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Federated Money Market Funds
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A Guide to Understanding Federated's Money Fund Management
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It's a challenging time to be an investor, so it's natural that you may be concerned about the security of your investments. When it comes to Federated money market funds, you can be assured that you are holding among the most conservative of investments.
For more than 30 years, the name Federated Investors has been synonymous with experience and integrity in money fund management. Federated's emphasis on credit quality has helped to keep its holdings well-insulated from the concerns that have been evident in the fixed-income market over the past year. |
Specifically, Federated money market funds:
- Currently, have no direct exposure to the subprime market.
- Have always sold and redeemed their shares at $1.00 net asset value (NAV). Federated never has infused capital to maintain a stable $1.00 NAV. Note that while Federated money market funds have never broken the $1.00 stated price, there is no guarantee that such price stability will be achieved in the future.
- Hold only those securities that measure up to Federated's own intensive internal rating standards as well as those that are rated in one of the two highest categories by nationally recognized rating organizations or their equivalents.
- Strictly comply with Rule 2a-7 of the Investment Company Act of 1940, which seeks to limit the exposure that a fund would have to any one issuer or guarantor of securities.1
At Federated, we understand the importance of protecting what is important to you while you invest toward your financial goals. We invite you to read on to learn more about our structured, transparent and disciplined investment process.
Seeking to Optimize Performance without Compromising Liquidity and Stability
Few managers can match Federated's combination of asset size, breadth of experience and depth of staff. As one of the top 3% of money fund managers in the U.S.2, we deliver economies of scale that allow us to bring investors the key advantages of pricing and market access.
Our objectives in managing cash are threefold: to preserve principal, the foundation of financial stability; to maintain daily liquidity so that clients can meet their cash flow obligations; and to offer investors a competitive yield.
We pursue these objectives through an unwavering adherence to a stringent credit review process, the expertise of our long-tenured team of money fund managers and continued investment in technology that can support our decision-making.
A Process Built on Intensive Credit Analysis
Managing money market funds requires attentiveness to many factors, including daily cash flows, longer-term cash flow trends in various rate environments and overall market dynamics. We strive to add value in a variety of ways and have built our reputation on sound portfolio structure and a thorough credit review process. As illustrated below, every security considered for Federated's Approved Issuer List is subject to stringent credit review, including the assignment of a credit rating by Federated in addition to and independent of third-party evaluations. In addition to quality considerations, our intensive security selection process involves careful evaluation of interest rate trends and determination of maturity structures.
For more complete information, view the prospectuses available on this website or contact your investment professional by calling 1-800-341-7400 for prospectuses. You should consider the fund's investment objectives, risks, charges, and expenses carefully before you invest. Information about these and other important subjects is in the fund's prospectus, which you should read carefully before investing.
1 Rule 2a-7 is a rule under the Investment Company Act of 1940 which permits a money market fund to use amortized cost to stabilize the value of its shares at $1.00. Rule 2a-7 imposes various restrictions on the money market fund's portfolio, including restrictions related to diversification, and credit quality and maturity of portfolio securities.
2 Strategic Insight, 8/31/08, based on assets under management in open-end funds.
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