Managed Volatility Fund II

Variable Annuity Funds . Asset Allocation .

Overview

 
AT A GLANCE
Portfolio
Assets
September 30 2019
$676.2 M
YTD Return NAV
October 14 2019
11.72%
Multi-Asset
Gross
Expenses
0.97%
Net
Expenses
0.97%
Documents
STRATEGY

Seeks to achieve high current income and moderate capital appreciation by investing in both equity and fixed-income securities that have high income potential.

KEY FACTS
Key Facts - Part 1
Benchmark 40% Russell® 1000 Value Index/60% Bloomberg Barclays U.S. Aggregate Bond Index
Key Facts - Part 2
Fund Number(s)
333
CUSIP 3 1 3 9 1 6 1 0 8
Performance Incp. Date February 10 1994
MORNINGSTAR CATEGORY & STYLE
Category
Insurance Tactical Allocation
Style
Large Value
Category
Insurance Tactical Allocation
Style
Medium Moderate
INVESTMENT GOALS Retirement
Growth
Income
Global Diversification
MANAGERS
James Gordon Jr., CFA
Senior Vice President
Senior Portfolio Manager
Head of Managed Risk & Analysis Teams

joined Federated
28 years of experience
Damian McIntyre, CFA, CAIA
Vice President
Portfolio Manager
Senior Quantitative Analyst

joined Federated
11 years of experience
Jerome Conner, CFA
Vice President
Senior Investment Analyst/ Portfolio Manager

joined Federated
23 years of experience
Ihab Salib
Senior Vice President
Senior Portfolio Manager
Head of International Fixed Income Group

joined Federated
27 years of experience
Todd Abraham, CFA
Senior Vice President
Senior Portfolio Manager, Head of Government/ Mortgage Backed Fixed Income Group

joined Federated
30 years of experience
Mark Durbiano, CFA
Senior Vice President
Senior Portfolio Manager
Head of Domestic High Yield Group
Head of Bond Sector Pod/ Committee

joined Federated
37 years of experience
Ian Miller, CFA
Vice President
Senior Portfolio Manager

joined Federated
13 years of experience

Characteristics

 
DISCLOSURES

For additional information, including definitions of related terms and indexes, see the Financial Glossary and Benchmark Index Glossary.

Documents

 
DISCLOSURES

1 disclosure If this product is new, it will not have completed its first financial reporting period. Please check back to view future shareholder reports. For the new share of an existing fund, you may wish to view recent shareholder reports of another share of that fund by visiting another share.

The “As of Date” for regulatory documents  is the date when the document is effective with the SEC and made available on Federated’s website.

2 disclosure Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at www.sec.gov within 60 days of the end of the fiscal quarter upon filing.

double dagger disclosure PDF file consists of a President's Message or Market Overview (if applicable) and Annual/Semi-Annual Shareholder Report. NOTE: To be sure you have the most recent information, please access both the Annual Report and the Semi-Annual Report.

Distributions and Taxes

 
DISCLOSURES

dagger disclosure The funds expense ratio is from the most recent prospectus. The expense ratio may reflect voluntary fee waivers and/or expense reimbursements determined by the funds Advisor and its affiliates. The voluntary waivers and/or reimbursements, if applicable, are in effect up to but not including the later of 06/01/2020 or the date of the funds next effective prospectus.

As of April 26, 2018, this formerly undesignated share class was re-designated as Primary Shares.

Expenses shown do not reflect any additional fees or expenses that may be imposed by separate accounts of insurance companies or in connection with any variable annuity or variable life insurance contract. If these had been included, an investor's costs would be higher.

Total returns for periods of less than one year are cumulative.

Total return may have been lower in the absence of temporary expense waivers or reimbursements.

Bond prices are sensitive to changes in interest rates, and a rise in interest rates can cause a decline in their prices.

International investing involves special risks including currency risk, increased volatility, political risks, and differences in auditing and other financial standards.

High-yield, lower-rated securities generally entail greater market, credit/default and liquidity risks and may be more volatile than investment-grade securities.

The fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional instruments.

There can be no guarantee that the fund will maintain its annualized volatility target. Furthermore, while the volatility management seeks competitive returns with more consistent volatility of returns, the attainment and maintenance of the target volatility does not ensure that the fund will deliver competitive returns. The fund’s managed volatility strategy may expose the fund to losses (some of which may be sudden and significant) that it would not have otherwise been exposed to if it only invested directly in equity and fixed income securities. For example, the value of the Long S&P Futures Positions (which may be up to 60% of the fund’s net asset value) may decline in value due to a decline in the level of the S&P 500, while the value of the Short S&P Futures Position (which may be up to 40% of the fund’s net asset value) may decline in value due to an increase in the level of the S&P 500. Furthermore, losses on the Short S&P Futures Position are potentially unlimited. Additionally, Long S&P 500 Futures Positions are being held to hedge the value of the fund’s direct investments in equity securities and, as a result, these futures contracts may decline in value at the same time as the fund’s direct investments in equity securities. The fund’s managed volatility strategy also exposes shareholders to leverage risk and the risks of investing in derivative contracts. There can be no assurances that the fund’s use of derivative contracts or hybrid instruments will work as intended.

Diversification does not assure a profit nor protect against loss.

There are no guarantees that dividend-paying stocks will continue to pay dividends. In addition, dividend-paying stocks may not experience the same capital appreciation potential as non-dividend-paying stocks.

Effective December 2, 2011, the fund's name was changed from Federated Capital Income Fund II to Federated Managed Volatility Fund II and the Advisor will use derivative contracts, including stock index futures to target an annualized volatility level for the Fund of approximately 10%. However, the actual or realized volatility for any particular period may be materially higher or lower depending on market conditions.

Volatility is a statistical measurement of the frequency and level of changes in the value of an asset, index or instrument without regard to the direction of those changes. Volatility may result from rapid and dramatic price swings.

Fund shares are available exclusively as a funding vehicle for life insurance companies writing variable life insurance policies and variable annuity contracts.  If you are an individual investor, contact your financial advisor or insurance company for more information on these products.

The fund is a managed portfolio and its holdings are subject to change.

The holdings percentages are based on net assets at the close of business on the date above, and may not necessarily reflect adjustments that are routinely made when presenting net assets for formal financial statement purposes. Because this is a managed portfolio, the investment mix will change.

The ratings agencies that provided the quality breakdown ratings are Standard and Poor's, Moody's and Fitch. When ratings vary, the highest rating is used. Credit ratings of A or better are considered to be high credit quality; credit ratings of BBB are good credit quality, and the lowest category of investment grade; credit ratings BB and below are lower-rated securities ("junk bonds"); and credit ratings of CCC or below have high default risk. The credit quality breakdown does not give effect to the impact of any credit derivative investments made by the fund.

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.

Product classifications noted at the top are Federated's internal classifications.

Federated Securities Corp., Distributor

Not FDIC Insured
May Lose Value
No Bank Guarantee

3352351062