FEDERATED MDT BALANCED FUND
A PORTFOLIO OF FEDERATED MDT SERIES
CLASS A SHARES
CLASS C SHARES
INSTITUTIONAL SHARES
SUPPLEMENT TO PROSPECTUS/PROXY STATEMENT DATED SEPTEMBER 18, 2006
Please note that John F. Sherman and Christopher J. Smith have been added as
portfolio managers for the Federated MDT Balanced Fund. John Sherman is
currently a portfolio manager of the MDT Balanced Fund. Therefore, if the
proposed Reorganization of MDT Balanced Fund into Federated MDT Balanced Fund is
approved by shareholders, John Sherman will continue to serve as a portfolio
manager for the Federated MDT Balanced Fund.
Accordingly, the following individuals will serve as Portfolio Managers of the
Federated MDT Balanced Fund:
DAVID M. GOLDSMITH
David M. Goldsmith, Ph.D., has been the Fund's Portfolio Manger for the equity
portion of the Fund since August 2006. Dr. Goldsmith joined MDT Advisers in
1990. He has been responsible for the development of the Optimum Q Process and
for the past 5 years he has been in charge of the Quantitative Equity Strategies
Group. Dr. Goldsmith supervises the Quantitative Equity Strategies Group which
assists in the development, maintenance and operation of the Optimum Q Process.
Dr. Goldsmith has over 23 years experience in the development and application of
financial and statistical modeling techniques. He received an A.B., Summa Cum
Laude, in Economics from Princeton University, where he won the Wolf Balleison
Memorial Prize for the outstanding senior thesis in economics. Dr. Goldsmith
also received a Ph.D., Economics, with a concentration in Finance from Harvard
University.
JOHN F. SHERMAN
John F. Sherman, C.F.A., has been the Fund's Portfolio Manager responsible for
asset allocation (including the selection of any exchanged-traded funds and
derivatives used in the asset allocation process) and the selection of REIT
securities for the Fund since November 2006. Mr. Sherman joined MDT Advisers in
2000. He has over fourteen years of experience analyzing financial markets and
has been responsible for the Adviser's fixed-income investments for the past
five years. Prior to joining the Adviser, Mr. Sherman served as a Senior Analyst
for Citizens Financial Group from 1999 to 2000 and as a Senior Analyst for the
FDIC from 1991 - 1999. He is a member of the CFA Institute and the Boston
Security Analysts Society. He holds a designation as a Chartered Financial
Analyst. He received a B.S.B.A. from North Adams State College, and an M.B.A.
from the Boston University Graduate School of Management.
JOSEPH M. BALESTRINO
Joseph M. Balestrino has been the Fund's Portfolio Manager for the fixed income
portion of the Fund since August 2006. Mr. Balestrino joined Federated in 1986
and has been a Senior Portfolio Manager and Senior Vice President of the Fund's
Sub-adviser since 1998. He was a Portfolio Manager and a Vice President of the
Fund's Sub-adviser from 1995 to 1998. Mr. Balestrino served as a Portfolio
Manager and an Assistant Vice President of the Sub-adviser from 1993 to 1995.
Mr. Balestrino is a Chartered Financial Analyst and received his Master's Degree
in Urban and Regional Planning from the University of Pittsburgh.
CHRISTOPHER J. SMITH
Christopher J. Smith has been the Fund's Portfolio Manager for the fixed income
portion of the Fund since November 2006. Mr. Smith joined Federated in 1995 as a
Portfolio Manager and a Vice President of a Federated advisory subsidiary. He
has been a Vice President of the Fund's Sub-adviser since 1997. He was an
Assistant Vice President of Provident Life & Accident Insurance Company from
1987 through 1994. Mr. Smith is a Chartered Financial Analyst. He received his
M.A. in Economics and Finance from the University of Kentucky.
IF YOU HAVE NOT PREVIOUSLY VOTED YOUR SHARES, PLEASE CAST YOUR VOTE ON THE
ENCLOSED PROXY CARD AND RETURN IT IN THE POSTAGE-PAID RETURN ENVELOPE PROVIDED.
IF YOU HAVE PREVIOUSLY VOTED YOUR SHARES AND DO NOT WISH TO CHANGE YOUR VOTE, NO
ACTION IS NECESSARY. IF YOU HAVE PREVIOUSLY VOTED YOUR SHARES AND WISH TO
CHANGE YOUR VOTE, YOU MAY DO SO BY FOLLOWING THE DIRECTIONS ON THE ENCLOSED
PROXY CARD OR BY CASTING YOUR VOTE BY TELEPHONE OR INTERNET USING THE
INSTRUCTIONS PROVIDED ON THE ENCLOSED PROXY CARD.
IF YOU HAVE ANY QUESTIONS, PLEASE FEEL FREE TO CALL AN MDT CLIENT SERVICE
REPRESENTATIVE AT 1-800-499-8541.
October 24, 2006
Cusip 31421R841
Cusip 31421R833
Cusip 31421R825
35791 (10/06)
PROXY
MDT BALANCED FUND (THE "FUND")
A PORTFOLIO OF MDT FUNDS
PROXY FOR THE MEETING OF SHAREHOLDERS TO BE HELD ON NOVEMBER 17, 2006
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Fund, a portfolio of MDT Funds (the "Trust"), hereby appoint Todd P. Zerega, C.
Grant Anderson, James G. Whetzel, Keith Antle, Richard Novak, Maureen A.
Ferguson, and Megan W. Clement or any one of them, true and lawful attorneys,
with the power of substitution of each, to vote all shares of the Fund which the
undersigned is entitled to vote at the Special Meeting of Shareholders (the
"Special Meeting") to be held on November 17, 2006, at 5800 Corporate Drive,
Pittsburgh, Pennsylvania, at 2:00 p.m., and at any adjournment thereof.
The attorneys named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If this proxy is executed and received in
time and no choice is indicated as to an item, this proxy will be voted
affirmatively on such matter. Discretionary authority is hereby conferred as to
all other matters as may properly come before the Special Meeting or any
adjournment thereof.
_____________________________________________________________
Signature(s) and Title(s), if applicable Date
Please sign this proxy exactly as your name appears on the
books of the Trust. Joint owners should each sign
personally. Trustees and other fiduciaries should indicate
the capacity in which they sign, and where more than one
name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should
state his or her title.
* FOLD HERE *
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE MDT FUNDS.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE PROPOSAL.
PLEASE MARK YOUR VOTE BELOW IN BLUE OR BLACK INK.
FOR AGAINST ABSTAIN
<c> <c> <c>
1. To approve or disapprove a New Investment Management Agreement between
Federated MDTA LLC and the Trust for the Fund, that will take effect on November
17, 2006;
2. For shareholders of the Fund, to approve or disapprove a proposed agreement
and plan of reorganization pursuant to which Federated MDT Balanced Fund, a
portfolio of Federated MDT Series, would acquire all of the assets of the Fund
in exchange for Class A Shares, Class C Shares and Institutional Shares of
Federated MDT Balanced Fund to be distributed pro rata by the Fund to its
shareholders, in complete liquidation and termination of the Fund.
If you should have any questions about the proxy material or the execution of
your vote, simply call 1-800-499-8541 between the hours of 10 a.m. and 10 p.m.
eastern time. Representatives will be happy to assist you. Please have this
proxy card available at the time of the call. Alternatively, to vote by touch-
tone phone, please call 1-866-458-9840 and follow the instructions. To vote by
Internet, please go to WWW.MYPROXYONLINE.COM and follow the instructions. If
you use either of these voting methods, please do not return this paper proxy
card.
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN AND RETURN THIS CARD AS SOON AS
POSSIBLE.
(bar code here)
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