form.htm
FEDERATED
MDT SERIES
Federated
Investors Funds
4000
Ericsson Drive
Warrendale,
Pennsylvania 15086-7561
December
28, 2009
EDGAR
Operations Branch
Securities
and Exchange Commission
Division
of Investment Management
450 Fifth
Street, Northwest
Washington,
DC 20549
RE: FEDERATED
MDT SERIES (the “Trust”)
Class A Shares
Class C Shares
Institutional Shares
1933 Act File No.
333-163421
1940 Act File No.
811-21904
Dear Sir
or Madam:
The following responds to your specific
instructions that we furnish written responses to the oral comments received
from the Securities Exchange Commission (the “Commission”) on December 24, 2009,
regarding the proposed reorganization of Federated MDT Small Cap Core Fund (the
“Acquiring Fund”) Federated MDT Small Cap Value Fund (the “Acquired Fund”) (the
“Reorganization”). As discussed with the Commission examiner, Sheila
Stout, the following changes have been made in response to the oral comments
received in regard to question 6:
In
response to your comment regarding the Acquired Fund’s net assets as of July 31,
2009 of approximately $24 million in comparison to the Acquiring
Fund’s net assets of approximately $6 million, you wanted more information as to
why the Acquired Fund’s portfolio net assets changed substantially since July
31, 2009 and more information on the reference to the small size of the fund in
the “Reasons for the Proposed Reorganization”. In response to your comments, the
fifth paragraph has been revised as follows:
“The MDT Adviser
also advised the Board that the relatively small size of the Federated Small Cap
Value Fund, which has become substantially smaller due to recent net redemptions
(as further described below), along with the relatively small amount of assets
in Federated Small Cap Value’s Morningstar category, has made the Federated
Small Cap Value Fund a non-viable fund. As of September 30, 2009, the Federated
Small Cap Value Fund had assets of $8,700,000 and the Federated Small Cap Core
Fund had assets of approximately $7,000,000. Year to date through
September 30, 2009, the net flows for the Federated Small Cap Core Fund were
-$1,300,000 and were $4,800,000 in 2008. Year to date through
September 30, 2009, the net flows for the Federated Small Cap Value Fund were
-$13,900,000 and were $18,300,000 in 2008. The MDT Adviser believes
that the Federated Small Cap Core Fund, on a pro forma basis, will be a more
viable fund. Further support for the position is that, Morningstar’s
small cap blend category, which contains Federated Small Cap Core Fund, is
substantially larger in terms of assets than the small cap value category, which
contains Federated Small Cap Value Fund”
In connection with the review of this
filing by staff of the Securities Exchange Commission, the Registrant
acknowledges the staff’s view that: the Registrant is responsible for the
adequacy and accuracy of the disclosure in the filings; staff comments or
changes to disclosure in response to staff comments in the filings reviewed by
the staff do not foreclose the Commission from taking any action with respect to
the filing; and the Registrant may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the federal
securities laws of the United States.
If you have any questions on the
enclosed material, please contact me at (412) 288-3810.
Very truly yours,
/s/ Terri L. Kerr
Terri L. Kerr
Paralegal
Enclosures