Municipal Notes
|
| 22.9%
|
TOTAL
|
| 100.0%
|
At November 30, 2004, the Fund's credit quality ratings composition 3 was as follows:
S&P Short-Term Ratings 4 as
Percentage of Total Investments 2
| | Moody's Short-Term Ratings 5 as
Percentage of Total Investments 2
|
A-1+
|
| 61.3%
| | Prime-1 | | 87.2% |
A-1
|
| 29.0%
| |
|
|
|
A-2
|
| 2.7%
| | Prime-2
|
| 2.2%
|
Not rated by S&P
|
| 7.0%
| | Not rated by Moody's
|
| 10.6%
|
TOTAL
|
| 100.0%
| | TOTAL
|
| 100.0%
|
At November 30, 2004, the Fund's effective maturity schedule 6 was as follows:
Securities with an
Effective Maturity of:
|
| Percentage of
Total Investments 2
|
1-7 Days
|
| 78.1%
|
8-30 Days
|
| 0.6%
|
31-90 Days
|
| 1.1%
|
91-180 Days
|
| 12.3%
|
181 Days or more
|
| 7.9%
|
TOTAL
|
| 100.0%
|
1 See the Fund's Prospectus and Statement of Additional Information for a description of these investments.
2 Percentages are based on total investments, which may differ from the Fund's total net assets used in computing the percentages in the Portfolio of Investments which follows.
3 These tables depict the short-term, credit-quality ratings assigned to the Fund's portfolio holdings by Standard & Poor's (S&P) and Moody's Investors Service (Moody's), each of which is a nationally recognized statistical rating organization (NRSRO). Holdings that are rated only by a different NRSRO than the one identified have been included in the "Not rated by..." category. Rated securities include a security with an obligor and/or credit enhancer that has received a rating from an NRSRO with respect to a class of debt obligations that is comparable in priority and security with the security held by the Fund. Credit quality ratings are an assessment of the risk that a security will default in payment and do not address other risks presented by the security. Please see the description of credit-quality ratings in the Fund's Statement of Additional Information.
These tables depict the short-term, credit-quality ratings as assigned only by the NRSRO identified in each table. Of the portfolio's total investments, 5.8% do not have short-term ratings by either of these NRSROs.
4 The ratings A-1+, A-1, and A-2 include municipal notes rated SP-1+, SP-1, and SP-2, respectively.
5 The ratings Prime-1 and Prime-2 include municipal notes rated MIG-1 and MIG-2, and variable rate demand instruments rated VMIG-1 and VMIG-2, respectively.
6 Effective maturity is determined in accordance with the requirements of Rule 2a-7 under the Investment Company Act of 1940, which regulates money market mutual funds.
Portfolio of Investments
November 30, 2004 (unaudited)
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--99.8% 1 | | | |
| | | Alabama--2.4% | | | |
| $ | 205,000 | | Abbeville, AL, IDB, Monthly VRDNs (Great Southern Wood,Inc.)/
(SouthTrust Bank LOC)
| | $ | 205,000 |
| 2,495,000 | | Birmingham, AL, IDA, Weekly VRDNs (Mrs. Strattons Salads, Inc.)/
(SouthTrust Bank LOC)
| | | 2,495,000 |
| 1,140,000 | | Birmingham, AL, IDA, (Series 1997), Weekly VRDNs (Millcraft, AL, Inc.)/
(Regions Bank, Alabama LOC)
| | | 1,140,000 |
| 475,000 | | Huntsville, AL, IDB, Weekly VRDNs (Giles & Kendall, Inc.)/(SouthTrust Bank LOC)
| | | 475,000 |
| 1,915,000 | | Perry County, AL, IDB, (Series 2001), Weekly VRDNs (Alabama Catfish Feedmill LLC)/(Regions Bank, Alabama LOC)
| | | 1,915,000 |
| 4,135,000 | | St. Clair County, AL, IDB, (Series 1993), Weekly VRDNs (Ebsco Industries, Inc.)/(National Australia Bank Ltd., Melbourne LOC)
|
|
| 4,135,000
|
| | | TOTAL
|
|
| 10,365,000
|
| | | Arizona--6.7% | | | |
| 2,500,000 | | Apache County, AZ, IDA, (Series 1983B), Weekly VRDNs (Tucson Electric Power Co.)/(Bank of New York LOC)
| | | 2,500,000 |
| 2,500,000 | | Arizona Health Facilities Authority, (Series 2002), Weekly VRDNs (Royal Oaks Life Care Community)/(Lasalle Bank, N.A. LOC)
| | | 2,500,000 |
| 2,000,000 | | Glendale, AZ, IDA, Weekly VRDNs (Friendship Retirement Corp.)/(Wells Fargo Bank Minnesota N.A. LOC)
| | | 2,000,000 |
| 700,000 | | Glendale, AZ, IDA, (Series 1999), Weekly VRDNs (Friendship Retirement Corp.)/(Wells Fargo Bank Minnesota N.A. LOC)
| | | 700,000 |
| 2,000,000 | | Maricopa County, AZ, IDA, (Series 2000A), Weekly VRDNs (Las Gardenias Apartments, LP)/(FNMA LOC)
| | | 2,000,000 |
| 1,400,000 | | Maricopa County, AZ, IDA, MFH Revenue Bonds, (Series 2002), Weekly VRDNs (San Remo Apartments, LP)/(FNMA LOC)
| | | 1,400,000 |
| 5,000,000 | 2,3 | Maricopa County, AZ, IDA, PUTTERS, (Series 420), Weekly VRDNs
(Catholic Healthcare West)/(J.P. Morgan Chase & Co. LIQ)/
(J.P.Morgan Chase Bank LOC)
| | | 5,000,000 |
| 2,750,000 | | Phoenix, AZ, IDA, (Series 2000), Weekly VRDNs (Copper Palms Apartments)/(FHLMC LOC)
| | | 2,750,000 |
| 1,079,000 | | Phoenix, AZ, IDA, (Series 2002), Weekly VRDNs (Jewell McFarland Lewis Fresh Start Women's Resource Center)/(Bank of America N.A. LOC)
| | | 1,079,000 |
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Arizona--continued | | | |
| $ | 1,000,000 | 2,3 | Phoenix, AZ, IDA, PT-479, Weekly VRDNs (Sunset Ranch Apartments)/
(FHLMC GTD)/(FHLMC LIQ)
| | $ | 1,000,000 |
| 3,050,000 | | Pima County, AZ, IDA, Weekly VRDNs (Tucson Electric Power Co.)/(Bank of New York LOC)
| | | 3,050,000 |
| 554,000 | 2,3 | Pima County, AZ, IDA, Single Family Mortgage (PA-159), Weekly VRDNs (GNMA COL)/(Merrill Lynch & Co., Inc. LIQ)
| | | 554,000 |
| 1,845,000 | | Sierra Vista, AZ, IDA, (Series 2001A), Weekly VRDNs (Mountain Steppes Properties LLC)/(FNMA LOC)
| | | 1,845,000 |
| 600,000 | | Tempe, AZ, IDA, (Series 2002C), Weekly VRDNs (Friendship Village of Tempe)/(Lasalle Bank, N.A. LOC)
| | | 600,000 |
| 700,000 | | Tucson, AZ, IDA, (Series 1989), Weekly VRDNs (Lincoln Garden Tucson LP)/
(FHLMC LOC)
| | | 700,000 |
| 1,150,000 | | Tucson, AZ, IDA, MFH Revenue Bonds, (Series 2002A), Weekly VRDNs (Quality Apartment Living, LLC)/(FNMA LOC)
|
|
| 1,150,000
|
| | | TOTAL
|
|
| 28,828,000
|
| | | Arkansas--2.1% | | | |
| 4,100,000 | | Arkansas Development Finance Authority, (Series 1999A), Weekly VRDNs (Riceland Foods, Inc.)/(BNP Paribas SA LOC)
| | | 4,100,000 |
| 1,225,000 | | Arkansas Development Finance Authority, (Series 2000A), Weekly VRDNs (Riceland Foods, Inc.)/(BNP Paribas SA LOC)
| | | 1,225,000 |
| 3,725,000 | | Nashville, AR, (Series 2000), Weekly VRDNs (Ox Bodies)/(Regions Bank, Alabama LOC)
|
|
| 3,725,000
|
| | | TOTAL
|
|
| 9,050,000
|
| | | California--7.2% | | | |
| 24,300,000 | | California PCFA, (1996 Series E), Daily VRDNs (Pacific Gas & Electric Co.)/
(Bank One N.A. (Chicago) LOC)
| | | 24,300,000 |
| 6,050,000 | | California State Department of Water Resources Power Supply Program, (Series 2002 C-1), Weekly VRDNs (Dexia Credit Local LOC)
| | | 6,050,000 |
| 582,533 | 2,3 | Koch Floating Rate Trust (California Non-AMT), (Series 1998-1), Weekly VRDNs (AMBAC INS)/(State Street Bank and Trust Co. LIQ)
|
|
| 582,533
|
| | | TOTAL
|
|
| 30,932,533
|
| | | Colorado--2.3% | | | |
| 2,000,000 | | Bachelor Gulch Metropolitan District, CO, (Series 2004), 1.20% TOBs (Compass Bank, Birmingham LOC), Mandatory Tender 12/1/2004
| | | 2,000,000 |
| 1,295,000 | | Colorado HFA, (Series 1996), Weekly VRDNs (Neppl-Springs Fabrication)/
(U.S. Bank, N.A. LOC)
| | | 1,295,000 |
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Colorado--continued | | | |
| $ | 1,650,000 | | Colorado HFA, (Series 2000A), Weekly VRDNs (New Belgium Brewing Co., Inc.)/(Wells Fargo Bank, N.A. LOC)
| | $ | 1,650,000 |
| 5,000,000 | | Denver, CO City & County Airport Authority, (Series 2004B), Weekly VRDNs (CDC IXIS Financial Guaranty N.A. INS)/(Bayerische Landesbank Girozentrale LIQ)
|
|
| 5,000,000
|
| | | TOTAL
|
|
| 9,945,000
|
| | | District of Columbia--0.6% | | | |
| 1,365,000 | 2,3 | District of Columbia HFA, Roaring Forks Certificates, (Series 2000-23), Weekly VRDNs (GNMA COL)/(Bank of New York LIQ)
| | | 1,365,000 |
| 1,330,000 | | District of Columbia, (Series 1999C), Weekly VRDNs (George Washington University)/(MBIA Insurance Corp. INS)/(Bank of America N.A. LIQ)
|
|
| 1,330,000
|
| | | TOTAL
|
|
| 2,695,000
|
| | | Florida--3.7% | | | |
| 3,885,000 | 2,3 | Escambia County, FL HFA, (Series 2004 FR/RI-L12), Weekly VRDNs
(GNMA COL)/(Lehman Brothers Holdings, Inc. LIQ)
| | | 3,885,000 |
| 4,000,000 | | Greater Orlando, FL, Aviation Authority, Weekly VRDNs (Cessna Aircraft Co.)/(Textron Inc. GTD)
| | | 4,000,000 |
| 4,500,000 | | Highlands County, FL, Health Facilities Authority, Hospital Revenue Bonds, 3.35% TOBs (Adventist Health System/ Sunbelt Obligated Group), Mandatory Tender 9/1/2005
| | | 4,549,821 |
| 3,250,000 | 2,3 | Lee County, FL, Solid Waste System, (Series 2003 FR/RI-L24J), Weekly VRDNs (MBIA Insurance Corp. INS)/(Lehman Brothers Holdings, Inc. LIQ)
|
|
| 3,250,000
|
| | | TOTAL
|
|
| 15,684,821
|
| | | Georgia--2.1% | | | |
| 2,200,000 | | Fulton County, GA, IDA, (Series 1989), Weekly VRDNs (STO Corp.)/(Dresdner Bank AG, Frankfurt LOC)
| | | 2,200,000 |
| 595,000 | | Gwinnett County, GA, Development Authority, (Series 2004), Weekly VRDNs (Pak-Lite, Inc.)/(Wachovia Bank N.A. LOC)
| | | 595,000 |
| 6,000,000 | | Monroe County, GA, Development Authority, (2nd Series 1995), 1.20% TOBs (Georgia Power Co.), Mandatory Tender 4/19/2005
|
|
| 6,000,000
|
| | | TOTAL
|
|
| 8,795,000
|
| | | Idaho--0.9% | | | |
| 3,720,000 | | Minidoka County, ID, IDC, (Series 1998), Weekly VRDNs (Nature's Best Produce, Inc.)/(BNP Paribas SA LOC)
|
|
| 3,720,000
|
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Illinois--2.0% | | | |
| $ | 3,500,000 | | Aurora City, IL, (Series 2000), Weekly VRDNs (Cleveland Hardware & Forging Co.)/(Fifth Third Bank, Cincinnati LOC)
| | $ | 3,500,000 |
| 2,075,000 | | Illinois Development Finance Authority, IDB, Weekly VRDNs
(T&D Investments LLC)/(U.S. Bank, N.A. LOC)
| | | 2,075,000 |
| 1,820,000 | 2,3 | Illinois Housing Development Authority, MERLOTS, (Series 2000 UUU), 2.17% TOBs (Wachovia Bank N.A. LIQ), Optional Tender 11/10/2005
| | | 1,820,000 |
| 1,214,000 | | Peoria, IL, (Series 1996), Weekly VRDNs (J.T. Fennell Co., Inc.)/(Bank
One N.A. (Chicago) LOC)
|
|
| 1,214,000
|
| | | TOTAL
|
|
| 8,609,000
|
| | | Indiana--1.8% | | | |
| 1,015,000 | | Carmel, IN, (Series 1996-A), Weekly VRDNs (Telamon Corp.)/(Lasalle
Bank, N.A. LOC)
| | | 1,015,000 |
| 2,380,000 | | Franklin, IN, Lakeview I Apartments, (Series 1994), Weekly VRDNs (Pedcor Investments LP)/(FHLB of Indianapolis LOC)
| | | 2,380,000 |
| 1,425,000 | | Huntington, IN, (Series 1998), Weekly VRDNs (DK Enterprises LLC)/(Wells Fargo Bank Minnesota N.A. LOC)
| | | 1,425,000 |
| 545,000 | | Indiana Development Finance Authority, Economic Development Revenue Refunding Bonds, Weekly VRDNs (T. M. Morris Manufacturing Co., Inc.)/
(Bank One N.A. (Chicago) LOC)
| | | 545,000 |
| 460,000 | | Tipton, IN, (Series 1997), Weekly VRDNs (MCJS LLC)/(Bank One N.A. (Chicago) LOC)
| | | 460,000 |
| 1,685,000 | | Winamac, IN, (Series 1997), Weekly VRDNs (Pulaski Health Foundation, Inc.)/(Key Bank, N.A. LOC)
|
|
| 1,685,000
|
| | | TOTAL
|
|
| 7,510,000
|
| | | Iowa--0.2% | | | |
| 975,000 | | Iowa Finance Authority, (Series 1998), Weekly VRDNs (Schumacher Elevator)/(Wells Fargo Bank Minnesota N.A. LOC)
|
|
| 975,000
|
| | | Kentucky--4.4% | | | |
| 360,000 | | Boone County, KY, (Series 1996), Weekly VRDNs (Western States Envelope Co.)/(Bank One N.A. (Chicago) LOC)
| | | 360,000 |
| 8,500,000 | | Boyd County, KY, (Series 2003), Weekly VRDNs (Air Products & Chemicals, Inc.)
| | | 8,500,000 |
| 3,500,000 | | Graves County, KY, (Series 1988), Weekly VRDNs (Seaboard Farms)/(Bank of New York LOC)
| | | 3,500,000 |
| 2,965,000 | | Henderson, KY IDRB, (Series 1998), Weekly VRDNs (Vincent Industrial Plastics, Inc.)/(Fifth Third Bank, Cincinnati LOC)
| | | 2,965,000 |
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Kentucky--continued | | | |
| $ | 2,947,000 | | Kenton County, KY, (Series 1999), Weekly VRDNs (Packaging Un-limited of Northern Kentucky, Inc.)/(National City Bank, Kentucky LOC)
| | $ | 2,947,000 |
| 400,000 | | Muhlenberg County, KY, (Series 1997), Weekly VRDNs (Plastic Products Co.)/(Wells Fargo Bank Minnesota N.A. LOC)
|
|
| 400,000
|
| | | TOTAL
|
|
| 18,672,000
|
| | | Louisiana--2.3% | | | |
| 2,000,000 | | East Baton Rouge Parish, LA, 4.00% Bonds (MBIA Insurance
Corp. INS), 2/1/2005
| | | 2,009,713 |
| 4,000,000 | | Louisiana Local Government Environmental Facilities Community Development Authority, (Series 2004), Weekly VRDNs (The Academy of the Sacred Heart of New Orleans)/(SunTrust Bank LOC)
| | | 4,000,000 |
| 3,350,000 | | Louisiana Local Government Environmental Facilities Community Development Authority, (Series 2004), Weekly VRDNs (The Christ Episcopal Church in Covington)/(SunTrust Bank LOC)
| | | 3,350,000 |
| 400,000 | | Ouachita Parish, LA, IDB, (Series 1997), Weekly VRDNs (EPCO Carbondioxide Products, Inc.)/(Bank One N.A. (Chicago) LOC)
|
|
| 400,000
|
| | | TOTAL
|
|
| 9,759,713
|
| | | Maryland--2.1% | | | |
| 2,455,000 | | Maryland State Community Development Administration, (Series 2003E), 1.25% TOBs, Mandatory Tender 12/21/2004
| | | 2,455,000 |
| 3,795,000 | | Maryland State Economic Development Corp., (Series 1999A), Weekly VRDNs (Victor Graphics, Inc.)/(Manufacturers & Traders Trust Co., Buffalo, NY LOC)
| | | 3,795,000 |
| 2,730,000 | 2,3 | Montgomery County, MD, Housing Opportunities Commission, (Series 2004 FR/RI-L5), Weekly VRDNs (Lehman Brothers Holdings, Inc. LIQ)
|
|
| 2,730,000
|
| | | TOTAL
|
|
| 8,980,000
|
| | | Massachusetts--0.7% | | | |
| 3,200,000 | | Massachusetts State HFA, (Series R), 1.15% BANs, 5/2/2005
|
|
| 3,200,000
|
| | | Michigan--0.6% | | | |
| 2,500,000 | 2,3 | Detroit, MI Economic Development Corp., Resource Recovery MERLOTS, (Series 2000-A90), Weekly VRDNs (AMBAC INS)/(Wachovia Bank N.A. LIQ)
|
|
| 2,500,000
|
| | | Minnesota--0.1% | | | |
| 445,000 | | Byron, MN, Weekly VRDNs (Schmidt Printing)/(Wells Fargo Bank
Minnesota N.A. LOC)
|
|
| 445,000
|
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Mississippi--2.4% | | | |
| $ | 2,420,000 | | Mississippi Business Finance Corp., (Series 2000A), Weekly VRDNs (TT&W Farm Products, Inc.)/(Amsouth Bank N.A., Birmingham LOC)
| | $ | 2,420,000 |
| 1,945,000 | 2,3 | Mississippi Home Corp., Roaring Forks, (Series 2002-16), Weekly VRDNs (GNMA COL)/(Bank of New York LIQ)
| | | 1,945,000 |
| 5,390,000 | 2,3 | Mississippi Home Corp., Roaring Forks Certificates, (Series 2001-14), Weekly VRDNs (GNMA COL)/(Bank of New York LIQ)
| | | 5,390,000 |
| 700,000 | | Senatobia, MS, Weekly VRDNs (Deltona Lighting Products, Inc.)/(SouthTrust Bank LOC)
|
|
| 700,000
|
| | | TOTAL
|
|
| 10,455,000
|
| | | Multi State--14.8% | | | |
| 1,528,000 | 2,3 | BNY Municipal Certificates Trust, (Series 2002-BNY1), Weekly VRDNs (Bank of New York LIQ)/(Bank of New York LOC)
| | | 1,528,000 |
| 1,000,000 | 2,3 | Charter Mac Floater Certificates Trust I, (Nat-2 Series), Weekly VRDNs (MBIA Insurance Corp. INS)/(Bayerische Landesbank Girozentrale, Dexia Bank, Belgium, Fleet National Bank, Landesbank Baden-Wuerttemberg and State Street Bank and Trust Co. LIQs)
| | | 1,000,000 |
| 7,000,000 | 2,3 | Charter Mac Floater Certificates Trust I, (Nat-4 Series), Weekly VRDNs (MBIA Insurance Corp. INS)/(Bayerische Landesbank Girozentrale, Dexia Bank, Belgium, Fleet National Bank, Landesbank Baden-Wuerttemberg and State Street Bank and Trust Co. LIQs)
| | | 7,000,000 |
| 9,441,000 | 2,3 | Clipper Tax-Exempt Certificates Trust (AMT MultiState), (Series 1999-3), Weekly VRDNs (State Street Bank and Trust Co. LIQ)
| | | 9,441,000 |
| 20,655,000 | 2,3 | Clipper Tax-Exempt Certificates Trust (AMT Multistate), (Series 2002-09), Weekly VRDNs (AMBAC, FGIC, FSA, MBIA Insurance Corp. INS) and State Street Bank and Trust Co. LIQs)
| | | 20,655,000 |
| 2,895,000 | 2,3 | Clipper Tax-Exempt Certificates Trust (Multistate-AMT), (Series 2003-01), Weekly VRDNs (Merrill Lynch & Co., Inc. LIQ)
| | | 2,895,000 |
| 2,869,500 | 2,3 | Clipper Tax-Exempt Certificates Trust (Multistate-AMT), (Series 2003-03), Weekly VRDNs (GNMA COL)/(Merrill Lynch & Co., Inc. LIQ)
| | | 2,869,500 |
| 6,716,355 | 2,3 | Clipper Tax-Exempt Certificates Trust (Multistate-AMT), (Series 2003-10), Weekly VRDNs (GNMA COL)/(State Street Bank and Trust Co. LIQ)
| | | 6,716,355 |
| 6,954,000 | 2,3 | Clipper Tax-Exempt Certificates Trust (Multistate-AMT), (Series 2004-02), Weekly VRDNs (State Street Bank and Trust Co. LIQ)
| | | 6,954,000 |
| 4,105,000 | 2,3 | Roaring Fork Municipal Products LLC, (Series 2000-12), Weekly VRDNs (Bank of New York LIQ)
|
|
| 4,105,000
|
| | | TOTAL
|
|
| 63,163,855
|
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | New Hampshire--0.1% | | | |
| $ | 538,000 | | New Hampshire Business Finance Authority, (Series A), Weekly VRDNs (Upper Valley Press)/(Key Bank, N.A. LOC)
|
| $
| 538,000
|
| | | New Jersey--1.6% | | | |
| 7,000,000 | | New Jersey Turnpike Authority, (Series 2003C-1), Weekly VRDNs
(FSA INS)/(WestLB AG (Guaranteed) LIQ)
|
|
| 7,000,000
|
| | | New Mexico--4.9% | | | |
| 20,765,418 | | New Mexico Mortgage Finance Authority, (Series 2004), 2.00% TOBs (Trinity Plus Funding Co. LLC), Mandatory Tender 3/1/2005
|
|
| 20,765,418
|
| | | New York--3.2% | | | |
| 6,000,000 | | New York City, NY, (2004 Series H-1), Daily VRDNs (Bank of New York LOC)
| | | 6,000,000 |
| 7,830,000 | | New York State Dormitory Authority, Mental Health Services (2003
Subseries F-2C), Weekly VRDNs (New York State)/(FSA INS)/(Dexia
Credit Local LIQ)
|
|
| 7,830,000
|
| | | TOTAL
|
|
| 13,830,000
|
| | | North Carolina--1.3% | | | |
| 5,500,000 | | Montgomery County, NC Industrial Facilities and Pollution Control Financing Authority, (Series 2000), Daily VRDNs (Republic Services, Inc.)/(SunTrust Bank LOC)
|
|
| 5,500,000
|
| | | Ohio--9.2% | | | |
| 2,000,000 | 2,3 | ABN AMRO MuniTOPS Certificates Trust (Ohio Non-AMT), (Series 2004-14), Weekly VRDNs (Columbus, OH City School District)/(FSA INS)/(ABN AMRO Bank NV, Amsterdam LIQ)
| | | 2,000,000 |
| 2,000,000 | | Belmont County, OH, 1.36% BANs, 3/16/2005
| | | 2,001,477 |
| 2,450,000 | | Brecksville City, OH, (Series 2004), 1.50% BANs, 5/5/2005
| | | 2,452,050 |
| 1,290,000 | 2,3 | Cleveland, OH Airport System, (PT-799), Weekly VRDNs (FSA INS)/(Merrill Lynch & Co., Inc. LIQ)
| | | 1,290,000 |
| 490,000 | | Cuyahoga County, OH, Hospital Authority, (Series 2000), Weekly VRDNs (The Sisters of Charity of St. Augustine Health System, Inc.)/(National City Bank, Ohio LOC)
| | | 490,000 |
| 1,500,000 | | Dublin, OH, Industrial Development Refunding Revenue Bonds, (Series 1997), Weekly VRDNs (Witco Corp.)/(Fleet National Bank LOC)
| | | 1,500,000 |
| 2,000,000 | | Hamilton, OH, Multi-Family Housing, (Series 2003A: Knollwood Crossing II Apartments), Weekly VRDNs (Pedcor Investments-2003-LIX LP)/(FHLB of Indianapolis LOC)
| | | 2,000,000 |
| 400,000 | | Hamilton, OH, Multi-Family Housing, (Series 2003B: Knollwood Crossing II Apartments), Weekly VRDNs (Pedcor Investments-2003-LIX LP)/(FHLB of Indianapolis LOC)
| | | 400,000 |
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Ohio--continued | | | |
| $ | 1,250,000 | | Lake County, OH, 2.00% BANs, 4/14/2005
| | $ | 1,253,992 |
| 750,000 | | Medina County, OH, (Series 1998), Weekly VRDNs (Mack Industries, Inc.)/
(Huntington National Bank, Columbus, OH LOC)
| | | 750,000 |
| 1,050,000 | | North Olmsted, OH, 1.55% BANs, 5/4/2005
| | | 1,051,090 |
| 3,560,000 | | North Ridgeville, OH, 1.52% BANs, 5/4/2005
| | | 3,562,809 |
| 1,580,000 | 2,3 | Ohio HFA, Variable Rate Certificates, (Series 2001-I), Weekly VRDNs
(GNMA COL)/(Bank of America N.A. LIQ)
| | | 1,580,000 |
| 1,660,000 | | Ohio State Higher Educational Facilities Commission, (Series A), Weekly VRDNs (John Carroll University, OH)/(Allied Irish Banks PLC LOC)
| | | 1,660,000 |
| 2,905,000 | | Portage County, OH, IDA, Adjustable Rate IDRBs, (Series 1996), Weekly VRDNs (Barnette Project)/(National City Bank, Ohio LOC)
| | | 2,905,000 |
| 1,690,000 | | Salem, OH, 1.55% BANs, 5/5/2005
| | | 1,691,414 |
| 2,780,000 | | Shaker Heights, OH, (Series A), 2.25% BANs, 5/12/2005
| | | 2,790,096 |
| 2,000,000 | | Toledo-Lucas County, OH, Port Authority, Airport Development Revenue Bonds, (Series 1996-1), Weekly VRDNs (Burlington Air Express, Inc.)/(ABN AMRO Bank NV, Amsterdam LOC)
| | | 2,000,000 |
| 6,460,000 | | Trumbull County, OH, Sewer District, 1.36% BANs, 4/5/2005
| | | 6,466,785 |
| 1,670,000 | | Wood County, OH, Series 1998 Weekly VRDNs (IMCO Carbide Tool, Inc.)/(Huntington National Bank, Columbus, OH LOC)
|
|
| 1,670,000
|
| | | TOTAL
|
|
| 39,514,713
|
| | | Oklahoma--0.5% | | | |
| 2,000,000 | | Oklahoma Development Finance Authority, (Series 2003), 1.35% TOBs (ConocoPhillips Co.)/(ConocoPhillips GTD), Optional Tender 12/1/2004
|
|
| 2,000,000
|
| | | Oregon--1.2% | | | |
| 720,000 | | Oregon State Economic & Community Development Commission,
(Series 191), Weekly VRDNs (Western Oregon Door LLC)/(Wells Fargo
Bank Minnesota N.A. LOC)
| | | 720,000 |
| 2,850,000 | | Oregon State Housing and Community Services Department, (Series P), 1.25% TOBs, Mandatory Tender 1/6/2005
| | | 2,850,000 |
| 1,500,000 | | Port of Morrow, OR, (Series 2001A), Weekly VRDNs (Threemile Canyon Farms LLC)/(Key Bank, N.A. LOC)
|
|
| 1,500,000
|
| | | TOTAL
|
|
| 5,070,000
|
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Pennsylvania--1.3% | | | |
| $ | 2,670,000 | | Montgomery County, PA, IDA, (Series 2000), Weekly VRDNs (American Foodservice Corp.)/(Wachovia Bank N.A. LOC)
| | $ | 2,670,000 |
| 360,000 | | Pennsylvania EDFA, (Series 1998A), Weekly VRDNs (Fourth Generation Realty LLC)/(PNC Bank, N.A. LOC)
| | | 360,000 |
| 2,500,000 | | Pennsylvania EDFA, Wastewater Treatment Revenue Refunding Bonds,
(Series 2004B), Weekly VRDNs (Sunoco, Inc.)
|
|
| 2,500,000
|
| | | TOTAL
|
|
| 5,530,000
|
| | | Puerto Rico--0.7% | | | |
| 3,000,000 | 2,3 | Puerto Rico Public Finance Corp., PUTTERs, (Series 272), Weekly VRDNs (J.P.Morgan Chase Bank LIQ)/(J.P.Morgan Chase Bank LOC)
|
|
| 3,000,000
|
| | | Rhode Island--0.7% | | | |
| 2,905,000 | | Warwick, RI, Housing Authority, (Series 2001), Daily VRDNs (Trafalgar East Apartments)/(Fleet National Bank LOC)
|
|
| 2,905,000
|
| | | South Carolina--2.1% | | | |
| 1,000,000 | | Berkeley County, SC, IDB, (Series 1996A), Weekly VRDNs (Nucor Corp.)
| | | 1,000,000 |
| 8,000,000 | | Berkeley County, SC, IDB, (Series 1998), Weekly VRDNs (Nucor Corp.)
|
|
| 8,000,000
|
| | | TOTAL
|
|
| 9,000,000
|
| | | Tennessee--1.8% | | | |
| 310,000 | | Benton County TN, IDB, (Series 1996), Weekly VRDNs (Jones Plastic and Engineering Corp.)/(National City Bank, Kentucky LOC)
| | | 310,000 |
| 1,075,000 | | Chattanooga, TN, IDB, Revenue Bonds, (Series 1997), Weekly VRDNs
(TB Wood's Inc.)/(PNC Bank, N.A. LOC)
| | | 1,075,000 |
| 2,515,000 | | Hamilton County, TN, IDB Weekly VRDNs (Pavestone Co.)/(Bank One N.A. (Chicago) LOC)
| | | 2,515,000 |
| 3,100,000 | | Union City, TN, IDB, (Series 1995), Weekly VRDNs (Kohler Co.)/(Wachovia Bank N.A. LOC)
| | | 3,100,000 |
| 700,000 | | Union County, TN, IDB, (Series 1995), Weekly VRDNs (Cooper Container Corporation)/(SunTrust Bank LOC)
|
|
| 700,000
|
| | | TOTAL
|
|
| 7,700,000
|
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Texas--8.5% | | | |
| $ | 1,000,000 | | Brazos Harbor, TX, Industrial Development Corp., (Series 2003), 1.80% TOBs (ConocoPhillips Co.)/(ConocoPhillips GTD), Optional Tender 8/1/2005
| | $ | 1,000,000 |
| 10,250,000 | | Gulf Coast, TX, Waste Disposal Authority Daily VRDNs (BP Amoco Corp.)
| | | 10,250,000 |
| 1,520,000 | 2,3 | Harris County, TX, HFDC, Roaring Forks Certificates, (Series 2001-13), Weekly VRDNs (GNMA COL)/(Bank of New York LIQ)
| | | 1,520,000 |
| 1,250,000 | | North Central Texas HFDC, Hospital Revenue Bonds, 5.50% Bonds (Baylor Health Care System), 5/15/2005
| | | 1,272,352 |
| 3,960,000 | 2,3 | San Antonio, TX, Electric & Gas System, MERLOTS, (Series 2002-A53), 1.75% TOBs (FSA INS)/(Wachovia Bank N.A. LIQ), Optional Tender 7/20/2005
| | | 3,960,000 |
| 1,120,000 | | Tarrant County, TX, IDC Weekly VRDNs (Holden Business Forms)/(Lasalle Bank, N.A. LOC)
| | | 1,120,000 |
| 5,000,000 | | Texas State Department of Housing & Community Affairs, (Series 2004F), 1.95% TOBs, Mandatory Tender 8/3/2005
| | | 5,000,000 |
| 2,300,000 | 2, 3 | Texas State Department of Housing & Community Affairs, MERLOTS,
(Series 2001-A109), 2.22% TOBs (GNMA COL)/(Wachovia Bank N.A. LIQ), Optional Tender 11/16/2005
| | | 2,300,000 |
| 10,000,000 | | Texas State, (Series 2004), 3.00% TRANs, 8/31/2005
|
|
| 10,102,992
|
| | | TOTAL
|
|
| 36,525,344
|
| | | Virginia--0.6% | | | |
| 2,500,000 | | Henrico County, VA, EDA, (Series 2003B), Weekly VRDNs (Westminster-Canterbury of Richmond)/(KBC Bank N.V. LOC)
|
|
| 2,500,000
|
| | | Washington--1.2% | | | |
| 5,000,000 | 2,3 | Clark County, WA, Public Utilities District No. 001, MERLOTS,
(Series 2001-A116), 2.11% TOBs (FSA INS)/(Wachovia Bank N.A. LIQ), Optional Tender 11/10/2005
|
|
| 5,000,000
|
| | | West Virginia--0.9% | | | |
| 3,760,000 | | Ritchie County, WV, IDRB, (Series 1996), Weekly VRDNs (Simonton Building Products, Inc.)/(PNC Bank, N.A. LOC)
|
|
| 3,760,000
|
Principal
Amount
|
|
|
| Value
|
| | | SHORT-TERM MUNICIPALS--continued 1 | | | |
| | | Wisconsin--0.6% | | | |
| $ | 1,700,000 | | Combined Locks, WI, Development Revenue Bonds, (Series 1997), Weekly VRDNs (Appleton Papers)/(Lasalle Bank, N.A. LOC)
| | $ | 1,700,000 |
| 795,000 | | Wisconsin Housing & EDA, Business Development Revenue Bonds,
(Series 1995), Weekly VRDNs (Carlson Tool & Manufacturing Corp.)/
(U.S. Bank, N.A. LOC)
|
|
| 795,000
|
| | | TOTAL
|
|
| 2,495,000
|
| | | TOTAL INVESTMENTS--99.8%
(AT AMORTIZED COST) 4
|
|
| 426,918,397
|
| | | OTHER ASSETS AND LIABILITIES - NET--0.2%
|
|
| 936,272
|
| | | TOTAL NET ASSETS--100%
|
| $
| 427,854,669
|
Securities that are subject to the federal alternative minimum tax (AMT) represent 63.9% of the portfolio as calculated based upon total portfolio market value.
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations (NRSROs) or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1, or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, or F-1+, F-1, or F-2 by Fitch Rating, are all considered rated in one of the two highest short-term rating categories.
Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities rated in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security. At November 30, 2004, the portfolio securities were rated as follows:
Tier Rating Based on Total Market Value
First Tier
|
| Second Tier
|
97.7%
|
| 2.3%
|
2 Denotes a restricted security, including securities purchased under Rule 144A of the Securities Act of 1933. These securities, unless registered under the Act or exempted from registration, may only be sold to qualified institutional investors. At November 30, 2004, these securities amounted to $113,835,388 which represents 26.6% of total net assets.
3 Denotes a restricted security, including securities purchased under Rule 144A that have been deemed
liquid by criteria approved by the Fund's Board of Trustees. At November 30, 2004, these securities amounted to $113,835,388 which represents 26.6% of total net assets.
4 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of total net assets at November 30, 2004.
The following acronyms are used throughout this portfolio:
| AMBAC | - --American Municipal Bond Assurance Corporation |
| AMT | - --Alternative Minimum Tax |
| BANs | - --Bond Anticipation Notes |
| COL | - --Collateralized |
| EDA | - --Economic Development Authority |
| EDFA | - --Economic Development Financing Authority |
| FGIC | - --Financial Guaranty Insurance Company |
| FHLB | - --Federal Home Loan Bank |
| FHLMC | - --Federal Home Loan Mortgage Corporation |
| FNMA | - --Federal National Mortgage Association |
| FSA | - --Financial Security Assurance |
| GNMA | - --Government National Mortgage Association |
| GTD | - --Guaranteed |
| HFA | - --Housing Finance Authority |
| HFDC | - --Health Facility Development Corporation |
| IDA | - --Industrial Development Authority |
| IDB | - --Industrial Development Bond |
| IDC | - --Industrial Development Corporation |
| IDRB | - --Industrial Development Revenue Bond |
| INS | - --Insured |
| LIQ | - --Liquidity Agreement |
| LLC | - --Limited Liability Corporation |
| LOC | - --Letter of Credit |
| LP | - --Limited Partnership |
| MERLOTS | - --Municipal Exempt Receipts -- Liquidity Optional Tender Series |
| PCFA | - --Pollution Control Finance Authority |
| PLC | - --Public Limited Company |
| PUTTERS | - --Puttable Tax-Exempt Receipts |
| TOBs | - --Tender Option Bonds |
| TOPS | - --Trust Obligation Participation Securities |
| TRANs | - --Tax and Revenue Anticipation Notes |
| VRDNs | - --Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
November 30, 2004 (unaudited)
Assets:
| | | | | | | | |
Total investments in securities, at amortized cost and value
| | | | | | $ | 426,918,397 | |
Income receivable
| | | | | | | 1,197,874 | |
Receivable for shares sold
|
|
|
|
|
|
| 6,945
|
|
TOTAL ASSETS
|
|
|
|
|
|
| 428,123,216
|
|
Liabilities:
| | | | | | | | |
Income distribution payable
| | $ | 137,912 | | | | | |
Payable to bank
| | | 23,030 | | | | | |
Payable for transfer and dividend disbursing agent fees and expenses
| | | 30,452 | | | | | |
Payable for distribution services fee (Note 5)
| | | 73,370 | | | | | |
Accrued expenses
|
|
| 3,783
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
|
|
| 268,547
|
|
Net assets for 427,861,122 shares outstanding
|
|
|
|
|
| $
| 427,854,669
|
|
Net Assets Consist of:
| | | | | | | | |
Paid-in capital
| | | | | | $ | 427,861,122 | |
Accumulated net realized loss on investments
| | | | | | | (3,873 | ) |
Distributions in excess of net investment income
|
|
|
|
|
|
| (2,580
| )
|
TOTAL NET ASSETS
|
|
|
|
|
| $
| 427,854,669
|
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
| | | | | | | | |
$427,854,669 ÷ 427,861,122 shares outstanding, no par value, unlimited shares authorized
|
|
|
|
|
|
| $1.00
|
|
See Notes which are an integral part of the Financial Statements
Statement of Operations
Six Months Ended November 30, 2004 (unaudited)
Investment Income:
| | | | | | | | | | | |
Interest
|
|
|
|
|
|
|
|
|
| $
| 3,328,628
|
Expenses:
| | | | | | | | | | | |
Investment adviser fee (Note 5)
| | | | | | $ | 1,179,396 | | | | |
Administrative personnel and services fee (Note 5)
| | | | | | | 189,327 | | | | |
Custodian fees
| | | | | | | 12,933 | | | | |
Transfer and dividend disbursing agent fees and expenses (Note 5)
| | | | | | | 47,600 | | | | |
Directors'/Trustees' fees
| | | | | | | 4,358 | | | | |
Auditing fees
| | | | | | | 6,574 | | | | |
Legal fees
| | | | | | | 3,779 | | | | |
Portfolio accounting fees
| | | | | | | 45,212 | | | | |
Distribution services fee (Note 5)
| | | | | | | 471,758 | | | | |
Share registration costs
| | | | | | | 11,454 | | | | |
Printing and postage
| | | | | | | 10,775 | | | | |
Insurance premiums
| | | | | | | 5,070 | | | | |
Miscellaneous
|
|
|
|
|
|
| 3,259
|
|
|
|
|
TOTAL EXPENSES
|
|
|
|
|
|
| 1,991,495
|
|
|
|
|
Waivers (Note 5):
| | | | | | | | | | | |
Waiver of investment adviser fee
| | $ | (59,615 | ) | | | | | | | |
Waiver of administrative personnel and services fee
| | | (9,587 | ) | | | | | | | |
Waiver of transfer and dividend disbursing agent fees and expenses
|
|
| (114
| )
|
|
|
|
|
|
|
|
TOTAL WAIVERS
|
|
|
|
|
|
| (69,316
| )
|
|
|
|
Net expenses
|
|
|
|
|
|
|
|
|
|
| 1,922,179
|
Net investment income
|
|
|
|
|
|
|
|
|
| $
| 1,406,449
|
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
|
|
| Six Months
Ended
(unaudited)
11/30/2004
|
|
|
| Year Ended
5/31/2004
|
|
Increase (Decrease) in Net Assets
| | | | | | | | |
Operations:
| | | | | | | | |
Net investment income
| | $ | 1,406,449 | | | $ | 1,655,696 | |
Net realized loss on investments
|
|
| - --
|
|
|
| (2,965
| )
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
|
|
| 1,406,449
|
|
|
| 1,652,731
|
|
Distributions to Shareholders:
| | | | | | | | |
Distributions from net investment income
|
|
| (1,408,907
| )
|
|
| (1,656,237
| )
|
Share Transactions:
| | | | | | | | |
Proceeds from sale of shares
| | | 988,885,436 | | | | 2,264,822,312 | |
Net asset value of shares issued to shareholders in payment of distributions declared
| | | 1,284,086 | | | | 1,653,503 | |
Cost of shares redeemed
|
|
| (1,042,314,034
| )
|
|
| (2,194,462,801
| )
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS
|
|
| (52,144,512
| )
|
|
| 72,013,014
|
|
Change in net assets
|
|
| (52,146,970
| )
|
|
| 72,009,508
|
|
Net Assets:
| | | | | | | | |
Beginning of period
|
|
| 480,001,639
|
|
|
| 407,992,131
|
|
End of period (including distributions in excess of net investment income of $(2,580) and $(122), respectively)
|
| $
| 427,854,669
|
|
| $
| 480,001,639
|
|
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
November 30, 2004 (unaudited)
1. ORGANIZATION
Cash Trust Series II (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 two portfolios. The financial statements included herein are only those of Municipal Cash
Series II (the "Fund"). The financial statements of the other portfolio 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. The investment objective of the Fund is to provide current income exempt from federal regular income tax consistent with stability of principal.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.
Investment Valuation
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date.
Premium and Discount Amortization
All premiums and discounts are amortized/accreted.
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.
When-Issued and Delayed Delivery Transactions
The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Restricted Securities
Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees (the "Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses, and revenues reported in the financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.
3. SHARES OF BENEFICIAL INTEREST
At November 30, 2004, capital paid-in aggregated $427,861,122.
The following table summarizes share activity:
|
| Six Months Ended
11/30/2004
|
|
| Year Ended
5/31/2004
|
|
Shares sold
| | 988,885,436 | | | 2,264,822,312 | |
Shares issued to shareholders in payment of distributions declared
| | 1,284,086 | | | 1,653,503 | |
Shares redeemed
|
| (1,042,314,034
| )
|
| (2,194,462,801
| )
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS
|
| (52,144,512
| )
|
| 72,013,014
|
|
4. FEDERAL TAX INFORMATION
At May 31, 2004, the Fund had a capital loss carryforward of $3,571 which will reduce the Fund's taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:
Expiration Year
|
| Expiration Amount
|
2008
|
| $ 908
|
2012
|
| $2,663
|
5. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. 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.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of all Federated funds as specified below:
Maximum
Administrative Fee
|
| Average Aggregate Daily Net Assets
of the Federated Funds
|
0.150%
|
| on the first $5 billion
|
0.125%
|
| on the next $5 billion
|
0.100%
|
| on the next $10 billion
|
0.075%
|
| on assets in excess of $20 billion
|
The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.
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 reimburse Federated Securities Corp. (FSC), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's shares. The Plan provides that the Fund may incur distribution expenses up to 0.20% of the average daily net assets of the Fund, annually, to reimburse FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Transfer and Dividend Disbursing Agent Fees and Expenses
Prior to July 1, 2004, Federated Services Company, through its subsidiary FSSC, served as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC was based on the size, type, and number of accounts and transactions made by shareholders. The fee paid to FSSC during the reporting period was $8,006, after voluntary waiver, if applicable.
Interfund Transactions
During the six months ended November 30, 2004, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and amounted to $521,790,000 and $638,885,000, respectively.
General
Certain of the Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.
6. LEGAL PROCEEDINGS
Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees, and seeking damages of unspecified amounts. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these recent lawsuits and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.
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. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so.
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.
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
A description of the policies and procedures that the Fund uses to determine how to vote proxies 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 through Federated's website. Go to http://www.federatedinvestors.com, select "Products," select the "Prospectuses and Regulatory Reports" link, then select the Fund to access the link to Form N-PX. This information is also available from the EDGAR database on the SEC's website at http://www.sec.gov.
QUARTERLY PORTFOLIO SCHEDULE
The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on "Form N-Q." These filings are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the "Products" section of the Federated Investors website at www.federatedinvestors.com by clicking on "Portfolio Holdings" and selecting the name of the Fund, or by selecting the name of the Fund and clicking on "Portfolio Holdings." You must register on the website the first time you wish to access this information.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY
In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.
Federated
World-Class Investment Manager
Municipal Cash Series II
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com
Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact
Federated Securities Corp., Distributor
Cusip 147552103
1121604 (1/05)
Federated is a registered mark of Federated Investors, Inc. 2005 (c)Federated Investors, Inc.
Federated
World-Class Investment Manager
Treasury Cash Series II
A Portfolio of Treasury Cash Trust Series II
SEMI-ANNUAL SHAREHOLDER REPORT
November 30, 2004
FINANCIAL HIGHLIGHTS
SHAREHOLDER EXPENSE EXAMPLE
PORTFOLIO OF INVESTMENTS SUMMARY TABLES
FINANCIAL STATEMENTS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
QUARTERLY PORTFOLIO SCHEDULE
Not FDIC Insured * May Lose Value * No Bank Guarantee
Federated Investors 50 Years of Growth & Innovation
Financial Highlights
(For a Share Outstanding Throughout Each Period)
| | Six Months
Ended
(unaudited) | | | Year Ended May 31,
|
|
| 11/30/2004
|
|
| 2004
|
|
| 2003
|
|
| 2002
|
|
| 2001
|
|
| 2000
|
|
Net Asset Value, Beginning of Period
| | $1.00 | | | $1.00 | | | $1.00 | | | $1.00 | | | $1.00 | | | $1.00 | |
Income From Investment Operations:
| | | | | | | | | | | | | | | | | | |
Net investment income
| | 0.003 | | | 0.002 | | | 0.007 | | | 0.018 | | | 0.051 | | | 0.046 | |
Net realized and unrealized gain (loss) on investments
|
| 0.000
| 1
|
| 0.000
| 1
|
| 0.001
|
|
| 0.000
| 1
|
| - --
|
|
| - --
|
|
TOTAL FROM INVESTMENT OPERATIONS
|
| 0.003
|
|
| 0.002
|
|
| 0.008
|
|
| 0.018
|
|
| 0.051
|
|
| 0.046
|
|
Less Distributions:
| | | | | | | | | | | | | | | | | | |
Distributions from net investment income
| | (0.003 | ) | | (0.002 | ) | | (0.007 | ) | | (0.018 | ) | | (0.051 | ) | | (0.046 | ) |
Distributions from net realized gain on investments
|
| (0.000
| ) 1
|
| (0.000
| ) 1
|
| (0.001
| )
|
| (0.000
| ) 1
|
| - --
|
|
| - --
|
|
TOTAL DISTRIBUTIONS
|
| (0.003
| )
|
| (0.002
| )
|
| (0.008
| )
|
| (0.018
| )
|
| (0.051
| )
|
| (0.046
| )
|
Net Asset Value, End of Period
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
| $1.00
|
|
Total Return 2
|
| 0.32
| %
|
| 0.23
| %
|
| 0.78
| %
|
| 1.79
| %
|
| 5.27
| %
|
| 4.66
| %
|
| | | | | | | | | | | | | | | | | | |
Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
| 0.83
| % 3
|
| 0.83
| %
|
| 0.83
| %
|
| 0.83
| %
|
| 0.83
| %
|
| 0.83
| %
|
Net investment income
|
| 0.61
| % 3
|
| 0.21
| %
|
| 0.74
| %
|
| 1.49
| %
|
| 5.18
| %
|
| 4.60
| %
|
Expense waiver/reimbursement 4
|
| 0.03
| % 3
|
| 0.02
| %
|
| 0.01
| %
|
| 0.01
| %
|
| 0.04
| %
|
| 0.04
| %
|
Supplemental Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
|
| $256,097
|
| $300,282
|
| $381,494
|
| $437,078
|
| $153,744
|
| $309,959
|
|
1 Represents less than $0.001.
2 Based on net asset value, which does not reflect the sales charge, redemption fee, or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.
3 Computed on an annualized basis.
4 This voluntary expense decrease is reflected in both the expense and the net investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Shareholder Expense Example
As a shareholder of the Fund, you incur ongoing costs, including management fees; to the extent applicable, distribution (12b-1) fees and/or shareholder services fees; and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from June 1, 2004 to November 30, 2004.
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 provided to enable you to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
|
| Beginning
Account Value
6/1/2004
|
| Ending
Account Value
11/30/2004
|
| Expenses Paid
During Period 1
|
Actual
|
| $1,000
|
| $1,003.20
|
| $4.17
|
Hypothetical (assuming a 5% return before expenses)
|
| $1,000
|
| $1,020.91
|
| $4.20
|
1 Expenses are equal to the Fund's annualized expense ratio of 0.83%, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Portfolio of Investments Summary Tables
At November 30, 2004, the Fund's portfolio composition 1 was as follows:
|
| Percentage of
Total Investments 2
|
Repurchase Agreements
|
| 84.8%
|
U.S. Treasury Securities
|
| 15.2%
|
TOTAL
|
| 100.0%
|
At November 30, 2004, the Fund's effective maturity 3 schedule was as follows:
Securities With an
Effective Maturity of:
|
| Percentage of
Total Investments 2
|
1-7 Days
|
| 76.3%
|
8-30 Days
|
| 6.3%
|
31-90 Days
|
| 8.9%
|
91-180 Days
|
| 8.1%
|
181 Days or more
|
| 0.4%
|
TOTAL
|
| 100.0%
|
1 See the Fund's Prospectus for a description of the principal types of securities in which the Fund invests.
2 Percentages are based on total investments, which may differ from the Fund's total net assets used in computing the percentages in the Portfolio of Investments which follows.
3 Effective maturity is determined in accordance with the requirements of Rule 2a-7 under the Investment Company Act of 1940, which regulates money market mutual funds.
Portfolio of Investments
November 30, 2004 (unaudited)
Principal
Amount
|
|
|
|
| Value
|
|
| | | U.S. TREASURY--15.3% | | | | |
| | | U.S. Treasury Bills--12.7% 1 | | | | |
| $ | 32,750,000 | | 1.545% - 2.380%, 12/23/2004 - 6/2/2005
|
| $
| 32,579,300
|
|
| | | U.S. Treasury Notes--2.6% | | | | |
| 6,500,000 | | 1.625%, 1/31/2005 - 4/30/2005
|
|
| 6,504,654
|
|
| | | TOTAL U.S. TREASURY
|
|
| 39,083,954
|
|
| | | REPURCHASE AGREEMENTS--85.2% | | | | |
| 50,000,000 | | Interest in $1,500,000,000 joint repurchase agreement with ABN AMRO Bank NV, New York, 1.980%, dated 11/30/2004 to be repurchased at $50,002,750 on 12/1/2004, collateralized by U.S. Treasury Obligations with various maturities to 2/15/2031, collateral market value $1,530,084,657
| | | 50,000,000 | |
| 50,000,000 | | Interest in $1,250,000,000 joint repurchase agreement with BNP Paribas Securities Corp., 1.970%, dated 11/30/2004 to be repurchased at $50,002,736 on 12/1/2004, collateralized by U.S. Treasury Obligations with various maturities to 4/15/2029, collateral market value $1,275,000,220
| | | 50,000,000 | |
| 50,000,000 | | Interest in $936,000,000 joint repurchase agreement with Barclays Capital, Inc., 1.960%, dated 11/30/2004 to be repurchased at $50,002,722 on 12/1/2004, collateralized by U.S. Treasury Obligations with various maturities to 8/15/2014, collateral market value $954,773,223
| | | 50,000,000 | |
| 12,000,000 | 2 | Interest in $670,000,000 joint repurchase agreement with Deutsche Bank Securities, Inc., 2.140%, dated 11/10/2004 to be repurchased at $12,064,200 on 2/10/2005, collateralized by U.S. Treasury Obligations with various maturities to 2/15/2014, collateral market value $683,400,688
| | | 12,000,000 | |
| 46,199,000 | | Interest in $2,250,000,000 joint repurchase agreement with J.P. Morgan Securities, Inc., 1.980%, dated 11/30/2004 to be repurchased at $46,201,541 on 12/1/2004, collateralized by U.S. Treasury Obligations with various maturities to 5/15/2015, collateral market value $2,295,849,333
| | | 46,199,000 | |
| 10,000,000 | 2 | Interest in $500,000,000 joint repurchase agreement with UBS Securities LLC, 1.880%, dated 10/20/2004 to be repurchased at $10,031,333 on 12/20/2004, collateralized by U.S. Treasury Obligations with various maturities to 2/15/2031, collateral market value $510,000,532
|
|
| 10,000,000
|
|
| | | TOTAL REPURCHASE AGREEMENTS
|
|
| 218,199,000
|
|
| | | TOTAL INVESTMENTS--100.5%
(AT AMORTIZED COST) 3
|
|
| 257,282,954
|
|
| | | OTHER ASSETS AND LIABILITIES - NET--(0.5)%
|
|
| (1,186,008
| )
|
| | | TOTAL NET ASSETS--100%
|
|
| 256,096,946
|
|
1 Each issue shows the rate of discount at the time of purchase.
2 Although final maturity falls beyond seven days at date of purchase, a liquidity feature is included in each transaction to permit termination of the repurchase agreement within seven days.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of total net assets at November 30, 2004.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
November 30, 2004 (unaudited)
Assets:
| | | | | | | |
Investments in repurchase agreements
| | $ | 218,199,000 | | | | |
Investments in securities
|
|
| 39,083,954
|
|
|
|
|
Total investments in securities, at amortized cost and value
| | | | | | $ | 257,282,954 |
Income receivable
|
|
|
|
|
|
| 66,324
|
TOTAL ASSETS
|
|
|
|
|
|
| 257,349,278
|
Liabilities:
| | | | | | | |
Payable for investments purchased
| | | 987,968 | | | | |
Income distribution payable
| | | 176,094 | | | | |
Payable to Bank
| | | 3,626 | | | | |
Payable for transfer and dividend disbursing agent fees and expenses
| | | 36,977 | | | | |
Payable for Directors/Trustees fees
| | | 66 | | | | |
Payable for distribution services fee (Note 4)
| | | 40,615 | | | | |
Accrued expenses
|
|
| 6,986
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
|
|
|
| 1,252,332
|
Net assets for 256,096,750 shares outstanding
|
|
|
|
|
| $
| 256,096,946
|
Net Assets Consist of:
| | | | | | | |
Paid-in capital
| | | | | | $ | 256,096,750 |
Undistributed net investment income
|
|
|
|
|
|
| 196
|
TOTAL NET ASSETS
|
|
|
|
|
| $
| 256,096,946
|
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
| | | | | | | |
$256,096,946 ÷ 256,096,750 shares outstanding, no par value, unlimited shares authorized
|
|
|
|
|
|
| $1.00
|
See Notes which are an integral part of the Financial Statements
Statement of Operations
Six Months Ended November 30, 2004 (unaudited)
Investment Income:
| | | | | | | | | | | |
Interest
|
|
|
|
|
|
|
|
|
| $
| 1,905,355
|
Expenses:
| | | | | | | | | | | |
Investment adviser fee (Note 4)
| | | | | | $ | 658,803 | | | | |
Administrative personnel and services fee (Note 4)
| | | | | | | 105,758 | | | | |
Custodian fees
| | | | | | | 13,923 | | | | |
Transfer and dividend disbursing agent fees and expenses (Note 4)
| | | | | | | 35,170 | | | | |
Directors'/Trustees' fees
| | | | | | | 3,451 | | | | |
Auditing fees
| | | | | | | 6,949 | | | | |
Legal fees
| | | | | | | 2,592 | | | | |
Portfolio accounting fees
| | | | | | | 34,623 | | | | |
Distribution services fee (Note 4)
| | | | | | | 254,298 | | | | |
Share registration costs
| | | | | | | 11,229 | | | | |
Printing and postage
| | | | | | | 5,354 | | | | |
Insurance premiums
| | | | | | | 4,599 | | | | |
Miscellaneous
|
|
|
|
|
|
| 9,776
|
|
|
|
|
TOTAL EXPENSES
|
|
|
|
|
|
| 1,146,525
|
|
|
|
|
Waivers (Note 4):
| | | | | | | | | | | |
Waiver of investment adviser fee
| | | $(38,702 | ) | | | | | | | |
Waiver of administrative personnel and services fee
| | | (5,356 | ) | | | | | | | |
Waiver of transfer and dividend disbursing agent fees and expenses
|
|
| (2,399
| )
|
|
|
|
|
|
|
|
TOTAL WAIVERS
|
|
|
|
|
|
| (46,457
| )
|
|
|
|
Net expenses
|
|
|
|
|
|
|
|
|
|
| 1,100,068
|
Net investment income
|
|
|
|
|
|
|
|
|
|
| 805,287
|
Net realized gain on investments
|
|
|
|
|
|
|
|
|
|
| 2,941
|
Change in net assets resulting from operations
|
|
|
|
|
|
|
|
|
| $
| 808,228
|
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
|
|
| Six Months
Ended
(unaudited)
11/30/2004
|
|
|
| Year Ended
5/31/2004
|
|
Increase (Decrease) in Net Assets
| | | | | | | | |
Operations:
| | | | | | | | |
Net investment income
| | $ | 805,287 | | | $ | 646,878 | |
Net realized gain on investments
|
|
| 2,941
|
|
|
| 56,404
|
|
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS
|
|
| 808,228
|
|
|
| 703,282
|
|
Distributions to Shareholders:
| | | | | | | | |
Distributions from net investment income
| | | (813,624 | ) | | | (666,821 | ) |
Distributions from net realized gain on investments
|
|
| (2,941)
|
|
|
| (56,404
| )
|
CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS
|
|
| (816,565
| )
|
|
| (723,225
| )
|
Share Transactions:
| | | | | | | | |
Proceeds from sale of shares
| | | 600,604,450 | | | | 1,657,412,283 | |
Net asset value of shares issued to shareholders in payment of distributions declared
| | | 153,009 | | | | 152,512 | |
Cost of shares redeemed
|
|
| (644,933,856
| )
|
|
| (1,738,756,684
| )
|
CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS
|
|
| (44,176,397
| )
|
|
| (81,191,889
| )
|
Change in net assets
|
|
| (44,184,734
| )
|
|
| (81,211,832
| )
|
Net Assets:
| | | | | | | | |
Beginning of period
|
|
| 300,281,680
|
|
|
| 381,493,512
|
|
End of period (including undistributed net investment income of $196 and $8,533, respectively)
|
| $
| 256,096,946
|
|
| $
| 300,281,680
|
|
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
November 30, 2004 (unaudited)
1. ORGANIZATION
Cash Trust Series II (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 two portfolios. The financial statements included herein are only those of Treasury Cash Series II (the "Fund"). The financial statements of the other portfolio 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. The investment objective of the Fund is to provide current income consistent with stability of principal and liquidity.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.
Investment Valuation
The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act.
Repurchase Agreements
It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of the collateral at least equals the repurchase price to be paid under the repurchase agreement.
The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Board of Trustees (the "Trustees"). Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.
Investment Income, Expenses and Distributions
Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date.
Premium and Discount Amortization
All premiums and discounts are amortized/accreted.
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.
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.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses, and revenues reported in the financial statements. Actual results could differ from those estimated.
Other
Investment transactions are accounted for on a trade date basis. Realized gains and losses from investment transactions are recorded on an identified cost basis.
3. SHARES OF BENEFICIAL INTEREST
At November 30, 2004, capital paid-in aggregated $256,096,750.
The following table summarizes share activity:
|
| Six Months
Ended
11/30/2004
|
|
| Year Ended
5/31/2004
|
|
Shares sold
| | 600,604,450 | | | 1,657,412,283 | |
Shares issued to shareholders in payment of distributions declared
| | 153,009 | | | 152,512 | |
Shares redeemed
|
| (644,933,856
| )
|
| (1,738,756,684
| )
|
NET CHANGE RESULTING FROM SHARE TRANSACTIONS
|
| (44,176,397
| )
|
| (81,191,889
| )
|
4. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
Federated Investment Management Company, the Fund's investment adviser (the "Adviser") receives for its services an annual investment adviser fee equal to 0.50% of the Fund's average daily net assets. 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.
Administrative Fee
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of all Federated funds as specified below:
Maximum
Administrative Fee
|
| Average Aggregate Daily Net Assets
of the Federated Funds
|
0.150%
|
| on the first $5 billion
|
0.125%
|
| on the next $5 billion
|
0.100%
|
| on the next $10 billion
|
0.075%
|
| on assets in excess of $20 billion
|
The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.
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 to finance activities intended to result in the sale of these shares. The Plan provides that the Fund may incur distribution expenses of up to 0.20% of average daily net assets, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion.
Transfer and Dividend Disbursing Agent Fees and Expenses
Prior to July 1, 2004, Federated Services Company, through its subsidiary FSSC, served as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC was based on the size, type and number of accounts and transactions made by shareholders. The fee paid to FSSC during the reporting period was $6,603, after voluntary waiver, if applicable.
General
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.
5. LEGAL PROCEEDINGS
Beginning in October 2003, Federated Investors, Inc. and various subsidiaries thereof (including the advisers and distributor for various investment companies, collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. Federated and various Funds have also been named as defendants in several additional lawsuits, the majority of which are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees, and seeking damages of unspecified amounts. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these recent lawsuits and future potential similar suits is uncertain. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.
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. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so.
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.
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
A description of the policies and procedures that the Fund uses to determine how to vote proxies 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 through Federated's Internet site. Go to http://www.federatedinvestors.com, select "Products," select the "Prospectuses and Regulatory Reports" link, then select the Fund to access the link to Form N-PX. This information is also available from the EDGAR database on the SEC's website at http://www.sec.gov.
QUARTERLY PORTFOLIO SCHEDULE
The Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on "Form N-Q." These filings are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the "Products" section of the Federated Investors website at www.federatedinvestors.com by clicking on "Portfolio Holdings" and selecting the name of the Fund, or by selecting the name of the Fund and clicking on "Portfolio Holdings." You must register on the website the first time you wish to access this information.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY
In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called "householding"), as permitted by applicable rules. The Fund's "householding" program covers its/their Prospectus and Statement of Additional Information, and supplements to each, as well as Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the "householding" program. The Fund is also permitted to treat a shareholder as having given consent ("implied consent") if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to "household" at least sixty (60) days before it begins "householding" and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to "opt out" of "householding." Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of "householding" at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-341-7400.
Federated
World-Class Investment Manager
Treasury Cash Series II
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com
Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact
Federated Securities Corp., Distributor
Cusip 147552301
1121606 (1/05)
Federated is a registered mark of Federated Investors, Inc. 2005 (c)Federated Investors, Inc.
Item 2. Code of Ethics
Not Applicable
Item 3. Audit Committee Financial Expert
Not Applicable
Item 4. Principal Accountant Fees and Services
Not Applicable
Item 5. Audit Committee of Listed Registrants
Not Applicable
Item 6. Schedule of Investments
Not Applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies
Not Applicable
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not Applicable
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers
Not Applicable
Item 10. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 11. Controls and Procedures
(a) The registrant's President and Treasurer have concluded that the
registrant's disclosure controls and procedures (as defined in rule
30a-3(c) under the Act) are effective in design and operation and are
sufficient to form the basis of the certifications required by Rule 30a-(2)
under the Act, based on their evaluation of these disclosure controls and
procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in rule 30a-3(d) under the Act) during the last
fiscal quarter that have materially affected, or are reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
Item 12. Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Cash Trust Series II
By /S/ Richard J. Thomas, Principal Financial Officer
(insert name and title)
Date January 24, 2005
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, Principal Executive Officer
Date January 24, 2005
By /S/ Richard J. Thomas, Principal Financial Officer
Date January 24, 2005
