497 1 federated.txt FEDERATED COMPLEX OF FUNDS Supplement dated November 3, 2003 to Current Prospectuses This supplement adds the following new section to the prospectuses for all funds listed below (including all portfolios and classes of shares thereof; the "Funds"). Legal Proceedings. Like many other mutual fund companies, in September 2003, Federated Investors, Inc., the parent company of the Funds' advisers and distributor (collectively, "Federated"), received detailed requests for information on shareholder trading activities in the Funds from the Securities and Exchange Commission, the New York State Attorney General, and the National Association of Securities Dealers. Federated immediately retained the law firm of Reed Smith LLP to conduct an internal investigation, which is ongoing. Additionally, attorneys from the law firm of Dickstein Shapiro Morin & Oshinsky LLP, independent counsel to the Funds, are participating in the investigation and are reporting to the independent directors of the Funds on their progress. The internal investigation is examining, among other things, circumstances in which it appears that a few Fund investors were granted exceptions to Federated's internal procedures for limiting frequent transactions, and that some of these investors made additional investments in other Federated funds. The investigation is also examining instances in which it appears that orders for Federated variable net asset value funds were placed and accepted after the funds' closing time at 4:00 p.m. Federated is taking steps to ensure that fund shareholder trading policies are adhered to. On October 22, 2003, Federated issued a press release that discusses these matters and announces that Federated is committed to taking remedial actions when and as appropriate, including compensating the Funds for any detrimental impact these transactions may have had on them. Based upon the progress of the investigation to date, Federated does not have sufficient information regarding these transactions to make a reasonable estimate of the amount, if any, by which the Funds have been impacted. The press release is available in the "About Us" section of Federated's website www.federatedinvestors.com, and any future press releases on this subject will also be posted there. Shortly after the press release was issued, and notwithstanding Federated's commitment to taking remedial actions, Federated and various Funds were named as defendants in several class action lawsuits filed in the United States District Court for the Western District of Pennsylvania seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. Federated and the Funds are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. Although we do not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from the regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds. The Federated Complex Of Funds consists of the following registrants and all portfolios and classes thereof: Cash Trust Series, Inc. Cash Trust Series II Federated Adjustable Rate Securities Fund Federated American Leaders Fund, Inc. Federated Equity Funds Federated Equity Income Fund, Inc. Federated Fixed Income Securities, Inc. Federated GNMA Trust Federated Government Income Securities, Inc. Federated High Income Bond Fund, Inc. Federated High Yield Trust Federated Income Securities Trust Federated Income Trust Federated Index Trust Federated Institutional Trust Federated Insurance Series Federated International Series, Inc. Federated Investment Series Funds, Inc. Federated Limited Duration Government Fund, Inc. Federated Managed Allocation Portfolios Federated Municipal Opportunities Fund, Inc. Federated Municipal Securities Fund, Inc. Federated Municipal Securities Income Trust Federated Short-Term Municipal Trust Federated Stock and Bond Fund, Inc. Federated Stock Trust Federated Total Return Government Bond Fund Federated Total Return Series, Inc. Federated U.S. Government Bond Fund Federated U.S. Government Securities Fund: 1-3 Years Federated U.S. Government Securities Fund: 2-5 Years Federated World Investment Series, Inc. Intermediate Municipal Trust Money Market Obligations Trust