Mutual funds are required by federal tax law to distribute, prior to December 31, virtually all the net capital gains realized through October 31. Mutual funds with a fiscal year ending November 30 may elect to distribute the net capital gains realized through the fiscal year end. The tax law imposes an excise tax on amounts not distributed by the mutual funds.

The following Federated funds anticipate paying a capital gain dividend in November or December:

Federated Fund Name	Record Date	Payable Date	Short Term ($)	Long Term ($)	Total (% of Net Assets)
American Leaders Fund — A Class	11/16/2005	11/18/2005	0.2716	1.9918	9.11
American Leaders Fund — B Class	11/16/2005	11/18/2005	0.2716	1.9918	9.11
American Leaders Fund — C Class	11/16/2005	11/18/2005	0.2716	1.9918	9.11
American Leaders Fund — F Class	11/16/2005	11/18/2005	0.2716	1.9918	9.11
American Leaders Fund — K Class	11/16/2005	11/18/2005	0.2716	1.9918	9.11
Capital Appreciation Fund — A Shares	11/15/2005	11/17/2005	0.0000	0.6480	2.60
Capital Appreciation Fund — B Shares	11/15/2005	11/17/2005	0.0000	0.6480	2.60
Capital Appreciation Fund — C Shares	11/15/2005	11/17/2005	0.0000	0.6480	2.60
Capital Appreciation Fund — K Shares	11/15/2005	11/17/2005	0.0000	0.6480	2.60
Institutional High Yield Bond Fund	11/15/2005	11/17/2005	0.1344	0.2909	3.98
International Capital Appreciation Fund — A Shares	12/23/2005	12/28/2005	0.0000	0.1509	1.47
International Capital Appreciation Fund — B Shares	12/23/2005	12/28/2005	0.0000	0.1509	1.47
International Capital Appreciation Fund — C Shares	12/23/2005	12/28/2005	0.0000	0.1509	1.47
International High Income Fund — A Shares	12/23/2005	12/28/2005	0.0000	0.1586	1.77
International High Income Fund — B Shares	12/23/2005	12/28/2005	0.0000	0.1586	1.77
International High Income Fund — C Shares	12/23/2005	12/28/2005	0.0000	0.1586	1.77
Kaufmann Fund — A Shares	11/11/2005	11/15/2005	0.0000	0.3323	6.06
Kaufmann Fund — B Shares	11/11/2005	11/15/2005	0.0000	0.3323	6.06
Kaufmann Fund — C Shares	11/11/2005	11/15/2005	0.0000	0.3323	6.06
Kaufmann Fund — K Shares	11/11/2005	11/15/2005	0.0000	0.3323	6.06
Kaufmann Small Cap Fund — A Shares	11/11/2005	11/15/2005	0.1344	0.1672	1.47
Kaufmann Small Cap Fund — B Shares	11/11/2005	11/15/2005	0.1344	0.1672	1.47
Kaufmann Small Cap Fund — C Shares	11/11/2005	11/15/2005	0.1344	0.1672	1.47
Market Opportunity Fund — A Shares	11/15/2005	11/17/2005	0.1975	0.6041	5.96
Market Opportunity Fund — B Shares	11/15/2005	11/17/2005	0.1975	0.6041	5.96
Market Opportunity Fund — C Shares	11/15/2005	11/17/2005	0.1975	0.6041	5.96
Max-Cap Index Fund — IS Class	11/22/2005	11/25/2005	0.0000	0.5278	2.16
Max-Cap Index Fund — SS Class	11/22/2005	11/25/2005	0.0000	0.5278	2.16
Max-Cap Index Fund — C Class	11/22/2005	11/25/2005	0.0000	0.5278	2.16
Max-Cap Index Fund — K Class	11/22/2005	11/25/2005	0.0000	0.5278	2.16
Mid-Cap Index Fund	11/22/2005	11/25/2005	0.1513	1.0949	5.63
Mini-Cap Index Fund — IS Class	11/22/2005	11/25/2005	0.0000	0.6115	3.94
Mini-Cap Index Fund — C Class	11/22/2005	11/25/2005	0.0000	0.6115	3.94
Stock and Bond Fund — A Shares	12/20/2005	12/22/2005	0.0000	0.3103	1.66
Stock and Bond Fund — B Shares	12/20/2005	12/22/2005	0.0000	0.3103	1.66
Stock and Bond Fund — C Shares	12/20/2005	12/22/2005	0.0000	0.3103	1.66
Stock and Bond Fund — K Shares	12/20/2005	12/22/2005	0.0000	0.3103	1.66
Stock Trust	11/22/2005	11/25/2005	0.7418	6.6673	19.75
Strategic Value Fund — A Shares	11/22/2005	11/25/2005	0.0182	0.0000	0.35
Strategic Value Fund — C Shares	11/22/2005	11/25/2005	0.0182	0.0000	0.35
Strategic Value Fund — IS Shares	11/22/2005	11/25/2005	0.0182	0.0000	0.35
U.S. Government Bond Fund	11/14/2005	11/16/2005	0.0000	0.2733	2.36

The preliminary capital gain per share was determined based on net capital gains realized at October 31, 2005, and shares outstanding at October 31, 2005. The actual capital gain per share may be greater or lesser due to fund trading activity through October 31 (or November 30, if applicable), and also due to possible adjustments to the capital gains realized, some of which are required by tax law. Furthermore, the actual capital gain per share will be calculated based on the shares outstanding at each fund's record date, which will differ from the October 31, 2005, shares outstanding.

For more complete information, view the prospectuses available on this Web site 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.

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