1.
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In
response to your comment to add the Tandy Representation in the
Correspondence letter:
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2.
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In
response to your comment on the names of the Acquired Fund and the
Acquiring Fund appearing to be in reverse order in the cover
letter:
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3.
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In
response to your comment that a NAST Analysis be performed and filed
explaining why the Acquiring Fund would be the accounting survivor after
the Reorganization:
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4.
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In
response to your comment to correct the date on the N-14
cover:
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5.
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In
response to your comment regarding the Introduction section of the N-14,
regarding deferred or prepaid
expenses:
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6.
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In
response to your comment regarding the Acquired Fund’s asset
size:
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As
of September 30, 2009, the asset size of the Acquired Fund was
approximately $8.7 million, while that of the Acquiring Fund was
approximately $7.0 million. Federated believes that the
Acquiring Fund, on a pro forma basis, will be a more viable
fund. Further, the Acquiring Fund is in Morningstar’s small cap
blend category, which is substantially larger in terms of assets than the
Acquired Fund’s small cap value
category.
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7.
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In
response to your comment that the total gross expenses in the NCSR
Financial Highlights dated July 31, 2009 are five basis points (gross) off
from the existing tables in the
N-14:
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The
Class A Shares of the Acquiring Fund and the Acquired Fund have a dormant
12b-1 fee of 0.05%. This dormant fee is presented in the fee table
because it is an expense that can be charged. The fee is not
reflected in the waiver ratio on the financial highlights because the fee
has not accrued.
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8.
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In
response to your comment that in the Capitalization Table that the
Reorganization costs are paid, in part, by the Acquired Fund. This should
be shown as an adjustment to net
assets.
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Due
to current expense cap on the Acquired Fund, certain expenses to be borne
in connection with the Reorganization will likely be reimbursed by the
Adviser. As such, there will be no material impact to net
assets.
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9.
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In
response to your comment as to the reason why, in the Statement of
Additional Information (“SAI”), we included Number 5 “Unaudited Financial
Statements of Federated MDT Small Cap Value Fund, a portfolio of Federated
MDT Series, dated January 31, 2009” and why we also included, on the
second page, “Unaudited financial statements of Federated Small Cap Value
Fund, dated January 31, 2009, which were filed with the Commission
pursuant to Section 30(b) of the Investment Company Act of 1940, as
amended, on or about March 26, 2009, with the Semi-Annual Report to
shareholders of Federated Small Cap Value
Fund”:
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10.
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In
response to your comment that in the SAI should include: (1) a footnote if
there are any securities to be disposed of (otherwise include an
adjustments column) and (2) a footnote if all securities conform to the
investment objectives and
limitations:
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11.
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In
response to your comment that in the SAI, on the Statement of Assets and
Liabilities, the total net assets do not equal the schedule of
investment:
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12.
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In
response to your comment that the SAI should have a footnote after
“Statement of Operations” that the Reorganization fees are being paid by
Acquired Fund.
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13.
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In
response to your comment that the fifth paragraph of the Section entitled
“Reasons for the Proposed Reorganization,” should have language added that
the Board believes at the beginning of the second
sentence:
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14.
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In
response to your comment that the fifth paragraph of the Section entitled
“Reasons for the Proposed Reorganization,” should clarify whether it is
intended to say that The Acquiring Fund will be a more viable fund after
the merger or the combination of the two
funds:
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15.
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In
response to your comment that on page 4, under the Section entitled
“Reasons for the Proposed Reorganization”, the second bullet point should
state that the Acquiring Fund’s waiver expires in
2010:
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17.
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In
response to your comment that “bank instruments” should not be excluded
from the Acquiring Fund’s non-fundamental concentration
policy:
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18.
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In
response to your comment that on Page 36, in the Section entitled
“Information About The Reorganization”, we have the same deferred or
prepaid expense language from the above Number 5 of this
letter:
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