Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices.
High-yield, lower-rate securities generally entail greater market, credit/default and liquidity risk and may be more volatile than investment-grade securities.
The fund is not a “money market” fund. A money market mutual fund attempts to maintain a stable net asset value through compliance with relevant SEC rules. The fund is not governed by those rules, and its shares will fluctuate in value.
Interest income from the fund's investments may be subject to the federal Alternative Minimum Tax (AMT) for individuals and corporations, and state and local taxes.
As of October 31, 2007, the fund gained the ability to invest at least a majority of its assets in securities rated investment-grade (or unrated securities of comparable quality), and may purchase securities rated below investment-grade (or unrated securities of comparable quality), which are also known as junk bonds, up to 49% of its assets. The fund does not have a specific minimum quality rating.
As of October 31, 2007, the fund’s Adviser gained the ability to deliberately undertake, in seeking to provide enhanced levels of income, to invest the fund’s assets in tax-exempt securities that are trading at a price less than the original issue price (or market discount bonds), enter in credit default swap arrangements and other derivative transactions, and engage in other permissible activities that may cause the fund to realize a limited amount of ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may result in taxable distributions to shareholders. The ordinary income derived from these investment strategies generally will be limited to approximately 5% or less of the fund’s annual distributions.
As of October 31, 2007, the fund’s Adviser also, normally (except as discussed below), began to invest the fund’s assets entirely in securities whose interest was not subject to (or not a specific preference item for purposes of) the federal AMT. However, in certain circumstances (such as, for example, when there is a lack of supply of non-AMT securities or there are advantageous market conditions, or if there are changes in tax laws relating to the AMT), to pursue the fund’s investment objective, the Adviser may invest the fund’s assets in securities that may be subject to AMT. In such circumstances, interest from the fund’s investments may be subject to the AMT.
Past performance is no guarantee of future results.
Investors should carefully consider the fund's investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us or view the prospectus provided on this website. Please carefully read the summary prospectus or prospectus before investing.
"Category" product classifications noted at the top are Federated's internal classifications.
Federated Securities Corp., Distributor
|Not FDIC Insured
||May Lose Value
||No Bank Guarantee