Filed by Federated MDT Series
Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant
to Rule 14a-12 of the Securities Act of 1934
Subject Company: Federated MDT Balanced Fund
Commission File No. 811-21904
Q&A FOR THE MANAGED ALLOCATION FUNDS PROPOSED MERGERS INTO
FEDERATED MDT BALANCED FUND
FINAL -SEPTEMBER 4, 2007
FOR FEDERATED INTERNAL USE ONLY
The Board of Trustees of Federated Managed Allocation Portfolio's approved the
merger of Federated Conservative Allocation Fund (FCOAF), Federated Moderate
Allocation Fund (FMAF) and Federated Growth Allocation Fund (FGAF) into
Federated MDT Balanced Fund at their May 2007 meeting. Each merger is
contingent upon the approval of the shareholders of the applicable Managed
Allocation Fund. Proxy statements are scheduled to be mailed to shareholders by
September 7, 2007 with the shareholder meeting scheduled for October 19, 2007.
The mergers are scheduled to occur on October 26, 2007.
QUESTION AND ANSWER:
WHY ARE THE MERGERS BEING PROPOSED?
Over the past several years their have been efforts to increase the sales of
the Managed Allocation Funds. However despite these efforts the funds have
continued to experience net redemptions. As a result we are
asking the shareholders of all 3 Managed Allocation Funds to approve
"reorganizationing" into Federated MDT Balanced Fund (FMDTBF). FMDTBF has a
similar investment strategy, investing in a balance of stocks and bonds, and
has had an attractive performance track record. See the total returns listed
below.
HOW WILL THE CLASSES BE MAPPED/MERGED INTO FEDERATED MDT BALANCED FUND?
Institutional Shares (IS) from all 3 Managed Allocation Portfolio's will be
merged in the Class A (at NAV) shares of Federated MDT Balanced Fund.
Select Shares (SEL) from all 3 Managed Allocation Portfolio's will be merged
in the Class C shares of Federated MDT Balanced Fund.
WHAT ABOUT FUND PERFORMANCE?
The performance history of Federated MDT Balanced Fund will survive post-
reorganization. The following chart shows performance comparison as of
6/30/07 (no-load Total Return) for Class A (FMDTBF)/Institutional Shares
(Managed Allocation Funds) and Class C (FMDTBF)/Select shares (Managed
Allocation Funds).
AVERAGE ANNUAL TOTAL RETURNS
AS OF 6/30/07
Class A/IS FED MDT Fed Conservative Fed Moderate Fed Growth
BALANCED FUND Allocation Fund Allocation Fund Allocation Fund
12 Month 12.20% 14.25% 18.70% 22.89%
3 Year 10.88% 7.33% 9.25% 10.89%
Since Inception 13.39%* 6.62% 7.42% 7.33%
Inception Date 9/05 5/94 5/94 5/94
The 5 and 10 year annual total returns for FCOAF, FMAF and FGAF respectively
are: 7.33%, 5.57%, 8.87%, 5.68%, 9.95%, and 5.35%
Class C /SEL FED MDT Fed Conservative Fed Moderate Fed Growth
BALANCED FUND Allocation Fund Allocation Fund Allocation Fund
12 Month 11.24% 13.34% 17.88% 21.84%
3 Year 10.00% 6.54% 8.49% 10.07%
Since Inception 12.51%* 5.88% 6.68% 6.57%
Inception Date 9/05 5/94 5/94 5/94
The 5 and 10 year annual total returns for FCOAF, FMAF and FGAF respectively
are: 6.58%, 4.83%, 8.14%, 4.95%, 8.84%, and 4.59%.
Source: Finders
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 may be lower or
higher than what is stated. To view performance current to the most recent
month-end and after-tax returns, visit FederatedInvestors.com.
Performance shown is before taxes.
*The Federated MDT Balanced Fund is the successor to the MDT Balanced Fund
pursuant to a reorganization that took place on December 8, 2006. Prior to
that date, the fund had no investment operations. Accordingly, the
performance information provided is historical information of the MDT
Balanced Fund. Returns shown for Class A and C Shares (inception date
9/15/05) for the periods prior to their inception are derived from the
historical performance of Institutional Class of the fund during such periods
and have been adjusted to reflect the higher total annual operating expenses
of each specific class.
WHAT IS THE IMPACT TO SHAREHOLDERS?
Shareholders will continue to be invested in a diversified portfolio that is
allocated between stocks and bonds. However there are some differences in
the investment strategy (see N-14 for comparison). The mergers are
anticipated to be a tax-free reorganization with the shareholder in most
cases moving into a lower net fee fund/class. All capital gains and income
will be distributed to shareholders of the Managed Allocation Funds prior to
the mergers.
WHAT IS THE IMPACT ON EXPENSES?
All fund/class mergers with the exception of FMAF will experience a decrease
in fund net expenses. Shareholders of the Select Services share class of
Federated Moderate Allocation Fund (FMAF) will be moving into a Fund with
slightly higher expenses (.02 bp). The current net expenses (after waivers)
are shown below for each of the Managed Allocation Funds plus the current
and anticipated post merger expenses for the Federated MDT Balanced Fund.
(The post merger expenses assume that all proposed mergers are consummated)
- ----------------------------------------------------------------
| |Class A/IS|Class C/SEL|
- ----------------------------------------------------------------
|FED MDT BALANCED FUND | | |
| ACTUAL /CURRENT EXPENSES| 1.42% |2.17% |
| PRO FORMA POST MERGER| 1.33% |2.08% |
- ----------------------------------------------------------------
|Actual Fed Conservative Allocation Fund| 1.46% |2.16% |
- ----------------------------------------------------------------
|Actual Fed Moderate Allocation Fund | 1.36% |2.06% |
- ----------------------------------------------------------------
|Actual Fed Growth Allocation Fund | 1.62% |2.32% |
- ----------------------------------------------------------------
WHAT IS THE TIMING?
The proxy was filed with the SEC on July 20 and should be mailed by September
7, 2007.
The Shareholder record date will be August 20, 2007
A solicitor will be used and is scheduled to begin calling shareholders a few
weeks after the proxy is mailed.
Shareholder meeting date is October 19, 2007 and the mergers are scheduled to
occur at the close of business on October 26, 2007.
SYMBOLS, FUND NUMBERS AND CUSIPS
Here are the symbols and fund numbers for the Class A and C shares of the
Federated MDT Balanced Fund:
Class A Class C
NASDAQ Symbol BAFAX BAFCX
Fund Number 308 202
Cusip 314212-88-7 314212-86-1
Federated Securities Corp., Distributor
07-249147 (8/07)
CONFIDENTIAL - FOR INTERNAL USE ONLY - NOT TO BE SENT TO
CLIENTS/REPORTERS/ANALYSTS
Federated Conservative Allocation Fund, Federated Moderate Allocation Fund and
Federated Growth Allocation Fund, portfolios of Federated Managed Allocation
Portfolios (ICA No. 811-7129) , together with Federated MDT Balanced Fund, a
portfolio of Federated MDT Series("Rochdale"), has filed a proxy
statement/prospectus and other relevant documents, concerning the planned
transitions with the United States Securities and Exchange Commission (the
"SEC").
INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS
FILED WITH THE SEC IN CONNECTION WITH THE PLANNED TRANSITION, OR INCORPORATED BY
REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSITION AND RELATED MATTERS. Investors will be able to
obtain these documents free of charge at the SEC Web site (www.sec.gov). In
addition, documents filed with the SEC by Federated, are available free of
charge at 1-800-341-7400.
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INSTITUTIONAL SALES MATERIAL. Not to be shown to the public.
8.2.2007