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Federated Prime Management Obligations Fund
Institutional Shares
Information as of 06/30/2010
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Fund Management Strategy
Even though the Federal Reserve held tight to its “exceptionally low levels” for “an extended period” policy language – making it all but certain its benchmark funds target won’t budge until late this year at the earliest – rates on the short end of the cash-yield curve rose during the second quarter. The movement wasn’t much – June actually saw short rates slip back a bit. And the increases had less to do with the economic recovery whose early spring bounce went splat as summer approached than with sovereign debt jitters that spread through Europe. The nervousness pushed up overnight and other short credit rates, akin to what occurred during the global financial crisis though nowhere near the magnitude. Indeed, unlike credit rates, Treasury bill yields moved lower over the three months – 2-year notes hit new lows – as the risk-averse trade flocked to where it always does when unease prevails … into the arms of Uncle Sam. The good news is that increases on the short end of the cash-yield curve have allowed for slightly higher yields without the interest-rate risk that would come from making investments further out on the cash-yield curve.
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Institutional Money Market Funds At-A-Glance
This piece provides a quarterly snapshot of Federated's institutional product line, including portfolio composition, ratings, operational information and more.
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| Not FDIC Insured |
May Lose Value |
No Bank Guarantee |
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