485BPOS

1933 Act File No. 2-29786

1940 Act File No. 811-1704

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933		X
	Pre-Effective Amendment No.
	Post-Effective Amendment No.   77	X
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940		X
	Amendment No.   51	X

FEDERATED AMERICAN LEADERS FUND, INC.

(Exact Name of Registrant as Specified in Charter)

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7000

(Address of Principal Executive Offices)

(412) 288-1900

(Registrant's Telephone Number)

John W. McGonigle, Esquire

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

(Name and Address of Agent for Service)

(Notices should be sent to the Agent for Service)

It is proposed that this filing will become effective:
X_	immediately upon filing pursuant to paragraph (b)
	on ____________________ pursuant to paragraph (b)
_	60 days after filing pursuant to paragraph (a)(i)
	on _____________ pursuant to paragraph (a)(i)
	75 days after filing pursuant to paragraph (a)(ii)
	on ____________ pursuant to paragraph (a)(ii) of Rule 485.
If appropriate, check the following box:
	This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

nancy

Federated
World-Class Investment Manager

Federated American Leaders Fund, Inc.

PROSPECTUS

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May 31, 2008

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CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
CLASS F SHARES

A mutual fund seeking growth of capital and of income by investing in common stocks and other securities of high-quality companies.

As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Not FDIC Insured * May Lose Value * No Bank Guarantee

CONTENTS

Risk/Return Summary 1

What are the Fund's Fees and Expenses? 5

What are the Fund's Investment Strategies? 6

What are the Principal Securities in Which the Fund Invests? 8

What are the Specific Risks of Investing in the Fund? 12

What Do Shares Cost? 14

How is the Fund Sold? 24

Payments to Financial Intermediaries 24

How to Purchase Shares 27

How to Redeem and Exchange Shares 30

Account and Share Information 34

Who Manages the Fund? 38

Legal Proceedings 39

Financial Information 41

Appendix A: Hypothetical Investment and Expense Information 46

Risk/Return Summary

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund's investment objective is to seek growth of capital and of income by concentrating the area of investment decision in the securities of high-quality companies. While there is no assurance that the Fund will achieve its investment objective, it endeavors to do so by following the strategies and policies described in this prospectus.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

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The Fund pursues its investment objective by using the value style of investing to select primarily equity securities of large capitalization companies that are in the top 50% of their industry in terms of revenues, are characterized by sound management, and have the ability to finance expected growth. Large capitalization companies are defined as those with market capitalizations similar to companies in the Standard & Poor's 500 Citigroup Value Index, which as of February 28, 2008 was in excess of $4 billion.

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The Fund may invest in derivative contracts to implement its investment strategies as more fully described below.

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WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

All mutual funds take investment risks. Therefore, it is possible to lose money by investing in the Fund. The primary factors that may reduce the Fund's returns include:

• Stock Market Risks. The value of equity securities in the Fund's portfolio will fluctuate and, as a result, the Fund's Share price may decline suddenly or over a sustained period of time.
  
• Risks Relating to Investing for Value. Due to the Fund's value style of investing, the Fund's Share price may lag that of other funds using a different investment style.
  
• Sector Risks. Because the Fund may allocate relatively more of its assets to one or more industry sectors comprising the Standard & Poor's 500 Index (S&P 500) than to other sectors of the Index, the Fund's performance will be more susceptible to any developments which affect the sectors emphasized by the Fund.
  
• Risks of Investing in ADRs and Domestically Traded Securities of Foreign Issuers. Because the Fund may invest in American Depositary Receipts (ADRs) and other domestically traded securities of foreign companies, the Fund's Share price may be affected by foreign economic and political conditions, taxation policies, and accounting and auditing standards.
  

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• Risks of Investing in Derivative Contracts and Hybrid Instruments. Derivative contracts and hybrid instruments involve risks different from, or possibly greater than, risks associated with investing directly in securities and other traditional investments. Specific risk issues related to the use of such contracts and instruments include valuation and tax issues, increased potential for losses and/or costs to the Fund, and a potential reduction in gains to the Fund. Each of these issues is described in greater detail in this prospectus. Derivative contracts and hybrid instruments may also involve other risks described in this prospectus or the Fund's Statement of Additional Information (SAI), such as stock market, interest rate, credit, currency, liquidity and leverage risks.
  

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The Shares offered by this prospectus are not deposits or obligations of any bank, are not endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

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Risk/Return Bar Chart and Table

The performance information shown below will help you analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's Class A Shares total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before and after taxes) is no guarantee of future results.

The total returns shown in the bar chart for the Fund's Class A Shares do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.

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The Fund's Class A Shares total return for the three-month period from January 1, 2008 to March 31, 2008 was (11.77)%.

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Within the period shown in the bar chart, the Fund's Class A Share highest quarterly return was 16.83% (quarter ended June 30, 2003). Its lowest quarterly return was (19.72)% (quarter ended September 30, 2002).

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Average Annual Total Return Table

The Average Annual Total Returns for the Fund's Class A Shares, Class B Shares, Class C Shares and Class F Shares are reduced to reflect applicable sales charges. Return Before Taxes is shown for all classes. In addition, Return After Taxes is shown for Class A Shares to illustrate the effect of federal taxes on Fund returns. Actual after-tax returns depend on each investor's personal tax situation, and are likely to differ from those shown. The table also shows returns for Standard & Poor's 500/ Citigroup Value Index (S&P 500/CV), a broad-based market index and the Lipper Large-Cap Value Average (LLCVA), an average of funds with similar investment objectives. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index or an average. Lipper averages represent the average of the total returns reported by all mutual funds as designated by Lipper, Inc. as falling in the respective categories indicated.

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(For the Periods Ended December 31, 2007)

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	1 Year	5 Years	10 Years
Class A Shares:
Return Before Taxes	<R>(14.68)%</R>	<R>7.75%</R>	<R>3.48%</R>
Return After Taxes on Distributions 1	<R>(18.09)%</R>	<R>6.12%</R>	<R>2.07%</R>
Return After Taxes on Distributions and Sale of Fund Shares 1	<R> (6.51)%</R>	<R>6.55%</R>	<R>2.59%</R>
Class B Shares:
Return Before Taxes	<R>(14.31)%</R>	<R>7.87%</R>	<R>3.43%</R>
<R>Class C Shares:</R>
Return Before Taxes	<R>(11.15)%</R>	<R>8.15%</R>	<R>3.29%</R>
Class F Shares:
Return Before Taxes	<R>(11.31)%</R>	<R>8.80%</R>	<R>3.97%</R>
S&P 500/CV	<R>1.99%</R>	<R>14.73%</R>	<R>6.66%</R>
LLCVA	<R>2.21%</R>	<R>13.10%</R>	<R>6.23%</R>

1 After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. Return After Taxes on Distributions assumes a continued investment in the Fund and shows the effect of taxes on Fund distributions. Return After Taxes on Distributions and Sale of Fund Shares assumes all Shares were redeemed at the end of each measurement period, and shows the effect of any taxable gain (or offsetting loss) on redemption, as well as the effects of taxes on Fund distributions. These after-tax returns do not reflect the effect of any applicable state and local taxes. After-tax returns for Class B, Class C and Class F Shares will differ from those shown above for Class A Shares. After-tax returns are not relevant to investors holding Shares through tax-deferred programs, such as IRA or 401(k) plans.

What are the Fund's Fees and Expenses?

FEDERATED AMERICAN LEADERS FUND, INC.
FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold Class A Shares, Class B Shares, Class C Shares and Class F Shares of the Fund.

Shareholder Fees	Class A	Class B	Class C	Class F
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)	5.50%	None	None	1.00%
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable)	0.00%	5.50%	1.00%	1.00%
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price)	None	None	None	None
Redemption Fee (as a percentage of amount redeemed, if applicable)	None	None	None	None
Exchange Fee	None	None	None	None
Annual Fund Operating Expenses (Before Reduction) 1
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee	0.64%	0.64%	0.64%	0.64%
Distribution (12b-1) Fee	None	0.75%	0.75%	None
Other Expenses 2	0.54%	0.58%	0.57%	0.52%
Total Annual Fund Operating Expenses	1.18%	1.97% 3	1.96%	1.16%
1 The percentages shown are based on expenses for the entire fiscal year ended March 31, 2008. However, the rate at which expenses are accrued during the fiscal year may not be constant and, at any particular point, may be greater or less than the stated average percentage. Although not contractually obligated to do so, the shareholder services provider did not charge certain amounts. These are shown below along with the net expenses the Fund actually paid for the fiscal year ended March 31, 2008.
Total Reduction of Fund Expenses	0.00%	0.00%	0.01%	0.01%
Total Actual Annual Fund Operating Expenses (after reduction)	1.18%	1.97%	1.95%	1.15%
2 Includes a shareholder services fee/account administration fee which is used to compensate intermediaries for shareholder services or account administrative services. Also includes a recordkeeping fee which is used to compensate intermediaries for recordkeeping services. Please see "Payments to Financial Intermediaries" herein. Also includes amounts the Fund incurred indirectly investing in other investment companies. For the fiscal year ended March 31, 2008, these "Acquired Fund Fees and Expenses" were less than 0.01%. The shareholder services provider did not charge, and therefore the Fund's Class C Shares and Class F Shares did not accrue, a portion of its fee. This reduction can be terminated at any time. Total other expenses paid by the Fund's Class C Shares and Class F Shares (after the reduction) were 0.56% and 0.51%, respectively, for the fiscal year ended March 31, 2008.
3 After Class B Shares have been held for eight years from the date of purchase, they will automatically convert to Class A Shares on or about the last day of the following month. Class A Shares pay lower operating expenses than the Class B Shares.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's Class A Shares, Class B Shares, Class C Shares and Class F Shares with the cost of investing in other mutual funds.

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The Example assumes that you invest $10,000 in the Fund's Class A Shares, Class B Shares, Class C Shares and Class F Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. Expenses assuming no redemption are also shown. The Example also assumes that your investment has a 5% return each year and that the Fund's Class A, Class B, Class C and Class F Shares operating expenses are before reduction as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:

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Share Class	1 Year	3 Years	5 Years	10 Years
Class A:
Expenses assuming redemption	<R>$664</R>	<R>$ 904</R>	<R>$1,163</R>	<R>$1,903</R>
Expenses assuming no redemption	<R>$664</R>	<R>$ 904</R>	<R>$1,163</R>	<R>$1,903</R>
Class B:
Expenses assuming redemption	<R>$750</R>	<R>$1,018</R>	<R>$1,262</R>	<R>$2,091</R>
Expenses assuming no redemption	<R>$200</R>	<R>$ 618</R>	<R>$1,062</R>	<R>$2,091</R>
Class C:
Expenses assuming redemption	<R>$299</R>	<R>$ 615</R>	<R>$1,057</R>	<R>$2,285</R>
Expenses assuming no redemption	<R>$199</R>	<R>$ 615</R>	<R>$1,057</R>	<R>$2,285</R>
Class F:
Expenses assuming redemption	$317	$ 565	<R>$ 732</R>	$1,495
Expenses assuming no redemption	$217	$ 465	<R>$ 732</R>	$1,495

What are the Fund's Investment Strategies?

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The Fund pursues its investment objective by investing primarily in equity securities of companies that are generally leaders in their industries, are characterized by sound management and have the ability to finance expected growth. The Fund's investment adviser (Adviser) attempts to identify good long-term values through disciplined investing and careful fundamental research. The Fund's holdings primarily will be in large capitalization companies that are in the top 50% of their industries with regard to revenues. Large capitalization companies are defined as those with market capitalizations similar to companies in the Standard & Poor's 500 Citigroup Value Index, which as of February 28, 2008 was in excess of $4 billion. A description of the various types of securities in which the Fund principally invests, and their risks, immediately follows the strategy discussion.

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Companies with similar characteristics may be grouped together in broad categories called sectors. The Adviser diversifies the Fund's investments, seeking to limit the Fund's risk exposure with respect to individual securities and industry sectors.

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The Fund's Adviser performs traditional fundamental analysis to select securities for the Fund that exhibit the most promising long-term value for the Fund's portfolio. In selecting securities, the Adviser focuses on the current financial condition of the issuing company, in addition to examining each issuer's business and product strength, competitive position and management expertise. Further, the Adviser considers current economic, financial market and industry factors, which may affect the issuing company. To determine the timing of purchases and sales of portfolio securities, the Adviser looks at recent stock price performance and the direction of current fiscal year earnings estimates of various companies.

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The Adviser uses the value style of investing, selecting securities of companies which are trading at discounts to their historic relationship to the market as well as to their expected growth. Value stocks tend to pay higher dividends than other segments of the market. Because the Adviser uses the value style, the price of the securities held by the Fund may not, under certain market conditions, increase as rapidly as stocks selected primarily for their growth attributes.

The Adviser may invest in American Depositary Receipts (ADRs), which represent interests in underlying securities issued by a foreign company, but which are traded in the United States. It may also invest directly in securities issued by a foreign company but traded in the United States. The Adviser invests primarily in the ADRs or securities of companies with significant operations within the United States. Securities of foreign companies may be more affected by foreign economic and political conditions, taxation policies, and accounting and auditing standards than those of U.S. companies.

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The Fund may use derivative contracts and/or hybrid instruments to implement elements of its investment strategy. For example, the Fund may use derivative contracts or hybrid instruments to increase or decrease the portfolio's exposure to the investment(s) underlying the derivative or hybrid. Additionally, by way of example, the Fund may use derivative contracts in an attempt to:

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• obtain premiums from the sale of derivative contracts;
  
• realize gains from trading a derivative contract; or
  
• hedge against potential losses.
  

There can be no assurance that the Fund's use of derivative contracts or hybrid instruments will work as intended.

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Because the Fund refers to "American" investments in its name, it will notify shareholders at least 60 days in advance of any change in its investment policies that would enable the Fund to normally invest less than 80% of its assets in U.S. equity or fixed-income investments.

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TEMPORARY INVESTMENTS

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The Fund may temporarily depart from its principal investment strategies by investing its assets in shorter-term debt securities and similar obligations or holding cash. It may do this in response to unusual circumstances, such as: adverse market, economic, or other conditions (for example, to help avoid potential losses, or during periods when there is a shortage of appropriate securities); to maintain liquidity to meet shareholder redemptions; or to accommodate cash inflows. It is possible that such investments could affect the Fund's investment returns and/or the ability to achieve the Fund's investment objectives.

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What are the Principal Securities in Which the Fund Invests?

EQUITY SECURITIES

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Equity securities represent a share of an issuer's earnings and assets, after the issuer pays its liabilities. The Fund cannot predict the income it will receive from equity securities because issuers generally have discretion as to the payment of any dividends or distributions. However, equity securities offer greater potential for appreciation than many other types of securities, because their value increases directly with the value of the issuer's business. The following describes the types of equity securities in which the Fund invests.

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Common Stocks

Common stocks are the most prevalent type of equity security. Common stocks receive the issuer's earnings after the issuer pays its creditors and any preferred stockholders. As a result, changes in an issuer's earnings directly influence the value of its common stock.

ADRs and Domestically Traded Securities of Foreign Issuers

American Depositary Receipts, which are traded in U.S. markets, represent interests in underlying securities issued by a foreign company and not traded in the United States. ADRs provide a way to buy shares of foreign based companies in the U.S. rather than in overseas markets. ADRs are also traded in U.S. dollars, eliminating the need for foreign exchange transactions. The Fund may also invest in securities issued directly by foreign companies and traded in U.S. dollars in U.S. markets. The Fund invests primarily in ADRs and securities of companies with significant operations within the United States.

DERIVATIVE CONTRACTS

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Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, currencies, indices, or other assets or instruments including other derivative contracts (each a "Reference Instrument" and collectively, "Reference Instruments"). Each party to a derivative contract is referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as "physically settled" derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as "cash settled" derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.

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Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the counterparty. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.

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The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and the counterparty. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange traded contracts, especially in times of financial stress.

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Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund's exposure to the risks of the Reference Instrument, and may also expose the fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract.

Payment obligations arising in connection with derivative contracts are frequently required to be secured with collateral (in the case of OTC contracts) or margin (in the case of exchange-traded contracts, as previously noted).

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The Fund may invest in a derivative contract if it is permitted to own, invest in, or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:

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Futures Contracts

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Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be commodity contracts. The Fund has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act and, therefore, is not subject to registration or regulation as a commodity pool operator under that Act. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures).

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Option Contracts

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Option contracts (also called "options") are rights to buy or sell a Reference Instrument for a specified price (the exercise price) during, or at the end of, a specified period. The seller (or writer) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. A put option gives the holder the right to sell the Reference Instrument to the writer of the option. Options can trade on exchanges or in the OTC market and may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.

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Swap Contracts

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A swap contract (also known as a "swap") is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Swaps do not always involve the delivery of the Reference Instruments by either party, and the parties might not own the Reference Instruments underlying the swap. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party's payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names.

Common types of swaps in which the Fund may invest include total return swaps.

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SPECIAL TRANSACTIONS

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Hybrid Instruments

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Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, currency, index, or other asset or instrument including a derivative contract). The Fund may use hybrid instruments only in connection with permissible investment activities. Hybrid instruments can take many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, a hybrid instrument may also combine elements of a fixed-income security and an equity security. Third, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.

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Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities, currencies, and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional investments or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional investments or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.

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Asset Segregation

In order to secure its obligations in connection with derivative contracts or special transactions, the Fund will either own the underlying assets, enter into offsetting transactions or set aside cash or readily marketable securities. This requirement may cause the Fund to miss favorable trading opportunities, due to a lack of sufficient cash or readily marketable securities. This requirement may also cause the Fund to realize losses on offsetting or terminated derivative contracts or special transactions.

What are the Specific Risks of Investing in the Fund?

STOCK MARKET RISKS

The value of equity securities in the Fund's portfolio will rise and fall. These fluctuations could be a sustained trend or a drastic movement. The Fund's portfolio will reflect changes in prices of individual portfolio stocks or general changes in stock valuations. Consequently, the Fund's Share price may decline.

The Adviser attempts to manage market risk by limiting the amount the Fund invests in each company's equity securities. However, diversification will not protect the Fund against widespread or prolonged declines in the stock market.

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RISKS RELATING TO INVESTING FOR VALUE

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Due to their relatively low valuations, value stocks are typically less volatile than growth stocks. For instance, the price of a value stock may experience a smaller increase on a forecast of higher earnings, a positive fundamental development, or positive market development. Further, value stocks tend to have higher dividends than growth stocks. This means they depend less on price changes for returns and may lag behind growth stocks in an up market.

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SECTOR RISKS

Companies with similar characteristics may be grouped together in broad categories called sectors. Sector risk is the possibility that a certain sector may underperform other sectors or the market as a whole. As the Adviser allocates more of the Fund's portfolio holdings to a particular sector, the Fund's performance will be more susceptible to any economic, business or other developments which generally affect that sector.

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RISKS OF INVESTING IN ADRS AND DOMESTICALLY TRADED SECURITIES OF FOREIGN ISSUERS

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Because the Fund may invest in ADRs and other domestically traded securities of foreign companies, the Fund's Share price may be affected by foreign economic and political conditions, taxation policies, and accounting and auditing standards. Foreign companies may not provide information as frequently or to as great an extent as companies in the United States. Foreign companies may also receive less coverage than U.S. companies by market analysts and the financial press. In addition, foreign countries may lack uniform accounting, auditing, and financial reporting standards or regulatory requirements comparable to U.S. companies. These factors may prevent the Fund and its Adviser from obtaining information concerning foreign companies that is as frequent, extensive, and reliable as the information available concerning companies in the United States.

RISKS OF INVESTING IN DERIVATIVE CONTRACTS AND HYBRID INSTRUMENTS

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The Fund's use of derivative contracts and hybrid instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for Federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund's total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund's investments. Any such termination of the Fund's OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs, and/or preventing the Fund from fully implementing its investment strategies). Finally, derivative contracts and hybrid instruments may also involve other risks described in this prospectus or in the Fund's SAI, such as stock market, interest rate, credit, currency, liquidity and leverage risks.

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What Do Shares Cost?

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CALCULATION OF NET ASSET VALUE

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When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next calculated net asset value of a Share (NAV) plus any applicable front-end sales charge (public offering price). A Share's NAV is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time) each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share's class, subtracting the liabilities allocated to the class and dividing the balance by the number of Shares of the class outstanding. The Fund's current NAV and public offering price may be found at FederatedInvestors.com and in the mutual funds section of certain newspapers under "Federated."

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You can purchase, redeem or exchange Shares any day the NYSE is open. When the Fund holds securities that trade principally in foreign markets on days the NYSE is closed, the value of the Fund's assets may change on days you cannot purchase or redeem Shares. This may also occur when the U.S. markets for fixed-income securities are open on a day the NYSE is closed.

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In calculating its NAV, the Fund generally values investments as follows:

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• Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
  

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• Derivative contracts listed on exchanges are valued at their reported settlement or closing price.
  

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• OTC derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board of Directors (Board).
  

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If the Fund cannot obtain a price or price evaluation from a pricing service for an investment, the Fund may attempt to value the investment based upon the mean of bid and asked quotations, or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund's NAV.

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Shares of other mutual funds are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.

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Fair Valuation and Significant Events Procedures

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The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund and of the Adviser to assist in this responsibility and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Board. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures. The Fund's Statement of Additional Information (SAI) discusses the methods used by pricing services and the Valuation Committee to value investments.

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Using fair value to price investments may result in a value that is different from an investment's most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The Valuation Committee generally will not change an investment's fair value in the absence of new information relating to the investment or its issuer such as changes in the issuer's business or financial results, or relating to external market factors, such as trends in the market values of comparable securities. This may result in less frequent, and larger, changes in fair values as compared to prices based on market quotations or price evaluations from pricing services or dealers.

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The Board also has adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

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• With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures or options contracts;
  

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• With respect to price evaluations of fixed-income securities determined before the close of regular trading on the NYSE, actions by the Federal Reserve Open Market Committee and other significant trends in U.S. fixed-income markets;
  

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• Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
  

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• Announcements concerning matters such as acquisitions, recapitalizations, or litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.
  

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The Valuation Committee uses a pricing service to determine the fair value of equity securities traded principally in foreign markets when the Adviser determines that there has been a significant trend in the U.S. equity markets or in index futures trading. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment using another method approved by the Board. The Board has ultimate responsibility for any fair valuations made in response to a significant event.

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The fair valuation of securities following a significant event can serve to reduce arbitrage opportunities for short-term traders to profit at the expense of long-term investors in the Fund. For example, such arbitrage opportunities may exist when the market on which portfolio securities are traded closes before the Fund calculates its NAV, which is typically the case with Asian and European markets. However, there is no assurance that these significant event procedures will prevent dilution of the NAV by short-term traders. See "Account and Share Information--Frequent Trading Policies" for other procedures the Fund employs to deter such short-term trading.

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SALES CHARGE INFORMATION

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The following table summarizes the minimum required investment amount and the maximum sales charge, if any, that you will pay on an investment in the Fund. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.

	Minimum Initial/Subsequent Investment Amounts 1	Maximum Sales Charges
Shares Offered		Front-End Sales Charge 2	Contingent Deferred Sales Charge 3
Class A	$1,500/$100	5.50%	0.00%
Class B	$1,500/$100	None	5.50%
Class C	$1,500/$100	None	1.00%
Class F	$1,500/$100	1.00%	1.00%

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1 The minimum initial and subsequent investment amounts for Individual Retirement Accounts (IRAs) are $250 and $100, respectively. There is no minimum initial or subsequent investment amount required for employer-sponsored retirement plans; however, such accounts remain subject to the Fund's policy on "Accounts with Low Balances" as discussed later in this prospectus. The minimum subsequent investment amount for Systematic Investment Programs (SIP) is $50. Financial intermediaries may impose higher or lower minimum investment requirements on their customers than those imposed by the Fund. To maximize your return and minimize the sales charges and marketing fees, purchases of Class B Shares are generally limited to $100,000 and purchases of Class C Shares are generally limited to $1,000,000. Purchases in excess of these limits may be made in Class A Shares. If your Shares are held on the books of the Fund in the name of a financial intermediary, you may be subject to rules of your financial intermediary that differ from those of the Fund. See "Purchase Restrictions on Class B and Class C Shares" below. After Class B Shares have been held for eight years from the date of purchase, they will automatically convert to Class A Shares on or about the last day of the following month. This conversion is a non-taxable event.

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2 Front-End Sales Charge is expressed as a percentage of public offering price. See "Sales Charge When You Purchase."

3 See "Sales Charge When You Redeem."

As shown in the table above, each class of Shares has a different sales charge structure. In addition, the ongoing annual operating expenses ("expense ratios"), as well as the compensation payable to financial intermediaries, also vary among the classes. Before you decide which class to purchase, you should review the different charges and expenses of each class carefully, in light of your personal circumstances, and consult with your financial intermediary.

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Among the important factors to consider are the amount you plan to invest and the length of time you expect to hold your investment. You should consider, for example, that it may be possible to reduce the front-end sales charges imposed on purchases of Class A Shares and Class F Shares. Among other ways, Class A Shares and Class F Shares have a series of "breakpoints," which means that the front-end sales charges decrease (and can be eliminated entirely) as the amount invested increases. (The breakpoint schedule is set out below under "Sales Charge When You Purchase.") On the other hand, Class B Shares do not have front-end sales charges, but the deferred sales charges imposed on redemptions of Class B Shares do not vary at all in relation to the amounts invested. Rather, these charges decrease with the passage of time (ultimately going to zero after shares have been held for six full years). Finally, Class C Shares do not have front-end sales charges, but do impose a contingent deferred sales charge only if redeemed within one year after purchase; however, the asset-based 12b-1 fees charged to Class C Shares are greater than those charged to Class A Shares and Class F Shares and comparable to those charged to Class B Shares.

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You should also consider that the expense ratio for Class A Shares will be lower than that for Class B or Class C Shares. Thus, the fact that no front-end charges are ever imposed on purchases of Class B Shares and Class C Shares does not always make them preferable to Class A Shares.

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SALES CHARGE WHEN YOU PURCHASE

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The following tables list the sales charges which will be applied to your Share purchase, subject to the breakpoint discounts indicated in the tables and described below.

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Class A Shares:
Purchase Amount	Sales Charge as a Percentage of Public Offering Price	Sales Charge as a Percentage of NAV
Less than $50,000	5.50%	5.82%
$50,000 but less than $100,000	4.50%	4.71%
$100,000 but less than $250,000	3.75%	3.90%
$250,000 but less than $500,000	2.50%	2.56%
$500,000 but less than $1 million	2.00%	2.04%
$1 million or greater 1	0.00%	0.00%

1 A contingent deferred sales charge of 0.75% of the redemption amount applies to Shares redeemed up to 24 months after purchase under certain investment programs where a financial intermediary received an advance payment on the transaction.

Class F Shares:
Purchase Amount	Sales Charge as a Percentage of Public Offering Price	Sales Charge as a Percentage of NAV
Less than $1 million	1.00%	1.01%
$1 million or greater	0.00%	0.00%

REDUCING THE SALES CHARGE WITH BREAKPOINT DISCOUNTS

Your investment may qualify for a reduction or elimination of the sales charge, also known as a breakpoint discount. The breakpoint discounts offered by the Fund are indicated in the tables above. You or your financial intermediary must notify the Fund's Transfer Agent of eligibility for any applicable breakpoint discount at the time of purchase.

In order to receive the applicable breakpoint discount, it may be necessary at the time of purchase for you to inform your financial intermediary or the Transfer Agent of the existence of other accounts in which there are holdings eligible to be aggregated to meet a sales charge breakpoint ("Qualifying Accounts"). Qualifying Accounts mean those Share accounts in the Federated funds held directly or through a financial intermediary or a through a single-participant retirement account by you, your spouse, your parents (if you are under age 21) and/or your children under age 21, which can be linked using tax identification numbers (TINs), social security numbers (SSNs) or broker identification numbers (BINs). Accounts held through 401(k) plans and similar multi-participant retirement plans, or through "Section 529" college savings plans or those accounts which cannot be linked using TINs, SSNs or BINs, are not Qualifying Accounts.

In order to verify your eligibility for a breakpoint discount, you will be required to provide to your financial intermediary or the Transfer Agent certain information on your New Account Form and may be required to provide account statements regarding Qualifying Accounts. If you purchase through a financial intermediary, you may be asked to provide additional information and records as required by the financial intermediary. Failure to provide proper notification or verification of eligibility for a breakpoint discount may result in your not receiving a breakpoint discount to which you are otherwise entitled. Breakpoint discounts apply only to your current purchase and do not apply retroactively to previous purchases. The sales charges applicable to the Shares offered in this prospectus, and the breakpoint discounts offered with respect to such Shares, are described in full in this prospectus. Because the prospectus is available on Federated's website free of charge, Federated does not disclose this information separately on the website.

Contingent upon notification to the Transfer Agent, the sales charge at purchase of Class A Shares and Class F Shares only, may be reduced or eliminated by:

Larger Purchases

• purchasing Class A or Class F Shares in greater quantities to reduce the applicable sales charge;
  

Concurrent and Accumulated Purchases

• combining concurrent purchases of and/or current investments in Class A, Class B, Class C, Class F and Class K Shares of any Federated fund made or held by Qualifying Accounts; the purchase amount used in determining the sales charge on your additional Share purchase will be calculated by multiplying the maximum public offering price times the number of Class A, Class B, Class C, Class F and Class K Shares of any Federated fund currently held in Qualifying Accounts and adding the dollar amount of your current purchase; or
  

Letter of Intent

• signing a letter of intent to purchase a qualifying amount of Class A or Class F Shares within 13 months. (Call your financial intermediary or the Fund for more information.) The Fund's custodian will hold Shares in escrow equal to the maximum applicable sales charge. If you complete the Letter of Intent, the Custodian will release the Shares in escrow to your account. If you do not fulfill the Letter of Intent, the Custodian will redeem the appropriate amount from the Shares held in escrow to pay the sales charges that were not applied to your purchases.
  

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PURCHASE RESTRICTIONS ON CLASS B AND CLASS C SHARES

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In order to maximize shareholder returns and minimize sales charges and marketing fees, an investor's purchases of Class B Shares are generally limited to $100,000 and an investor's purchases of Class C Shares are generally limited to $1,000,000. In applying the limit, the dollar amount of the current purchase is added to the product obtained by multiplying the maximum public offering price times the number of Class A, Class B, Class C, Class F and Class K Shares of any Federated fund currently held in linked Qualifying Accounts. If the sum of these two amounts would equal or exceed the limit, then the current purchase order will not be processed. Instead, the Distributor will attempt to contact the investor or the investor's financial intermediary to offer the opportunity to convert the order to Class A Shares.

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In addition, orders to purchase Class B Shares for employer-sponsored retirement plans will not be processed. Instead, the Distributor will attempt to contact the investor or the investor's financial intermediary to offer the opportunity to invest in an alternative share class. If your Shares are held on the books of the Fund in the name of a financial intermediary, you may be subject to rules of your financial intermediary that differ from those of the Fund.

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ELIMINATING THE SALES CHARGE

Contingent upon notification to the Transfer Agent, the sales charge will be eliminated when you purchase Shares:

• within 120 days of redeeming Shares of an equal or greater amount;
  
• through a financial intermediary that did not receive a dealer reallowance on the purchase;
  
• with reinvested dividends or capital gains;
  
• as a shareholder that originally became a shareholder of a Federated fund pursuant to the terms of an agreement and plan of reorganization which permits shareholders to acquire Shares at NAV;
  
• as a Federated Life Member (Federated shareholders who originally were issued shares through the "Liberty Account," which was an account for the Liberty Family of Funds on February 28, 1987, or who invested through an affinity group prior to August 1, 1987, into the Liberty Account) (Class A Shares only);
  
• as a Director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates, an employee of any financial intermediary that sells Shares according to a sales agreement with the Distributor, an immediate family member of these individuals or a trust, pension or profit-sharing plan for these individuals; or
  
• pursuant to the exchange privilege.
  

The sales charge will not be eliminated if you purchase Shares of the Fund through an exchange of shares of Liberty U.S. Government Money Market Trust unless your Liberty shares were acquired through an exchange of shares on which the sales charge had previously been paid.

SALES CHARGE WHEN YOU REDEEM

Your redemption proceeds may be reduced by a sales charge, commonly referred to as a contingent deferred sales charge (CDSC).

To keep the sales charge as low as possible, the Fund redeems your Shares in this order:

• Shares that are not subject to a CDSC; and
  
• Shares held the longest. (To determine the number of years your Shares have been held, include the time you held shares of other Federated funds that have been exchanged for Shares of this Fund.)
  

The CDSC is then calculated using the Share price at the time of purchase or redemption, whichever is lower.

Class A Shares:
If you make a purchase of Class A Shares in the amount of $1 million or more and your financial intermediary received an advance commission on the sale, you will pay a 0.75% CDSC on any such shares redeemed within 24 months of the purchase.
Class B Shares:
Shares Held Up To:		CDSC
1 Year		5.50%
2 Years		4.75%
3 Years		4.00%
4 Years		3.00%
5 Years		2.00%
6 Years		1.00%
7 Years or More		0.00%
Class C Shares:
You will pay a 1.00% CDSC if you redeem Shares within 12 months of the purchase date.
Class F Shares:
Purchase Amount	Shares Held	CDSC
Up to $2 million	4 years or less	1.00%
$2 million - but less than $5 million	2 years or less	0.50%
$5 million or more	1 year or less	0.25%

If your investment qualifies for a reduction or elimination of the CDSC, you or your financial intermediary must notify the Transfer Agent at the time of redemption. If the Transfer Agent is not notified, the CDSC will apply.

Contingent upon notification to the Transfer Agent, you will not be charged a CDSC when redeeming Shares:

• following the death of the last surviving shareholder on the account or your post-purchase disability, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986 (the beneficiary on an account with a Transfer on Death registration is deemed the last surviving shareholder on the account);
  

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• representing minimum required distributions from an IRA or other retirement plan to a shareholder who has attained the age of 70-1/2;
  

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• purchased within 120 days of a previous redemption of Shares, to the extent that the value of the Shares purchased was equal to or less than the value of the previous redemption;
  
• purchased by Directors, employees of the Fund, the Adviser, the Distributor and their affiliates, by employees of a financial intermediary that sells Shares according to a sales agreement with the Distributor, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
  
• purchased through a financial intermediary that did not receive an advance commission on the purchase;
  
• purchased with reinvested dividends or capital gains;
  
• redeemed by the Fund when it closes an account for not meeting the minimum balance requirements; or
  
• purchased pursuant to the exchange privilege if the Shares were held for the applicable CDSC holding period (the holding period on the shares purchased in the exchange will include the holding period of the shares sold in the exchange); or
  

Class B Shares Only

• which are qualifying redemptions of Class B Shares under a Systematic Withdrawal Program; or
  

Class F Shares Only

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• representing a total or partial distribution from a qualified plan, which does not include account transfers, rollovers, or redemptions for the purpose of reinvestment. For these purposes, qualified plan does not include an IRA, Keogh Plan or custodial account following retirement.
  

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How is the Fund Sold?

The Fund offers five Share classes: Class A Shares, Class B Shares, Class C Shares, Class F Shares, and Class K Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Class A Shares, Class B Shares, Class C Shares, and Class F Shares. All Share classes have different sales charges and other expenses which affect their performance. Contact your financial intermediary or call 1-800-341-7400 for more information concerning the other class.

The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus to individuals, directly or through financial intermediaries. Under the Distributor's Contract with the Fund, the Distributor offers Shares on a continuous, best-efforts basis. The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

Payments to Financial Intermediaries

The Fund and its affiliated service providers may pay fees as described below to financial intermediaries (such as broker-dealers, banks, investment advisers or third-party administrators) whose customers are shareholders of the Fund.

FRONT-END SALES CHARGE REALLOWANCES

The Distributor receives a front-end sales charge on certain Share sales. The Distributor pays a portion of this charge to financial intermediaries that are eligible to receive it (the "Dealer Reallowance") and retains any remaining portion of the front-end sales charge.

When a financial intermediary's customer purchases Shares, the financial intermediary may receive a Dealer Reallowance as follows:

Class A Shares:
Purchase Amount	Dealer Reallowance as a Percentage of Public Offering Price
Less than $50,000	5.00%
$50,000 but less than $100,000	4.00%
$100,000 but less than $250,000	3.25%
$250,000 but less than $500,000	2.25%
$500,000 but less than $1 million	1.80%
$1 million or greater	0.00%
Class F Shares:
Purchase Amount	Dealer Reallowance as a Percentage of Public Offering Price
Less than $1 million	1.00%
$1 million or greater	0.00%

ADVANCE COMMISSIONS

When a financial intermediary's customer purchases Shares, the financial intermediary may receive an advance commission as follows:

Class A Shares (for purchases over $1 million)
Purchase Amount	Advance Commission as a Percentage of Public Offering Price
First $1 million - $5 million	0.75%
Next $5 million - $20 million	0.50%
Over $20 million	0.25%

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Advance commissions are calculated on a year-by-year basis based on amounts invested during that year. Accordingly, with respect to additional purchase amounts, the advance commission breakpoint resets annually to the first breakpoint on the anniversary of the first purchase.

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Class A Share purchases under this program may be made by Letter of Intent or by combining concurrent purchases. The above advance commission will be paid only on those purchases that were not previously subject to a front-end sales charge or dealer advance commission. Certain retirement accounts may not be eligible for this program.

Class B Shares:
	Advance Commission as a Percentage of Public Offering Price
All Purchase Amounts	Up to 5.00%
Class C Shares:
All Purchase Amounts	1.00%
Class F Shares:
Purchase Amount
Less than $2 million	1.00%
$2 million but less than $5 million	0.50%
$5 million or greater	0.25%

RULE 12B-1 FEES

The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees of up to 0.75% of average net assets to the Distributor for the sale, distribution, administration and customer servicing of the Fund's Class B Shares and Class C Shares. When the Distributor receives Rule 12b-1 Fees, it may pay some or all of them to financial intermediaries whose customers purchase Shares. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.

SERVICE FEES

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The Fund may pay Service Fees of up to 0.25% of average net assets to financial intermediaries or to Federated Shareholder Services Company (FSSC), a subsidiary of Federated, for providing services to shareholders and maintaining shareholder accounts. Intermediaries that receive Service Fees may include a company affiliated with management of Federated. If a financial intermediary receives Service Fees on an account, it is not eligible to also receive Account Administration Fees on that same account.

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ACCOUNT ADMINISTRATION FEES

The Fund may pay Account Administration Fees of up to 0.25% of average net assets to banks that are not registered as broker-dealers or investment advisers for providing administrative services to the Funds and shareholders. If a financial intermediary receives Account Administration Fees on an account, it is not eligible to also receive Service Fees or Recordkeeping Fees on that same account.

RECORDKEEPING FEES

The Fund may pay Recordkeeping Fees on an average net assets basis or on a per account per year basis to financial intermediaries for providing recordkeeping services to the Funds and shareholders. If a financial intermediary receives Recordkeeping Fees on an account, it is not eligible to also receive Account Administration Fees or Networking Fees on that same account.

NETWORKING FEES

The Fund may reimburse Networking Fees on a per account per year basis to financial intermediaries for providing administrative services to the Funds and shareholders on certain non-omnibus accounts. If a financial intermediary receives Networking Fees on an account, it is not eligible to also receive Recordkeeping Fees on that same account.

ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES

The Distributor may pay out of its own resources amounts (including items of material value) to certain financial intermediaries that support the sale of Shares or provide services to Fund shareholders. The amounts of these payments could be significant, and may create an incentive for the financial intermediary or its employees or associated persons to recommend or sell Shares of the Fund to you. In some cases, such payments may be made by or funded from the resources of companies affiliated with the Distributor (including the Adviser). These payments are not reflected in the fees and expenses listed in the fee table section of the Fund's prospectus and described above because they are not paid by the Fund.

These payments are negotiated and may be based on such factors as the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; or the type and nature of services or support furnished by the financial intermediary. These payments may be in addition to payments made by the Fund to the financial intermediary under a Rule 12b-1 Plan and/or Service Fees arrangement. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated funds within the financial intermediary's organization by, for example, placement on a list of preferred or recommended funds, and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary's organization. You can ask your financial intermediary for information about any payments it receives from the Distributor or the Fund and any services provided.

How to Purchase Shares

You may purchase Shares through a financial intermediary, directly from the Fund or through an exchange from another Federated fund. The Fund reserves the right to reject any request to purchase or exchange Shares.

Where the Fund offers more than one Share class and you do not specify the class choice on your New Account Form or form of payment (e.g., Federal Reserve wire or check), you automatically will receive Class A Shares.

THROUGH A FINANCIAL INTERMEDIARY

• Establish an account with the financial intermediary; and
  
• Submit your purchase order to the financial intermediary before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). You will receive the next calculated NAV if the financial intermediary forwards the order to the Fund on the same day and the Fund receives payment within three business days. You will become the owner of Shares and receive dividends when the Fund receives your payment.
  

Financial intermediaries should send payments according to the instructions in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

• Establish your account with the Fund by submitting a completed New Account Form; and
  
• Send your payment to the Fund by Federal Reserve wire or check.
  

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You will become the owner of Shares and your Shares will be priced at the next calculated NAV after the Fund receives your wire or your check. If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees incurred by the Fund or State Street Bank and Trust Company, the Fund's transfer agent.

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An institution may establish an account and place an order by calling the Fund and the Shares will be priced at the next calculated NAV after the Fund receives the order.

By Wire

Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are restricted.

By Check

Make your check payable to The Federated Funds , note your account number on the check, and send it to:

The Federated Funds
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that requires a street address, send it to:

The Federated Funds
30 Dan Road
Canton, MA 02021

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund reserves the right to reject any purchase request. For example, to protect against check fraud the Fund may reject any purchase request involving a check that is not made payable to The Federated Funds (including, but not limited to, requests to purchase Shares using third-party checks), or involving temporary checks or credit card checks.

THROUGH AN EXCHANGE

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You may purchase Shares through an exchange from the same share class of another Federated fund. You must meet the minimum initial investment requirement for purchasing Shares (if applicable) and both accounts must have identical registrations.

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BY SYSTEMATIC INVESTMENT PROGRAM

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Once you have opened an account, you may automatically purchase additional Shares on a regular basis by completing the Systematic Investment Program section of the New Account Form or by contacting the Fund or your financial intermediary.

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BY AUTOMATED CLEARING HOUSE (ACH)

Once you have opened an account, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.

RETIREMENT INVESTMENTS

You may purchase Shares as retirement investments (such as qualified plans and IRAs or transfer or rollover of assets). Call your financial intermediary or the Fund for information on retirement investments. We suggest that you discuss retirement investments with your tax adviser. You may be subject to an annual IRA account fee.

How to Redeem and Exchange Shares

You should redeem or exchange Shares:

• through a financial intermediary if you purchased Shares through a financial intermediary; or
  
• directly from the Fund if you purchased Shares directly from the Fund.
  

Shares of the Fund may be redeemed for cash or exchanged for shares of the same class of other Federated funds on days on which the Fund computes its NAV. Redemption requests may be made by telephone or in writing.

THROUGH A FINANCIAL INTERMEDIARY

Submit your redemption or exchange request to your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive is based upon the next calculated NAV after the Fund receives the order from your financial intermediary.

DIRECTLY FROM THE FUND

By Telephone

You may redeem or exchange Shares by simply calling the Fund at 1-800-341-7400.

If you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time), you will receive a redemption amount based on that day's NAV.

By Mail

You may redeem or exchange Shares by sending a written request to the Fund.

You will receive a redemption amount based on the next calculated NAV after the Fund receives your written request in proper form.

Send requests by mail to:

The Federated Funds
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

The Federated Funds
30 Dan Road
Canton, MA 02021

All requests must include:

• Fund Name and Share Class, account number and account registration;
  
• amount to be redeemed or exchanged;
  
• signatures of all shareholders exactly as registered; and
  
• if exchanging, the Fund Name and Share Class, account number and account registration into which you are exchanging.
  

Call your financial intermediary or the Fund if you need special instructions.

Signature Guarantees

Signatures must be guaranteed by a financial institution which is a participant in a Medallion signature guarantee program if:

• your redemption will be sent to an address other than the address of record;
  
• your redemption will be sent to an address of record that was changed within the last 30 days;
  
• a redemption is payable to someone other than the shareholder(s) of record; or
  

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• exchanging (transferring) into another fund with a different shareholder registration.
  

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A Medallion signature guarantee is designed to protect your account from fraud. Obtain a Medallion signature guarantee from a bank or trust company, savings association, credit union or broker, dealer, or securities exchange member. A notary public cannot provide a signature guarantee.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The following payment options are available if you complete the appropriate section of the New Account Form or an Account Service Options Form. These payment options require a signature guarantee if they were not established when the account was opened:

• an electronic transfer to your account at a financial institution that is an ACH member; or
  
• wire payment to your account at a domestic commercial bank that is a Federal Reserve System member.
  

Redemption in Kind

Although the Fund intends to pay Share redemptions in cash, it reserves the right to pay the redemption price in whole or in part by a distribution of the Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed for up to seven days:

• to allow your purchase to clear (as discussed below);
  
• during periods of market volatility;
  
• when a shareholder's trade activity or amount adversely impacts the Fund's ability to manage its assets; or
  
• during any period when the Federal Reserve wire or applicable Federal Reserve banks are closed, other than customary weekend and holiday closings.
  

If you request a redemption of Shares recently purchased by check (including a cashier's check or certified check), money order, bank draft or ACH, your redemption proceeds may not be made available up to seven calendar days to allow the Fund to collect payment on the instrument used to purchase such Shares. If the purchase instrument does not clear, your purchase order will be canceled and you will be responsible for any losses incurred by the Fund as a result of your canceled order.

In addition, the right of redemption may be suspended, or the payment of proceeds may be delayed, during any period:

• when the NYSE is closed, other than customary weekend and holiday closings;
  
• when trading on the NYSE is restricted, as determined by the SEC; or
  
• in which an emergency exists, as determined by the SEC, so that disposal of the Fund's investments or determination of its NAV is not reasonably practicable.
  

You will not accrue interest or dividends on uncashed redemption checks from the Fund if those checks are undeliverable and returned to the Fund.

REDEMPTIONS FROM RETIREMENT ACCOUNTS

In the absence of your specific instructions, 10% of the value of your redemption from a retirement account in the Fund may be withheld for taxes. This withholding only applies to certain types of retirement accounts.

EXCHANGE PRIVILEGE

You may exchange Shares of the Fund into shares of the same class of another Federated fund. To do this, you must:

• ensure that the account registrations are identical;
  

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• meet any applicable minimum initial investment requirements; and
  

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• receive a prospectus for the fund into which you wish to exchange.
  

An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction.

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The Fund may modify or terminate the exchange privilege at any time. In addition, the Fund may terminate your exchange privilege if your exchange activity is found to be excessive under the Fund's frequent trading policies. See "Account and Share Information--Frequent Trading Policies."

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SYSTEMATIC WITHDRAWAL/EXCHANGE PROGRAM

You may automatically redeem or exchange Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your financial intermediary or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income. Generally, it is not advisable to continue to purchase Shares subject to a sales charge while redeeming Shares using this program.

Systematic Withdrawal Program (SWP) on Class B Shares

You will not be charged a CDSC on SWP redemptions if:

• you redeem 12% or less of your account value in a single year;
  
• you reinvest all dividends and capital gains distributions; and
  
• your account has at least a $10,000 balance when you establish the SWP. (You cannot aggregate multiple Class B Share accounts to meet this minimum balance.)
  

You will be subject to a CDSC on redemption amounts that exceed the 12% annual limit. In measuring the redemption percentage, your account is valued when you establish the SWP and then annually at calendar year-end. You can redeem monthly, quarterly, or semi-annually.

ADDITIONAL CONDITIONS

Telephone Transactions

The Fund will record your telephone instructions. If the Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.

Share Certificates

The Fund no longer issues share certificates. If you are redeeming or exchanging Shares represented by certificates previously issued by the Fund, you must return the certificates with your written redemption or exchange request. For your protection, send your certificates by registered or certified mail, but do not endorse them.

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases, redemptions and exchanges (except for systematic transactions). In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Fund declares and pays any dividends quarterly to shareholders. Dividends are paid to all shareholders invested in the Fund on the record date. The record date is the date on which a shareholder must officially own Shares in order to earn a dividend.

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In addition, the Fund pays any capital gains at least annually, and may make such special distributions of dividends and capital gains as may be necessary to meet applicable regulatory requirements. Your dividends and capital gains distributions will be automatically reinvested in additional Shares without a sales charge, unless you elect cash payments. Dividends may also be reinvested without sales charges in shares of any class of any other Federated fund of which you are already a shareholder.

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If you have elected to receive dividends and/or capital gain distributions in cash, and your check is returned by the postal or other delivery service as "undeliverable," or you do not respond to mailings from Federated with regard to uncashed distribution checks, your distribution option will automatically be converted to having all dividends and capital gains reinvested in additional shares. No interest will accrue on amounts represented by uncashed distribution checks.

If you purchase Shares just before the record date for a dividend or capital gain distribution, you will pay the full price for the Shares and then receive a portion of the price back in the form of a taxable distribution, whether or not you reinvest the distribution in Shares. Therefore, you should consider the tax implications of purchasing Shares shortly before the record date for a dividend or capital gain. Contact your financial intermediary or the Fund for information concerning when dividends and capital gains will be paid.

ACCOUNTS WITH LOW BALANCES

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Due to the high cost of maintaining accounts with low balances, accounts may be closed if redemptions or exchanges cause the account balance to fall below $1,500. Before an account is closed, you will be notified and allowed at least 30 days to purchase additional Shares to meet the minimum.

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TAX INFORMATION

The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. Fund distributions of dividends and capital gains are taxable to you whether paid in cash or reinvested in the Fund. Dividends are taxable at different rates depending on the source of dividend income. Capital gains are taxable at different rates depending upon the length of time the Fund holds its assets.

Fund distributions are expected to be both dividends and capital gains. Redemptions and exchanges are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.

FREQUENT TRADING POLICIES

Frequent or short-term trading into and out of the Fund can have adverse consequences for the Fund and shareholders who use the Fund as a long-term investment vehicle. Such trading in significant amounts can disrupt the Fund's investment strategies (e.g., by requiring it to sell investments at inopportune times or maintain excessive short-term or cash positions to support redemptions), increase brokerage and administrative costs and affect the timing and amount of taxable gains distributed by the Fund. Investors engaged in such trading may also seek to profit by anticipating changes in the Fund's NAV in advance of the time as of which NAV is calculated.

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The Fund's Board has approved policies and procedures intended to discourage excessive frequent or short-term trading of the Fund's Shares. The Fund's fair valuation procedures are intended in part to discourage short-term trading strategies by reducing the potential for these strategies to succeed. See "What Do Shares Cost?". The Fund monitors trading in Fund Shares in an effort to identify disruptive trading activity. The Fund monitors trades into and out of the Fund within a period of 30 days or less. The size of Share transactions subject to monitoring varies. However, where it is determined that a shareholder has exceeded the detection amounts twice within a period of 12 months, the shareholder will be precluded from making further purchases or exchanges of Fund Shares. The Fund may also monitor trades into and out of the Fund over periods longer than 30 days, and if potentially disruptive trading activity is detected, the shareholder will be precluded from making further purchases or exchanges of Fund Shares. Whether or not the specific monitoring limits are exceeded, the Fund's management or the Adviser may determine from the amount, frequency or pattern of purchases and redemptions or exchanges that a shareholder is engaged in excessive trading that is or could be detrimental to the Fund and other shareholders and may preclude the shareholder from making further purchases or exchanges of Fund Shares. No matter how the Fund defines its limits on frequent trading of Fund Shares, other purchases and sales of Fund Shares may have adverse effects on the management of the Fund's portfolio and its performance.

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The Fund's frequent trading restrictions do not apply to purchases and sales of Fund Shares by other Federated funds. These funds impose the same frequent trading restrictions as the Fund at their shareholder level. In addition, allocation changes of the investing Federated fund are monitored, and the managers of the recipient fund must determine that there is no disruption to their management activity. The intent of this exception is to allow investing fund managers to accommodate cash flows that result from non-abusive trading in the investing fund, without being stopped from such trading because the aggregate of such trades exceeds the monitoring limits. Nonetheless, as with any trading in Fund Shares, purchases and redemptions of Fund Shares by other Federated funds could adversely affect the management of the Fund's portfolio and its performance.

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The Fund's objective is that its restrictions on short-term trading should apply to all shareholders that are subject to the restrictions, regardless of the number or type of accounts in which Shares are held. However, the Fund anticipates that limitations on its ability to identify trading activity to specific shareholders, including where shares are held through intermediaries in multiple or omnibus accounts, will mean that these restrictions may not be able to be applied uniformly in all cases.

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PORTFOLIO HOLDINGS INFORMATION

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Information concerning the Fund's portfolio holdings is available in the "Products" section of Federated's website at FederatedInvestors.com. A complete listing of the Fund's portfolio holdings as of the end of each calendar quarter is posted on the website 30 days (or the next business day) after the end of the quarter and remains posted until replaced by the information for the succeeding quarter. Summary portfolio composition information as of the close of each month (except for recent purchase and sale transaction information, which is updated quarterly) is posted on the website 15 days (or the next business day) after month-end and remains until replaced by the information for the succeeding month. The summary portfolio composition information may include identification of the Fund's top ten holdings, recent purchase and sale transactions and a percentage breakdown of the portfolio by sector.

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To access this information from the "Products" section of the website, click on the "Portfolio Holdings" link under "Related Information" and select the appropriate link opposite the name of the Fund, or select the name of the Fund, and from the Fund's page click on the "Portfolio Holdings" or "Composition" link.

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You may also access portfolio information as of the end of the Fund's fiscal quarters from the "Products" section of the website. The Fund's annual and semi-annual reports, which contain complete listings of the Fund's portfolio holdings as of the end of the Fund's second and fourth fiscal quarters, may be accessed by selecting the "Prospectuses and Regulatory Reports" link under "Related Information" and selecting the link to the appropriate PDF. Complete listings of the Fund's portfolio holdings as of the end of the Fund's first and third fiscal quarters may be accessed by selecting "Portfolio Holdings" from the "Products" section and then selecting the appropriate link opposite the name of the Fund. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC's website at www.sec.gov.

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Who Manages the Fund?

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The Board governs the Fund. The Board selects and oversees the Adviser, Federated Equity Management Company of Pennsylvania. The Adviser manages the Fund's assets, including buying and selling portfolio securities. Federated Advisory Services Company (FASC), an affiliate of the Adviser, provides research, quantitative analysis, equity trading and transaction settlement and certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund. The address of the Adviser and FASC is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

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The Adviser and other subsidiaries of Federated advise approximately 148 equity, fixed-income, and money market mutual funds as well as a variety of customized separately managed accounts, which totaled approximately $302 billion in assets as of December 31, 2007. Federated was established in 1955 and is one of the largest investment managers in the United States with approximately 1,270 employees. Federated provides investment products to nearly 5,500 investment professionals and institutions.

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PORTFOLIO MANAGEMENT INFORMATION

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Kevin R. McCloskey

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Kevin R. McCloskey has been a Portfolio Manager of the Fund since March 2001. Mr. McCloskey joined Federated in 1999 as a Portfolio Manager and is a Vice President of the Fund's Adviser. From September 1994 to July 1999, he served as a portfolio manager, and from January 1994 to September 1994, he served as an investment/quantitative analyst at Killian Asset Management Corporation. Mr. McCloskey is a Chartered Financial Analyst. He received his M.B.A. from the University of Dayton.

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The Fund's SAI provides additional information about the Portfolio Manager's compensation, management of other accounts, and ownership of securities in the Fund.

ADVISORY FEES

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The Fund's investment advisory contract provides for payment to the Adviser of an annual investment advisory fee of 0.55% of the Fund's average daily net assets plus 4.50% of the Fund's gross income. The Adviser may voluntarily waive a portion of its fee or reimburse the Fund for certain operating expenses.

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Gross income includes, in general, discounts earned on U.S. Treasury bills and agency discount notes, interest earned on all interest-bearing obligations, and dividend income recorded on the ex-dividend date but does not include capital gains or losses or reduction for expenses.

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A discussion of the Board's review of the Fund's investment advisory contract is available in the Fund's Annual Report dated March 31, 2008.

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Legal Proceedings

Since October 2003, Federated and related entities (collectively, "Federated"), and various Federated funds ("Funds"), have been named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. 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. These lawsuits began to be filed shortly after Federated's first public announcement that it had received requests for information on shareholder trading activities in the Funds from the SEC, the Office of the New York State Attorney General ("NYAG"), and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. Specifically, the SEC and NYAG settled proceedings against three Federated subsidiaries involving undisclosed market timing arrangements and late trading. The SEC made findings: that Federated Investment Management Company ("FIMC"), an SEC-registered investment adviser to various Funds, and Federated Securities Corp., an SEC-registered broker-dealer and distributor for the Funds, violated provisions of the Investment Advisers Act and Investment Company Act by approving, but not disclosing, three market timing arrangements, or the associated conflict of interest between FIMC and the funds involved in the arrangements, either to other fund shareholders or to the funds' board; and that Federated Shareholder Services Company, formerly an SEC-registered transfer agent, failed to prevent a customer and a Federated employee from late trading in violation of provisions of the Investment Company Act. The NYAG found that such conduct violated provisions of New York State law. Federated entered into the settlements without admitting or denying the regulators' findings. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay disgorgement and a civil money penalty in the aggregate amount of an additional $72 million and, among other things, agreed that it would not serve as investment adviser to any registered investment company unless: (i) at least 75% of the fund's directors are independent of Federated; (ii) the chairman of each such fund is independent of Federated; (iii) no action may be taken by the fund's board or any committee thereof unless approved by a majority of the independent trustees of the fund or committee, respectively; and (iv) the fund appoints a "senior officer" who reports to the independent trustees and is responsible for monitoring compliance by the fund with applicable laws and fiduciary duties and for managing the process by which management fees charged to a fund are approved. The settlements are described in Federated's announcement which, along with previous press releases and related communications on those matters, is available in the "About Us" section of Federated's website at FederatedInvestors.com ..

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Federated entities have also been named as defendants in several additional lawsuits that are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees.

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The Board of the Funds retained the law firm of Dickstein Shapiro LLP to represent the Funds in each of the lawsuits described in the preceding two paragraphs. Federated and the Funds, and their respective counsel, have been defending this litigation, and none of the Funds remains a defendant in any of the lawsuits (though some could potentially receive any recoveries as nominal defendants). Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys' fees, and expenses, and future potential similar suits is uncertain. 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, 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.

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Financial Information

FINANCIAL HIGHLIGHTS

The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per Share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.

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The information for each of the three years in the period ended March 31, 2008 has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose report, along with the Fund's audited financial statements, is included in the Annual Report. The information for prior years was audited by, Deloitte & Touche LLP, another independent registered public accounting firm.

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Financial Highlights - Class A Shares

(For a Share Outstanding Throughout Each Period)

Year Ended March 31	2008			2007			2006	1		2005			2004
Net Asset Value, Beginning of Period	$23.75			$24.02			$24.46			$23.56			$17.23
Income From Investment Operations:
Net investment income	0.20	2		0.25	2		0.27	2		0.26			0.24
Net realized and unrealized gain (loss) on investments	(3.88	)		2.21			1.85			0.98			6.33
TOTAL FROM INVESTMENT OPERATIONS	(3.68	)		2.46			2.12			1.24			6.57
Less Distributions:
Distributions from net investment income	(0.19	)		(0.27	)		(0.28	)		(0.34	)		(0.24	)
Distributions from net realized gain on investments	(4.56	)		(2.46	)		(2.28	)		- --			- --
TOTAL DISTRIBUTIONS	(4.75	)		(2.73	)		(2.56	)		(0.34	)		(0.24	)
Net Asset Value, End of Period	$15.32			$23.75			$24.02			$24.46			$23.56
Total Return 3	(17.89	)%		10.26	%		9.09	%		5.29	% 4		38.28	%
Ratios to Average Net Assets:
Net expenses	1.18	% 5		1.17	% 5		1.17	% 5		1.16	% 5		1.21	% 5
Net investment income	0.92	%		1.03	%		1.10	%		1.11	%		1.12	%
Expense waiver/reimbursement 6	0.01	%		0.00	% 7		0.00	% 7		0.00	% 7		0.00	% 7
Supplemental Data:
Net assets, end of period (000 omitted)	$924,098		$1,462,078			$1,528,974			$1,577,454			$1,562,277
Portfolio turnover	96	%		55	%		49	%		58	%		29	%

1 Beginning with the year ended March 31, 2006, the Fund was audited by Ernst & Young LLP. The previous years were audited by another independent registered public accounting firm.

2 Per share numbers have been calculated using the average shares method.

3 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.

4 During the period, the Fund was reimbursed by the Adviser, which had an impact of 0.04% on the total return.

5 The net expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements. The net expense ratios for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 are 1.17%, 1.16%, 1.16%, 1.16% and 1.19%, respectively, after taking into account these expense reductions.

6 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

7 Represents less than 0.01%.

Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2008, which can be obtained free of charge.

Financial Highlights - Class B Shares

(For a Share Outstanding Throughout Each Period)

Year Ended March 31	2008			2007			2006	1		2005			2004
Net Asset Value, Beginning of Period	$23.83			$24.08			$24.52			$23.61			$17.22
Income From Investment Operations:
Net investment income	0.02	2		0.06	2		0.07	2		0.11			0.09
Net realized and unrealized gain (loss) on investments	(3.88	)		2.22			1.85			0.96			6.31
TOTAL FROM INVESTMENT OPERATIONS	(3.86	)		2.28			1.92			1.07			6.40
Less Distributions:
Distributions from net investment income	(0.01	)		(0.07	)		(0.08	)		(0.16	)		(0.01	)
Distributions from net realized gain on investments	(4.56	)		(2.46	)		(2.28	)		- --			- --
TOTAL DISTRIBUTIONS	(4.57	)		(2.53	)		(2.36	)		(0.16	)		(0.01	)
Net Asset Value, End of Period	$15.40			$23.83			$24.08			$24.52			$23.61
Total Return 3	(18.52	)%		9.41	%		8.20	%		4.52	% 4		37.19	%
Ratios to Average Net Assets:
Net expenses	1.97	% 5		1.96	% 5		1.96	% 5		1.92	% 5		1.96	% 5
Net investment income	0.11	%		0.23	%		0.30	%		0.34	%		0.38	%
Expense waiver/reimbursement 6	0.01	%		0.00	% 7		0.00	% 7		0.00	% 7		0.00	% 7
Supplemental Data:
Net assets, end of period (000 omitted)	$179,738		$391,359			$589,994			$798,138			$991,586
Portfolio turnover	96	%		55	%		49	%		58	%		29	%

1 Beginning with the year ended March 31, 2006, the Fund was audited by Ernst & Young LLP. The previous years were audited by another independent registered public accounting firm.

2 Per share numbers have been calculated using the average shares method.

3 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.

4 During the period, the Fund was reimbursed by the Adviser, which had an impact of 0.04% on the total return.

5 The net expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements. The net expense ratios for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 are 1.96%, 1.95%, 1.94%, 1.92% and 1.94%, respectively, after taking into account these expense reductions.

6 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

7 Represents less than 0.01%.

Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2008, which can be obtained free of charge.

Financial Highlights - Class C Shares

(For a Share Outstanding Throughout Each Period)

Year Ended March 31	2008			2007			2006	1		2005			2004
Net Asset Value, Beginning of Period	$23.83			$24.09			$24.53			$23.63			$17.22
Income From Investment Operations:
Net investment income	0.03	2		0.07	2		0.08	2		0.09			0.09
Net realized and unrealized gain (loss) on investments	(3.88	)		2.21			1.85			0.97			6.33
TOTAL FROM INVESTMENT OPERATIONS	(3.85	)		2.28			1.93			1.06			6.42
Less Distributions:
Distributions from net investment income	(0.03	)		(0.08	)		(0.09	)		(0.16	)		(0.01	)
Distributions from net realized gain on investments	(4.56	)		(2.46	)		(2.28	)		- --			- --
TOTAL DISTRIBUTIONS	(4.59	)		(2.54	)		(2.37	)		(0.16	)		(0.01	)
Net Asset Value, End of Period	$15.39			$23.83			$24.09			$24.53			$23.63
Total Return 3	(18.49	)%		9.41	%		8.24	%		4.48	% 4		37.26	%
Ratios to Average Net Assets:
Net expenses	1.95	% 5		1.94	% 5		1.94	% 5		1.93	% 5		1.96	% 5
Net investment income	0.15	%		0.27	%		0.33	%		0.33	%		0.37	%
Expense waiver/reimbursement 6	0.01	%		0.00	% 7		0.00	% 7		0.00	% 7		0.00	% 7
Supplemental Data:
Net assets, end of period (000 omitted)	$63,026		$104,351			$111,946			$121,085			$126,806
Portfolio turnover	96	%		55	%		49	%		58	%		29	%

1 Beginning with the year ended March 31, 2006, the Fund was audited by Ernst & Young LLP. The previous years were audited by another independent registered public accounting firm.

2 Per share numbers have been calculated using the average shares method.

3 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.

4 During the period, the Fund was reimbursed by the Adviser, which had an impact of 0.04% on the total return.

5 The net expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements. The net expense ratios for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 are 1.94%, 1.93%, 1.93%, 1.93% and 1.94%, respectively, after taking into account these expense reductions.

6 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

7 Represents less than 0.01%.

Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2008, which can be obtained free of charge.

Financial Highlights y- Class F Shares

(For a Share Outstanding Throughout Each Period)

Year Ended March 31	2008			2007			2006 1			2005			2004
Net Asset Value, Beginning of Period	$23.71			$23.98			$24.42			$23.53			$17.21
Income From Investment Operations:
Net investment income	0.20	2		0.25	2		0.27	2		0.28			0.25
Net realized and unrealized gain (loss) on investments	(3.87	)		2.22			1.85			0.95			6.31
TOTAL FROM INVESTMENT OPERATIONS	(3.67	)		2.47			2.12			1.23			6.56
Less Distributions:
Distributions from net investment income	(0.20	)		(0.28	)		(0.28	)		(0.34	)		(0.24	)
Distributions from net realized gain on investments	(4.56	)		(2.46	)		(2.28	)		- --			- --
TOTAL DISTRIBUTIONS	(4.76	)		(2.74	)		(2.56	)		(0.34	)		(0.24	)
Net Asset Value, End of Period	$15.28			$23.71			$23.98			$24.42			$23.53
Total Return 3	(17.89	)%		10.31	% 4		9.11	%		5.27	% 5		38.29	%
Ratios to Average Net Assets:
Net expenses	1.15	% 6		1.15	% 6		1.16	% 6		1.16	% 6		1.19	% 6
Net investment income	0.95	%		1.05	%		1.11	%		1.11	%		1.15	%
Expense waiver/reimbursement 7	0.01	%		0.00	% 8		0.00	% 8		0.00	% 8		0.00	% 8
Supplemental Data:
Net assets, end of period (000 omitted)	$31,408		$50,202			$59,611			$66,364			$71,908
Portfolio turnover	96	%		55	%		49	%		58	%		29	%

1 Beginning with the year ended March 31, 2006, the Fund was audited by Ernst & Young LLP. The previous years were audited by another independent registered public accounting firm.

2 Per share numbers have been calculated using the average shares method.

3 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.

4 During the period, the Fund received a regulatory settlement from an unaffiliated third party, which had an impact of 0.05% on the total return.

5 During the period, the Fund was reimbursed by the Adviser, which had an impact of 0.05% on the total return.

6 The net expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements. The net expense ratios for the years ended March 31, 2008, 2007, 2006, 2005 and 2004 are 1.14%, 1.14%, 1.14%, 1.15% and 1.17%, respectively, after taking into account these expense reductions.

7 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

8 Represents less than 0.01%.

Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2008, which can be obtained free of charge.

Appendix A: Hypothetical Investment and Expense Information

The following charts provide additional hypothetical information about the effect of the Fund's expenses, including investment advisory fees and other Fund costs, on the Fund's assumed returns over a 10-year period. Each chart shows the estimated expenses that would be incurred in respect of a hypothetical investment of $10,000, assuming a 5% return each year, and no redemption of Shares. Each chart also assumes that the Fund's annual expense ratio stays the same throughout the 10-year period (except for Class B Shares, which convert to Class A Shares after you have held them for eight years) and that all dividends and distributions are reinvested. The annual expense ratio used in each chart is the same as stated in the "Fees and Expenses" table of this prospectus (and thus may not reflect any fee waiver or expense reimbursement currently in effect). The maximum amount of any sales charge that might be imposed on the purchase of Shares (and deducted from the hypothetical initial investment of $10,000; the "Front-End Sales Charge") is reflected in the "Hypothetical Expenses" column. The hypothetical investment information does not reflect the effect of charges (if any) normally applicable to redemptions of Shares (e.g., deferred sales charges, redemption fees). Mutual fund returns, as well as fees and expenses, may fluctuate over time, and your actual investment returns and total expenses may be higher or lower than those shown below.

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FEDERATED AMERICAN LEADERS FUND, INC.: CLASS A SHARES
ANNUAL EXPENSE RATIO: 1.18%
MAXIMUM FRONT-END SALES CHARGE: 5.50%

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<R>Year</R>	<R>Hypothetical Beginning Investment</R>	<R>Hypothetical Performance Earnings</R>	<R>Investment After Returns</R>	<R>Hypothetical Expenses </R>	<R>Hypothetical Ending Investment</R>
<R>1</R>	<R>$10,000.00</R>	<R>$472.50</R>	<R>$9,922.50</R>	<R>$663.64</R>	<R>$9,810.99</R>
<R>2</R>	<R>$9,810.99</R>	<R>$490.55</R>	<R>$10,301.54</R>	<R>$117.98</R>	<R>$10,185.77</R>
<R>3</R>	<R>$10,185.77</R>	<R>$509.29</R>	<R>$10,695.06</R>	<R>$122.49</R>	<R>$10,574.87</R>
<R>4</R>	<R>$10,574.87</R>	<R>$528.74</R>	<R>$11,103.61</R>	<R>$127.17</R>	<R>$10,978.83</R>
<R>5</R>	<R>$10,978.83</R>	<R>$548.94</R>	<R>$11,527.77</R>	<R>$132.02</R>	<R>$11,398.22</R>
<R>6</R>	<R>$11,398.22</R>	<R>$569.91</R>	<R>$11,968.13</R>	<R>$137.07</R>	<R>$11,833.63</R>
<R>7</R>	<R>$11,833.63</R>	<R>$591.68</R>	<R>$12,425.31</R>	<R>$142.30</R>	<R>$12,285.67</R>
<R>8</R>	<R>$12,285.67</R>	<R>$614.28</R>	<R>$12,899.95</R>	<R>$147.74</R>	<R>$12,754.98</R>
<R>9</R>	<R>$12,754.98</R>	<R>$637.75</R>	<R>$13,392.73</R>	<R>$153.38</R>	<R>$13,242.22</R>
<R>10</R>	<R>$13,242.22</R>	<R>$662.11</R>	<R>$13,904.33</R>	<R>$159.24</R>	<R>$13,748.07</R>
<R>Cumulative</R>		<R>$5,625.75</R>		<R>$1,903.03</R>

<R>

FEDERATED AMERICAN LEADERS FUND, INC.: CLASS B SHARES
ANNUAL EXPENSE RATIO: 1.97%
MAXIMUM FRONT-END SALES CHARGE: NONE

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<R>Year</R>	<R>Hypothetical Beginning Investment</R>	<R>Hypothetical Performance Earnings</R>	<R>Investment After Returns</R>	<R>Hypothetical Expenses </R>	<R>Hypothetical Ending Investment</R>
<R>1</R>	<R>$10,000.00</R>	<R>$500.00</R>	<R>$10,500.00</R>	<R>$199.98</R>	<R>$10,303.00</R>
<R>2</R>	<R>$10,303.00</R>	<R>$515.15</R>	<R>$10,818.15</R>	<R>$206.04</R>	<R>$10,615.18</R>
<R>3</R>	<R>$10,615.18</R>	<R>$530.76</R>	<R>$11,145.94</R>	<R>$212.29</R>	<R>$10,936.82</R>
<R>4</R>	<R>$10,936.82</R>	<R>$546.84</R>	<R>$11,483.66</R>	<R>$218.72</R>	<R>$11,268.21</R>
<R>5</R>	<R>$11,268.21</R>	<R>$563.41</R>	<R>$11,831.62</R>	<R>$225.35</R>	<R>$11,609.64</R>
<R>6</R>	<R>$11,609.64</R>	<R>$580.48</R>	<R>$12,190.12</R>	<R>$232.17</R>	<R>$11,961.41</R>
<R>7</R>	<R>$11,961.41</R>	<R>$598.07</R>	<R>$12,559.48</R>	<R>$239.21</R>	<R>$12,323.84</R>
<R>8</R>	<R>$12,323.84</R>	<R>$616.19</R>	<R>$12,940.03</R>	<R>$246.46</R>	<R>$12,697.25</R>
<R>Converts from Class B to Class A</R>				<R>Annual Expense Ratio: 1.18%</R>
<R>9</R>	<R>$12,697.25</R>	<R>$634.86</R>	<R>$13,332.11</R>	<R>$152.69</R>	<R>$13,182.28</R>
<R>10</R>	<R>$13,182.28</R>	<R>$659.11</R>	<R>$13,841.39</R>	<R>$158.52</R>	<R>$13,685.84</R>
<R>Cumulative</R>		<R>$5,744.87</R>		<R>$2,091.43</R>

<R>

FEDERATED AMERICAN LEADERS FUND, INC.: CLASS C SHARES
ANNUAL EXPENSE RATIO: 1.96%
MAXIMUM FRONT-END SALES CHARGE: NONE

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<R>Year</R>	<R>Hypothetical Beginning Investment</R>	<R>Hypothetical Performance Earnings</R>	<R>Investment After Returns</R>	<R>Hypothetical Expenses </R>	<R>Hypothetical Ending Investment</R>
<R>1</R>	<R>$10,000.00</R>	<R>$500.00</R>	<R>$10,500.00</R>	<R>$198.98</R>	<R>$10,304.00</R>
<R>2</R>	<R>$10,304.00</R>	<R>$515.20</R>	<R>$10,819.20</R>	<R>$205.03</R>	<R>$10,617.24</R>
<R>3</R>	<R>$10,617.24</R>	<R>$530.86</R>	<R>$11,148.10</R>	<R>$211.26</R>	<R>$10,940.00</R>
<R>4</R>	<R>$10,940.00</R>	<R>$547.00</R>	<R>$11,487.00</R>	<R>$217.68</R>	<R>$11,272.58</R>
<R>5</R>	<R>$11,272.58</R>	<R>$563.63</R>	<R>$11,836.21</R>	<R>$224.30</R>	<R>$11,615.27</R>
<R>6</R>	<R>$11,615.27</R>	<R>$580.76</R>	<R>$12,196.03</R>	<R>$231.12</R>	<R>$11,968.37</R>
<R>7</R>	<R>$11,968.37</R>	<R>$598.42</R>	<R>$12,566.79</R>	<R>$238.15</R>	<R>$12,332.21</R>
<R>8</R>	<R>$12,332.21</R>	<R>$616.61</R>	<R>$12,948.82</R>	<R>$245.39</R>	<R>$12,707.11</R>
<R>9</R>	<R>$12,707.11</R>	<R>$635.36</R>	<R>$13,342.47</R>	<R>$252.85</R>	<R>$13,093.41</R>
<R>10</R>	<R>$13,093.41</R>	<R>$654.67</R>	<R>$13,748.08</R>	<R>$260.53</R>	<R>$13,491.45</R>
<R>Cumulative</R>		<R>$5,742.51</R>		<R>$2,285.29</R>

FEDERATED AMERICAN LEADERS FUND, INC.: CLASS F SHARES
ANNUAL EXPENSE RATIO: 1.16%
MAXIMUM FRONT-END SALES CHARGE: 1.00%

Year	Hypothetical Beginning Investment	Hypothetical Performance Earnings	Investment After Returns	Hypothetical Expenses	Hypothetical Ending Investment
1	$10,000.00	$495.00	$10,395.00	$217.04	$10,280.16
2	$10,280.16	$514.01	$10,794.17	$121.54	$10,674.92
3	$10,674.92	$533.75	$11,208.67	$126.21	$11,084.84
4	$11,084.84	$554.24	$11,639.08	$131.05	$11,510.50
5	$11,510.50	$575.53	$12,086.03	$136.09	$11,952.50
6	$11,952.50	$597.63	$12,550.13	$141.31	$12,411.48
7	$12,411.48	$620.57	$13,032.05	$146.74	$12,888.08
8	$12,888.08	$644.40	$13,532.48	$152.37	$13,382.98
9	$13,382.98	$669.15	$14,052.13	$158.22	$13,896.89
10	$13,896.89	$694.84	$14,591.73	$164.30	$14,430.53
Cumulative		$5,899.12		$1,494.87

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A Statement of Additional Information (SAI) dated May 31, 2008, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report's Management's Discussion of Fund Performance discusses market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year. The SAI contains a description of the Fund's policies and procedures with respect to the disclosure of its portfolio securities. To obtain the SAI, Annual Report, Semi-Annual Report and other information without charge, and to make inquiries, call your financial intermediary or the Fund at 1-800-341-7400.

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These documents, as well as additional information about the Fund (including portfolio holdings, performance and distributions), are also available on Federated's website at FederatedInvestors.com.

You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's website at www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.

Investment Company Act File No. 811-1704

Federated
World-Class Investment Manager

Federated American Leaders Fund, Inc.
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Contact us at FederatedInvestors.com
or call 1-800-341-7400.

Federated Securities Corp., Distributor

Cusip 313914103
Cusip 313914202
Cusip 313914301
Cusip 313914400

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G01085-01 (5/08)

</R>

Federated is a registered mark of Federated Investors, Inc. 2008 (c)Federated Investors, Inc.

Federated
World-Class Investment Manager

Federated American Leaders Fund, Inc.

PROSPECTUS

<R>

May 31, 2008

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CLASS K SHARES

A mutual fund seeking growth of capital and of income by investing in common stocks and other securities of high-quality companies.

As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

Not FDIC Insured * May Lose Value * No Bank Guarantee

CONTENTS

Risk/Return Summary 1

What are the Fund's Fees and Expenses? 5

What are the Fund's Investment Strategies? 6

What are the Principal Securities in Which the Fund Invests? 8

What are the Specific Risks of Investing in the Fund? 11

What Do Shares Cost? 13

How is the Fund Sold? 15

Payments to Financial Intermediaries 16

How to Purchase Shares 17

How to Redeem and Exchange Shares 19

Account and Share Information 23

Who Manages the Fund? 26

Legal Proceedings 27

Financial Information 29

Appendix A: Hypothetical Investment and Expense Information 31

Risk/Return Summary

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?

The Fund's investment objective is to seek growth of capital and of income by concentrating the area of investment decision in the securities of high-quality companies. While there is no assurance that the Fund will achieve its investment objective, it endeavors to do so by following the strategies and policies described in this prospectus.

WHAT ARE THE FUND'S MAIN INVESTMENT STRATEGIES?

<R>

The Fund pursues its investment objective by using the value style of investing to select primarily equity securities of large capitalization companies that are in the top 50% of their industry in terms of revenues, are characterized by sound management, and have the ability to finance expected growth. Large capitalization companies are defined as those with market capitalizations similar to companies in the Standard & Poor's 500 Citigroup Value Index, which as of February 28, 2008 was in excess of $4 billion.

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<R>

The Fund may invest in derivative contracts to implement its investment strategies as more fully described below.

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WHAT ARE THE MAIN RISKS OF INVESTING IN THE FUND?

All mutual funds take investment risks. Therefore, it is possible to lose money by investing in the Fund. The primary factors that may reduce the Fund's returns include:

• Stock Market Risks. The value of equity securities in the Fund's portfolio will fluctuate and, as a result, the Fund's Share price may decline suddenly or over a sustained period of time.
  
• Risks Relating to Investing for Value. Due to the Fund's value style of investing, the Fund's Share price may lag that of other funds using a different investment style.
  
• Sector Risks. Because the Fund may allocate relatively more of its assets to one or more industry sectors comprising the Standard & Poor's 500 Index (S&P 500) than to other sectors of the Index, the Fund's performance will be more susceptible to any developments which affect the sectors emphasized by the Fund.
  
• Risks of Investing in ADRs and Domestically Traded Securities of Foreign Issuers. Because the Fund may invest in American Depositary Receipts (ADRs) and other domestically traded securities of foreign companies, the Fund's Share price may be affected by foreign economic and political conditions, taxation policies, and accounting and auditing standards.
  

<R>

• Risks of Investing in Derivative Contracts and Hybrid Instruments. Derivative contracts and hybrid instruments involve risks different from, or possibly greater than, risks associated with investing directly in securities and other traditional investments. Specific risk issues related to the use of such contracts and instruments include valuation and tax issues, increased potential for losses and/or costs to the Fund, and a potential reduction in gains to the Fund. Each of these issues is described in greater detail in this prospectus. Derivative contracts and hybrid instruments may also involve other risks described in this prospectus or the Fund's Statement of Additional Information (SAI), such as stock market, interest rate, credit, currency, liquidity and leverage risks.
  

</R>
<R>

The Shares offered by this prospectus are not deposits or obligations of any bank, are not endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

</R>

Risk/Return Bar Chart and Table

<R>

The Fund's Class K Shares commenced operations on April 8, 2003. The Fund offers four other classes of shares, Class A Shares, Class B Shares, Class C Shares and Class F Shares. For the period prior to the commencement of operations of the Class K Shares, the performance information shown in the bar chart below is for the Fund's Class A Shares, adjusted to reflect the expenses of the Class K Shares. This performance information will help you to analyze the Fund's investment risks in light of its historical returns. The bar chart shows the variability of the Fund's Class K Shares total returns on a calendar year-by-year basis. The Average Annual Total Return table shows returns averaged over the stated periods, and includes comparative performance information. The Fund's performance will fluctuate, and past performance (before taxes) is no guarantee of future results.

</R>

The Fund's Class K Shares are sold without a sales charge (load). The total returns shown in the bar chart above are based upon net asset value.

<R>

The Fund's Class K Shares total return for the three-month period from January 1, 2008 to March 31, 2008 was (11.87)%.

</R>
<R>

Within the period shown in the bar chart, the Fund's Class K Shares highest quarterly return was 16.69% (quarter ended June 30, 2003). Its lowest quarterly return was (19.82)% (quarter ended September 30, 2002).

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Average Annual Total Return Table

<R>

As previously discussed, the Fund's Class K Shares commenced operations on April 8, 2003. Accordingly, for the period prior to the commencement of operations, the performance information shown in the Average Annual Total Return Table is for the Fund's Class A Shares, adjusted to reflect the expenses of the Class K Shares. The table shows returns for the Standard & Poor's 500/Citigroup Value Index (S&P 500/CV), a broad-based market index and the Lipper Large-Cap Value Average (LLCVA), an average of funds with similar investment objectives. Index returns do not reflect taxes, sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. Indexes are unmanaged, and it is not possible to invest directly in an index or average. Lipper averages represent the average of the total returns reported by all mutual funds as designated by Lipper, Inc. as falling in the respective categories indicated.

</R>
<R>

(For the Periods Ended December 31, 2007)

</R>

	1 Year	5 Years	10 Years
Fund:
Return Before Taxes	<R>(10.11)%</R>	<R>8.50%</R>	<R>3.58%</R>
S&P 500/CV	<R>1.99%</R>	<R>14.73%</R>	<R>6.66%</R>
LLCVA	<R>2.21%</R>	<R>13.10%</R>	<R>6.23%</R>

What are the Fund's Fees and Expenses?

FEDERATED AMERICAN LEADERS FUND, INC.

FEES AND EXPENSES

This table describes the fees and expenses that you may pay if you buy and hold Class K Shares of the Fund.

Shareholder Fees
Fees Paid Directly From Your Investment
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)	None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, as applicable)	None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of offering price)	None
Redemption Fee (as a percentage of amount redeemed, if applicable)	None
Exchange Fee	None
Annual Fund Operating Expenses 1
Expenses That are Deducted From Fund Assets (as a percentage of average net assets)
Management Fee	0.64%
Distribution (12b-1) Fee	0.50%
Other Expenses 2	0.48%
Total Annual Fund Operating Expenses	1.62%
1 The percentages shown are based on expenses for the entire fiscal year ended March 31, 2008. However, the rate at which expenses are accrued during the fiscal year may not be constant and, at any particular point, may be greater or less than the stated average percentage.
2 Includes a recordkeeping fee which is used to compensate intermediaries for recordkeeping services. Please see "Payments to Financial Intermediaries" herein. Also includes amounts the Fund incurred indirectly investing in other investment companies. For the fiscal year ended March 31, 2008, these "Acquired Fund Fees and Expenses" were less than 0.01%.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Fund's Class K Shares with the cost of investing in other mutual funds.

The Example assumes that you invest $10,000 in the Fund's Class K Shares for the time periods indicated and then redeem all of your Shares at the end of those periods. The Example also assumes that your investment has a 5% return each year and that the Fund's Class K Shares operating expenses are as shown in the table and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:

1 Year	$	165
3 Years	$	511
5 Years	$	881
10 Years	$	1,922

What are the Fund's Investment Strategies?

<R>

The Fund pursues its investment objective by investing primarily in equity securities of companies that are generally leaders in their industries, are characterized by sound management and have the ability to finance expected growth. The Fund's investment adviser (Adviser) attempts to identify good long-term values through disciplined investing and careful fundamental research. The Fund's holdings primarily will be in large capitalization companies that are in the top 50% of their industries with regard to revenues. Large capitalization companies are defined as those with market capitalizations similar to companies in the Standard & Poor's 500 Citigroup Value Index, which as of February 28, 2008 was in excess of $4 billion. A description of the various types of securities in which the Fund principally invests, and their risks, immediately follows the strategy discussion.

</R>

Companies with similar characteristics may be grouped together in broad categories called sectors. The Adviser diversifies the Fund's investments, seeking to limit the Fund's risk exposure with respect to individual securities and industry sectors.

The Fund's Adviser performs traditional fundamental analysis to select securities for the Fund that exhibit the most promising long-term value for the Fund's portfolio. In selecting securities, the Adviser focuses on the current financial condition of the issuing company, in addition to examining each issuer's business and product strength, competitive position, and management expertise. Further, the Adviser considers current economic, financial market and industry factors, which may affect the issuing company. To determine the timing of purchases and sales of portfolio securities, the Adviser looks at recent stock price performance and the direction of current fiscal year earnings estimates of various companies.

The Adviser uses the value style of investing, selecting securities of companies which are trading at discounts to their historic relationship to the market as well as to their expected growth. Value stocks tend to pay higher dividends than other segments of the market. Because the Adviser uses the value style, the price of the securities held by the Fund may not, under certain market conditions, increase as rapidly as stocks selected primarily for their growth attributes.

The Adviser may invest in American Depositary Receipts (ADRs), which represent interests in underlying securities issued by a foreign company, but which are traded in the United States. It may also invest directly in securities issued by a foreign company but traded in the United States. The Adviser invests primarily in the ADRs or securities of companies with significant operations within the United States. Securities of foreign companies may be more affected by foreign economic and political conditions, taxation policies, and accounting and auditing standards than those of U.S. companies.

<R>

The Fund may use derivative contracts and/or hybrid instruments to implement elements of its investment strategy. For example, the Fund may use derivative contracts or hybrid instruments to increase or decrease the portfolio's exposure to the investment(s) underlying the derivative or hybrid. Additionally, by way of example, the Fund may use derivative contracts in an attempt to:

</R>

• obtain premiums from the sale of derivative contracts;
  
• realize gains from trading a derivative contract; or
  
• hedge against potential losses.
  

There can be no assurance that the Fund's use of derivative contracts or hybrid instruments will work as intended.

<R>

Because the Fund refers to "American" investments in its name, it will notify shareholders at least 60 days in advance of any change in its investment policies that would enable the Fund to normally invest less than 80% of its assets in U.S. equity or fixed-income investments.

</R>
<R>

TEMPORARY INVESTMENTS

</R>
<R>

The Fund may temporarily depart from its principal investment strategies by investing its assets in shorter-term debt securities and similar obligations or holding cash. It may do this in response to unusual circumstances, such as: adverse market, economic, or other conditions (for example, to help avoid potential losses, or during periods when there is a shortage of appropriate securities); to maintain liquidity to meet shareholder redemptions; or to accommodate cash inflows. It is possible that such investments could affect the Fund's investment returns and/or the ability to achieve the Fund's investment objectives.

</R>

What are the Principal Securities in Which the Fund Invests?

EQUITY SECURITIES

<R>

Equity securities represent a share of an issuer's earnings and assets, after the issuer pays its liabilities. The Fund cannot predict the income it will receive from equity securities because issuers generally have discretion as to the payment of any dividends or distributions. However, equity securities offer greater potential for appreciation than many other types of securities, because their value increases directly with the value of the issuer's business. The following describes the types of equity securities in which the Fund invests.

</R>

Common Stocks

Common stocks are the most prevalent type of equity security. Common stocks receive the issuer's earnings after the issuer pays its creditors and any preferred stockholders. As a result, changes in an issuer's earnings directly influence the value of its common stock.

ADRs and Domestically Traded Securities of Foreign Issuers

American Depositary Receipts, which are traded in U.S. markets, represent interests in underlying securities issued by a foreign company and not traded in the United States. ADRs provide a way to buy shares of foreign based companies in the U.S. rather than in overseas markets. ADRs are also traded in U.S. dollars, eliminating the need for foreign exchange transactions. The Fund may also invest in securities issued directly by foreign companies and traded in U.S. dollars in U.S. markets. The Fund invests primarily in ADRs and securities of companies with significant operations within the United States.

DERIVATIVE CONTRACTS

<R>

Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, currencies, indices, or other assets or instruments including other derivative contracts (each a "Reference Instrument" and collectively, "Reference Instruments"). Each party to a derivative contract is referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as "physically settled" derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as "cash settled" derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.

</R>

Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the counterparty. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.

<R>

The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and the counterparty. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange traded contracts, especially in times of financial stress.

</R>

Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund's exposure to the risks of the Reference Instrument, and may also expose the fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract.

Payment obligations arising in connection with derivative contracts are frequently required to be secured with collateral (in the case of OTC contracts) or margin (in the case of exchange-traded contracts, as previously noted).

<R>

The Fund may invest in a derivative contract if it is permitted to own, invest in, or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:

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Futures Contracts

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Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be commodity contracts. The Fund has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act and, therefore, is not subject to registration or regulation as a commodity pool operator under that Act. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures).

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Option Contracts

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Option contracts (also called "options") are rights to buy or sell a Reference Instrument for a specified price (the exercise price) during, or at the end of, a specified period. The seller (or writer) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. A put option gives the holder the right to sell the Reference Instrument to the writer of the option. Options can trade on exchanges or in the OTC market and may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.

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Swap Contracts

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A swap contract (also known as a "swap") is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Swaps do not always involve the delivery of the Reference Instruments by either party, and the parties might not own the Reference Instruments underlying the swap. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party's payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names.

Common types of swaps in which the Fund may invest include total return swaps.

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SPECIAL TRANSACTIONS

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Hybrid Instruments

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Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, currency, index, or other asset or instrument including a derivative contract). The Fund may use hybrid instruments only in connection with permissible investment activities. Hybrid instruments can take many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, a hybrid instrument may also combine elements of a fixed-income security and an equity security. Third, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.

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Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities, currencies and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional investments or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional investments or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.

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Asset Segregation

In order to secure its obligations in connection with derivative contracts or special transactions, the Fund will either own the underlying assets, enter into offsetting transactions or set aside cash or readily marketable securities. This requirement may cause the Fund to miss favorable trading opportunities, due to a lack of sufficient cash or readily marketable securities. This requirement may also cause the Fund to realize losses on offsetting or terminated derivative contracts or special transactions.

What are the Specific Risks of Investing in the Fund?

STOCK MARKET RISKS

The value of equity securities in the Fund's portfolio will rise and fall. These fluctuations could be a sustained trend or a drastic movement. The Fund's portfolio will reflect changes in prices of individual portfolio stocks or general changes in stock valuations. Consequently, the Fund's Share price may decline.

The Adviser attempts to manage market risk by limiting the amount the Fund invests in each company's equity securities. However, diversification will not protect the Fund against widespread or prolonged declines in the stock market.

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RISKS RELATING TO INVESTING FOR VALUE

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Due to their relatively low valuations, value stocks are typically less volatile than growth stocks. For instance, the price of a value stock may experience a smaller increase on a forecast of higher earnings, a positive fundamental development, or positive market development. Further, value stocks tend to have higher dividends than growth stocks. This means they depend less on price changes for returns and may lag behind growth stocks in an up market.

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SECTOR RISKS

Companies with similar characteristics may be grouped together in broad categories called sectors. Sector risk is the possibility that a certain sector may underperform other sectors or the market as a whole. As the Adviser allocates more of the Fund's portfolio holdings to a particular sector, the Fund's performance will be more susceptible to any economic, business or other developments which generally affect that sector.

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RISKS OF INVESTING IN ADRS AND DOMESTICALLY TRADED SECURITIES OF FOREIGN ISSUERS

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Because the Fund may invest in ADRs and other domestically traded securities of foreign companies, the Fund's Share price may be affected by foreign economic and political conditions, taxation policies, and accounting and auditing standards. Foreign companies may not provide information as frequently or to as great an extent as companies in the United States. Foreign companies may also receive less coverage than U.S. companies by market analysts and the financial press. In addition, foreign countries may lack uniform accounting, auditing, and financial reporting standards or regulatory requirements comparable to U.S. companies. These factors may prevent the Fund and its Adviser from obtaining information concerning foreign companies that is as frequent, extensive, and reliable as the information available concerning companies in the United States.

RISKS OF INVESTING IN DERIVATIVE CONTRACTS AND HYBRID INSTRUMENTS

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The Fund's use of derivative contracts and hybrid instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for Federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund's total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund's investments. Any such termination of the Fund's OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs, and/or preventing the Fund from fully implementing its investment strategies). Finally, derivative contracts and hybrid instruments may also involve other risks described in this prospectus or in the Fund's SAI, such as stock market, interest rate, credit, currency, liquidity and leverage risks.

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What Do Shares Cost?

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CALCULATION OF NET ASSET VALUE

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When the Fund receives your transaction request in proper form (as described in this prospectus), it is processed at the next calculated net asset value of a Share (NAV) plus any applicable front-end sales charge (public offering price). A Share's NAV is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time) each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share's class, subtracting the liabilities allocated to the class and dividing the balance by the number of Shares of the class outstanding. The Fund's current NAV and public offering price may be found at FederatedInvestors.com and in the mutual funds section of certain newspapers under "Federated."

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You can purchase, redeem or exchange Shares any day the NYSE is open. When the Fund holds securities that trade principally in foreign markets on days the NYSE is closed, the value of the Fund's assets may change on days you cannot purchase or redeem Shares. This may also occur when the U.S. markets for fixed-income securities are open on a day the NYSE is closed.

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In calculating its NAV, the Fund generally values investments as follows:

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• Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
  

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• Derivative contracts listed on exchanges are valued at their reported settlement or closing price.
  

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• OTC derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board of Directors (Board).
  

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If the Fund cannot obtain a price or price evaluation from a pricing service for an investment, the Fund may attempt to value the investment based upon the mean of bid and asked quotations, or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Fund uses the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund's NAV.

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Shares of other mutual funds are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.

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Fair Valuation and Significant Events Procedures

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The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund and of the Adviser to assist in this responsibility and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Board. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures. The Fund's Statement of Additional Information (SAI) discusses the methods used by pricing services and the Valuation Committee to value investments.

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Using fair value to price investments may result in a value that is different from an investment's most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The Valuation Committee generally will not change an investment's fair value in the absence of new information relating to the investment or its issuer such as changes in the issuer's business or financial results, or relating to external market factors, such as trends in the market values of comparable securities. This may result in less frequent, and larger, changes in fair values as compared to prices based on market quotations or price evaluations from pricing services or dealers.

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The Board also has adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:

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• With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures or options contracts;
  

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• With respect to price evaluations of fixed-income securities determined before the close of regular trading on the NYSE, actions by the Federal Reserve Open Market Committee and other significant trends in U.S. fixed-income markets;
  

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• Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
  

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• Announcements concerning matters such as acquisitions, recapitalizations, or litigation developments, or a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.
  

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The Valuation Committee uses a pricing service to determine the fair value of equity securities traded principally in foreign markets when the Adviser determines that there has been a significant trend in the U.S. equity markets or in index futures trading. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment using another method approved by the Board. The Board has ultimate responsibility for any fair valuations made in response to a significant event.

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The fair valuation of securities following a significant event can serve to reduce arbitrage opportunities for short-term traders to profit at the expense of long-term investors in the Fund. For example, such arbitrage opportunities may exist when the market on which portfolio securities are traded closes before the Fund calculates its NAV, which is typically the case with Asian and European markets. However, there is no assurance that these significant event procedures will prevent dilution of the NAV by short-term traders. See "Account and Share Information--Frequent Trading Policies" for other procedures the Fund employs to deter such short-term trading.

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How is the Fund Sold?

The Fund offers five Share classes: Class A Shares, Class B Shares, Class C Shares, Class F Shares, and Class K Shares, each representing interests in a single portfolio of securities. This prospectus relates only to Class K Shares. All Share classes have different sales charges and other expenses which affect their performance. Contact your financial intermediary or call 1-800-341-7400 for more information concerning the other classes.

The Fund's Distributor, Federated Securities Corp., markets the Shares described in this prospectus generally to 401(k) plans, 457 plans, employer sponsored 403(b) plans, profit sharing and money purchase pension plans, defined benefit plans and non-qualified deferred compensation plans and IRA rollovers from such plans directly or through financial intermediaries. Class K Shares are generally available only to retirement plans where plan level omnibus accounts are held on the books of the Fund. Under the Distributor's Contract with the Fund, the Distributor offers Shares on a continuous, best-efforts basis. The Distributor is a subsidiary of Federated Investors, Inc. (Federated).

Payments to Financial Intermediaries

The Fund and its affiliated service providers may pay fees as described below to financial intermediaries (such as broker-dealers, banks, investment advisers or third-party administrators) whose customers are shareholders of the Fund.

RULE 12B-1 FEES

The Fund has adopted a Rule 12b-1 Plan, which allows it to pay marketing fees of up to 0.50% of average net assets to the Distributor for the sale, distribution, administration and customer servicing of the Fund's Class K Shares. When the Distributor receives Rule 12b-1 Fees, it may pay some or all of them to financial intermediaries whose customers purchase Shares. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.

RECORDKEEPING FEES

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The Fund may pay Recordkeeping Fees on an average net assets basis or on a per account per year basis to financial intermediaries for providing recordkeeping services to the Funds and shareholders. If a financial intermediary receives Recordkeeping Fees on an account, it is not eligible to also receive or Networking Fees on that same account.

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NETWORKING FEES

The Fund may reimburse Networking Fees on a per account per year basis to financial intermediaries for providing administrative services to the Funds and shareholders on certain non-omnibus accounts. If a financial intermediary receives Networking Fees on an account, it is not eligible to also receive Recordkeeping Fees on that same account.

ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES

The Distributor may pay out of its own resources amounts (including items of material value) to certain financial intermediaries that support the sale of Shares or provide services to Fund shareholders. The amounts of these payments could be significant, and may create an incentive for the financial intermediary or its employees or associated persons to recommend or sell Shares of the Fund to you. In some cases, such payments may be made by or funded from the resources of companies affiliated with the Distributor (including the Adviser). These payments are not reflected in the fees and expenses listed in the fee table section of the Fund's prospectus and described above because they are not paid by the Fund.

These payments are negotiated and may be based on such factors as the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; or the type and nature of services or support furnished by the financial intermediary. These payments may be in addition to payments made by the Fund to the financial intermediary under a Rule 12b-1 Plan and/or Service Fees arrangement. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated funds within the financial intermediary's organization by, for example, placement on a list of preferred or recommended funds, and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary's organization. You can ask your financial intermediary for information about any payments it receives from the Distributor or the Fund and any services provided.

How to Purchase Shares

You may purchase Shares through a financial intermediary, directly from the Fund or through an exchange from another Federated fund. The Fund reserves the right to reject any request to purchase or exchange Shares.

Where the Fund offers more than one Share class and you do not specify the class choice on your New Account Form or form of payment (e.g., Federal Reserve wire or check), you automatically will receive Class A Shares.

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The minimum initial and subsequent investment amounts for IRA Rollovers from retirement plans are $250 and $100, respectively. There is no minimum initial or subsequent amount required for employer-sponsored retirement plans; however, such accounts remain subject to the Fund's policy on "Accounts with Low Balances" as discussed later in this prospectus.

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An institutional investor's minimum investment is calculated by combining all accounts it maintains with the Fund. Accounts established through financial intermediaries may be subject to a smaller minimum investment amount. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.

THROUGH A FINANCIAL INTERMEDIARY

• Establish an account with the financial intermediary; and
  
• Submit your purchase order to the financial intermediary before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). You will receive the next calculated NAV if the financial intermediary forwards the order to the Fund on the same day and the Fund receives payment within one business day. You will become the owner of Shares and receive dividends when the Fund receives your payment.
  

Financial intermediaries should send payments according to the instructions in the sections "By Wire" or "By Check."

DIRECTLY FROM THE FUND

• Establish your account with the Fund by submitting a completed New Account Form; and
  
• Send your payment to the Fund by Federal Reserve wire or check.
  

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You will become the owner of Shares and your Shares will be priced at the next calculated NAV after the Fund receives your wire or your check. If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees incurred by the Fund or State Street Bank and Trust Company, the Fund's transfer agent.

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An institution may establish an account and place an order by calling the Fund and the Shares will be priced at the next calculated NAV after the Fund receives the order.

By Wire

Send your wire to:

State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
Attention: EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number

You cannot purchase Shares by wire on holidays when wire transfers are restricted.

By Check

Make your check payable to The Federated Funds , note your account number on the check, and send it to:

The Federated Funds
P.O. Box 8600
Boston, MA 02266-8600

If you send your check by a private courier or overnight delivery service that requires a street address, send it to:

The Federated Funds
30 Dan Road
Canton, MA 02021

Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund reserves the right to reject any purchase request. For example, to protect against check fraud the Fund may reject any purchase request involving a check that is not made payable to The Federated Funds (including, but not limited to, requests to purchase Shares using third-party checks), or involving temporary checks or credit card checks.

THROUGH AN EXCHANGE

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You may purchase Shares through an exchange from the same share class of another Federated fund. You must meet the minimum initial investment requirement for purchasing Shares (if applicable) and both accounts must have identical registrations.

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BY SYSTEMATIC INVESTMENT PROGRAM

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Once you have opened an account, you may automatically purchase additional Shares on a regular basis by completing the Systematic Investment Program section of the New Account Form or by contacting the Fund or your financial intermediary.

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BY AUTOMATED CLEARING HOUSE (ACH)

Once you have opened an account, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.

How to Redeem and Exchange Shares

You should redeem or exchange Shares:

• through a financial intermediary if you purchased Shares through a financial intermediary; or
  
• directly from the Fund if you purchased Shares directly from the Fund.
  

Shares of the Fund may be redeemed for cash or exchanged for shares of the same class of other Federated funds on days on which the Fund computes its NAV. Redemption requests may be made by telephone or in writing.

THROUGH A FINANCIAL INTERMEDIARY

Submit your redemption or exchange request to your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive is based upon the next calculated NAV after the Fund receives the order from your financial intermediary.

DIRECTLY FROM THE FUND

By Telephone

You may redeem or exchange Shares by simply calling the Fund at 1-800-341-7400.

If you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time), you will receive a redemption amount based on that day's NAV.

By Mail

You may redeem or exchange Shares by sending a written request to the Fund.

You will receive a redemption amount based on the next calculated NAV after the Fund receives your written request in proper form.

Send requests by mail to:

The Federated Funds
P.O. Box 8600
Boston, MA 02266-8600

Send requests by private courier or overnight delivery service to:

The Federated Funds
30 Dan Road
Canton, MA 02021

All requests must include:

• Fund Name and Share Class, account number and account registration;
  
• amount to be redeemed or exchanged;
  
• signatures of all shareholders exactly as registered; and
  
• if exchanging , the Fund Name and Share Class, account number and account registration into which you are exchanging.
  

Call your financial intermediary or the Fund if you need special instructions.

Signature Guarantees

Signatures must be guaranteed by a financial institution which is a participant in a Medallion signature guarantee program if:

• your redemption will be sent to an address other than the address of record;
  
• your redemption will be sent to an address of record that was changed within the last 30 days;
  
• a redemption is payable to someone other than the shareholder(s) of record; or
  

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• exchanging (transferring) into another fund with a different shareholder registration.
  

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A Medallion signature guarantee is designed to protect your account from fraud. Obtain a Medallion signature guarantee from a bank or trust company, savings association, credit union or broker, dealer, or securities exchange member. A notary public cannot provide a signature guarantee.

PAYMENT METHODS FOR REDEMPTIONS

Your redemption proceeds will be mailed by check to your address of record. The following payment options are available if you complete the appropriate section of the New Account Form or an Account Service Options Form. These payment options require a signature guarantee if they were not established when the account was opened:

• an electronic transfer to your account at a financial institution that is an ACH member; or
  
• wire payment to your account at a domestic commercial bank that is a Federal Reserve System member.
  

Redemption in Kind

Although the Fund intends to pay Share redemptions in cash, it reserves the right to pay the redemption price in whole or in part by a distribution of the Fund's portfolio securities.

LIMITATIONS ON REDEMPTION PROCEEDS

Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed for up to seven days:

• to allow your purchase to clear (as discussed below);
  
• during periods of market volatility;
  
• when a shareholder's trade activity or amount adversely impacts the Fund's ability to manage its assets; or
  
• during any period when the Federal Reserve wire or applicable Federal Reserve banks are closed, other than customary weekend and holiday closings.
  

If you request a redemption of Shares recently purchased by check (including a cashier's check or certified check), money order, bank draft or ACH, your redemption proceeds may not be made available up to seven calendar days to allow the Fund to collect payment on the instrument used to purchase such Shares. If the purchase instrument does not clear, your purchase order will be canceled and you will be responsible for any losses incurred by the Fund as a result of your canceled order.

In addition, the right of redemption may be suspended, or the payment of proceeds may be delayed, during any period:

• when the NYSE is closed, other than customary weekend and holiday closings;
  
• when trading on the NYSE is restricted, as determined by the SEC; or
  
• in which an emergency exists, as determined by the SEC, so that disposal of the Fund's investments or determination of its NAV is not reasonably practicable.
  

You will not accrue interest or dividends on uncashed redemption checks from the Fund if those checks are undeliverable and returned to the Fund.

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EXCHANGE PRIVILEGE

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You may exchange Shares of the Fund into shares of the same class of another Federated fund. To do this, you must:

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• ensure that the account registrations are identical;
  

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• meet any applicable minimum initial investment requirements; and
  

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• receive a prospectus for the fund into which you wish to exchange.
  

An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction.

The Fund may modify or terminate the exchange privilege at any time. In addition, the Fund may terminate your exchange privilege if your exchange activity is found to be excessive under the Fund's frequent trading policies. See "Account and Share Information - Frequent Trading Policies."

SYSTEMATIC WITHDRAWAL/EXCHANGE PROGRAM

You may automatically redeem or exchange Shares in a minimum amount of $100 on a regular basis. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your financial intermediary or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.

ADDITIONAL CONDITIONS

Telephone Transactions

The Fund will record your telephone instructions. If the Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.

Share Certificates

The Fund no longer issues share certificates. If you are redeeming or exchanging Shares represented by certificates previously issued by the Fund, you must return the certificates with your written redemption or exchange request. For your protection, send your certificates by registered or certified mail, but do not endorse them.

Account and Share Information

CONFIRMATIONS AND ACCOUNT STATEMENTS

You will receive confirmation of purchases, redemptions and exchanges (except for systematic transactions). In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.

DIVIDENDS AND CAPITAL GAINS

The Fund declares and pays any dividends quarterly to shareholders. Dividends are paid to all shareholders invested in the Fund on the record date. The record date is the date on which a shareholder must officially own Shares in order to earn a dividend.

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In addition, the Fund pays any capital gains at least annually, and may make such special distributions of dividends and capital gains as may be necessary to meet applicable regulatory requirements. Your dividends and capital gains distributions will be automatically reinvested in additional Shares without a sales charge, unless you elect cash payments. Dividends may also be reinvested without sales charges in shares of any class of any other Federated fund of which you are already a shareholder.

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If you have elected to receive dividends and/or capital gain distributions in cash, and your check is returned by the postal or other delivery service as "undeliverable," or you do not respond to mailings from Federated with regard to uncashed distribution checks, your distribution option will automatically be converted to having all dividends and capital gains reinvested in additional shares. No interest will accrue on amounts represented by uncashed distribution checks.

If you purchase Shares just before the record date for a dividend or capital gain distribution, you will pay the full price for the Shares and then receive a portion of the price back in the form of a taxable distribution, whether or not you reinvest the distribution in Shares. Therefore, you should consider the tax implications of purchasing Shares shortly before the record date for a dividend or capital gain. Contact your financial intermediary or the Fund for information concerning when dividends and capital gains will be paid.

ACCOUNTS WITH LOW BALANCES

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Due to the high cost of maintaining accounts with low balances, accounts may be closed if redemptions or exchanges cause the account balance to fall below $250. Before an account is closed, you will be notified and allowed at least 30 days to purchase additional Shares to meet the minimum.

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TAX INFORMATION

The Fund sends an annual statement of your account activity to assist you in completing your federal, state and local tax returns. Fund distributions of dividends and capital gains are taxable to you whether paid in cash or reinvested in the Fund. Dividends are taxable at different rates depending on the source of dividend income. Capital gains are taxable at different rates depending upon the length of time the Fund holds its assets.

Fund distributions are expected to be both dividends and capital gains. Redemptions and exchanges are taxable sales. Please consult your tax adviser regarding your federal, state and local tax liability.

FREQUENT TRADING POLICIES

Frequent or short-term trading into and out of the Fund can have adverse consequences for the Fund and shareholders who use the Fund as a long-term investment vehicle. Such trading in significant amounts can disrupt the Fund's investment strategies (e.g., by requiring it to sell investments at inopportune times or maintain excessive short-term or cash positions to support redemptions), increase brokerage and administrative costs and affect the timing and amount of taxable gains distributed by the Fund. Investors engaged in such trading may also seek to profit by anticipating changes in the Fund's NAV in advance of the time as of which NAV is calculated.

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The Fund's Board has approved policies and procedures intended to discourage excessive frequent or short-term trading of the Fund's Shares. The Fund's fair valuation procedures are intended in part to discourage short-term trading strategies by reducing the potential for these strategies to succeed. See "What Do Shares Cost?". The Fund monitors trading in Fund Shares in an effort to identify disruptive trading activity. The Fund monitors trades into and out of the Fund within a period of 30 days or less. The size of Share transactions subject to monitoring varies. However, where it is determined that a shareholder has exceeded the detection amounts twice within a period of 12 months, the shareholder will be precluded from making further purchases or exchanges of Fund Shares. The Fund may also monitor trades into and out of the Fund over periods longer than 30 days, and if potentially disruptive trading activity is detected, the shareholder will be precluded from making further purchases or exchanges of Fund Shares. Whether or not the specific monitoring limits are exceeded, the Fund's management or the Adviser may determine from the amount, frequency or pattern of purchases and redemptions or exchanges that a shareholder is engaged in excessive trading that is or could be detrimental to the Fund and other shareholders and may preclude the shareholder from making further purchases or exchanges of Fund Shares. No matter how the Fund defines its limits on frequent trading of Fund Shares, other purchases and sales of Fund Shares may have adverse effects on the management of the Fund's portfolio and its performance.

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The Fund's frequent trading restrictions do not apply to purchases and sales of Fund Shares by other Federated funds. These funds impose the same frequent trading restrictions as the Fund at their shareholder level. In addition, allocation changes of the investing Federated fund are monitored, and the managers of the recipient fund must determine that there is no disruption to their management activity. The intent of this exception is to allow investing fund managers to accommodate cash flows that result from non-abusive trading in the investing fund, without being stopped from such trading because the aggregate of such trades exceeds the monitoring limits. Nonetheless, as with any trading in Fund Shares, purchases and redemptions of Fund Shares by other Federated funds could adversely affect the management of the Fund's portfolio and its performance.

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The Fund's objective is that its restrictions on short-term trading should apply to all shareholders that are subject to the restrictions, regardless of the number or type of accounts in which Shares are held. However, the Fund anticipates that limitations on its ability to identify trading activity to specific shareholders, including where shares are held through intermediaries in multiple or omnibus accounts, will mean that these restrictions may not be able to be applied uniformly in all cases.

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PORTFOLIO HOLDINGS INFORMATION

Information concerning the Fund's portfolio holdings is available in the "Products" section of Federated's website at FederatedInvestors.com .. A complete listing of the Fund's portfolio holdings as of the end of each calendar quarter is posted on the website 30 days (or the next business day) after the end of the quarter and remains posted until replaced by the information for the succeeding quarter. Summary portfolio composition information as of the close of each month (except for recent purchase and sale transaction information, which is updated quarterly) is posted on the website 15 days (or the next business day) after month-end and remains until replaced by the information for the succeeding month. The summary portfolio composition information may include identification of the Fund's top ten holdings, recent purchase and sale transactions and a percentage breakdown of the portfolio by sector.

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To access this information from the "Products" section of the website, click on the "Portfolio Holdings" link under "Related Information" and select the appropriate link opposite the name of the Fund, or select the name of the Fund, and from the Fund's page click on the "Portfolio Holdings" or "Composition" link.

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You may also access portfolio information as of the end of the Fund's fiscal quarters from the "Products" section of the website. The Fund's annual and semi-annual reports, which contain complete listings of the Fund's portfolio holdings as of the end of the Fund's second and fourth fiscal quarters, may be accessed by selecting the "Prospectuses and Regulatory Reports" link under "Related Information" and selecting the link to the appropriate PDF. Complete listings of the Fund's portfolio holdings as of the end of the Fund's first and third fiscal quarters may be accessed by selecting "Portfolio Holdings" from the "Products" section and then selecting the appropriate link opposite the name of the Fund. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC's website at www.sec.gov.

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Who Manages the Fund?

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The Board governs the Fund. The Board selects and oversees the Adviser, Federated Equity Management Company of Pennsylvania. The Adviser manages the Fund's assets, including buying and selling portfolio securities. Federated Advisory Services Company (FASC), an affiliate of the Adviser, provides research, quantitative analysis, equity trading and transaction settlement and certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund. The address of the Adviser and FASC is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.

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The Adviser and other subsidiaries of Federated advise approximately 148 equity, fixed-income, and money market mutual funds as well as a variety of customized separately managed accounts, which totaled approximately $302 billion in assets as of December 31, 2007. Federated was established in 1955 and is one of the largest investment managers in the United States with approximately 1,270 employees. Federated provides investment products to nearly 5,500 investment professionals and institutions.

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PORTFOLIO MANAGEMENT INFORMATION

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Kevin R. McCloskey

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Kevin R. McCloskey has been a Portfolio Manager of the Fund since March 2001. Mr. McCloskey joined Federated in 1999 as a Portfolio Manager and is a Vice President of the Fund's Adviser. From September 1994 to July 1999, he served as a portfolio manager, and from January 1994 to September 1994, he served as an investment/quantitative analyst at Killian Asset Management Corporation. Mr. McCloskey is a Chartered Financial Analyst. He received his M.B.A. from the University of Dayton.

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The Fund's SAI provides additional information about the Portfolio Manager's compensation, management of other accounts, and ownership of securities in the Fund.

ADVISORY FEES

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The Fund's investment advisory contract provides for payment to the Adviser of an annual investment advisory fee of% of the Fund's average daily net assets plus 4.50% of the Fund's gross income. The Adviser may voluntarily waive a portion of its fee or reimburse the Fund for certain operating expenses.

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Gross income includes, in general, discounts earned on U.S. Treasury bills and agency discount notes, interest earned on all interest-bearing obligations, and dividend income recorded on the ex-dividend date but does not include capital gains or losses or reduction for expenses.

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A discussion of the Board's review of the Fund's investment advisory contract is available in the Fund's Annual Report dated March 31, 2008.

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Legal Proceedings

Since October 2003, Federated and related entities (collectively, "Federated"), and various Federated funds ("Funds"), have been named as defendants in several class action lawsuits now pending in the United States District Court for the District of Maryland. 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. These lawsuits began to be filed shortly after Federated's first public announcement that it had received requests for information on shareholder trading activities in the Funds from the SEC, the Office of the New York State Attorney General ("NYAG"), and other authorities. In that regard, on November 28, 2005, Federated announced that it had reached final settlements with the SEC and the NYAG with respect to those matters. Specifically, the SEC and NYAG settled proceedings against three Federated subsidiaries involving undisclosed market timing arrangements and late trading. The SEC made findings: that Federated Investment Management Company ("FIMC"), an SEC-registered investment adviser to various Funds, and Federated Securities Corp., an SEC-registered broker-dealer and distributor for the Funds, violated provisions of the Investment Advisers Act and Investment Company Act by approving, but not disclosing, three market timing arrangements, or the associated conflict of interest between FIMC and the funds involved in the arrangements, either to other fund shareholders or to the funds' board; and that Federated Shareholder Services Company, formerly an SEC-registered transfer agent, failed to prevent a customer and a Federated employee from late trading in violation of provisions of the Investment Company Act. The NYAG found that such conduct violated provisions of New York State law. Federated entered into the settlements without admitting or denying the regulators' findings. As Federated previously reported in 2004, it has already paid approximately $8.0 million to certain funds as determined by an independent consultant. As part of these settlements, Federated agreed to pay disgorgement and a civil money penalty in the aggregate amount of an additional $72 million and, among other things, agreed that it would not serve as investment adviser to any registered investment company unless: (i) at least 75% of the fund's directors are independent of Federated; (ii) the chairman of each such fund is independent of Federated; (iii) no action may be taken by the fund's board or any committee thereof unless approved by a majority of the independent trustees of the fund or committee, respectively; and (iv) the fund appoints a "senior officer" who reports to the independent trustees and is responsible for monitoring compliance by the fund with applicable laws and fiduciary duties and for managing the process by which management fees charged to a fund are approved. The settlements are described in Federated's announcement which, along with previous press releases and related communications on those matters, is available in the "About Us" section of Federated's website at FederatedInvestors.com ..

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Federated entities have also been named as defendants in several additional lawsuits that are now pending in the United States District Court for the Western District of Pennsylvania, alleging, among other things, excessive advisory and Rule 12b-1 fees.

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The Board of the Funds retained the law firm of Dickstein Shapiro LLP to represent the Funds in each of the lawsuits described in the preceding two paragraphs. Federated and the Funds, and their respective counsel, have been defending this litigation, and none of the Funds remains a defendant in any of the lawsuits (though some could potentially receive any recoveries as nominal defendants). Additional lawsuits based upon similar allegations may be filed in the future. The potential impact of these lawsuits, all of which seek unquantified damages, attorneys' fees, and expenses, and future potential similar suits is uncertain. 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, 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.

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Financial Information

FINANCIAL HIGHLIGHTS

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The Financial Highlights will help you understand the Fund's financial performance for its past five fiscal years. Some of the information is presented on a per Share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.

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The information for each of the three years in the period ended March 31, 2008 has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose report, along with the Fund's audited financial statements, is included in the Annual Report. The information for prior years was audited by, Deloitte & Touche LLP, another independent registered public accounting firm.

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Financial Highlights

(For a Share Outstanding Throughout Each Period)

	Year Ended March 31,												Period Ended
	2008			2007			2006	1		2005			3/31/2004	2
Net Asset Value, Beginning of Period	$23.75			$24.01			$24.46			$23.57			$17.74
Income From Investment Operations:
Net investment income	0.10	3		0.14	3		0.16	3		0.17			0.13
Net realized and unrealized gain (loss) on investments	(3.88	)		2.22			1.85			0.95			5.85
TOTAL FROM INVESTMENT OPERATIONS	(3.78	)		2.36			2.01			1.12			5.98
Less Distributions:
Distributions from net investment income	(0.09	)		(0.16	)		(0.18	)		(0.23	)		(0.15	)
Distributions from net realized gain on investments	(4.56	)		(2.46	)		(2.28	)		- --			- --
TOTAL DISTRIBUTIONS	(4.65	)		(2.62	)		(2.46	)		(0.23	)		(0.15	)
Net Asset Value, End of Period	$15.32			$23.75			$24.01			$24.46			$23.57
Total Return 4	(18.27	)%		9.81	% 5		8.58	%		4.78	% 6		33.76	%
Ratios to Average Net Assets:
Net expenses	1.62	% 7		1.62	% 7		1.64	% 7		1.63	% 7		1.66	% 7,8
Net investment income	0.44	%		0.57	%		0.66	%		0.64	%		0.54	% 8
Expense waiver/reimbursement 9	0.01	%		0.00	% 10		0.00	% 10		0.00	% 10		0.00	% 8,10
Supplemental Data:
Net assets, end of period (000 omitted)	$14,137		$44,992			$53,310			$18,095			$3,082
Portfolio turnover	96	%		55	%		49	%		58	%		29	% 11

1 Beginning with the year ended March 31, 2006, the Fund was audited by Ernst & Young LLP. The previous periods were audited by another independent registered public accounting firm.

2 Reflects operations for the period from April 8, 2003 (start of performance) to March 31, 2004.

3 Per share numbers have been calculated using the average shares method.

4 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable. Total returns for periods of less than one year are not annualized.

5 During the period, the Fund received a regulatory settlement from an unaffiliated third party, which had an impact of 0.04% on the total return.

6 During the period, the Fund was reimbursed by the Adviser, which had an impact of 0.04% on the total return.

7 The net expense ratio is calculated without reduction for fees paid indirectly for directed brokerage arrangements. The net expense ratios for the years ended March 31, 2008, 2007, 2006, 2005 and for the period ended March 31, 2004 are 1.61%, 1.62%, 1.63%, 1.63% and 1.64%, respectively, after taking into account these expense reductions.

8 Computed on an annualized basis.

9 This expense decrease is reflected in both the net expense and the net investment income ratios shown above.

10 Represents less than 0.01%.

11 Portfolio turnover is calculated at the Fund level. Percentage indicated was calculated for the fiscal year ended March 31, 2004.

Further information about the Fund's performance is contained in the Fund's Annual Report, dated March 31, 2008, which can be obtained free of charge.

Appendix A: Hypothetical Investment and Expense Information

The following chart provides additional hypothetical information about the effect of the Fund's expenses, including investment advisory fees and other Fund costs, on the Fund's assumed returns over a 10-year period. The chart shows the estimated expenses that would be incurred in respect of a hypothetical investment of $10,000, assuming a 5% return each year, and no redemption of Shares. The chart also assumes that the Fund's annual expense ratio stays the same throughout the 10-year period and that all dividends and distributions are reinvested. The annual expense ratio used in the chart is the same as stated in the "Fees and Expenses" table of this prospectus (and thus may not reflect any fee waiver or expense reimbursement currently in effect). The maximum amount of any sales charge that might be imposed on the purchase of Shares (and deducted from the hypothetical initial investment of $10,000; the "Front-End Sales Charge") is reflected in the "Hypothetical Expenses" column. The hypothetical investment information does not reflect the effect of charges (if any) normally applicable to redemptions of Shares (e.g., deferred sales charges, redemption fees). Mutual fund returns, as well as fees and expenses, may fluctuate over time, and your actual investment returns and total expenses may be higher or lower than those shown below.

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FEDERATED AMERICAN LEADERS FUND, INC.: CLASS K SHARES
ANNUAL EXPENSE RATIO: 1.62%
MAXIMUM FRONT-END SALES CHARGE: NONE

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Year	Hypothetical Beginning Investment	Hypothetical Performance Earnings	Investment After Returns	Hypothetical Expenses	Hypothetical Ending Investment
1	$10,000.00	$500.00	$10,500.00	$164.74	$10,338.00
2	$10,338.00	$516.90	$10,854.90	$170.31	$10,687.42
3	$10,687.42	$534.37	$11,221.79	$176.06	$11,048.65
4	$11,048.65	$552.43	$11,601.08	$182.01	$11,422.09
5	$11,422.09	$571.10	$11,993.19	$188.17	$11,808.16
6	$11,808.16	$590.41	$12,398.57	$194.53	$12,207.28
7	$12,207.28	$610.36	$12,817.64	$201.10	$12,619.89
8	$12,619.89	$630.99	$13,250.88	$207.90	$13,046.44
9	$13,046.44	$652.32	$13,698.76	$214.92	$13,487.41
10	$13,487.41	$674.37	$14,161.78	$222.19	$13,943.28
Cumulative		$5,833.25		$1,921.93

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A Statement of Additional Information (SAI) dated May 31, 2008, is incorporated by reference into this prospectus. Additional information about the Fund and its investments is contained in the Fund's SAI and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report's Management's Discussion of Fund Performance discusses market conditions and investment strategies that significantly affected the Fund's performance during its last fiscal year. The SAI contains a description of the Fund's policies and procedures with respect to the disclosure of its portfolio securities. To obtain the SAI, Annual Report, Semi-Annual Report and other information without charge, and to make inquiries, call your financial intermediary or the Fund at 1-800-341-7400.

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These documents, as well as additional information about the Fund (including portfolio holdings, performance and distributions), are also available on Federated's website at FederatedInvestors.com.

You can obtain information about the Fund (including the SAI) by writing to or visiting the SEC's Public Reference Room in Washington, DC. You may also access Fund information from the EDGAR Database on the SEC's website at www.sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov or by writing to the SEC's Public Reference Section, Washington, DC 20549-0102. Call 1-202-942-8090 for information on the Public Reference Room's operations and copying fees.

Investment Company Act File No. 811-1704

Federated
World-Class Investment Manager

Federated American Leaders Fund, Inc.
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
Contact us at FederatedInvestors.com
or call 1-800-341-7400.

Federated Securities Corp., Distributor

Cusip 313914509

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28210 (5/08)

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Federated is a registered mark of Federated Investors, Inc. 2008 (c)Federated Investors, Inc.

FEDERATED AMERICAN LEADERS FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION


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MAY 31, 2008

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CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
CLASS F SHARES
CLASS K SHARES

This Statement of Additional Information (SAI) is not a prospectus. Read this
SAI in conjunction with the prospectuses for Class A Shares, Class B Shares,
Class C Shares, Class F Shares and Class K Shares of Federated American Leaders
Fund, Inc. (Fund), dated May 31, 2008. This SAI incorporates by reference the
Fund's Annual Report. Obtain the prospectuses or the Annual Report without
charge by calling 1-800-341-7400.





                                         CONTENTS
                                         <R></R>
                                         How is the Fund Organized?......
                                         Securities in Which the Fund Invests...
                                         investment Risks.......................
                                         Investment Objective (and Policies) and
                                         Investment Limitations.................
                                         What Do Shares Cost?...................
                                         How is the Fund Sold?..................
                                         Exchanging Securities for Shares.......
                                         Subaccounting Services.................
                                         Redemption in Kind.....................
                                         Account and Share Information..........
                                         Tax Information........................
                                         Who Manages and Provides Services to
                                         the Fund?..............................
                                         How Does the Fund Measure Performance?.
                                         Who is Federated Investors, Inc.?......
                                         Financial Information..................
                                         Investment Ratings.....................
                                         Addresses..............................
                                         Appendix...............................
                                         <R></R>


Federated American Leaders Fund, Inc.

Federated Investors Funds

5800 Corporate Drive

Pittsburgh, PA 15237-7000

Contact us at FEDERATEDINVESTORS.COM

or call 1-800-341-7400.

Federated Securities Corp., Distributor

8062808 (5/08)

Federated is a registered mark

of Federated Investors, Inc.

2008 {copyright}Federated Investors, Inc.



HOW IS THE FUND ORGANIZED?

The Fund is a diversified open-end, management investment company that was
established under the laws of the State of Maryland on July 22, 1968.

The Board of Directors (Board) has established five classes of shares of the
Fund, known as Class A Shares, Class B Shares, Class C Shares, Class F Shares
and Class K Shares (Shares). This SAI relates to all classes of Shares. The
Fund's investment adviser is Federated Equity Management Company of Pennsylvania
(Adviser). Prior to January 1, 2004, Federated Investment Management Company was
the Adviser to the Fund. Both the current Adviser and the former Adviser are
wholly owned subsidiaries of Federated Investors, Inc. (Federated).



SECURITIES IN WHICH THE FUND INVESTS

In pursuing its investment strategy, the Fund may invest in the following
securities for any purpose that is consistent with its investment objective:


SECURITIES DESCRIPTIONS AND TECHNIQUES

EQUITY SECURITIES
Equity securities represent a share of an issuer's earnings and assets, after
the issuer pays its liabilities.  The Fund cannot predict the income it will
receive from equity securities because issuers generally have discretion as to
the payment of any dividends or distributions.  However, equity securities offer
greater potential for appreciation than many other types of securities, because
their value increases directly with the value of the issuer's business.  The
following describes the types of equity securities in which the Fund invests.


COMMON STOCKS
Common stocks are the most prevalent type of equity security.  Common stocks
receive the issuer's earnings after the issuer pays its creditors and any
preferred stockholders.  As a result, changes in an issuer's earnings directly
influence the value of its common stock.


PREFERRED STOCKS
Preferred stocks have the right to receive specified dividends or distributions
before the issuer makes payments on its common stock.  Some preferred stocks
also participate in dividends and distributions paid on common stock.  Preferred
stocks may also permit the issuer to redeem the stock.  The Fund may also treat
such redeemable preferred stock as a fixed-income security.


INTERESTS IN OTHER LIMITED LIABILITY COMPANIES
Entities such as limited partnerships, limited liability companies, business
trusts and companies organized outside the United States may issue securities
comparable to common or preferred stock.


REAL ESTATE INVESTMENT TRUSTS (REITS)
REITs are real estate investment trusts that lease, operate and finance
commercial real estate.  REITs are exempt from federal corporate income tax if
they limit their operations and distribute most of their income.  Such tax
requirements limit a REIT's ability to respond to changes in the commercial real
estate market.


WARRANTS
Warrants give the Fund the option to buy the issuer's equity securities at a
specified price (the exercise price) at a specified future date (the expiration
date).  The Fund may buy the designated securities by paying the exercise price
before the expiration date.  Warrants may become worthless if the price of the
stock does not rise above the exercise price by the expiration date.  This
increases the market risks of warrants as compared to the underlying security.
Rights are the same as warrants, except companies typically issue rights to
existing stockholders.


FIXED-INCOME SECURITIES
Fixed-income securities pay interest, dividends or distributions at a specified
rate.  The rate may be a fixed percentage of the principal or adjusted
periodically.  In addition, the issuer of a fixed-income security must repay the
principal amount of the security, normally within a specified time.  Fixed-
income securities provide more regular income than equity securities.  However,
the returns on fixed-income securities are limited and normally do not increase
with the issuer's earnings.  This limits the potential appreciation of fixed-
income securities as compared to equity securities.

A security's yield measures the annual income earned on a security as a
percentage of its price.  A security's yield will increase or decrease depending
upon whether it costs less (a discount) or more (a premium) than the principal
amount.  If the issuer may redeem the security before its scheduled maturity,
the price and yield on a discount or premium security may change based upon the
probability of an early redemption.  Securities with higher risks generally have
higher yields.

The following describes the types of fixed-income securities in which the Fund
invests.


TREASURY SECURITIES
Treasury securities are direct obligations of the federal government of the
United States. Treasury securities are generally regarded as having the lowest
credit risks.


AGENCY SECURITIES
Agency securities are issued or guaranteed by a federal agency or other
government sponsored entity (GSE) acting under federal authority. Some GSE
securities are supported by the full faith and credit of the United States.
These include the Government National Mortgage Association, Small Business
Administration, Farm Credit System Financial Assistance Corporation, Farmer's
Home Administration, Federal Financing Bank, General Services Administration,
Department of Housing and Urban Development, Export-Import Bank, Overseas
Private Investment Corporation, and Washington Metropolitan Area Transit
Authority Bonds.

Other GSE securities receive support through federal subsidies, loans or other
benefits. For example, the U.S. Treasury is authorized to purchase specified
amounts of securities issued by (or otherwise make funds available to) the
Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association, and Tennessee Valley Authority in support of such
obligations.

A few GSE securities have no explicit financial support, but are regarded as
having implied support because the federal government sponsors their activities.
These include the Farm Credit System, Financing Corporation, and Resolution
Funding Corporation.

Investors regard agency securities as having low credit risks, but not as low as
Treasury securities. A Fund treats mortgage-backed securities guaranteed by a
GSE as if issued or guaranteed by a federal agency. Although such a guarantee
protects against credit risks, it does not reduce market and prepayment risks.


CORPORATE DEBT SECURITIES
Corporate debt securities are fixed-income securities issued by businesses.
Notes, bonds, debentures and commercial paper are the most prevalent types of
corporate debt securities. The Fund may also purchase interests in bank loans to
companies. The credit risks of corporate debt securities vary widely among
issuers.

In addition, the credit risk of an issuer's debt security may vary based on its
priority for repayment. For example, higher ranking (senior) debt securities
have a higher priority than lower ranking (subordinated) securities. This means
that the issuer might not make payments on subordinated securities while
continuing to make payments on senior securities. In addition, in the event of
bankruptcy, holders of senior securities may receive amounts otherwise payable
to the holders of subordinated securities. Some subordinated securities, such as
trust preferred and capital securities notes, also permit the issuer to defer
payments under certain circumstances. For example, insurance companies issue
securities known as surplus notes that permit the insurance company to defer any
payment that would reduce its capital below regulatory requirements.

COMMERCIAL PAPER
Commercial paper is an issuer's obligation with a maturity of less than nine
months. Companies typically issue commercial paper to pay for current
expenditures. Most issuers constantly reissue their commercial paper and use the
proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue
to obtain liquidity in this fashion, its commercial paper may default. The short
maturity of commercial paper reduces both the market and credit risks as
compared to other debt securities of the same issuer.

DEMAND INSTRUMENTS
Demand instruments are corporate debt securities that the issuer must repay upon
demand. Other demand instruments require a third party, such as a dealer or
bank, to repurchase the security for its face value upon demand. The Fund treats
demand instruments as short-term securities, even though their stated maturity
may extend beyond one year.


ZERO COUPON SECURITIES
Zero coupon securities do not pay interest or principal until final maturity
unlike debt securities that provide periodic payments of interest (referred to
as a coupon payment). Investors buy zero coupon securities at a price below the
amount payable at maturity. The difference between the purchase price and the
amount paid at maturity represents interest on the zero coupon security.
Investors must wait until maturity to receive interest and principal, which
increases the market and credit risks of a zero coupon security.

There are many forms of zero coupon securities. Some are issued at a discount
and are referred to as zero coupon or capital appreciation bonds. Others are
created from interest bearing bonds by separating the right to receive the
bond's coupon payments from the right to receive the bond's principal due at
maturity, a process known as coupon stripping. Treasury STRIPs, IOs and POs are
the most common forms of stripped zero coupon securities. In addition, some
securities give the issuer the option to deliver additional securities in place
of cash interest payments, thereby increasing the amount payable at maturity.
These are referred to as pay-in-kind or PIK securities.


CONVERTIBLE SECURITIES
Convertible securities are fixed-income securities that the Fund has the option
to exchange for equity securities at a specified conversion price. The option
allows the Fund to realize additional returns if the market price of the equity
securities exceeds the conversion price. For example, the Fund may hold fixed-
income securities that are convertible into shares of common stock at a
conversion price of $10 per share. If the market value of the shares of common
stock reached $12, the Fund could realize an additional $2 per share by
converting its fixed-income securities.

Convertible securities have lower yields than comparable fixed-income
securities. In addition, at the time a convertible security is issued the
conversion price exceeds the market value of the underlying equity securities.
Thus, convertible securities may provide lower returns than non-convertible
fixed-income securities or equity securities depending upon changes in the price
of the underlying equity securities. However, convertible securities permit the
Fund to realize some of the potential appreciation of the underlying equity
securities with less risk of losing its initial investment.

The Fund treats convertible securities as both fixed income and equity
securities for purposes of its investment policies and limitations, because of
their unique characteristics.


FOREIGN SECURITIES
Foreign securities are securities of issuers based outside the United States.
The Fund considers an issuer to be based outside the United States if:

   {circle}it  is organized under the laws of, or has a principal office located
      in, another country;

   {circle}the principal  trading  market  for  its  securities  is  in  another
      country; or

   {circle}it  (or its subsidiaries) derived in its most current fiscal year  at
      least 50%  of  its  total  assets, capitalization, gross revenue or profit
      from goods produced, services performed, or sales made in another country.

Foreign securities are primarily denominated in foreign currencies. Along with
the risks normally associated with domestic securities of the same type, foreign
securities are subject to currency risks and risks of foreign investing. Trading
in certain foreign markets is also subject to liquidity risks.

FOREIGN EXCHANGE CONTRACTS
In order to convert U.S. dollars into the currency needed to buy a foreign
security, or to convert foreign currency received from the sale of a foreign
security into U.S. dollars, the Fund may enter into spot currency trades.  In a
spot trade, the Fund agrees to exchange one currency for another at the current
exchange rate.  The Fund may also enter into derivative contracts in which a
foreign currency is an underlying asset.  The exchange rate for currency
derivative contracts may be higher or lower than the spot exchange rate.  Use of
these derivative contracts may increase or decrease the Fund's exposure to
currency risks.

DEPOSITARY RECEIPTS
Depositary receipts represent interests in underlying securities issued by a
foreign company. Depositary receipts are not traded in the same market as the
underlying security. The foreign securities underlying American Depositary
Receipts (ADRs) are not traded in the United States. ADRs provide a way to buy
shares of foreign-based companies in the United States rather than in overseas
markets. ADRs are also traded in U.S. dollars, eliminating the need for foreign
exchange transactions. The foreign securities underlying European Depositary
Receipts (EDRs), Global Depositary Receipts (GDRs), and International Depositary
Receipts (IDRs), are traded globally or outside the United States. Depositary
receipts involve many of the same risks of investing directly in foreign
securities, including currency risks and risks of foreign investing.

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DERIVATIVE CONTRACTS
Derivative contracts are financial instruments that require payments based upon
changes in the values of designated securities, commodities, currencies,
indices, or other assets or instruments including other derivative contracts,
(each a "Reference Instrument" and collectively, "Reference Instruments").  Each
party to a derivative contract is referred to as a counterparty.  Some
derivative contracts require payments relating to an actual, future trade
involving the Reference Instrument.  These types of derivatives are frequently
referred to as "physically settled" derivatives.  Other derivative contracts
require payments relating to the income or returns from, or changes in the
market value of, a Reference Instrument.  These types of derivatives are known
as "cash settled" derivatives, since they require cash payments in lieu of
delivery of the Reference Instrument.

Many derivative contracts are traded on securities or commodities exchanges.  In
this case, the exchange sets all the terms of the contract except for the price.
Investors make payments due under their contracts through the exchange.  Most
exchanges require investors to maintain margin accounts through their brokers to
cover their potential obligations to the exchange.  Parties to the contract make
(or collect) daily payments to the margin accounts to reflect losses (or gains)
in the value of their contracts.  This protects investors against potential
defaults by the counterparty.  Trading contracts on an exchange also allows
investors to close out their contracts by entering into offsetting contracts.

For example, the Fund could close out an open contract to buy an asset at a
future date by entering into an offsetting contract to sell the same asset on
the same date.  If the offsetting sale price is more than the original purchase
price, the Fund realizes a gain; if it is less, the Fund realizes a loss.
Exchanges may limit the amount of open contracts permitted at any one time.
Such limits may prevent the Fund from closing out a position.  If this happens,
the Fund will be required to keep the contract open (even if it is losing money
on the contract), and to make any payments required under the contract (even if
it has to sell portfolio securities at unfavorable prices to do so).  Inability
to close out a contract could also harm the Fund by preventing it from disposing
of or trading any assets it has been using to secure its obligations under the
contract.

The Fund may also trade derivative contracts over-the-counter (OTC) in
transactions negotiated directly between the Fund and the counterparty. OTC
contracts do not necessarily have standard terms, so they may be less liquid and
more difficult to value than exchange-traded contracts. In addition, OTC
contracts with more specialized terms may be more difficult to value than
exchange traded contracts, especially in times of financial stress.

Depending on how the Fund uses derivative contracts and the relationships
between the market value of a derivative contract and the Reference Instrument,
derivative contracts may increase or decrease the Fund's exposure to the risks
of the Reference Instrument, and may also expose the fund to liquidity and
leverage risks.  OTC contracts also expose the Fund to credit risks in the event
that a counterparty defaults on the contract.

The Fund may invest in a derivative contract if it is permitted to own, invest
in, or otherwise have economic exposure to the Reference Instrument. The Fund is
not required to own a Reference Instrument in order to buy or sell a derivative
contract relating to that Reference Instrument. The Fund may trade in the
following types of derivative contracts, including combinations thereof:

FUTURES CONTRACTS
Futures contracts provide for the future sale by one party and purchase by
another party of a specified amount of a Reference Instrument at a specified
price, date and time.  Entering into a contract to buy a Reference Instrument is
commonly referred to as buying a contract or holding a long position in the
asset.  Entering into a contract to sell a Reference Instrument is commonly
referred to as selling a contract or holding a short position in the Reference
Instrument.  Futures contracts are considered to be commodity contracts. The
Fund has claimed an exclusion from the definition of the term "commodity pool
operator" under the Commodity Exchange Act and, therefore, is not subject to
registration or regulation as a commodity pool operator under that Act.  Futures
contracts traded OTC are frequently referred to as forward contracts.  The Fund
can buy or sell financial futures (such as interest rate futures, index futures
and security futures), as well as, currency futures and currency forward
contracts.

INTEREST RATE FUTURES
An interest-rate futures contract is an exchange-traded contract for which the
Reference Instrument is an interest-bearing fixed income security or an inter-
bank deposit. Two examples of common interest rate futures contracts are U.S.
Treasury futures contracts and Eurodollar futures contracts. The Reference
Instrument for a U.S. Treasury futures contract is a U.S. Treasury security. The
Reference Instrument for a Eurodollar futures contract is the London Interbank
Offered Rate (commonly referred to as "LIBOR"); Eurodollar futures contracts
enable the purchaser to obtain a fixed rate for the lending of funds over a
stated period of time and the seller to obtain a fixed rate for a borrowing of
funds over that same period.

INDEX FUTURES
An index futures contract is an exchange-traded contract to make or receive a
payment based upon changes in the value of an index. An index is a statistical
composite that measures changes in the value of designated Reference
Instruments. An index is usually computed by a sum product of a list of the
designated Reference Instruments' current prices and a list of weights assigned
to these Reference Instruments.

SECURITY FUTURES
A security futures contract is an exchange-traded contract to purchase or sell
in the future a specific quantity of a security (other than a Treasury security)
or a narrow-based securities index at a certain price. Presently, the only
available security futures contracts use shares of a single equity security as
the Reference Instrument. However, it is possible that in the future security
futures contracts will be developed that use a single fixed-income security as
the Reference Instrument.





CURRENCY FUTURES AND CURRENCY FORWARD CONTRACTS
A currency futures contract is an exchange-traded contract to buy or sell a
particular currency at a specific price at some time in the future (commonly
three months or more). A currency forward contract is an OTC derivative that
represents an obligation to purchase or sell a specific currency at a future
date, at a price set at the time of the contract and for a period agreed upon by
the parties which may be either a window of time or a fixed number of days from
the date of the contract. Currency futures and forward contracts are highly
volatile, with a relatively small price movement potentially resulting in
substantial gains or losses to the Fund. Additionally, the Fund may lose money
on currency futures and forward contracts if changes in currency rates do not
occur as anticipated or if the Fund's counterparty to the contract were to
default.

OPTION CONTRACTS
Option contracts (also called "options") are rights to buy or sell a Reference
Instrument for a specified price (the exercise price) during, or at the end of,
a specified period. The seller (or writer) of the option receives a payment, or
premium, from the buyer, which the writer keeps regardless of whether the buyer
uses (or exercises) the option. Options can trade on exchanges or in the OTC
market and may be bought or sold on a wide variety of Reference Instruments.
Options that are written on futures contracts will be subject to margin
requirements similar to those applied to futures contracts.

The Fund may buy and/or sell the following types of options:

CALL OPTIONS
A call option gives the holder (buyer) the right to buy the Reference Instrument
from the seller (writer) of the option. The Fund may use call options in the
following ways:

{circle}Buy call options on a Reference Instrument in anticipation of an
   increase in the value of the Reference Instrument; and

{circle}Write call options on a Reference Instrument to generate income from
   premiums, and in anticipation of a decrease or only limited increase in the
   value of the Reference Instrument.  If the Fund writes a call option on a
   Reference Instrument that it owns and that call option is exercised, the Fund
   foregoes any possible profit from an increase in the market price of the
   Reference Instrument over the exercise price plus the premium received.

PUT OPTIONS
A put option gives the holder the right to sell the Reference Instrument to the
writer of the option. The Fund may use put options in the following ways:

{circle}Buy put options on a Reference Instrument in anticipation of a decrease
   in the value of the Reference Instrument; and

{circle}Write put options on a Reference Instrument to generate income from
   premiums, and in anticipation of an increase or only limited decrease in the
   value of the Reference Instrument. In writing puts, there is a risk that the
   Fund may be required to take delivery of the Reference Instrument when its
   current market price is lower than the exercise price.

The Fund may also buy or write options, as needed, to close out existing option
positions.

Finally, the Fund may enter into combinations of options contracts in an attempt
to benefit from changes in the prices of those options contracts (without regard
to changes in the value of the Reference Instrument).

SWAP CONTRACTS
A swap contract (also known as a "swap") is a type of derivative contract in
which two parties agree to pay each other (swap) the returns derived from
Reference Instruments.  Most swaps do not involve the delivery of the underlying
assets by either party, and the parties might not own the Reference Instruments.
The payments are usually made on a net basis so that, on any given day, the Fund
would receive (or pay) only the amount by which its payment under the contract
is less than (or exceeds) the amount of the other party's payment. Swap
agreements are sophisticated instruments that can take many different forms and
are known by a variety of names.  Common swap agreements that the Fund may use
include:

INTEREST RATE SWAPS
Interest rate swaps are contracts in which one party agrees to make regular
payments equal to a fixed or floating interest rate times a stated principal
amount (commonly referred to as a "notional principal amount") in return for
payments equal to a different fixed or floating rate times the same principal
amount, for a specific period. For example, a $10 million London Interbank
Offered Rate (commonly referred to as "LIBOR") swap would require one party to
pay the equivalent of the London Interbank Offered Rate of interest (which
fluctuates) on $10 million principal amount in exchange for the right to receive
the equivalent of a stated fixed rate of interest on $10 million principal
amount.

CAPS AND FLOORS
Caps and Floors are contracts in which one party agrees to make payments only if
an interest rate or index goes above (Cap) or below (Floor) a certain level in
return for a fee from the other party.



TOTAL RETURN SWAPS
A total return swap is an agreement between two parties whereby one party agrees
to make payments of the total return from a Reference Instrument (or a basket of
such instruments) during the specified period, in return for payments equal to a
fixed or floating rate of interest or the total return from another Reference
Instrument.  Alternately, a total return swap can be structured so that one
party will make payments to the other party if the value of a Reference
Instrument increases, but receive payments from the other party if the value of
that instrument decreases.

CREDIT DEFAULT SWAPS
A credit default swap (CDS) is an agreement between two parties whereby one
party (the "Protection Buyer") agrees to make payments over the term of the CDS
to the other party (the "Protection Seller"), provided that no designated event
of default, restructuring or other credit related event (each a "Credit Event")
occurs with respect to Reference Instrument that is usually a particular bond or
the unsecured credit of an issuer, in general (the "Reference Obligation"). Many
CDS are physically settled, which means that if a Credit Event occurs, the
Protection Seller must pay the Protection Buyer the full notional value, or "par
value," of the Reference Obligation in exchange for delivery by the Protection
Buyer of the Reference Obligation or another similar obligation issued by the
issuer of the Reference Obligation (the "Deliverable Obligation").  The
Counterparties agree to the characteristics of the Deliverable Obligation at the
time that they enter into the CDS. Alternately, a CDS can be "cash settled,"
which means that upon the occurrence of a Credit Event, the Protection Buyer
will receive a payment from the Protection Seller equal to the difference
between the par amount of the Reference Obligation and its market value at the
time of the Credit Event.  The Fund may be either the Protection Buyer or the
Protection Seller in a CDS.  If the Fund is a Protection Buyer and no Credit
Event occurs, the Fund will lose its entire investment in the CDS (i.e., an
amount equal to the payments made to the Protection Seller over the term of the
CDS). However, if a Credit Event occurs, the Fund (as Protection Buyer) will
deliver the Deliverable Obligation and receive a payment equal to the full
notional value of the Reference Obligation, even though the Reference Obligation
may have little or no value. If the Fund is the Protection Seller and no Credit
Event occurs, the Fund will receive a fixed rate of income throughout the term
of the CDS. However, if a Credit Event occurs, the Fund (as Protection Seller)
will pay the Protection Buyer the full notional value of the Reference
Obligation and receive the Deliverable Obligation from the Protection Buyer.  A
CDS may involve greater risks than if the Fund invested directly in the
Reference Obligation. For example, a CDS may increase credit risk since the Fund
has exposure to both the issuer of the Reference Obligation and the Counterparty
to the CDS.

CURRENCY SWAPS
Currency swaps are contracts which provide for interest payments in different
currencies. The parties might agree to exchange the notional principal amounts
of the currencies as well (commonly called a "foreign exchange swap").

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HEDGING
Hedging transactions are intended to reduce specific risks. For example, to
protect the Fund against circumstances that would normally cause the Fund's
portfolio securities to decline in value, the Fund may buy or sell a derivative
contract that would normally increase in value under the same circumstances. The
Fund may also attempt to hedge by using combinations of different derivative
contracts, or derivative contracts and securities. The Fund's ability to hedge
may be limited by the costs of the derivative contracts. The Fund may attempt to
lower the cost of hedging by entering into transactions that provide only
limited protection, including transactions that (1) hedge only a portion of its
portfolio, (2) use derivative contracts that cover a narrow range of
circumstances or (3) involve the sale of derivative contracts with different
terms. Consequently, hedging transactions will not eliminate risk even if they
work as intended. In addition, hedging strategies are not always successful, and
could result in increased expenses and losses to the Fund.


SPECIAL TRANSACTIONS

INTER-FUND BORROWING AND LENDING ARRANGEMENTS
The Securities and Exchange Commission (SEC) has granted an exemption that
permits the Fund and all other funds advised by subsidiaries of Federated
Investors, Inc. (Federated funds) to lend and borrow money for certain temporary
purposes directly to and from other Federated funds.  Participation in this
inter-fund lending program is voluntary for both borrowing and lending Federated
funds, and an inter-fund loan is only made if it benefits each participating
Federated fund.  Federated Investors, Inc. (Federated) administers the program
according to procedures approved by the Fund's Board, and the Board monitors the
operation of the program.  Any inter-fund loan must comply with certain
conditions set out in the exemption, which are designed to assure fairness and
protect all participating Federated funds.

For example, inter-fund lending is permitted only (a) to meet shareholder
redemption requests, and (b) to meet commitments arising from "failed" trades,
and (c) for other temporary purposes.  All inter-fund loans must be repaid in
seven days or less.  The Fund's participation in this program must be consistent
with its investment policies and limitations, and must meet certain percentage
tests.  Inter-fund loans may be made only when the rate of interest to be
charged is more attractive to the lending Federated fund than market-competitive
rates on overnight repurchase agreements (Repo Rate) and more attractive to the
borrowing Federated fund than the rate of interest that would be charged by an
unaffiliated bank for short-term borrowings (Bank Loan Rate), as determined by
the Board.  The interest rate imposed on inter-fund loans is the average of the
Repo Rate and the Bank Loan Rate.


REPURCHASE AGREEMENTS
Repurchase agreements are transactions in which a Fund buys a security from a
dealer or bank and agrees to sell the security back at a mutually agreed-upon
time and price. The repurchase price exceeds the sale price, reflecting an
agreed-upon interest rate effective for the period the Fund owns the security
subject to repurchase. The agreed-upon interest rate is unrelated to the
interest rate on the underlying security. The Funds will only enter into
repurchase agreements with banks and other recognized financial institutions,
such as broker/dealers, which are deemed by the Adviser to be creditworthy.

A Fund's custodian or subcustodian is required to take possession of the
securities subject to repurchase agreements. The Adviser or subcustodian will
monitor the value of the underlying security each day to ensure that the value
of the security always equals or exceeds the repurchase price.

Repurchase agreements are subject to credit risk.


REVERSE REPURCHASE AGREEMENTS
Reverse repurchase agreements are repurchase agreements in which the Fund is the
seller (rather than the buyer) of the securities, and agrees to repurchase them
at an agreed-upon time and price. A reverse repurchase agreement may be viewed
as a type of borrowing by the Fund. Reverse repurchase agreements are subject to
credit risks. In addition, reverse repurchase agreements create leverage risks
because the Fund must repurchase the underlying security at a higher price,
regardless of the market value of the security at the time of repurchase.

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HYBRID INSTRUMENTS
Hybrid instruments combine elements of two different kinds of securities or
financial instruments (such as a derivative contract). Frequently, the value of
a hybrid instrument is determined by reference to changes in the value of a
Reference Instrument (that is a designated security, commodity, currency, index,
or other asset or instrument including a derivative contract).  Hybrid
instruments can take on many forms including, but not limited to, the following
forms. First, a common form of a hybrid instrument combines elements of a
derivative contract with those of another security (typically a fixed-income
security). In this case all or a portion of the interest or principal payable on
a hybrid security is determined by reference to changes in the price of a
Reference Instrument.  Second, a hybrid instrument may also combine elements of
a fixed-income security and an equity security. Third, hybrid instruments may
include convertible securities with conversion terms related to a Reference
Instrument.

Depending on the type and terms of the hybrid instrument, its risks may reflect
a combination of the risks of investing in the Reference Instrument with the
risks of investing in other securities, currencies and derivative contracts.
Thus, an investment in a hybrid instrument may entail significant risks in
addition to those associated with traditional securities or the Reference
Instrument.  Hybrid instruments are also potentially more volatile than
traditional securities or the Reference Instrument.  Moreover, depending on the
structure of the particular hybrid, it may expose the Fund to leverage risks or
carry liquidity risks.

CREDIT LINKED NOTE
A credit linked note (CLN) is a type of hybrid instrument in which a special
purpose entity issues a structured note (the "Note Issuer") with respect to
which the Reference Instrument is a single bond, a portfolio of bonds, or the
unsecured credit of an issuer, in general (each a "Reference Credit").  The
purchaser of the CLN (the "Note Purchaser") invests a par amount and receives a
payment during the term of the CLN that equals a fixed or floating rate of
interest equivalent to a high rated funded asset (such as a bank certificate of
deposit) plus an additional premium that relates to taking on the credit risk of
the Reference Credit. Upon maturity of the CLN, the Note Purchaser will receive
a payment equal to (i) the original par amount paid to the Note Issuer, if there
is no occurrence of a designated event of default, restructuring or other credit
event (each, a "Credit Event") with respect to the issuer of the Reference
Credit or (ii) the market value of the Reference Credit, if a Credit Event has
occurred.  Depending upon the terms of the CLN, it is also possible that the
Note Purchaser may be required to take physical delivery of the Reference Credit
in the event of a Credit Event. Most credit linked notes use a corporate bond
(or a portfolio of corporate bonds) as the Reference Credit. However, almost any
type of fixed-income security (including foreign government securities), index,
or derivative contract (such as a credit default swap) can be used as the
Reference Credit.

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EQUITY LINKED NOTE
An equity linked note (ELN) is a type of hybrid instrument that provides the
noteholder with exposure to a single equity security, a basket of equity
securities, or an equity index (the "Reference Equity Instrument").  Typically,
an ELN pays interest at agreed rates over a specified time period and, at
maturity, either converts into shares of a Reference Equity Instrument or
returns a payment to the noteholder based on the change in value of a Reference
Equity Instrument.


SECURITIES LENDING
The Fund may lend portfolio securities to borrowers that the Adviser deems
creditworthy.  In return, the Fund receives cash or liquid securities from the
borrower as collateral.  The borrower must furnish additional collateral if the
market value of the loaned securities increases.  Also, the borrower must pay
the Fund the equivalent of any dividends or interest received on the loaned
securities.

The Fund will reinvest cash collateral in securities that qualify as an
acceptable investment for the Fund.  However, the Fund must pay interest to the
borrower for the use of cash collateral.

Loans are subject to termination at the option of the Fund or the borrower.  The
Fund will not have the right to vote on securities while they are on loan.
However, the Fund will attempt to terminate a loan in an effort to reacquire the
securities in time to vote on matters that are deemed to be material by the
Adviser. There can be no assurance that the Fund will have sufficient notice of
such matters to be able to terminate the loan in time to vote thereon.  The Fund
may pay administrative and custodial fees in connection with a loan and may pay
a negotiated portion of the interest earned on the cash collateral to a
securities lending agent or broker.

Securities lending activities are subject to interest rate risks and credit
risks. These transactions create leverage risks.


ASSET SEGREGATION
In accordance with the SEC and SEC staff positions regarding the interpretation
of the Investment Company Act of 1940 (1940 Act), with respect to derivatives
that create a future payment obligation of the Fund, the Fund must "set aside"
(referred to sometimes as "asset segregation") liquid assets, or engage in other
SEC- or staff-approved measures, while the derivative contracts are open. For
example, with respect to forwards and futures contracts that are not
contractually required to "cash-settle," the Fund must cover its open positions
by setting aside cash or readily marketable securities equal to the contracts'
full, notional value. With respect to forwards and futures that are
contractually required to "cash-settle," however, the Fund is permitted to set
aside cash or readily marketable securities in an amount equal to the Fund's
daily marked-to-market (net) obligations, if any (i.e., the Fund's daily net
liability, if any), rather than the notional value.

The Fund will employ another approach to segregating assets to cover options
that it sells. If the Fund sells a call option, the Fund will set aside either
the Reference Instrument subject to the option, cash or readily marketable
securities with a value that equals or exceeds the current market value of the
Reference Instrument. In no event, will the value of the cash or readily
marketable securities set aside by the Fund be less than the exercise price of
the call option. If the Fund sells a put option, the Fund will set aside cash or
readily marketable securities with a value that equals or exceeds the exercise
price of the put option.

The Fund's asset segregation approach for swap agreements varies among different
types of swaps. For example, if the Fund enters into a credit default swap as
the Protection Buyer, then it will set aside cash or readily marketable
securities necessary to meet any accrued payment obligations under the swap. By
comparison, if the Fund enters into a credit default swap as the Protection
Seller, then the Fund will set aside cash or readily marketable securities equal
to the full notional amount of the swap that must be paid upon the occurrence of
a Credit Event. For some other types of swaps, such as interest rate swaps, the
Fund will calculate the obligations of the counterparties to the swap on a net
basis. Consequently, the Fund's current obligation (or rights) under this type
of swap will equal only the net amount to be paid or received based on the
relative values of the positions held by each counterparty to the swap (the "net
amount"). The net amount currently owed by or to the Fund will be accrued daily
and the Fund will set aside cash or readily marketable securities equal to any
accrued but unpaid net amount owed by the Fund under the swap.

The Fund may reduce the liquid assets segregated to cover obligations under a
derivative contract by entering into an offsetting derivative contract. For
example, if the Fund sells a put option for the same Reference Instrument as a
call option the Fund has sold, and the exercise price of the call option is the
same as or higher than the exercise price of the put option, then the Fund may
net its obligations under the options and set aside cash or readily marketable
securities (including any margin deposited for the options) with a value equal
to the greater of (a) the current market value of the Reference Instrument
deliverable under the call option or (b) the exercise price of the put option.

By setting aside cash or readily marketable securities equal to only its net
obligations under swaps and certain cash-settled derivative contracts, the Fund
will have the ability to employ leverage to a greater extent than if the Fund
were required to segregate cash or readily marketable securities equal to the
full notional value of such contracts. The use of leverage involves certain
risks. See "Risk Factors." Unless the Fund has other cash or readily marketable
securities to set aside, it cannot trade assets set aside in connection with
derivative contracts or special transactions without entering into an offsetting
derivative contract or terminating a special transaction. This may cause the
Fund to miss favorable trading opportunities or to realize losses on derivative
contracts or special transactions. The Fund reserves the right to modify its
asset segregation policies in the future to comply with any changes in the
positions articulated from time to time by the SEC and its staff.

Generally, special transactions do not cash-settle on a net basis. Consequently,
with respect to special transactions, the Fund will set aside cash or readily
marketable securities with a value that equals or exceeds the Fund's
obligations.





INVESTMENT RISKS

There are many factors which may affect an investment in the Fund. The Fund's
principal risks are described in its prospectus. Additional risk factors are
outlined below.


EQUITY SECURITIES INVESTMENT RISKS

STOCK MARKET RISKS
The value of equity securities in the Fund's portfolio will rise and fall. These
  fluctuations could be a sustained trend or a drastic movement. The Fund's
  portfolio will reflect changes in prices of individual portfolio stocks or
  general changes in stock valuations. Consequently, the Fund's share price may
  decline.

The Adviser attempts to manage market risk by limiting the amount the Fund
  invests in each company's equity securities. However, diversification will not
  protect the Fund against widespread or prolonged declines in the stock market.


SECTOR RISKS
Companies with similar characteristics may be grouped together in broad
  categories called sectors. Sector risk is the possibility that a certain
  sector may underperform other sectors or the market as a whole. As the Adviser
  allocates more of the Fund's portfolio holdings to a particular sector, the
  Fund's performance will be more susceptible to any economic, business or other
  developments which generally affect that sector.

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LIQUIDITY RISKS
Trading opportunities are more limited for equity securities that are not widely
  held. This may make it more difficult to sell or buy a security at a favorable
  price or time. Consequently, the Fund may have to accept a lower price to sell
  a security, sell other securities to raise cash or give up an investment
  opportunity, any of which could have a negative effect on the Fund's
  performance. Infrequent trading of securities may also lead to an increase in
  their price volatility.

Liquidity risk also refers to the possibility that the Fund may not be able to
  sell a security or close out a derivative contract when it wants to. If this
  happens, the Fund will be required to continue to hold the security or keep
  the position open, and the Fund could incur losses.

OTC derivative contracts generally carry greater liquidity risk than exchange-
  traded contracts. This risk may be increased in times of financial stress, if
  the trading market for OTC derivative contracts becomes restricted.

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RISKS RELATED TO INVESTING FOR VALUE
Due to their relatively low valuations, value stocks are typically less volatile
  than growth stocks. For instance, the price of a value stock may experience a
  smaller increase on a forecast of higher earnings, a positive fundamental
  development, or positive market development. Further, value stocks tend to
  have higher dividends than growth stocks. This means they depend less on price
  changes for returns and may lag behind growth stocks in an up market.


CURRENCY RISKS
Exchange rates for currencies fluctuate daily. The combination of currency risk
  and market risk tends to make securities traded in foreign markets more
  volatile than securities traded exclusively in the U.S.


CREDIT RISKS
Credit risk includes the possibility that a party to a transaction involving the
  Fund will fail to meet its obligations. This could cause the Fund to lose the
  benefit of the transaction or prevent the Fund from selling or buying other
  securities to implement its investment strategy.


LEVERAGE RISKS
Leverage risk is created when an investment exposes the Fund to a level of risk
  that exceeds the amount invested. Changes in the value of such an investment
  magnify the Fund's risk of loss and potential for gain.

Investments can have these same results if their returns are based on a multiple
  of a specified index, security, or other benchmark.


RISKS OF FOREIGN INVESTING
Foreign securities pose additional risks because foreign economic or political
  conditions may be less favorable than those of the United States. Securities
  in foreign markets may also be subject to taxation policies that reduce
  returns for U.S. investors.

Foreign companies may not provide information (including financial statements)
  as frequently or to as great an extent as companies in the United States.
  Foreign companies may also receive less coverage than United States companies
  by market analysts and the financial press. In addition, foreign countries may
  lack uniform accounting, auditing and financial reporting standards or
  regulatory requirements comparable to those applicable to U.S. companies.
  These factors may prevent the Fund and its Adviser from obtaining information
  concerning foreign companies that is as frequent, extensive and reliable as
  the information available concerning companies in the United States.

Foreign countries may have restrictions on foreign ownership of securities or
  may impose exchange controls, capital flow restrictions or repatriation
  restrictions which could adversely affect the liquidity of the Fund's
  investments.


FIXED-INCOME SECURITIES INVESTMENT RISKS

INTEREST RATE RISKS
Prices of fixed-income securities rise and fall in response to interest rate
  changes in the interest rate paid by similar securities. Generally, when
  interest rates rise, prices of fixed-income securities fall. However, market
  factors, such as the demand for particular fixed-income securities, may cause
  the price of certain fixed-income securities to fall while the prices of other
  securities rise or remain unchanged.

Interest rate changes have a greater effect on the price of fixed-income
  securities with longer durations. Duration measures the price sensitivity of a
  fixed-income security to changes in interest rates.


CREDIT RISKS
Credit risk is the possibility that an issuer will default on a security by
  failing to pay interest or principal when due. If an issuer defaults, the Fund
  will lose money.

Many fixed-income securities receive credit ratings from services such as
  Standard & Poor's and Moody's Investor Services, Inc. These services assign
  ratings to securities by assessing the likelihood of issuer default. Lower
  credit ratings correspond to higher credit risk. If a security has not
  received a rating, the Fund must rely entirely upon the Adviser's credit
  assessment.

Fixed-income securities generally compensate for greater credit risk by paying
  interest at a higher rate. The difference between the yield of a security and
  the yield of a U.S. Treasury security with a comparable maturity (the spread)
  measures the additional interest paid for risk. Spreads may increase generally
  in response to adverse economic or market conditions. A security's spread may
  also increase if the security's rating is lowered, or the security is
  perceived to have an increased credit risk. An increase in the spread will
  cause the price of the security to decline.

Credit risk includes the possibility that a party to a transaction involving the
  Fund will fail to meet its obligations. This could cause the Fund to lose the
  benefit of the transaction or prevent the Fund from selling or buying other
  securities to implement its investment strategy.


LIQUIDITY RISKS
Trading opportunities are more limited for fixed-income securities that have not
  received any credit ratings, have received ratings below investment grade or
  are not widely held. These features may make it more difficult to sell or buy
  a security at a favorable price or time. Consequently, the Fund may have to
  accept a lower price to sell a security, sell other securities to raise cash
  or give up an investment opportunity, any of which could have a negative
  effect on the Fund's performance. Infrequent trading of securities may also
  lead to an increase in their price volatility.

Liquidity risk also refers to the possibility that the Fund may not be able to
  sell a security or close out a derivative contract when it wants to. If this
  happens, the Fund will be required to continue to hold the security or keep
  the position open, and the Fund could incur losses.

OTC derivative contracts generally carry greater liquidity risk than exchange-
  traded contracts.  This risk may be increased in times of financial stress, if
  the trading market for OTC derivative contracts becomes restricted.

<R>

PREPAYMENT RISKS
Unlike traditional fixed-income securities, which pay a fixed rate of interest
  until maturity (when the entire principal amount is due) payments on mortgage-
  backed securities include both interest and a partial payment of principal.
  Partial payment of principal may be comprised of scheduled principal payments
  as well as unscheduled payments from the voluntary prepayment , refinancing,
  or foreclosure of the underlying loans.  These unscheduled prepayments of
  principal create risks that can adversely affect a Fund holding mortgage-
  backed securities.

For example, when interest rates decline, the values of mortgage-backed
securities generally rise.  However, when interest rates decline, unscheduled
prepayments can be expected to accelerate, and the Fund would be required to
reinvest the proceeds of the prepayments at the lower interest rates then
available.  Unscheduled prepayments would also limit the potential for capital
appreciation on mortgage-backed securities.

Conversely, when interest rates rise, the values of mortgage-backed securities
generally fall.  Since rising interest rates typically result in decreased
prepayments, this could lengthen the average lives of mortgage-backed
securities, and cause their value to decline more than traditional fixed-income
securities.

Generally, mortgage-backed securities compensate for the increased risk
  associated with prepayments by paying a higher yield.  The additional interest
  paid for risk is measured by the difference between the yield of a mortgage-
  backed security and the yield of a U.S. Treasury security with a comparable
  maturity (the spread).  An increase in the spread will cause the price of the
  mortgage-backed security to decline.  Spreads generally increase in response
  to adverse economic or market conditions.  Spreads may also increase if the
  security is perceived to have an increased prepayment risk or is perceived to
  have less market demand.


RISKS ASSOCIATED WITH NONINVESTMENT-GRADE SECURITIES
The Fund may invest in convertible securities rated below investment-grade, also
  known as junk bonds. Such convertible securities generally entail greater
  market, credit and liquidity risks than investment-grade securities. For
  example, their prices are more volatile, economic downturns and financial
  setbacks may affect their prices more negatively, and their trading market may
  be more limited.


CALL RISKS
Call risk is the possibility that an issuer may redeem a fixed-income security
  before maturity (a call) at a price below its current market price. An
  increase in the likelihood of a call may reduce the security's price.

If a fixed-income security is called, the Fund may have to reinvest the proceeds
  in other fixed-income securities with lower interest rates, higher credit
  risks, or other less favorable characteristics.


SECTOR RISKS
A substantial part of the Fund's portfolio may be comprised of securities issued
  or credit enhanced by companies in similar businesses, or with other similar
  characteristics. As a result, the Fund will be more susceptible to any
  economic, business, political, or other developments which generally affect
  these issuers.


RISKS OF FOREIGN INVESTING
Foreign securities pose additional risks because foreign economic or political
  conditions may be less favorable than those of the United States. Securities
  in foreign markets may also be subject to taxation policies that reduce
  returns for U.S. investors.

Foreign companies may not provide information (including financial statements)
  as frequently or to as great an extent as companies in the United States.
  Foreign companies may also receive less coverage than United States companies
  by market analysts and the financial press. In addition, foreign countries may
  lack uniform accounting, auditing and financial reporting standards or
  regulatory requirements comparable to those applicable to U.S. companies.
  These factors may prevent the Fund and its Adviser from obtaining information
  concerning foreign companies that is as frequent, extensive and reliable as
  the information available concerning companies in the United States.

Foreign countries may have restrictions on foreign ownership of securities or
  may impose exchange controls, capital flow restrictions or repatriation
  restrictions which could adversely affect the liquidity of the Fund's
  investments.


CURRENCY RISKS
Exchange rates for currencies fluctuate daily. The combination of currency risk
  and market risk tends to make securities traded in foreign markets more
  volatile than securities traded exclusively in the U.S.


STOCK MARKET RISKS
The value of equity securities in the Fund's portfolio will rise and fall. These
  fluctuations could be a sustained trend or a drastic movement. The Fund's
  portfolio will reflect changes in prices of individual portfolio stocks or
  general changes in stock valuations. Consequently, the Fund's share price may
  decline.

The Adviser attempts to manage market risk by limiting the amount the Fund
  invests in each company's equity securities. However, diversification will not
  protect the Fund against widespread or prolonged declines in the stock market.

</R>

RISKS OF INVESTING IN DERIVATIVE CONTRACTS AND HYBRID INSTRUMENTS
The Fund's use of derivative contracts and hybrid instruments involves risks
different from, or possibly greater than, the risks associated with investing
directly in securities and other traditional investments.  First, changes in the
value of the derivative contracts and hybrid instruments in which the Fund
invests may not be correlated with changes in the value of the underlying
Reference Instruments or, if they are correlated, may move in the opposite
direction than originally anticipated. Second, while some strategies involving
derivatives may reduce the risk of loss, they may also reduce potential gains
or, in some cases, result in losses by offsetting favorable price movements in
portfolio holdings.  Third, there is a risk that derivative contracts and hybrid
instruments may be erroneously priced or improperly valued and, as a result, the
Fund may need to make increased cash payments to the counterparty.  Fourth,
derivative contracts and hybrid instruments may cause the Fund to realize
increased ordinary income or short-term capital gains (which are treated as
ordinary income for Federal income tax purposes) and, as a result, may increase
taxable distributions to shareholders. Fifth, a common provision in OTC
derivative contracts permits the counterparty to terminate any such contract
between it and the Fund, if the value of the Fund's total net assets declines
below a specified level over a given time period. Factors that may contribute to
such a decline (which usually must be substantial) include significant
shareholder redemptions and/or a marked decrease in the market value of the
Fund's investments. Any such termination of the Fund's OTC derivative contracts
may adversely affect the Fund (for example, by increasing losses and/or costs,
and/or preventing the Fund from fully implementing its investment strategies).
Finally, derivative contracts and hybrid instruments may also involve other
risks described herein or in the Fund's prospectus, such as stock market,
interest rate, credit, currency, liquidity and leverage risks.


RISKS ASSOCIATED WITH THE INVESTMENT ACTIVITIES OF OTHER ACCOUNTS
Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser and accounts managed by affiliates of the
Adviser.  Therefore, it is possible that investment-related actions taken by
such other accounts could adversely impact the Fund with respect to, for
example, the value of Fund portfolio holdings, and/or prices paid to or received
by the Fund on its portfolio transactions, and/or the Fund's ability to obtain
or dispose of portfolio securities.  Related considerations are discussed
elsewhere in this SAI under "Brokerage Transactions and Investment Allocation."





INVESTMENT OBJECTIVE (AND POLICIES) AND INVESTMENT LIMITATIONS

The Fund's fundamental investment objective is to seek growth of capital and of
income by concentrating the area of investment decision in the securities of
high-quality companies. The investment objective may not be changed by the
Fund's directors without shareholder approval.


Whenever deemed appropriate to the attainment of its investment objective, the
Fund may make investments in a particular industry which would result in up to
25% of its total assets, taken at market value, being invested in such industry.
If through market action the market value of the Fund's assets invested in a
particular industry exceeds 25% of the market value of its total assets, the
Fund will not be required to make any reduction of its holdings in the
particular industry.

INVESTMENT LIMITATIONS

SELLING SHORT AND BUYING ON MARGIN
The Fund will not sell any securities short or purchase any securities on
margin, but it may obtain such short-term credits as may be necessary for
clearance or purchase and sales of securities.


BORROWING MONEY
The Fund will not borrow money except from banks as a temporary measure for
extraordinary or emergency purposes and then: (1) only in amounts not in excess
of 5% of the value of its total assets; or (2) in an amount up to one-third of
the value of its total assets, including the amount borrowed, in order to meet
redemption requests without immediately selling any portfolio instruments. In
addition, the Fund may enter into reverse repurchase agreements and otherwise
borrow up to one-third of the value of its total assets, including the amount
borrowed, in order to meet redemption requests without immediately selling any
portfolio instruments. The use of repurchase agreements and the borrowing
provision in (2) above, is not for investment leverage but solely to facilitate
management of the portfolio by enabling the Fund to meet redemption requests
when the liquidation of portfolio instruments is deemed to be inconvenient or
disadvantageous.

Interest paid on borrowed funds will not be available for investment and will
reduce net income. The Fund will liquidate any such borrowings as soon as
possible and may not purchase any portfolio securities while the borrowings are
outstanding. However, during the period any reverse repurchase agreements are
outstanding, but only to the extent necessary to assure completion of the
reverse repurchase agreements, the Fund will restrict the purchase of portfolio
instruments to money market instruments maturing on or before the expiration
date of the reverse repurchase agreements.


PLEDGING ASSETS
The Fund will not mortgage, pledge, or hypothecate its securities.


DIVERSIFICATION OF INVESTMENTS
The Fund will not purchase the securities of any issuer if such purchase at the
time thereof would cause more than 5% of the total assets (taken at market
value) to be invested in the securities of such issuer, except U.S. government
securities as defined in the I1940 Act, and will not purchase more than 10% of
any class of voting securities of any one issuer.


INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund will not purchase securities of other investment companies or
investment trusts, except by purchase in the open market where no commission or
profit to a sponsor or dealer results from such purchase other than the
customary brokerage commissions or except when such purchase, though not made in
the open market, is part of a plan of merger or consolidation.


INVESTING IN NEW ISSUERS
The Fund will not invest more than 5% of its total assets (taken at market
value) in securities of issuers which have a record of less than three years of
continuous operation, including, however, in such three years the operation of
any predecessor company or companies, partnership, or individual enterprise if
the issuer whose securities are proposed as investment for funds of the Fund has
come into existence as a result or a merger, consolidation, reorganization or
the purchase of substantially all of the assets of such predecessor company or
companies, partnership or individual enterprise.


INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS OF THE FUND
The Fund will not purchase or retain in its portfolio any securities issued by
an issuer any of whose officers, directors, trustees or security holders is an
officer or Director of the Fund or is a member, officer, director or trustee of
the investment adviser, if at the time of or after the purchase of the
securities of such issuer by the Fund one or more of such persons owns
beneficially more than  1/2 of 1% of the shares or securities, or both (all
taken at market value) of such issuer and such persons owning more than one-half
of one percent ( 1/2%) of such shares or together own beneficially more than 5%
of such shares or securities, or both (all taken at market value).


UNDERWRITING
The Fund will not underwrite or engage in agency distribution of securities
issued by others; provided, however, that this shall not be construed to prevent
or limit in any manner the power of the Fund to purchase securities for
investment as herein provided.


INVESTING IN COMMODITIES OR REAL ESTATE
The Fund will not invest in commodities, commodity contracts, or real estate.


LENDING CASH OR SECURITIES
The Fund will not lend any of its assets except portfolio securities. (This
shall not prevent the purchase or holding of U.S. government securities, bonds,
debentures, notes, certificates of indebtedness or other debt securities of an
issuer, repurchase agreements covering U.S. government securities, or other
transactions which are permitted by the Fund's investment objective and policies
or Articles of Incorporation.)


ACQUIRING SECURITIES
The Fund will not purchase securities of a company for the purpose of exercising
control or management. However, the Fund may invest in up to 10% of any class of
the voting securities of any one issuer and may exercise its voting powers
consistent with the best interests of the Fund. In addition, the Fund, other
companies advised by the Fund's investment adviser, and other affiliated
companies may together buy and hold substantial amounts of voting stock of a
company and may vote together in regard to such company's affairs. In some such
cases, the Fund and its affiliates might collectively be considered to be in
control of such company. In some cases, the Directors and other persons
associated with the Fund and its affiliates might possibly become directors of
companies in which the Fund holds stock.


CONCENTRATION OF INVESTMENTS
The Fund will not invest more than 25% of the value of its total assets in any
one industry.


ISSUING SENIOR SECURITIES
The Fund will not issue senior securities.


INVESTING IN RESTRICTED SECURITIES
The Fund will not purchase restricted securities if immediately thereafter more
than 15% of the net assets of the Fund, taken at market value, would be invested
in such securities.

THE ABOVE LIMITATIONS CANNOT BE CHANGED UNLESS AUTHORIZED BY THE BOARD AND BY
THE "VOTE OF A MAJORITY OF ITS OUTSTANDING VOTING SECURITIES," AS DEFINED BY THE
INVESTMENT COMPANY ACT OF 1940 (1940 ACT). THE FOLLOWING LIMITATIONS, HOWEVER,
MAY BE CHANGED BY THE BOARD WITHOUT SHAREHOLDER APPROVAL. SHAREHOLDERS WILL BE
NOTIFIED BEFORE ANY MATERIAL CHANGE IN THESE LIMITATIONS BECOMES EFFECTIVE.

<R>

INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
The Fund may invest its assets in securities of other investment companies,
including the securities of affiliated money market funds, as an efficient means
of implementing its investment strategies and/or managing its uninvested cash.
These other investment companies are managed independently of the Fund and incur
additional fees and/or expenses which would, therefore, be borne indirectly by
the Fund in connection with any such investment.  However, the Adviser believes
that the benefits and efficiencies of this approach should outweigh the
potential additional fees and/or expenses.  The Fund may invest in money market
securities directly.

For purposes of the above limitations, the Fund considers certificates of
deposit and demand and time deposits issued by a U.S. branch of a domestic bank
or savings association having capital, surplus and undivided profits in excess
of $100,000,000 at the time of investment to be "cash items."  Except with
respect to borrowing money, if a percentage limitations is adhered to at the
time of investment, a later increase or decrease in percentage resulting from
any change in value or net assets will not result in a violation of such
limitation.



WHAT DO SHARES COST?

A Share's NAV is determined as of the end of regular trading on the New York
Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time) each day the NYSE is
open. The Fund calculates the NAV of each class by valuing the assets allocated
to the Share's class, subtracting the liabilities allocated to the class and
dividing the balance by the number of Shares of the class outstanding. The NAV
for each class of Shares may differ due to the variance in daily net income
realized by each class. Such variance will reflect only accrued net income to
which the Shareholders of a particular class are entitled. The NAV is calculated
to the nearest whole cent per Share.

In calculating its NAV, the Fund generally values investments as follows:

   {circle}Equity securities listed on a U.S. securities exchange or traded
      through the U.S. national market system are valued at their last reported
      sale price or official closing price in their principal exchange or
      market. If a price is not readily available, such equity securities are
      valued based upon the mean of closing bid and asked quotations from one or
      more dealers.

   {circle}Other equity securities traded primarily in the U.S. are valued based
      upon the mean of closing bid and asked quotations from one or more
      dealers.

   {circle}Equity securities traded primarily through securities exchanges and
      regulated market systems outside the U.S. are valued at their last
      reported sale price or official closing price in their principal exchange
      or market. These prices may be adjusted for significant events occurring
      after the closing of such exchanges or market systems as described below.
      If a price is not readily available, such equity securities are valued
      based upon the mean of closing bid and asked quotations from one or more
      dealers.

   {circle}Fixed-income securities and repurchase agreements acquired with
      remaining maturities of greater than sixty-days are fair valued using
      price evaluations provided by a pricing service approved by the Board. The
      methods used by pricing services to determine such price evaluations are
      described below. If a price evaluation is not readily available, such
      fixed-income securities are fair valued based upon price evaluations from
      one or more dealers.

   {circle}Fixed-income securities and repurchase agreements acquired with
      remaining maturities of sixty-days or less are valued at their amortized
      cost as described below.

   {circle}Futures contracts listed on exchanges are valued at their reported
      settlement price. Option contracts listed on exchanges are valued at their
      reported closing price. If a price is not readily available, such
      derivative contracts are valued based upon the mean of closing bid and
      asked quotations from one or more futures commission merchants.

   {circle}OTC derivative contracts are fair valued using price evaluations
      provided by various pricing services approved by the Board. The methods
      used by pricing services to determine such price evaluations are described
      below. If a price evaluation is not readily available, such derivative
      contracts are fair valued based upon price evaluations from one or more
      dealers or using a recognized pricing model for the contract.

   {circle}Shares of other mutual funds are valued based upon their reported
      NAVs. The prospectuses for these mutual funds explain the circumstances
      under which they will use fair value pricing and the effects of using fair
      value pricing.

If any price, quotation, price evaluation or other pricing source is not readily
available when the NAV is calculated, the Fund uses the fair value of the
investment determined in accordance with the procedures described below. There
can be no assurance that the Fund could purchase or sell an investment at the
price used to calculate the Fund's NAV. The Fund will not use a pricing service
or dealer who is an affiliated person of the Adviser to value investments.

Non-investment assets and liabilities are valued in accordance with Generally
Accepted Accounting Principles (GAAP). The NAV calculation includes expenses,
dividend income, interest income and other income through the date of the
calculation. Changes in holdings of investments and in the number of outstanding
Shares are included in the calculation not later than the first business day
following such change. Any assets or liabilities denominated in foreign
currencies are converted into U.S. dollars using an exchange rate obtained from
one or more currency dealers.

The Fund follows procedures that are common in the mutual fund industry
regarding errors made in the calculation of its NAV. This means that, generally,
the Fund will not correct errors of less than one cent per Share or errors that
did not result in net dilution to the Fund.


AMORTIZED COST VALUES
Under the amortized cost valuation method, an investment is valued initially at
its cost as determined in accordance with GAAP. The Fund then adjusts the amount
of interest income accrued each day over the term of the investment to account
for any difference between the initial cost of the investment and the amount
payable at its maturity. If the amount payable at maturity exceeds the initial
cost (a discount), then the daily accrual is increased; if the initial cost
exceeds the amount payable at maturity (a premium), then the daily accrual is
decreased. The Fund adds the amount of the increase to (in the case of a
discount), or subtracts the amount of the decrease from (in the case of a
premium), the investment's cost each day. The Fund uses this adjusted cost to
value the investment.


FAIR VALUATION AND SIGNIFICANT EVENTS PROCEDURES
The Board has ultimate responsibility for determining the fair value of
investments for which market quotations are not readily available. The Board has
appointed a Valuation Committee comprised of officers of the Fund and of the
Adviser to assist in this responsibility and in overseeing the calculation of
the NAV. The Board has also authorized the use of pricing services recommended
by the Valuation Committee to provide price evaluations of the current fair
value of certain investments for purposes of calculating the NAV.

PRICING SERVICE VALUATIONS. Based on the recommendations of the Valuation
Committee, the Board has authorized the Fund to use pricing services that
provide daily fair value evaluations of the current value of certain
investments, primarily fixed income securities and OTC derivatives contracts.
Different pricing services may provide different price evaluations for the same
security because of differences in their methods of evaluating market values.
Factors considered by pricing services in evaluating an investment include the
yields or prices of investments of comparable quality, coupon, maturity, call
rights and other potential prepayments, terms and type, reported transactions,
indications as to values from dealers, and general market conditions. A pricing
service may find it more difficult to apply these and other factors to
relatively illiquid or volatile investments, which may result in less frequent
or more significant changes in the price evaluations of these investments. If a
pricing service determines that it does not have sufficient information to use
its standard methodology, it may evaluate an investment based on the present
value of what investors can reasonably expect to receive from the issuer's
operations or liquidation.

Some pricing services provide a single price evaluation reflecting the bid-side
of the market for an investment (a "bid" evaluation). Other pricing services
offer both bid evaluations and price evaluations indicative of a price between
the prices bid and asked for the investment (a "mid" evaluation). The Fund
normally uses bid evaluations for U.S. Treasury and Agency securities, mortgage-
backed securities and municipal securities. The Fund normally uses mid
evaluations for other types of fixed income securities and OTC derivative
contracts.

FAIR VALUATION PROCEDURES. The Board has established procedures for determining
the fair value of investments for which price evaluations from pricing services
or dealers and market quotations are not readily available. The procedures
define an investment's "fair value" as the price that the Fund might reasonably
expect to receive upon its current sale. The procedures assume that any sale
would be made to a willing buyer in the ordinary course of trading. The
procedures require consideration of factors that vary based on the type of
investment and the information available. Factors that may be considered in
determining an investment's fair value include: (1) the last reported price at
which the investment was traded, (2) information provided by dealers or
investment analysts regarding the investment or the issuer, (3) changes in
financial conditions and business prospects disclosed in the issuer's financial
statements and other reports, (4) publicly announced transactions (such as
tender offers and mergers) involving the issuer, (5) comparisons to other
investments or to financial indices that are correlated to the investment,
(6) with respect to fixed-income investments, changes in market yields and
spreads, (7) with respect to investments that have been suspended from trading,
the circumstances leading to the suspension, and (8) other factors that might
affect the investment's value.

The Valuation Committee is responsible for the day-to-day implementation of
these procedures. The Valuation Committee may also authorize the use of a
financial valuation model to determine the fair value of a specific type of
investment. The Board periodically reviews and approves the fair valuations made
by the Valuation Committee and any changes made to the procedures.

Using fair value to price investments may result in a value that is different
from an investment's most recent closing price and from the prices used by other
mutual funds to calculate their NAVs. The fair value of an investment will
generally remain unchanged in the absence of new information relating to the
investment or its issuer, such as changes in the issuer's business or financial
results, or relating to external market factors, such as trends in the market
values of comparable securities. This may result in less frequent, and larger,
changes in fair value prices as compared to prices based on market quotations or
price evaluations from pricing services or dealers.

SIGNIFICANT EVENTS. The Board has adopted procedures requiring an investment to
be priced at its fair value whenever the Adviser determines that a significant
event affecting the value of the investment has occurred between the time as of
which the price of the investment would otherwise be determined and the time as
of which the NAV is computed. An event is considered significant if there is
both an affirmative expectation that the investment's value will change in
response to the event and a reasonable basis for quantifying the resulting
change in value. Examples of significant events that may occur after the close
of the principal market on which a security is traded, or the time of a price
evaluation provided by a pricing service or a dealer, include:

   {circle}With respect to securities traded principally in foreign markets,
      significant trends in U.S. equity markets or in the trading of foreign
      securities index futures or options contracts;

   {circle}With respect to price evaluations of fixed-income securities
      determined before the close of regular trading on the NYSE, actions by the
      Federal Reserve Open Market Committee and other significant trends in U.S.
      fixed-income markets;

   {circle}Political or other developments affecting the economy or markets in
      which an issuer conducts its operations or its securities are traded; and

   {circle}Announcements concerning matters such as acquisitions,
      recapitalizations, or litigation developments, or a natural disaster
      affecting the issuer's operations or regulatory changes or market
      developments affecting the issuer's industry.

The Valuation Committee uses a pricing service to determine the fair value of
equity securities traded principally in foreign markets when the Adviser
determines that there has been a significant trend in the U.S. equity markets or
in index futures trading. The pricing service uses models that correlate changes
between the closing and opening price of equity securities traded primarily in
non-U.S. markets to changes in prices in U.S. traded securities and derivative
contracts. The pricing service seeks to employ the model that provides the most
significant correlation based on a periodic review of the results. The model
uses the correlation to adjust the reported closing price of a foreign equity
security based on information available up to the close of the NYSE.

For other significant events, the Fund may seek to obtain more current
quotations or price evaluations from alternative pricing sources. If a reliable
alternative pricing source is not available, the fair value of the investment is
determined using the methods discussed above in Fair Valuation Procedures. The
Board has ultimate responsibility for any fair valuations made in response to a
significant event.

</R>


HOW IS THE FUND SOLD?

Under the Distributor's Contract with the Fund, the Distributor (Federated
Securities Corp.) offers Shares on a continuous, best-efforts basis.


RULE 12B-1 PLAN (CLASS B SHARES, CLASS C SHARES AND CLASS K SHARES)
As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the
Distributor for activities principally intended to result in the sale of Shares
such as advertising and marketing of Shares (including printing and distributing
prospectuses and sales literature to prospective shareholders and financial
intermediaries) and providing incentives to financial intermediaries to sell
Shares.  The Plan is also designed to cover the cost of administrative services
performed in conjunction with the sale of Shares, including, but not limited to,
shareholder services, recordkeeping services and educational services, as well
as the costs of implementing and operating the Plan.  The Rule 12b-1 Plan allows
the Distributor to contract with financial intermediaries to perform activities
covered by the Plan. The Rule 12b-1 Plan is expected to benefit the Fund in a
number of ways. For example, it is anticipated that the Plan will help the Fund
attract and retain assets, thus providing cash for orderly portfolio management
and Share redemptions and possibly helping to stabilize or reduce other
operating expenses. In addition, the Plan is integral to the multiple class
structure of the Fund, which promotes the sale of Shares by providing a range of
options to investors. The Fund's service providers that receive asset-based fees
also benefit from stable or increasing Fund assets.

The Fund may compensate the Distributor more or less than its actual marketing
expenses. In no event will the Fund pay for any expenses of the Distributor that
exceed the maximum Rule 12b-1 Plan fee.

For some classes of Shares, the maximum Rule 12b-1 Plan fee that can be paid in
any one year may not be sufficient to cover the marketing-related expenses the
Distributor has incurred. Therefore, it may take the Distributor a number of
years to recoup these expenses.

Federated and its subsidiaries may benefit from arrangements where the Rule 12b-
1 Plan fees related to Class B Shares may be paid to third parties who have
provided the funds to make advance commission payments to financial
intermediaries.


ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES
The Distributor may pay out of its own resources amounts (including items of
material value) to certain financial intermediaries.  In some cases, such
payments may be made by, or funded from the resources of, companies affiliated
with the Distributor (including the Adviser).  While Financial Industry
Regulatory Authority (FINRA) regulations limit the sales charges that you may
bear, there are no limits with regard to the amounts that the Distributor may
pay out of its own resources.  In addition to the payments which are generally
described herein and in the prospectus, the financial intermediary also may
receive payments under the Rule 12b-1 Plan and/or Service Fees. In connection
with these payments, the financial intermediary may elevate the prominence or
profile of the Fund and/or other Federated funds within the financial
intermediary's organization by, for example, placement on a list of preferred or
recommended funds, and/or granting the Distributor preferential or enhanced
opportunities to promote the funds in various ways within the financial
intermediary's organization. You can ask your financial intermediary for
information about any payments it receives from the Distributor or the Federated
funds and any services provided.

The following examples illustrate the types of instances in which the
Distributor may make additional payments to financial intermediaries.


SUPPLEMENTAL PAYMENTS
The Distributor may make supplemental payments to certain financial
intermediaries that are holders or dealers of record for accounts in one or more
of the Federated funds.  These payments may be based on such factors as the
number or value of Shares the financial intermediary sells or may sell; the
value of client assets invested; or the type and nature of services or support
furnished by the financial intermediary.


PROCESSING SUPPORT PAYMENTS
The Distributor may make payments to financial intermediaries that sell
Federated fund shares to help offset their costs associated with client account
maintenance support, statement processing and transaction processing.  The types
of payments that the Distributor may make under this category include payment of
ticket charges on a per transaction basis; payment of networking fees; and
payment for ancillary services such as setting up funds on the financial
intermediary's mutual fund trading system.


RETIREMENT PLAN PROGRAM SERVICING PAYMENTS
The Distributor may make payments to certain financial intermediaries who sell
Federated fund shares through retirement plan programs.  A financial
intermediary may perform retirement plan program services itself or may arrange
with a third party to perform retirement plan program services.  In addition to
participant recordkeeping, reporting, or transaction processing, retirement plan
program services may include services rendered to a plan in connection with
fund/investment selection and monitoring; employee enrollment and education;
plan balance rollover or separation, or other similar services.


OTHER BENEFITS TO FINANCIAL INTERMEDIARIES
From time to time, the Distributor, at its expense, may provide additional
compensation to financial intermediaries that sell or arrange for the sale of
Shares.  Such compensation may include financial assistance to financial
intermediaries that enable the Distributor to participate in or present at
conferences or seminars, sales or training programs for invited employees,
client and investor events and other financial intermediary-sponsored events.

The Distributor also may hold or sponsor, at its expense, sales events,
conferences and programs for employees or associated persons of financial
intermediaries and may pay the travel and lodging expenses of attendees.  The
Distributor also may provide, at its expense, meals and entertainment in
conjunction with meetings with financial intermediaries.  Other compensation may
be offered to the extent not prohibited by applicable laws, regulations or the
rules of any self-regulatory agency, such as the FINRA.

<R>

UNDERWRITING COMMISSIONS
The following chart reflects the total front-end sales charges and contingent
deferred sales charges paid in connection with the sale of Class A Shares, Class
B Shares, Class C Shares and Class F Shares of the Fund and the amount retained
by the Distributor for the last three fiscal years ended March 31:



                                2008                                  2007                                  2006

                TOTAL SALES CHARGES  AMOUNT RETAINED  TOTAL SALES CHARGES  AMOUNT RETAINED  TOTAL SALES CHARGES  AMOUNT RETAINED
Class A Shares             $574,921          $65,867           $1,046,444         $112,272           $1,942,097         $209,405
Class B Shares             $349,675               $0             $514,516               $0             $975,707               $0
Class C Shares               $1,654           $1,654              $12,934           $2,846              $21,116              $34
Class F Shares              $13,549           $7,135               $9,163           $2,706              $10,726              $19

</R>


EXCHANGING SECURITIES FOR SHARES

You may contact the Distributor to request a purchase of Shares in exchange for
securities you own. The Fund reserves the right to determine whether to accept
your securities and the minimum market value to accept. The Fund will value your
securities in the same manner as it values its assets. This exchange is treated
as a sale of your securities for federal tax purposes.



SUBACCOUNTING SERVICES

Certain financial intermediaries may wish to use the transfer agent's
subaccounting system to minimize their internal recordkeeping requirements. The
transfer agent may charge a fee based on the level of subaccounting services
rendered. Financial intermediaries holding Shares in a fiduciary, agency,
custodial or similar capacity may charge or pass through subaccounting fees as
part of or in addition to normal trust or agency account fees. They may also
charge fees for other services that may be related to the ownership of Shares.
This information should, therefore, be read together with any agreement between
the customer and the financial intermediary about the services provided, the
fees charged for those services, and any restrictions and limitations imposed.



REDEMPTION IN KIND

Although the Fund intends to pay Share redemptions in cash, it reserves the
right, as described below, to pay the redemption price in whole or in part by a
distribution of the Fund's portfolio securities.

Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act,
the Fund is obligated to pay Share redemptions to any one shareholder in cash
only up to the lesser of $250,000 or 1% of the net assets represented by such
Share class during any 90-day period.

Any Share redemption payment greater than this amount will also be in cash
unless the Fund's Board determines that payment should be in kind. In such a
case, the Fund will pay all or a portion of the remainder of the redemption in
portfolio securities, valued in the same way as the Fund determines its NAV. The
portfolio securities will be selected in a manner that the Fund's Board deems
fair and equitable and, to the extent available, such securities will be readily
marketable.

Redemption in kind is not as liquid as a cash redemption. If redemption is made
in kind, shareholders receiving the portfolio securities and selling them before
their maturity could receive less than the redemption value of the securities
and could incur certain transaction costs.



ACCOUNT AND SHARE INFORMATION

<R>

VOTING RIGHTS
Each Share of the Fund gives the shareholder one vote in Director elections and
other matters submitted to shareholders for vote.

All Shares of the Fund have equal voting rights, except that in matters
affecting only a particular class, only Shares of that class are entitled to
vote.

Directors may be removed by the Board or by shareholders at a special meeting. A
special meeting of shareholders will be called by the Board upon the written
request of shareholders who own at least 10% of the Fund's outstanding Shares.

As of May 1, 2008, the following shareholders owned of record, beneficially, or
both, 5% or more of outstanding Class A Shares: Edward Jones & Co., Maryland
Heights, MO owned approximately 14,780,227 Shares (25.02%); and Pershing LLC,
Jersey City, NJ owned approximately 3,162,823 Shares (5.35%).

As of May 1, 2008, the following shareholders owned of record, beneficially, or
both, 5% or more of outstanding Class B Shares: Edward Jones & Co., Maryland
Heights, MO owned approximately 1,591,623 Shares (14.21%) and Pershing LLC,
Jersey City, NJ owned approximately 1,427,270 Shares (12.75%).

As of May 1, 2008, the following shareholders owned of record, beneficially, or
both, 5% or more of outstanding Class C Shares: Edward Jones & Co., Maryland
Heights, MO owned approximately 368,994 Shares (9.30%), MLPF& S, Jacksonville,
FL owned approximately 362,122 Shares (9.13%); and Citigroup Global Markets
Inc., New York, NY owned approximately 355,871 Shares (8.97%).

As of May 1, 2008, the following shareholders owned of record, beneficially, or
both, 5% or more of outstanding Class F Shares: MLPF& S, Jacksonville, FL owned
approximately 253,296 Shares (12.61%), Edward Jones & Co., Maryland Heights, MO
owned approximately 226,181 Shares (11.26%); and Pershing LLC, Jersey City, NJ
owned approximately 134,849 Shares (6.71%).

As of May 1, 2008, there were no shareholders who owned of record, beneficially,
or both, 5% or more of outstanding Class K Shares.

Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.

Edward Jones & Co. is organized in the state of Missouri and is a subsidiary of
Jones Financial Companies; organized in the state of Missouri.



TAX INFORMATION


FEDERAL INCOME TAX
The Fund intends to meet requirements of Subchapter M of the Internal Revenue
Code (Code) applicable to regulated investment companies. If these requirements
are not met, it will not receive special tax treatment and will be subject to
federal corporate income tax.

The Fund is entitled to a loss carry-forward, which may reduce the taxable
income or gain that the Fund would realize, and to which the shareholder would
be subject, in the future.

</R>

FOREIGN INVESTMENTS
If the Fund purchases foreign securities, their investment income may be subject
to foreign withholding or other taxes that could reduce the return on these
securities. Tax treaties between the United States and foreign countries,
however, may reduce or eliminate the amount of foreign taxes to which the Fund
would be subject. The effective rate of foreign tax cannot be predicted since
the amount of Fund assets to be invested within various countries is uncertain.
However, the Fund intends to operate so as to qualify for treaty-reduced tax
rates when applicable.

Distributions from a Fund may be based on estimates of book income for the year.
Book income generally consists solely of the income generated by the securities
in the portfolio, whereas tax-basis income includes, in addition, gains or
losses attributable to currency fluctuation. Due to differences in the book and
tax treatment of fixed-income securities denominated in foreign currencies, it
is difficult to project currency effects on an interim basis. Therefore, to the
extent that currency fluctuations cannot be anticipated, a portion of
distributions to shareholders could later be designated as a return of capital,
rather than income, for income tax purposes, which may be of particular concern
to simple trusts.

If the Fund invests in the stock of certain foreign corporations, they may
constitute Passive Foreign Investment Companies (PFIC), and the Fund may be
subject to federal income taxes upon disposition of PFIC investments.

If more than 50% of the value of the Fund's assets at the end of the tax year is
represented by stock or securities of foreign corporations, the Fund will
qualify for certain Code provisions that allow its shareholders to claim a
foreign tax credit or deduction on their U.S. income tax returns. The Code may
limit a shareholder's ability to claim a foreign tax credit. Shareholders who
elect to deduct their portion of the Fund's foreign taxes rather than take the
foreign tax credit must itemize deductions on their income tax returns.



WHO MANAGES AND PROVIDES SERVICES TO THE FUND?


BOARD OF DIRECTORS
The  Board is responsible for managing  the  Fund's  business  affairs  and  for
exercising all the Fund's powers except those reserved for the shareholders. The
following  tables  give  information  about  each  Board  member  and the senior
officers  of the Fund. Where required, the tables separately list Board  members
who are "interested  persons" of the Fund (i.e., "Interested" Board members) and
those who are not (i.e.,  "Independent"  Board members). Unless otherwise noted,
the address of each person listed is Federated  Investors  Tower,  1001  Liberty
Avenue,  Pittsburgh,  PA  15222.   The  address of all Independent Board members
listed is 5800 Corporate Drive, Pittsburgh,  PA  15237-7000;  Attention:  Mutual
Fund Board.  As of December 31, 2007, the Fund comprised one portfolio, and  the
Federated  Fund  Complex  consisted  of  40 investment companies (comprising 148
portfolios). Unless otherwise noted, each  Officer  is  elected annually. Unless
otherwise noted, each Board member oversees all portfolios in the Federated Fund
Complex and serves for an indefinite term.

As of May 1, 2008, the Fund's Board and Officers as a group owned less than 1%
of each Class of the Fund's outstanding Shares.










                                -1-














INTERESTED DIRECTORS BACKGROUND AND COMPENSATION




NAME             PRINCIPAL OCCUPATION(S) FOR PAST FIVE YEARS,                                             AGGREGATE
BIRTH DATE       OTHER DIRECTORSHIPS HELD AND PREVIOUS POSITION(S)                                     COMPENSATION
POSITIONS                                                                                                 FROM FUND
HELD WITH                                                                                              (PAST FISCAL
FUND                                                                                                          YEAR)
DATE SERVICE
BEGAN                                                                                                                          TOTAL
                                                                                                                        COMPENSATION
                                                                                                                           FROM FUND
                                                                                                                                 AND
                                                                                                                           FEDERATED
                                                                                                                        FUND COMPLEX
                                                                                                                               (PAST
                                                                                                                            CALENDAR
                                                                                                                               YEAR)
JOHN F.          PRINCIPAL OCCUPATIONS: Director or Trustee of the Federated Fund Complex;                       $0               $0
DONAHUE*         Chairman and Director, Federated Investors, Inc.; Chairman of the Federated Fund
Birth Date:      Complex's Executive Committee.
July 28,
1924             PREVIOUS POSITIONS: Chairman of the Federated Fund Complex; Trustee, Federated
DIRECTOR         Investment Management Company and Chairman and Director, Federated Investment
Began            Counseling.
serving:
July 1968

J.               PRINCIPAL OCCUPATIONS: Principal Executive Officer and President of the Federated               $0               $0
CHRISTOPHER      Fund Complex; Director or Trustee of some of the Funds in the Federated Fund
DONAHUE*         Complex; President, Chief Executive Officer and Director, Federated Investors,
Birth Date:      Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee,
April 11,        Federated Investment Counseling; Chairman and Director, Federated Global
1949             Investment Management Corp.; Chairman, Federated Equity Management Company of
PRESIDENT        Pennsylvania and Passport Research, Ltd. (Investment advisory subsidiary of
AND DIRECTOR     Federated); Trustee, Federated Shareholder Services Company; Director, Federated
Began            Services Company.
serving:
October 1999     PREVIOUS POSITIONS: President, Federated Investment Counseling; President and
                 Chief Executive Officer, Federated Investment Management Company, Federated
                 Global Investment Management Corp. and Passport Research, Ltd.


* Family relationships and reasons for "interested" status: John F. Donahue is
the father of J. Christopher Donahue; both are "interested" due to their
beneficial ownership of shares of Federated Investors, Inc. and the positions
they hold with Federated and its subsidiaries.


INDEPENDENT DIRECTORS BACKGROUND AND COMPENSATION




NAME             PRINCIPAL OCCUPATION(S) FOR PAST FIVE YEARS,                                             AGGREGATE
BIRTH DATE       OTHER DIRECTORSHIPS HELD AND PREVIOUS POSITION(S)                                     COMPENSATION
POSITIONS                                                                                                 FROM FUND
HELD WITH                                                                                              (PAST FISCAL
FUND                                                                                                          YEAR)
DATE SERVICE
BEGAN                                                                                                                          TOTAL
                                                                                                                        COMPENSATION
                                                                                                                           FROM FUND
                                                                                                                                 AND
                                                                                                                           FEDERATED
                                                                                                                        FUND COMPLEX
                                                                                                                               (PAST
                                                                                                                            CALENDAR
                                                                                                                               YEAR)
THOMAS G.        PRINCIPAL OCCUPATION: Director or Trustee of the Federated Fund Complex.                 $2,626.36         $198,000
BIGLEY
Birth Date:      OTHER DIRECTORSHIPS HELD: Director, Member of Executive Committee, Children's
February 3,      Hospital of Pittsburgh; Director, University of Pittsburgh.
1934
DIRECTOR         PREVIOUS POSITION: Senior Partner, Ernst & Young LLP.
Began
serving:
November
1994

JOHN T.          PRINCIPAL OCCUPATIONS: Director or Trustee of the Federated Fund Complex;                $2,570.82         $198,000
CONROY, JR.      Chairman of the Board, Investment Properties Corporation; Partner or Trustee in
Birth Date:      private real estate ventures in Southwest Florida; Assistant Professor in
June 23,         Theology at Barry University and Blessed Edmund Rice School for Pastoral
1937             Ministry.
DIRECTOR
Began            PREVIOUS POSITIONS: President, Investment Properties Corporation; Senior Vice
serving:         President, John R. Wood and Associates, Inc., Realtors; President, Naples
August 1991      Property Management, Inc. and Northgate Village Development Corporation.

NICHOLAS P.      PRINCIPAL OCCUPATION: Director or Trustee of the Federated Fund Complex.                 $2,626.36         $198,000
CONSTANTAKIS
Birth Date:      OTHER DIRECTORSHIPS HELD: Director and Chairman of the Audit Committee, Michael
September 3,     Baker Corporation (engineering and energy services worldwide).
1939
DIRECTOR         PREVIOUS POSITION: Partner, Andersen Worldwide SC.
Began
serving:
October 1999

JOHN F.          PRINCIPAL OCCUPATION: Director or Trustee of the Federated Fund Complex;                 $2,387.59         $180,000
CUNNINGHAM       Director, QSGI, Inc. (technology services company).
Birth Date:
March 5,         OTHER DIRECTORSHIPS HELD: Chairman, President and Chief Executive Officer,
1943             Cunningham & Co., Inc. (strategic business consulting); Trustee Associate, Boston
DIRECTOR         College.
Began
serving:         PREVIOUS POSITIONS: Director, Redgate Communications and EMC Corporation
April 1999       (computer storage systems); Chairman of the Board and Chief Executive Officer,
                 Computer Consoles, Inc.; President and Chief Operating Officer, Wang
                 Laboratories; Director, First National Bank of Boston; Director, Apollo Computer,
                 Inc.

PETER E.         PRINCIPAL OCCUPATION: Director or Trustee of the Federated Fund Complex.                 $2,387.59         $180,000
MADDEN
Birth Date:      OTHER DIRECTORSHIPS HELD: Board of Overseers, Babson College.
March 16,
1942             PREVIOUS POSITIONS: Representative, Commonwealth of Massachusetts General Court;
DIRECTOR         President, State Street Bank and Trust Company and State Street Corporation
Began            (retired); Director, VISA USA and VISA International; Chairman and Director,
serving:         Massachusetts Bankers Association; Director, Depository Trust Corporation;
August 1991      Director, The Boston Stock Exchange.

CHARLES F.       PRINCIPAL OCCUPATIONS: Director or Trustee of the Federated Fund Complex;                $2,640.24         $198,000
MANSFIELD,       Management Consultant.
JR.
Birth Date:      PREVIOUS POSITIONS: Chief Executive Officer, PBTC International Bank; Partner,
April 10,        Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail
1945             Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA
DIRECTOR         (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of
Began            Banking and Finance, Frank G. Zarb School of Business, Hofstra University;
serving:         Executive Vice President DVC Group, Inc. (marketing, communications and
April 1999       technology).

JOHN E.          PRINCIPAL OCCUPATIONS: Director or Trustee, and Chairman of the Board of                 $3,220.44         $240,000
MURRAY, JR.,     Directors or Trustees, of the Federated Fund Complex; Chancellor and Law
J.D., S.J.D.     Professor, Duquesne University; Partner, Murray, Hogue & Lannis.
Birth Date:
December 20,     OTHER DIRECTORSHIPS HELD: Director, Michael Baker Corp. (engineering,
1932             construction, operations and technical services).
DIRECTOR
Began            PREVIOUS POSITIONS: President, Duquesne University; Dean and Professor of Law,
serving:         University of Pittsburgh School of Law; Dean and Professor of Law, Villanova
February         University School of Law.
1995

THOMAS M.        PRINCIPAL OCCUPATIONS: Director or Trustee of the Federated Fund Complex;                $2,387.59         $180,000
O'NEILL          Managing Director and Partner, Navigator Management Company, L.P. (investment and
Birth Date:      strategic consulting).
June 14,
1951             OTHER DIRECTORSHIPS HELD: Board of Overseers, Children's Hospital of Boston;
DIRECTOR         Visiting Committee on Athletics, Harvard College.
Began
serving:         PREVIOUS POSITIONS: Chief Executive Officer and President, Managing Director and
October 2006     Chief Investment Officer, Fleet Investment Advisors; President and Chief
                 Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman,
                 Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam
                 Companies, Boston, MA; and Credit Analyst and Lending Officer, Fleet Bank.

MARJORIE P.      PRINCIPAL OCCUPATIONS: Director or Trustee of the Federated Fund Complex;                $2,387.59         $180,000
SMUTS            formerly, Public Relations/Marketing Consultant/Conference Coordinator.
Birth Date:
June 21,         PREVIOUS POSITIONS: National Spokesperson, Aluminum Company of America;
1935             television producer; President, Marj Palmer Assoc.; Owner, Scandia Bord.
DIRECTOR
Began
serving:
February
1984

JOHN S.          PRINCIPAL OCCUPATIONS: Director or Trustee of the Federated Fund Complex;                $2,443.13         $180,000
WALSH            President and Director, Heat Wagon, Inc. (manufacturer of construction temporary
Birth Date:      heaters); President and Director, Manufacturers Products, Inc. (distributor of
November 28,     portable construction heaters); President, Portable Heater Parts, a division of
1957             Manufacturers Products, Inc.
DIRECTOR
Began            PREVIOUS POSITION: Vice President, Walsh & Kelly, Inc.
serving:
April 1999

JAMES F.         PRINCIPAL OCCUPATIONS: Director or Trustee of the Federated Fund Complex;                $2,387.59         $180,000
WILL             formerly, Vice Chancellor and President, Saint Vincent College.
Birth Date:
October 12,      OTHER DIRECTORSHIPS HELD: Trustee, Saint Vincent College; Alleghany Corporation.
1938
DIRECTOR         PREVIOUS POSITIONS: Chairman, President and Chief Executive Officer, Armco, Inc.;
Began            President and Chief Executive Officer, Cyclops Industries; President and Chief
serving:         Operating Officer, Kaiser Steel Corporation.
April 2006













                                -2-












OFFICERS**




NAME        PRINCIPAL OCCUPATION(S) AND PREVIOUS POSITION(S)
BIRTH DATE
ADDRESS
POSITIONS
HELD WITH
FUND
DATE
SERVICE
BEGAN
JOHN W.     PRINCIPAL OCCUPATIONS: Executive Vice President and Secretary of the Federated Fund Complex; Vice Chairman, Executive
MCGONIGLE   Vice President, Secretary and Director, Federated Investors, Inc.
Birth Date:
October 26, PREVIOUS POSITIONS: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director,
1938        Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp.
EXECUTIVE
VICE
PRESIDENT
AND
SECRETARY
Began
serving:
May 1969

RICHARD A.  PRINCIPAL OCCUPATIONS: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President,
NOVAK       Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp., Edgewood Services,
Birth Date: Inc. and Southpointe Distribution Services, Inc.
December
25, 1963    PREVIOUS POSITIONS: Controller of Federated Investors, Inc.; Vice President, Finance of Federated Services Company; held
TREASURER   various financial management positions within The Mercy Hospital of Pittsburgh; Auditor, Arthur Andersen & Co.
Began
serving:
January
2006

RICHARD B.  PRINCIPAL OCCUPATIONS: Vice Chairman or Vice President of some of the Funds in the Federated Fund Complex; Vice
FISHER      Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp.
Birth Date:
May 17,     PREVIOUS POSITIONS: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice
1923        President, Federated Investors, Inc. and Director and Chief Executive Officer, Federated Securities Corp.
VICE
PRESIDENT
Began
serving:
May 1976

BRIAN P.    PRINCIPAL OCCUPATIONS: Senior Vice President and Chief Compliance Officer of the Federated Fund Complex; Vice President
BOUDA       and Chief Compliance Officer of Federated Investors, Inc.; and Chief Compliance Officer of its subsidiaries. Mr. Bouda
Birth Date: joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin.
February
28, 1947
SENIOR VICE
PRESIDENT
AND CHIEF
COMPLIANCE
OFFICER
Began
serving:
August 2004

STEPHEN F.  PRINCIPAL OCCUPATIONS: Stephen F. Auth is Chief Investment Officer of this Fund and various other Funds in the Federated
AUTH        Fund Complex; Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp.
Birth Date: and Federated Equity Management Company of Pennsylvania.
September
3, 1956     PREVIOUS POSITIONS: Executive Vice President, Federated Investment Management Company, and Passport Research, Ltd.
450         (Investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division;
Lexington   Senior Vice President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and
Avenue      Portfolio Manager, Prudential Investments.
Suite 3700
New York,
NY 10017-
3943
CHIEF
INVESTMENT
OFFICER
Began
serving:
November
2002


**Officers do not receive any compensation from the Fund.
In addition, the Fund has appointed an Anti-Money Laundering Compliance Officer.


COMMITTEES OF THE BOARD


BOARD          COMMITTEE        COMMITTEE FUNCTIONS                                                                        MEETINGS
COMMITTEE      MEMBERS                                                                                                     HELD
                                                                                                                           DURING
                                                                                                                           LAST
                                                                                                                           FISCAL
                                                                                                                           YEAR

EXECUTIVE      John F.          In between meetings of the full Board, the Executive Committee generally may exercise      Three
               Donahue          all the powers of the full Board in the management and direction of the business and
               John E.          conduct of the affairs of the Corporation in such manner as the Executive Committee
               Murray, Jr.,     shall deem to be in the best interests of the Corporation.  However, the Executive
               J.D., S.J.D.     Committee cannot elect or remove Board members, increase or decrease the number of
               John S.          Directors, elect or remove any Officer, declare dividends, issue shares or recommend
               Walsh            to shareholders any action requiring shareholder approval.

AUDIT          Thomas G.        The purposes of the Audit Committee are to oversee the accounting and financial            Seven
               Bigley           reporting process of the Fund, the Fund`s internal control over financial reporting,
               Nicholas P.      and the quality, integrity and independent audit of the Fund`s financial statements.
               Constantakis     The Committee also oversees or assists the Board with the oversight of compliance with
               Charles F.       legal requirements relating to those matters, approves the engagement and reviews the
               Mansfield,       qualifications, independence and performance of the Fund`s independent registered
               Jr.              public accounting firm, acts as a liaison between the independent registered public
               John S.          accounting firm and the Board and reviews the Fund`s internal audit function.
               Walsh

NOMINATING     Thomas G.        The Nominating Committee, whose members consist of all Independent Directors, selects      Two
               Bigley           and nominates persons for election to the Fund`s Board when vacancies occur. The
               John T.          Committee will consider candidates recommended by shareholders, Independent Directors,
               Conroy, Jr.      officers or employees of any of the Fund`s agents or service providers and counsel to
               Nicholas P.      the Fund. Any shareholder who desires to have an individual considered for nomination
               Constantakis     by the Committee must submit a recommendation in writing to the Secretary of the Fund,
               John F.          at the Fund 's address appearing on the back cover of this Statement of Additional
               Cunningham       Information. The recommendation should include the name and address of both the
               Peter E.         shareholder and the candidate and detailed information concerning the candidate's
               Madden           qualifications and experience. In identifying and evaluating candidates for
               Charles F.       consideration, the Committee shall consider such factors as it deems appropriate.
               Mansfield,       Those factors will ordinarily include:  integrity, intelligence, collegiality,
               Jr.              judgment, diversity, skill, business and other experience, qualification as an
               John E.          "Independent Director," the existence of material relationships which may create the
               Murray, Jr.      appearance of a lack of independence, financial or accounting knowledge and
               Thomas M.        experience, and dedication and willingness to devote the time and attention necessary
               O'Neill          to fulfill Board responsibilities.
               Marjorie P.
               Smuts
               John S.
               Walsh
               James F.
               Will


















                                -3-












<R>


BOARD OWNERSHIP OF SHARES IN THE FUND AND IN THE FEDERATED FAMILY OF INVESTMENT
COMPANIES AS OF DECEMBER 31, 2007


INTERESTED                                                                                    AGGREGATE
BOARD MEMBER NAME                                                                       DOLLAR RANGE OF
                                                               DOLLAR RANGE OF          SHARES OWNED IN
                                                                  SHARES OWNED      FEDERATED FAMILY OF
                                      IN FEDERATED AMERICAN LEADERS FUND, INC.     INVESTMENT COMPANIES

John F. Donahue                                                  Over $100,000            Over $100,000
J. Christopher Donahue                                         $10,001-$50,000            Over $100,000

INDEPENDENT
BOARD MEMBER NAME
Thomas G. Bigley                                                          None            Over $100,000
John T. Conroy, Jr.                                                       None            Over $100,000
Nicholas P. Constantakis                                                  None            Over $100,000
John F. Cunningham                                                        None            Over $100,000
Peter E. Madden                                                           None            Over $100,000
Charles F. Mansfield, Jr.                                                 None            Over $100,000
John E. Murray, Jr., J.D., S.J.D.                                         None            Over $100,000
Thomas M. O'Neill                                                         None                     None
Marjorie P. Smuts                                                         None            Over $100,000
John S. Walsh                                                             None            Over $100,000
James F. Will                                                             None                     None

</R>

INVESTMENT ADVISER
The Adviser conducts investment research and makes investment decisions for the
Fund.

The Adviser is a wholly owned subsidiary of Federated.

The Adviser shall not be liable to the Fund or any Fund shareholder for any
losses that may be sustained in the purchase, holding, or sale of any security
or for anything done or omitted by it, except acts or omissions involving
willful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties imposed upon it by its contract with the Fund.


PORTFOLIO MANAGER INFORMATION
<R>
The following information about the Fund's Portfolio Manager is provided as of
the end of the Fund's most recently completed fiscal year.

 OTHER ACCOUNTS MANAGED BY            TOTAL NUMBER OF OTHER
 KEVIN MCCLOSKEY                          ACCOUNTS MANAGED/
                                              TOTAL ASSETS*
 Registered Investment Companies   2 Funds/$568.354 million
 Other Pooled Investment Vehicles                         0
 Other Accounts                   1 Account/$10.742 million
* None of the Accounts has an advisory fee that is based on the performance of
the account.
Dollar value range of shares owned in the Fund: none.

Kevin McCloskey is paid a fixed base salary and a variable annual incentive.
Base salary is determined within a market competitive position-specific salary
range, based on the portfolio manager's experience and performance.  The annual
incentive amount is determined based primarily on Investment Product Performance
(IPP) and, to a lesser extent, Financial Success, and may be paid entirely in
cash, or in a combination of cash and restricted stock of Federated Investors,
Inc. (Federated).  The total combined annual incentive opportunity is intended
to be competitive in the market for this portfolio manager role.

IPP is measured on a rolling 1, 3, and 5 calendar year pre-tax gross total
return basis vs. the Fund's designated peer group of comparable accounts and vs.
the Fund's benchmark (i.e., S&P 500/Citigroup Value Index).  Performance periods
are adjusted if a portfolio manager has been managing an account for less than
five years; accounts with less than one-year of performance history under a
portfolio manager may be excluded.  As noted above, Kevin McCloskey is also the
portfolio manager for other accounts in addition to the Fund.  Such other
accounts may have different benchmarks.    Within each performance measurement
period, IPP is calculated with an equal weighting of each included account
managed by the portfolio manager.  Mr. McCloskey has oversight responsibility
for other portfolios that he does not personally manage.  A portion of the IPP
score is determined by the investment performance of these other portfolios vs.
product specific benchmarks.  A portion of the bonus tied to the IPP score maybe
adjusted based on management's assessment of overall contributions to fund
performance and any other factors as deemed relevant.

The Financial Success category is designed to tie the portfolio manager's bonus,
in part, to Federated's overall financial results.  Funding for the Financial
Success category maybe determined on a product or asset class basis, as well as
on corporate financial results.  Senior Management determines individual
Financial Success bonuses on a discretionary basis, considering overall
contributions and any other factors deemed relevant.

As a general matter, certain conflicts of interest may arise in connection with
a portfolio manager's management of a fund's investments, on the one hand, and
the investments of other accounts for which the portfolio manager is
responsible, on the other.  For example, it is possible that the various
accounts managed could have different investment strategies that, at times,
might conflict with one another to the possible detriment of the Fund.
Alternatively, to the extent that the same investment opportunities might be
desirable for more than one account, possible conflicts could arise in
determining how to allocate them.  Other potential conflicts might include
conflicts created by specific portfolio manager compensation arrangements, and
conflicts relating to selection of brokers or dealers to execute fund portfolio
trades and/or specific uses of commissions from Fund portfolio trades (for
example, research, or "soft dollars").  The Adviser has adopted policies and
procedures and has structured the portfolio managers' compensation in a manner
reasonably designed to safeguard the Fund from being negatively affected as a
result of any such potential conflicts.

</R>

SERVICES AGREEMENT
Federated Advisory Services Company, an affiliate of the Adviser, provides
research, quantitative analysis, equity trading and transaction settlement and
certain support services to the Adviser.  The fee for these services is paid by
the Adviser and not by the Fund.


OTHER RELATED SERVICES
Affiliates of the Adviser may, from time to time, provide certain electronic
equipment and software to institutional customers in order to facilitate the
purchase of Fund Shares offered by the Distributor.


CODE OF ETHICS RESTRICTIONS ON PERSONAL TRADING

As required by SEC rules, the Fund, its Adviser, and its Distributor have
adopted codes of ethics.  These codes govern securities trading activities of
investment personnel, Fund Directors, and certain other employees.  Although
they do permit these people to trade in securities, including those that the
Fund could buy, as well as Shares of the Fund, they also contain significant
safeguards designed to protect the Fund and its shareholders from abuses in this
area, such as requirements to obtain prior approval for, and to report,
particular transactions.


VOTING PROXIES ON FUND PORTFOLIO SECURITIES

The Board has delegated to the Adviser authority to vote proxies on the
securities held in the Fund's portfolio.  The Board has also approved the
Adviser's policies and procedures for voting the proxies, which are described
below.

<R>

PROXY VOTING POLICIES
The Adviser's general policy is to cast proxy votes in favor of proposals that
the Adviser anticipates will enhance the long-term value of the securities being
voted.  Generally, this will mean voting for proposals that the Adviser believes
will: improve the management of a company; increase the rights or preferences of
the voted securities; and/or increase the chance that a premium offer would be
made for the company or for the voted securities.

The following examples illustrate how these general policies may apply to
proposals submitted by a company's board of directors.  However, whether the
Adviser supports or opposes a proposal will always depend on the specific
circumstances described in the proxy statement and other available information.

On matters of corporate governance, generally the Adviser will vote for the full
slate of directors nominated in an uncontested election; and for proposals to:
require a company's audit committee to be comprised entirely of independent
directors; require independent tabulation of proxies and/or confidential voting
by shareholders; reorganize in another jurisdiction (unless it would reduce the
rights or preferences of the securities being voted); ratify the board's
selection of auditors (unless compensation for non-audit services exceeded 50%
of the total compensation received from the company, or the previous auditor was
dismissed because of a disagreement with the company); and repeal a shareholder
rights plan (also known as a "poison pill").  The Adviser will generally vote
against the adoption of such a plan (unless the plan is designed to facilitate,
rather than prevent, unsolicited offers for the company).

On matters of capital structure, generally the Adviser will vote: against
proposals to authorize or issue shares that are senior in priority or voting
rights to the securities being voted; and for proposals to: reduce the amount of
shares authorized for issuance; authorize a stock repurchase program; and grant
preemptive rights to the securities being voted.  The Adviser will generally
vote against proposals to eliminate such preemptive rights.

On matters relating to management compensation, generally the Adviser will vote:
for stock incentive plans that align the recipients' interests with the
interests of shareholders without creating undue dilution; against proposals
that would permit the amendment or replacement of outstanding stock incentives
with new stock incentives having more favorable terms; and against executive
compensation plans that do not disclose the maximum amounts of compensation that
may be awarded or the criteria for determining awards.

On matters relating to corporate transactions, the Adviser will vote proxies
relating to proposed mergers, capital reorganizations, and similar transactions
in accordance with the general policy, based upon its analysis of the proposed
transaction.  The Adviser will vote proxies in contested elections of directors
in accordance with the general policy, based upon its analysis of the opposing
slates and their respective proposed business strategies.  Some transactions may
also involve proposed changes to the company's corporate governance, capital
structure or management compensation.  The Adviser will vote on such changes
based on its evaluation of the proposed transaction or contested election.  In
these circumstances, the Adviser may vote in a manner contrary to the general
practice for similar proposals made outside the context of such a proposed
transaction or change in the board.  For example, if the Adviser decides to vote
against a proposed transaction, it may vote for anti-takeover measures
reasonably designed to prevent the transaction, even though the Adviser
typically votes against such measures in other contexts.

The Adviser generally votes against proposals submitted by shareholders without
the favorable recommendation of a company's board.  The Adviser believes that a
company's board should manage its business and policies, and that shareholders
who seek specific changes should strive to convince the board of their merits or
seek direct representation on the board.

In addition, the Adviser will not vote if it determines that the consequences or
costs outweigh the potential benefit of voting.  For example, if a foreign
market requires shareholders casting proxies to retain the voted shares until
the meeting date (thereby rendering the shares "illiquid" for some period of
time), the Adviser will not vote proxies for such shares.


PROXY VOTING PROCEDURES
The Adviser has established a Proxy Voting Committee (Proxy Committee), to
exercise all voting discretion granted to the Adviser by the Board in accordance
with the proxy voting policies.  The Adviser has hired Institutional Shareholder
Services (ISS) to obtain, vote, and record proxies in accordance with the Proxy
Committee's directions.  The Proxy Committee has supplied ISS with general
guidelines that represent decisions made by the Proxy Committee in order to vote
common proxy proposals; however, the Proxy Committee retains the right to modify
these guidelines at any time or to vote contrary to the guidelines at any time
in order to cast proxy votes in a manner that the Proxy Committee believes is
consistent with the Adviser's general policy.  ISS may vote any proxy as
directed in the guidelines without further direction from the Proxy Committee
and may make any determinations required to implement the guidelines.  However,
if the guidelines require case-by-case direction for a proposal, ISS shall
provide the Proxy Committee with all information that it has obtained regarding
the proposal and the Proxy Committee will provide specific direction to ISS.

</R>

CONFLICTS OF INTEREST
The Adviser has adopted procedures to address situations where a matter on which
a proxy is sought may present a potential conflict between the interests of the
Fund (and its shareholders) and those of the Adviser or Distributor.  This may
occur where a significant business relationship exists between the Adviser (or
its affiliates) and a company involved with a proxy vote.  A company that is a
proponent, opponent, or the subject of a proxy vote, and which to the knowledge
of the Proxy Committee has this type of significant business relationship, is
referred to as an "Interested Company."

The Adviser has implemented the following procedures in order to avoid concerns
that the conflicting interests of the Adviser have influenced proxy votes.  Any
employee of the Adviser who is contacted by an Interested Company regarding
proxies to be voted by the Adviser must refer the Interested Company to a member
of the Proxy Committee, and must inform the Interested Company that the Proxy
Committee has exclusive authority to determine how the Adviser will vote.  Any
Proxy Committee member contacted by an Interested Company must report it to the
full Proxy Committee and provide a written summary of the communication.  Under
no circumstances will the Proxy Committee or any member of the Proxy Committee
make a commitment to an Interested Company regarding the voting of proxies or
disclose to an Interested Company how the Proxy Committee has directed such
proxies to be voted.  If the Proxy Voting Guidelines already provide specific
direction on the proposal in question, the Proxy Committee shall not alter or
amend such directions.  If the Proxy Voting Guidelines require the Proxy
Committee to provide further direction, the Proxy Committee shall do so in
accordance with the proxy voting policies, without regard for the interests of
the Adviser with respect to the Interested Company.  If the Proxy Committee
provides any direction as to the voting of proxies relating to a proposal
affecting an Interested Company, it must disclose to the Fund's Board
information regarding: the significant business relationship; any material
communication with the Interested Company; the matter(s) voted on; and how, and
why, the Adviser voted as it did.

If the Fund holds shares of another investment company for which the Adviser (or
an affiliate) acts as an investment adviser, the Proxy Committee will vote the
Fund's proxies in the same proportion as the votes cast by shareholders who are
not clients of the Adviser at any shareholders' meeting called by such
investment company, unless otherwise directed by the Board.


PROXY VOTING REPORT
A report on "Form N-PX" of how the Fund voted any proxies during the most recent
12-month period ended June 30 is available through Federated's website.  Go to
FederatedInvestors.com; select "Products;" select the Fund; then use the link to
"Prospectuses and Regulatory Reports" to access the link to Form N-PX. Form N-PX
filings are also available at the SEC's website at www.sec.gov.

<R>

PORTFOLIO HOLDINGS INFORMATION
Information concerning the Fund's portfolio holdings is available in the
"Products" section of Federated's website at FederatedInvestors.com. A complete
listing of the Fund's portfolio holdings as of the end of each calendar quarter
is posted on the website 30 days (or the next business day) after the end of the
quarter and remains posted until replaced by the information for the succeeding
quarter. Summary portfolio composition information as of the close of each month
(except for recent purchase and sale transaction information, which is updated
quarterly) is posted on the website 15 days (or the next business day) after
month-end and remains until replaced by the information for the succeeding
month.  The summary portfolio composition information may include identification
of the Fund's top ten holdings, recent purchase and sale transactions and a
percentage breakdown of the portfolio by sector.

To access this information from the "Products" section of the website, click on
the "Portfolio Holdings" link under "Related Information" and select the
appropriate link opposite the name of the Fund, or select the name of the Fund,
and from the Fund's page click on the "Portfolio Holdings" or "Composition"
link.

You may also access portfolio information as of the end of the Fund's fiscal
quarters from the "Products" section of the website.  The Fund's annual and
semiannual reports, which contain complete listings of the Fund's portfolio
holdings as of the end of the Fund's second and fourth fiscal quarters, may be
accessed by selecting the "Prospectuses and Regulatory Reports" link under
"Related Information" and selecting the link to the appropriate PDF.  Complete
listings of the Fund's portfolio holdings as of the end of the Fund's first and
third fiscal quarters may be accessed by selecting "Portfolio Holdings" from the
"Products" section and then selecting the appropriate link opposite the name of
the Fund.  Fiscal quarter information is made available on the website within 70
days after the end of the fiscal quarter.  This information is also available in
reports filed with the SEC at the SEC's website at www.sec.gov.

The disclosure policy of the Fund and the Adviser prohibits the disclosure of
portfolio holdings information to any investor or intermediary before the same
information is made available to other investors.  Employees of the Adviser or
its affiliates who have access to nonpublic information concerning the Fund's
portfolio holdings are prohibited from trading securities on the basis of this
information.  Such persons must report all personal securities trades and obtain
pre-clearance for all personal securities trades other than mutual fund shares.

Firms that provide administrative, custody, financial, accounting, legal or
other services to the Fund may receive nonpublic information about Fund
portfolio holdings for purposes relating to their services.  The Fund may also
provide portfolio holdings information to publications that rate, rank or
otherwise categorize investment companies.  Traders or portfolio managers may
provide "interest" lists to facilitate portfolio trading if the list reflects
only that subset of the portfolio for which the trader or portfolio manager is
seeking market interest.  A list of service providers, publications and other
third parties who may receive nonpublic portfolio holdings information appears
in the Appendix to this SAI.

The furnishing of nonpublic portfolio holdings information to any third party
(other than authorized governmental or regulatory personnel) requires the prior
approval of the President of the Adviser and of the Chief Compliance Officer of
the Funds.  The President of the Adviser and the Chief Compliance Officer will
approve the furnishing of nonpublic portfolio holdings information to a third
party only if they consider the furnishing of such information to be in the best
interests of the Fund and its shareholders.  In that regard, and to address
possible conflicts between the interests of Fund shareholders and those of the
Adviser and its affiliates, the following procedures apply.  No consideration
may be received by the Fund, the Adviser, any affiliate of the Adviser or any of
their employees in connection with the disclosure of portfolio holdings
information.  Before information is furnished, the third party must sign a
written agreement that it will safeguard the confidentiality of the information,
will use it only for the purposes for which it is furnished and will not use it
in connection with the trading of any security.  Persons approved to receive
nonpublic portfolio holdings information will receive it as often as necessary
for the purpose for which it is provided.  Such information may be furnished as
frequently as daily and often with no time lag between the date of the
information and the date it is furnished.  The Board receives and reviews
annually a list of the persons who receive nonpublic portfolio holdings
information and the purposes for which it is furnished.


BROKERAGE TRANSACTIONS AND INVESTMENT ALLOCATION

Equity securities may be traded in the over-the-counter market through
broker/dealers acting as principal or agent, or in transactions directly with
other investors.  Transactions may also be executed on a securities exchange or
through an electronic communications network.  The Adviser seeks to obtain best
execution of trades in equity securities by balancing the costs inherent in
trading, including opportunity costs, market impact costs and commissions.  As a
general matter, the Adviser seeks to add value to its investment management by
using market information to capitalize on market opportunities, actively seek
liquidity and discover price.  The Adviser continually monitors its trading
results in an effort to improve execution.  Fixed-income securities  are
generally traded in an over-the-counter market on a net basis (i.e., without
commission) through dealers acting as principal or in transactions directly with
the issuer.  Dealers derive an undisclosed amount of compensation by offering
securities at a higher price than they bid for them.  Some fixed income
securities may have only one primary market maker.  The Adviser seeks to use
dealers it believes to be actively and effectively trading the security being
purchased or sold, but may not always obtain the lowest purchase price or
highest sale price with respect to a fixed-income security. The Adviser's
receipt of research services (as described below) may also be a factor in the
Adviser's selection of brokers and dealers.  The Adviser may also direct certain
portfolio trades to a broker that, in turn, pays a portion of the Fund's
operating expenses.  The Adviser makes decisions on portfolio transactions and
selects brokers and dealers subject to review by the Fund's Board.

Investment decisions for the Fund are made independently from those of other
accounts managed by the Adviser and accounts managed by affiliates of the
Adviser.  Except as noted below, when the Fund and one or more of those accounts
invests in, or disposes of, the same security, available investments or
opportunities for sales will be allocated among the Fund and the account(s) in a
manner believed by the Adviser to be equitable. While the coordination and
ability to participate in volume transactions may benefit the Fund, it is
possible that this procedure could adversely impact the price paid or received
and/or the position obtained or disposed of by the Fund.  Investments for
Federated Kaufmann Fund and other accounts managed by that fund's portfolio
managers in initial public offerings ("IPO") are made independently from any
other accounts, and much of their non-IPO trading may also be conducted
independently from other accounts. Trading and allocation of investments,
including IPOs, for accounts managed by Federated MDTA LLC are also made
independently from the Fund.  Investment decisions, and trading, for certain
separately managed or wrap-fee accounts, and other accounts, of the Adviser
and/or certain investment adviser affiliates of the Adviser, also are generally
made, and conducted, independently from the Fund.  It is possible that such
independent trading activity could adversely impact the prices paid or received
and/or positions obtained or disposed of by the Fund.

On March 31, 2008, the Fund owned securities of the following regular
broker/dealers:

 BROKER DEALER       VALUE OF
                 SECURITIES OWNED
 J.P. Morgan.      $41,077,380
 Goldman Sachs     $25,370,826
 Morgan Stanley    $27,954,690
 Lehman Brothers   $10,200,440
 Merrill Lynch     $10,335,738

RESEARCH SERVICES
Research services may include advice as to the advisability of investing in
securities; security analysis and reports; economic studies; industry studies;
receipt of quotations for portfolio evaluations; and similar services. Research
services may be used by the Adviser or by affiliates of Federated in advising
other accounts. To the extent that receipt of these services may replace
services for which the Adviser or its affiliates might otherwise have paid, it
would tend to reduce their expenses. The Adviser and its affiliates exercise
reasonable business judgment in selecting brokers to execute securities
transactions where receipt of research services is a factor. They determine in
good faith that commissions charged by such persons are reasonable in
relationship to the value of the brokerage and research services provided.

For the fiscal year ended, March 31, 2008, the Fund's Adviser directed brokerage
transactions to certain brokers in connection with the Adviser's receipt of
research services. The total amount of these transactions was $712,547,968 for
which the Fund paid $917,831 in brokerage commissions.

</R>

ADMINISTRATOR
Federated Administrative Services (FAS), a subsidiary of Federated, provides
administrative personnel and services (including certain legal and financial
reporting services) necessary to operate the Fund. FAS provides these at the
following annual rates, based on the average aggregate daily net assets of the
Fund and most of the other Federated funds:

 ADMINISTRATIVE FEE     AVERAGE AGGREGATE DAILY
                        NET ASSETS OF THE FEDERATED FUNDS
 0.150 of 1%            on the first $5 billion
 0.125 of 1%            on the next $5 billion
 0.100 of 1%            on the next $10 billion
 0.075 of 1%            on assets over $20 billion
The administrative fee received during any fiscal year shall be at least
$150,000 per portfolio and $40,000 per each additional class of Shares. FAS may
voluntarily waive a portion of its fee and may reimburse the Fund for expenses.

FAS also provides certain accounting and recordkeeping services with respect to
the Fund's portfolio investments for a fee based on Fund assets plus out-of-
pocket expenses.


CUSTODIAN
State Street Bank and Trust Company, Boston, Massachusetts, is custodian for the
securities and cash of the Fund. Foreign instruments purchased by the Fund are
held by foreign banks participating in a network coordinated by State Street
Bank.


TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company, the Fund's registered transfer agent,
maintains all necessary shareholder records.


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The independent registered public accounting firm for the Fund, Ernst & Young
LLP, conducts its audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States), which require it to plan and perform
its audits to provide reasonable assurance about whether the Fund's financial
statements and financial highlights are free of material misstatement.

<R>

FEES PAID BY THE FUND FOR SERVICES

 FOR THE YEAR ENDED MARCH 31     2008            2007            2006
 Advisory Fee Earned             $11,376,068     $14,349,596     $16,090,643
 Advisory Fee Reduction          $0              $0              $0
 Advisory Fee Reimbursement      $29,313         $2,635          $0
 Brokerage Commissions           $4,414,902      $3,259,640      $3,400,800
 Administrative Fee              $1,346,324      $1,679,757      $1,885,354
 12B-1 FEE:
  Class B Shares                 $2,212,499      --              --
  Class C Shares                 $678,904        --              --
  Class K Shares                 $170,233        --              --
 SHAREHOLDER SERVICES FEE:
  Class A Shares                 $3,208,565      --              --
  Class B Shares                 $737,500        --              --
  Class C Shares                 $218,237        --              --
  Class F Shares                 $104,793        --              --
Fees are allocated among classes based on their pro rata share of Fund assets,
except for marketing (Rule 12b-1) fees and shareholder services fees, which are
borne only by the applicable class of Shares.

Includes $2,426 paid to a company affiliated with management of Federated.

</R>


HOW DOES THE FUND MEASURE PERFORMANCE?

The Fund may advertise Share performance by using the SEC's standard methods for
calculating performance applicable to all mutual funds. The SEC also permits
this standard performance information to be accompanied by non-standard
performance information.

Share performance reflects the effect of non-recurring charges, such as maximum
sales charges, which, if excluded, would increase the total return and yield.
The performance of Shares depends upon such variables as: portfolio quality;
average portfolio maturity; type and value of portfolio securities; changes in
interest rates; changes or differences in the Fund's or any class of Shares'
expenses; and various other factors.

Share performance fluctuates on a daily basis largely because net earnings
and/or the value of portfolio holdings fluctuate daily. Both net earnings and
offering price per Share are factors in the computation of yield and total
return.

<R>

AVERAGE ANNUAL TOTAL RETURNS AND YIELD
Total returns are given for the one-year,  five-year and ten-year periods ended
March 31, 2008.

Yield is given for the 30-day period ended March 31, 2008.



                                                      30-DAY PERIOD     1 YEAR       5 YEARS     10 YEARS

CLASS A SHARES:
Total Return
  Before Taxes                                        N/A               (22.40)%     6.33%       0.96%
  After Taxes on Distributions                        N/A               (25.15)%     4.82%       (0.36)%
  After Taxes on Distributions and Sale of Shares
                                                      N/A               (10.77)%     5.66%       0.60%
Yield                                                 0.91%             N/A          N/A         N/A





                                                      30-DAY PERIOD     1 YEAR       5 YEARS     10 YEARS

CLASS B SHARES:
Total Return
  Before Taxes                                        N/A               (22.07)%     6.43%       0.91%
  After Taxes on Distributions                        N/A               (24.81)%     5.05%       (0.23)%
  After Taxes on Distributions and Sale of Shares
                                                      N/A               (10.50)%     5.76%       0.66%
Yield                                                 0.24%             N/A          N/A         N/A





                                                      30-DAY PERIOD     1 YEAR       5 YEARS     10 YEARS

CLASS C SHARES:
Total Return
  Before Taxes                                        N/A               (19.14)%     6.72%       0.77%
  After Taxes on Distributions                        N/A               (21.90)%     5.35%       (0.34)%
  After Taxes on Distributions and Sale of Shares                                                0.54%
                                                      N/A               (8.58)%      6.01%
Yield                                                 0.19%             N/A          N/A         N/A





                                                      30-DAY PERIOD     1 YEAR       5 YEARS     10 YEARS

CLASS F SHARES:
Total Return
  Before Taxes                                        N/A               (19.35)%     7.33%       1.44%
  After Taxes on Distributions                        N/A               (22.25)%     5.81%       0.11%
  After Taxes on Distributions and Sale of Shares
                                                      N/A               (8.60)%      6.55%       1.01%

Yield                                                 0.99%             N/A          N/A         N/A



                  30-DAY PERIOD  1 YEAR    5 YEARS  10 YEARS
 CLASS K SHARES:
 Total Return
   Before Taxes   N/A            (18.27)%  7.06%    1.05%
 Yield            0.53%          N/A       N/A      N/A


</R>

TOTAL RETURN
Total return represents the change (expressed as a percentage) in the value of
Shares over a specific period of time, and includes the investment of income and
capital gains distributions.

The average annual total return for Shares is the average compounded rate of
return for a given period that would equate a $10,000 initial investment to the
ending redeemable value of that investment. The ending redeemable value is
computed by multiplying the number of Shares owned at the end of the period by
the NAV per Share at the end of the period. The number of Shares owned at the
end of the period is based on the number of Shares purchased at the beginning of
the period with $10,000, less any applicable sales charge, adjusted over the
period by any additional Shares, assuming the annual reinvestment of all
dividends and distributions. Total returns after taxes are calculated in a
similar manner, but reflect additional standard assumptions required by the SEC.


YIELD
The yield of Shares is calculated by dividing: (i) the net investment income per
Share earned by the Shares over a 30-day period; by (ii) the maximum offering
price per Share on the last day of the period. This number is then annualized
using semi-annual compounding. This means that the amount of income generated
during the 30-day period is assumed to be generated each month over a 12-month
period and is reinvested every six months. The yield does not necessarily
reflect income actually earned by Shares because of certain adjustments required
by the SEC and, therefore, may not correlate to the dividends or other
distributions paid to shareholders.

To the extent financial intermediaries charge fees in connection with services
provided in conjunction with an investment in Shares, the Share performance is
lower for shareholders paying those fees.



WHO IS FEDERATED INVESTORS, INC.?

Federated and its subsidiaries are dedicated to providing  you  with world-class
investment  management.  With offices in Pittsburgh, New York City,  Boston  and
Frankfurt, Federated  is  a  firm with independent research, product breadth and
industry standing.

Federated seeks to achieve superior and sustainable investment performance for a
broad array of global clients  through  a  team  structure utilizing proprietary
qualitative and quantitative research.


FEDERATED FUNDS OVERVIEW

EQUITIES
As   of  December  31,  2007,  Federated  managed  49  equity   funds   totaling
approximately  $29  billion  in  assets  across  growth,  value,  equity income,
international, index and sector allocation styles.


TAXABLE FIXED-INCOME
As  of  December  31,  2007,  Federated managed 35 taxable bond funds including:
high-yield, multi-sector, mortgage-backed,  U.S.  government, U.S. corporate and
international, with assets approximating $15 billion.


TAX FREE FIXED-INCOME
As  of  December  31,  2007,  Federated  managed 13 municipal  bond  funds  with
approximately $3 billion in assets and 22  municipal  money  market  funds  with
approximately $32 billion in total assets.


MONEY MARKET FUNDS
As  of  December  31,  2007,  Federated managed $215 billion in assets across 51
money market funds, including 17  government, 11 prime, 22 municipal and 1 euro-
denominated with assets approximating $105 billion, $78 billion, $32 billion and
$.27 billion.

The  Chief  Investment  Officers  responsible   for  oversight  of  the  various
investment  sectors  within Federated are: Stephen  F.  Auth,  CFA,  for  Global
Equity; Robert J. Ostrowski, CFA, for Taxable Fixed-Income; Mary Jo Ochson, CFA,
for Tax Free Fixed-Income;  and  Deborah  A.  Cunningham,  CFA, for Money Market
Funds.



FINANCIAL INFORMATION

The Financial Statements for the Fund for the fiscal year ended March 31, 2008
are incorporated herein by reference to the Annual Report to Shareholders of
Federated American Leaders Fund, Inc. dated March 31, 2008.



INVESTMENT RATINGS


STANDARD & POOR'S (S&P) LONG-TERM DEBT RATING DEFINITIONS
AAA--Highest credit quality. 'AAA' ratings denote the lowest expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA--Very high credit quality. 'AA' ratings denote a very low expectation of
credit risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

A--High credit quality. 'A' ratings denote a low expectation of credit risk. The
capacity for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB--Good credit quality. 'BBB' ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

BB--Speculative. 'BB' ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time; however, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment-grade.

B--Highly speculative. 'B' ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.

CCC, CC, C--High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A 'CC' rating indicates that default of some
kind appears probable. 'C' ratings signal imminent default.

D--In payment default. The 'D' rating category is used when payments on a
financial commitment are not made on the date due even if the applicable grace
period has not expired, unless Standard & Poor's believes that such payments
will be made during such grace period. The 'D' rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on
a financial commitment are jeopardized.


MOODY'S INVESTORS SERVICE (MOODY'S) LONG-TERM DEBT RATINGS
AAA-- Bonds and preferred stock which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are generally
referred to as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

AA-- Bonds and preferred stock which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may be
other elements present which make the long-term risk appear somewhat larger than
the Aaa securities.

A-- Bonds and preferred stock which are rated A possess many favorable
investment attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest are considered
adequate, but elements may be present which suggest a susceptibility to
impairment some time in the future.

BAA-Bonds and preferred stock which are rated Baa are considered as medium-grade
obligations (i.e., they are neither highly protected nor poorly secured).
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.

BA-Bonds and preferred stock which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured. Often the
protection of interest and principal payments may be very moderate, and thereby
not well safeguarded during both good and bad times over the future. Uncertainty
of position characterizes bonds in this class.

B-Bonds and preferred stock which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.

CAA-Bonds and preferred stock which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of danger with respect
to principal or interest.

CA-Bonds and preferred stock which are rated Ca are highly speculative and are
likely in, or very near, default, with some prospect of recovery of principal
and interest.

C-Bonds and preferred stock which are rated C are the lowest rated class of
bonds and are typically in default, with little prospect for recovery of
principal or interest.

NR--Indicates that both the bonds and the obligor or credit enhancer are not
currently rated by S&P or Moody's with respect to short-term indebtedness.
However, management considers them to be of comparable quality to securities
rated A-1 or P-1.

NR(1)--The underlying issuer/obligor/guarantor has other outstanding debt rated
AAA by S&P or Aaa by Moody's.

NR(2)--The underlying issuer/obligor/guarantor has other outstanding debt rated
AA by S&P or Aa by Moody's.

NR(3)--The underlying issuer/obligor/guarantor has other outstanding debt rated
A by S&P or Moody's.


FITCH RATINGS LONG-TERM DEBT RATING DEFINITIONS
AAA--HIGHEST CREDIT QUALITY. 'AAA' ratings denote the lowest expectation of
credit risk. They are assigned only in case of exceptionally strong capacity for
timely payment of financial commitments. This capacity is highly unlikely to be
adversely affected by foreseeable events.

AA--VERY HIGH CREDIT QUALITY. 'AA' ratings denote a very low expectation of
credit risk. They indicate very strong capacity for timely payment of financial
commitments. This capacity is not significantly vulnerable to foreseeable
events.

A--HIGH CREDIT QUALITY. 'A' ratings denote a low expectation of credit risk. The
capacity for timely payment of financial commitments is considered strong. This
capacity may, nevertheless, be more vulnerable to changes in circumstances or in
economic conditions than is the case for higher ratings.

BBB--GOOD CREDIT QUALITY. 'BBB' ratings indicate that there is currently a low
expectation of credit risk. The capacity for timely payment of financial
commitments is considered adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this capacity. This is the lowest
investment-grade category.

BB--SPECULATIVE. 'BB' ratings indicate that there is a possibility of credit
risk developing, particularly as the result of adverse economic change over
time; however, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment-grade.

B--HIGHLY SPECULATIVE. 'B' ratings indicate that significant credit risk is
present, but a limited margin of safety remains. Financial commitments are
currently being met; however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.


MOODY'S COMMERCIAL PAPER RATINGS
PRIME-1--Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1 repayment
ability will often be evidenced by many of the following characteristics:
leading market positions in well established industries, high rates of return on
funds employed, conservative capitalization structure with moderate reliance on
debt and ample asset protection, broad margins in earning coverage of fixed
financial charges and high internal cash generation, and well-established access
to a range of financial markets and assured sources of alternate liquidity.

PRIME-2--Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This will normally
be evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.


S&P COMMERCIAL PAPER RATINGS
A-1-- A short-term obligation rated 'A-1' is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.

A-2-- A short-term obligation rated 'A-2' is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.


FITCH RATINGS COMMERCIAL PAPER RATING DEFINITIONS
F-1--Indicates the strongest capacity for timely payment of financial
commitments relative to other issuers or issues in the same country. Under their
national rating scale, this rating is assigned to the "best" credit risk
relative to all others in the same country and is normally assigned to all
financial commitments issued or guaranteed by the sovereign state. Where the
credit risk is particularly strong, a "+" is added to the assigned rating.

F-2-- Indicates a satisfactory capacity for timely payment of financial
commitments relative to other issuers or issues in the same country. However,
the margin of safety is not as great as in the case of the higher ratings.


A.M. BEST LONG-TERM DEBT RATINGS
An A.M. Best Long-Term Debt Rating (issue credit rating) is an opinion as to the
issuer's ability to meet its financial obligations to security holders when due.
These ratings are assigned to debt and preferred stock issues.

AAA-EXCEPTIONAL.  Assigned to issues where the issuer has, in A.M. Best's
opinion, an exceptional ability to meet the terms of the obligation.

AA-VERY STRONG.  Assigned to issues where the issuer has, in A.M. Best's
opinion, a very strong ability to meet the terms of the obligation.

A-STRONG.  Assigned to issues where the issuer has, in A.M. Best's opinion, a
strong ability to meet the terms of the obligation.

BBB-ADEQUATE.  Assigned to issues where the issuer has, in A.M. Best's opinion,
an adequate ability to meet the terms of the obligation; however, is more
susceptible to changes in economic or other conditions.

BB-SPECULATIVE.  Assigned to issues where the issuer has, in A.M. Best's
opinion, speculative credit characteristics, generally due to a moderate margin
of principal and interest payment protection and vulnerability to economic
changes.  .

B-VERY SPECULATIVE.  Assigned to issues where the issuer has, in A.M. Best's
opinion, very speculative credit characteristics, generally due to a modest
margin of principal and interest payment protection and extreme vulnerability to
economic changes.  .

CCC, CC, C-EXTREMELY SPECULATIVE.  Assigned to issues where the issuer has, in
A.M. Best's opinion, extremely speculative credit characteristics, generally due
to a minimal margin of principal and interest payment protection and/or limited
ability to withstand adverse changes in economic or other conditions.

D-IN DEFAULT.  In default on payment of principal, interest or other terms and
conditions.  The rating also is utilized when a bankruptcy petition, or similar
action, has been filed.

Ratings from "aa" to "ccc" may be enhanced with a "+" (plus) or "-" (minus) to
indicate whether credit quality is near the top or bottom of a category.  A
company's Long-Term Credit Rating also may be assigned an Under Review modifier
("u") that generally is event-driven (positive, negative or developing) and
indicates that the company's A.M. Best Rating opinion is under review and may be
subject to near-term change.  Ratings prefixed with an ("i") denote indicative
ratings.  Ratings may also be assigned a Public Data modifier ("pd") which
indicates that a company does not subscribe to A.M. Best's interactive rating
process.


A.M. BEST SHORT-TERM DEBT RATINGS
An A.M. Best Short-Term Debt Rating (issue credit rating) is an opinion as to
the issuer's ability to meet its obligations having maturities generally less
than one year, such as commercial paper.

AMB-1+ -STRONGEST.  Assigned to issues where the issuer has, in A.M. Best's
opinion, the strongest ability to repay short-term debt obligations.

AMB-1 -OUTSTANDING.  Assigned to issues where the issuer has, in A.M. Best's
opinion, an outstanding ability to repay short-term debt obligations.

AMB-2 -SATISFACTORY.  Assigned to issues where the issuer has, in A.M. Best's
opinion, a satisfactory ability to repay short-term debt obligations.

AMB-3 -ADEQUATE.  Assigned to issues where the issuer has, in A.M. Best's
opinion, an adequate ability to repay short-term debt obligations; however,
adverse economic conditions will likely lead to a reduced capacity to meet its
financial commitments on short-term debt obligations.

AMB-4 -SPECULATIVE.  Assigned to issues where the issuer has, in A.M. Best's
opinion, speculative credit characteristics and is vulnerable to economic or
other external changes, which could have a marked impact on the company's
ability to meet its commitments on short-term debt obligations.

D-IN DEFAULT.  In default on payment of principal, interest or other terms and
conditions.  The rating also is utilized when a bankruptcy petition, or similar
action, has been filed.

A company's Short-Term Credit Rating also may be assigned an Under Review
modifier ("u") that generally is event-driven (positive, negative or developing)
and indicates that the company's A.M. Best Rating opinion is under review and
may be subject to near-term change.  Ratings prefixed with an ("i") denote
indicative ratings.


A.M. BEST RATING OUTLOOK
A.M. Best Credit Ratings (aaa to c) are assigned a Rating Outlook that indicates
the potential direction of a company's rating for an intermediate period,
generally defined as the next 12 to 36 months.  Public Data Ratings are not
assigned an Outlook.  Ratings Outlooks are as follows:

POSITIVE-Indicates a company's financial/market trends are favorable, relative
to its current rating level, and if continued, the company has a good
possibility of having its rating upgraded.

NEGATIVE-Indicates a company is experiencing unfavorable financial/market
trends, relative to its current rating level, and if continued, the company has
a good possibility of having its rating downgraded.

STABLE-Indicates a company is experiencing stable financial/market trends and
that there is a low likelihood that its rating will change in the near term.










                                -4-














ADDRESSES


FEDERATED AMERICAN LEADERS FUND, INC.
CLASS A SHARES
CLASS B SHARES
CLASS C SHARES
CLASS F SHARES
CLASS K SHARES


FEDERATED INVESTORS FUNDS

5800 CORPORATE DRIVE

PITTSBURGH, PA 15237-7000


DISTRIBUTOR
Federated Securities Corp.

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779


INVESTMENT ADVISER
Federated Equity Management Company of Pennsylvania

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, PA 15222-3779


CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
State Street Bank and Trust Company

P.O. Box 8600

Boston, MA 02266-8600


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP

200 Clarendon Street

Boston, MA 02116-5072










                                -5-















APPENDIX

The following is a list of persons other than the Adviser and its affiliates
that may receive nonpublic portfolio holdings information concerning the Fund:


CUSTODIAN
State Street Bank and Trust Company


SECURITIES LENDING AGENT
Wachovia Bank, National Association


INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP


LEGAL COUNSEL
Dickstein Shapiro LLP
Reed Smith LLP

SERVICE PROVIDERS
Institutional Shareholder Services
Bloomberg
Factset
Investor Responsibility Research Center
Wilshire Associates, Inc.

SECURITY PRICING SERVICES
Reuters
Standard & Poor's
FT Interactive Data
Bear Stearns

RATINGS AGENCIES
Standard & Poor's


PERFORMANCE REPORTING/PUBLICATIONS
Fidelity-Strategic Advisors
Lipper, Inc.
Morningstar
NASDAQ
Value Line
Wiesenberger/Thomson Financial

OTHER
Investment Company Institute
Astec Consulting Group, Inc.

Item 23.                      Exhibits

(a)
1	Conformed copy of Articles of Incorporation, with Amendment No. 9, of the Registrant as restated;	(4)
2	Amendment Nos. 10, 11 and 12	(11)
3	Amendment No. 13	(15)

(b)
1	Copy of Amended and Restated By-Laws of the Registrant;	(4)
2	Amendment Nos. 12, 13 and 14	(8)
3	Amendment No. 15	(12)
4	Amendment No. 16	(15)
5	Amendment Nos. 17, 18 and 19	(16)

(c) Copy of Specimen Certificate for Shares of Capital Stock of the Registrant As of September 1, 1997, Federated Securities Corp. stopped issuing share certificates. (1)

	(d)
	1	Conformed copy of Investment Advisory Contract of the Registrant;						(4)
	2	Conformed copy of Amendment to the Investment Advisory Contract of the Registrant;						(11)
	3	Conformed copy of Assignment to the Investment Advisory Contract;						(14)
	(e)
	1	Conformed copy of Distributor's Contract of the Registrant including Exhibits A, B and C;						(3)
	2	Conformed copy of Exhibit D to the Distributor's Contract of the Registrant;						(4)
	3	Conformed copy of Exhibit E to the Distributor's Contract of the Registrant;						(13)
	4	Conformed copy of Amendment to the Distributor’s Contract of the Registrant;						(11)
	5	Conformed copy of Distributor’s Contract (Class B Shares);						(7)
	6	Conformed copy of Amendment to Distributor’s Contract (Class B Shares);						(11)
	7	The Registrant hereby incorporates the conformed copy of the specimen Mutual Funds Sales and Service Agreement; Mutual Funds Service Agreement; and Plan Trustee/Mutual Funds Service Agreement from Item 24(b)(6) of the Cash Trust Series II Registration Statement on Form N-1A, filed with the Commission on July 24, 1995. (File Nos. 33-38550 and 811-6269);
	(f)	Not applicable
	(g)
	1	Conformed copy of Custodian Agreement of the Registrant;						(4)
	2	Conformed copy of Custodian Fee Schedule						(7)
	3	Conformed copy of Amendment to the Custodian Agreement of the Registrant;						(12)
	(h)
	1	Conformed copy of Amended and Restated Agreement for Fund Accounting Services, Administrative Services, Transfer Agency Services, and Custody Services Procurement;						(8)
	2	Conformed copy of Amendment to Agreement for Fund Accounting Services, Administrative Services, Transfer Agency Services, and Custody Services Procurement;						(12)
	3	Conformed copy of Principal Shareholder Services Agreement (Class B Shares);						(7)
	4	Conformed copy of Shareholder Services Agreement (Class B Shares);						(7)
	5	The responses described in Item 23(e)(vi) are hereby incorporated by reference;
	6	The Registrant hereby incorporates the conformed copy Amendment No. 2 to the Amended and Restated Agreement for Fund Accounting Services, Administrative Services, Transfer Agency Services and Custody Services Procurement from Item 23 (h)(v) of the Federated U.S. Government Securities: 2-5 Years Registration Statement on Form N-1A, filed with the Commission on March 30, 2004. (File Nos. 2-75769 and 811-3387);
	7	The Registrant hereby incorporates the conformed copy Amendment No. 3 to the Amended and Restated Agreement for Fund Accounting Services, Administrative Services, Transfer Agency Services and Custody Services Procurement from Item 23 (h)(v) of the Federated U.S. Government Securities: 2-5 Years Registration Statement on Form N-1A, filed with the Commission on March 30, 2004. (File Nos. 2-75769 and 811-3387);
	8	The Registrant hereby incorporates by reference the conformed copy of the Agreement for Administrative Services from Item 23 (h) (vix) of the Federated Index Trust Registration Statement on Form N-1A, filed with the Commission on December 30, 2003. (File Nos. 33-33852 and 811-8161).
	9	The Registrant hereby incorporates by reference the conformed copy of the Financial Administration and Accounting Services Agreement from Item 23 (h) (v) of the Federated Limited Duration Government Fund, Inc. Registration Statement on Form N-1A, filed with the Commission on April 26, 2004. (File Nos. 33-41004 and 811-6307).
	10	The Registrant hereby incorporates by reference the conformed copy of the Second Amended and Restated Services Agreement, with attached Schedule 1 revised 6/30/04, from Item (h) (vii) of Cash Trust Series, Inc. Registration Statement on Form N-1A, filed with the Commission on July 29, 2004. (File Nos. 33-29838 and 811-5843)
	11	The Registrant hereby incorporates by reference the conformed copy of the Financial Administration and Accounting Services Agreement, with attached Exhibit A revised 6/30/04, from Item (h) (vii) of Cash Trust Series, Inc. Registration Statement on Form N-1A, filed with the Commission on July 29, 2004. (File Nos. 33-29838 and 811-5843);
	12	The Registrant hereby incorporates by reference the conformed copy of the Agreement for Administrative Services, with Exhibit 1 and Amendments 1 and 2 attached, between Federated Administrative Services and the Registrant from Item 23(h)(iv) of the Federated Total Return Series, Inc.Registration Statement on Form N-1A, filed with the Commission on November 29, 2004. (File Nos. 33-50773 and 811-7115);
	13	The Registrant hereby incorporates the conformed copy of Transfer Agency and Service Agreement between the Federated Funds and State Street Bank and Trust Company from Item (h)(ix)of the Federated Total Return Government Bond Fund Registration Statement on Form N-1A, filed with the Commission on April 28, 2005. (File Nos. 33-60411 and 811-07309);
	14	The Registrant hereby incorporates by reference the conformed copy of Amendment No. 3 to the Agreement for Administrative Services between Federated Administrative Services Company and the Registrant dated June 1, 2005, from Item 23(h) (ii) of the Cash Trust Series, Inc. Registration Statement on Form N-1A, filed with the Commission on July 27, 2005. (File Nos. 33-29838 and 811-5843);
	15	The Registrant hereby incorporates the conformed copy of Transfer Agency and Service Agreement between the Federated Funds and State Street Bank and Trust Company from Item 23(h)(viii)of the Federated Total Return Government Bond Fund Registration Statement on Form N-1A, filed with the Commission on April 28, 2006 (File Nos. 33-60411 and 811-07309)
	16	Conformed copy of Financial Administration Accounting and Services Agreement, dated January 1, 2007;						(17)
	(i)	Conformed copy of Opinion of Consent of Counsel as to legality of shares being registered;						(1)
	(j)
	1	Conformed Copy of Consent of Independent Public Accountants;						(+)
	(k)	Not applicable;
	(l)	Conformed copy of Initial Capital Understanding;						(1)
	(m)
	1	Conformed copy of Rule 12b-1 Plan of the Registrant;						(3)
	2	Conformed copy of Exhibit A to the Rule 12b-1 Plan of the Registrant;						(4)
	3	Conformed copy of Exhibit C to the Rule 12b-1 Plan of the Registrant;						(13)
	4	Conformed Copy of Exhibit 1 and Schedule A to the 12b-1 Distribution Plan (Class B Shares) of the Registrant;						(7)
	5	Conformed copy of Distribution Plan of the Registrant;						(14)
	6	The responses described in Item 23 (e)(vi) are hereby incorporated by reference;
	(n)
	1	The Registrant hereby incorporates the Copy of the Multiple Class Plan and attached Exhibits from Item (n) of the Federated Short-Term Municipal Trust Registration Statement on Form N-1A, filed with the Commission on August 28, 2006. (File Nos. 2-72277 and 811-3181)
	2	Copy of Multiple Class Plan and attached exhibits;						(+)
	(o)
	1	Conformed copy of Power of Attorney of the Registrant;						(10)
	2	Conformed copy of Power of Attorney of Director of the Registrant;						(9)
	3	Conformed copy of Power of Attorney of Chairman and President of the Registrant;						(12)
	4	Conformed copy of Power of Attorney of Chief Investment Officer of the Registrant;						(12)
	5	Conformed copy of Power of Attorney of Director of the Registrant;						(16)
	6	Conformed copy of Power of Attorney of Treasurer of the Registrant;						(16)
	7	Conformed copy of Power of Attorney of Director of the Registrant;						(17)
	8	Conformed copy of Power of Attorney of Director of the Registrant;						(17)
	(p)	Item 23(p0(1)p is superseded by Item 23 (p)(2)
	1	The Registrant hereby incorporates the conformed copy of the Federated Investors, Inc. Code of Ethics for Access Persons, effective 1/1/2005, from Item 23(p) of the Money Market Obligations Trust Registration Statement on Form N-1A filed with the Commission on February 25, 2005. (File Nos. 33-31602 and 811-5950).
	+	All exhibits have been filed electronically.
		ALL RESPONSES ARE INCORPORATED BY REFERENCE TO A POST-EFFECTIVE AMENDMENT (PEA) OF THE REGISTRANT FILED ON FORM N-1A (FILE NOS. 2-29786 and 811-1704.)
	1	Response is incorporated by reference to Registrant's Initial Registration Statement on Form S-5 filed August 5, 1968. (File Nos. 2-29786 and 811-1704.)
	2	PEA No. 47 filed July 26, 1989
	3	PEA No. 59 filed May 26, 1994
	4	PEA No. 60 filed May 25, 1995
	7	PEA No. 64 filed May 28, 1998
	8	PEA No. 65 filed March 30, 1999
	9	PEA No. 66 filed May 27, 1999
	10	PEA No. 67 filed May 25, 2000
	11	PEA No. 69 filed May 29, 2002
	12	PEA No. 70 filed February 7, 2003
	13	PEA No. 71 filed March 31, 2003
	14	PEA No. 73 filed June 1, 2004.
	15	PEA No. 74 filed May 27, 2005.
	16	PEA No. 75 filed May 26, 2006.
	17	PEA No. 76 filed May 29, 2007.
	Item 24  Persons Controlled by or Under Common Control with the Fund:
	None
	Item 25  Indemnification
	(1)
	Item 26  Business and Other Connections of Investment Adviser:
	For a description of the other business of the Investment Adviser, see the section entitled “Who Manages the Fund?” in Part A. The affiliations with the Registrant of two of the Trustees and one of the Officers of the Investment Adviser are included in Part B of this Registration Statement under "Who Manages and Provides Services to the Fund?"  The remaining Trustees of the Investment Adviser and, in parentheses, their principal occupations are:  Thomas R. Donahue, (Chief Financial Officer, Federated Investors, Inc.), 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779, John B. Fisher, (Vice Chairman, Federated Investors, Inc.) 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779 and Mark D. Olson (a principal of the firm, Mark D. Olson & Company, L.L.C. and Partner, Wilson, Halbrook & Bayard, P.A.), 800 Delaware Avenue, P.O. Box 2305, Wilmington, DE  19899-2305.  The business address of each of the Officers of the Investment Adviser is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.  These individuals are also officers of a majority of the Investment Advisers to the investment companies in the Federated Fund Complex described in Part B of this Registration Statement.
	The remaining Officers of the Investment Adviser are:
	President/ Chief Executive Officer:				John B. Fisher
	Vice Chairman:				William D. Dawson, III
	Senior Vice Presidents:				Todd Abraham J. Scott Albrecht Joseph M. Balestrino Randall S. Bauer Jonathan C. Conley Deborah A. Cunningham Mark E. Durbiano Donald T. Ellenberger Susan R. Hill Robert M. Kowit Jeffrey A. Kozemchak Mary Jo Ochson Robert J. Ostrowski Ihab Salib Paige Wilhelm
	Vice Presidents:				G. Andrew Bonnewell Hanan Callas Jerome Conner James R. Crea, Jr. Karol Crummie Lee R. Cunningham, II B. Anthony Delserone, Jr. William Ehling Eamonn G. Folan Richard J. Gallo John T. Gentry Kathryn P. Glass Patricia L. Heagy William R. Jamison Nathan H. Kehm John C. Kerber J. Andrew Kirschler Marian R. Marinack Kevin McClosky Natalie F. Metz Thomas J. Mitchell Joseph M. Natoli Bob Nolte Mary Kay Pavuk Jeffrey A. Petro John Polinski Rae Ann Rice Brian Ruffner Roberto Sanchez-Dahl, Sr. John Sidawi Michael W. Sirianni, Jr. Christopher Smith Kyle Stewart Mary Ellen Tesla Timothy G. Trebilcock Paolo H. Valle Stephen J. Wagner Mark Weiss George B. Wright
	Assistant Vice Presidents:				Jason DeVito Bryan Dingle Timothy Gannon James Grant Ann Kruczek Tracey L. Lusk Ann Manley Keith Michaud Karl Mocharko Joseph Mycka Nick Navari Gene Neavin Liam O’Connell Nicholas S. Tripodes
	Secretary:				G. Andrew Bonnewell
	Treasurer:				Thomas R. Donahue
	Assistant Treasurer:				Denis McAuley, III
	Item 27  Principal Underwriters:
	(a)	Federated Securities Corp., the Distributor for shares of the Registrant, acts as principal underwriter for the following open-end investment companies, including the Registrant:
		Cash Trust Series, Inc.
		Cash Trust Series II
		Federated Adjustable Rate Securities Fund
		Federated American Leaders Fund, Inc.
		Federated Core Trust
		Federated Core Trust II, L.P.
		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 Intermediate Government Fund, Inc.
		Federated International Series, Inc.
		Federated Investment Series Funds, Inc.
		Federated Managed Allocation Portfolios
		Federated Managed Pool Series
		Federated MDT Series
		Federated Municipal Securities Fund, Inc.
		Federated Municipal Securities Income Trust
		Federated Premier Intermediate Municipal Income Fund
		Federated Premier Municipal Income Fund
		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
		Edward Jones Money Market Fund
		Money Market Obligations Trust
	(b)	The business address of each of the Officers of Federated Securities Corp. is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.
	(1) Positions and Offices With Distributor		(2) Name				(3) Positions and Offices With Registrant
	Chairman:		Richard B. Fisher				Vice President
	Executive Vice Vice President, Assistant Secretary and Director:		Thomas R. Donahue
	President and Director:		Thomas E. Territ
	Vice President and Director:		Peter J. Germain
	Treasurer and Director:		Denis McAuley III
	Senior Vice Presidents:		Michael Bappert Marc Benacci Richard W. Boyd Bryan Burke Charles L. Davis, Jr. Laura M. Deger Peter W. Eisenbrandt Theodore Fadool, Jr. Bruce Hastings James M. Heaton Harry J. Kennedy Michael Koenig Anne H. Kruczek Amy Michaliszyn Richard C. Mihm Keith Nixon Rich Paulson Solon A. Person, IV Chris Prado Brian S. Ronayne Colin B. Starks F. Andrew Thinnes Robert F. Tousignant William C. Tustin Paul Uhlman
	Vice Presidents:		Irving Anderson Dan Berry John B. Bohnet Edward R. Bozek Edwin J. Brooks, III Jane E. Broeren-Lambesis Daniel Brown Mark Carroll Dan Casey Scott Charlton Steven R. Cohen James Conely Kevin J. Crenny G. Michael Cullen Beth C. Dell Ron Dorman Donald C. Edwards Timothy Franklin Jamie Getz Scott Gundersen Peter Gustini Dayna C. Haferkamp Raymond J. Hanley Vincent L. Harper, Jr. Jeffrey S. Jones Ed Koontz Christopher A. Layton Michael H. Liss Michael R. Manning Michael Marcin Martin J. McCaffrey Mary A. McCaffrey Joseph McGinley Vincent T. Morrow Doris T. Muller Alec H. Neilly Rebecca Nelson John A. O’Neill James E. Ostrowski Stephen Otto Mark Patsy Robert F. Phillips Josh Rasmussen Richard A. Recker Ronald Reich Christopher Renwick Diane M. Robinson Timothy A. Rosewicz Thomas S. Schinabeck Edward J. Segura Peter Siconolfi Edward L. Smith John A. Staley Jack L. Streich Mark Strubel Michael Vahl David Wasik G. Walter Whalen Stephen White Lewis Williams Edward J. Wojnarowski Michael P. Wolff Erik Zettlemayer Paul Zuber
	Assistant Vice Presidents:		Robert W. Bauman Chris Jackson William Rose
	Secretary:		C. Todd Gibson
	Assistant Treasurer:		Lori A. Hensler Richard A. Novak
	(c)	Not applicable
	Item 28.                                                                                                                       Location of Accounts and Records:
	All accounts and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated thereunder are maintained at one of the following locations:
	Registrant					Reed Smith LLP Investment Management Group (IMG) Federated Investors Tower 12th Floor 1001 Liberty Avenue Pittsburgh, PA  15222-3779 (Notices should be sent to the Agent for Service at above address) Federated Investors Funds 5800 Corporate Drive Pittsburgh, PA  15237
	Federated Shareholder Services Company (“custodian, Transfer Agent and Dividend Disbursing Agent”)					P.O. Box 8600 Boston, MA  02266-8600
	Federated Services Company (“Administrator”)					Federated Investors Tower 1001 Liberty Avenue Pittsburgh, PA  15222-3779
	Federated Investment Management Company (“Adviser”)					Federated Investors Tower 1001 Liberty Avenue Pittsburgh, PA  15222-3779
	Item 29  Management Services:  : Not applicable.
	Item 30.  Undertakings:
	Registrant hereby undertakes to comply with the provisions of Section 16(c) of the 1940 Act with respect to the removal of Directors and the calling of special shareholder meetings by shareholders.
SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, FEDERATED AMERICAN LEADERS FUND, INC., certifies that it meets all of the requirements for effectiveness of this Amendment to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the 30th day of May, 2008.
FEDERATED AMERICAN LEADERS FUND, INC.
BY: /s/ C. Grant Anderson C. Grant Anderson, Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment to its Registration Statement has been signed below by the following person in the capacity and on the date indicated:
NAME				TITLE					DATE
BY: /s/ C. Grant Anderson C. Grant Anderson, Assistant Secretary				Attorney In Fact For the Persons Listed Below					May 30, 2008
John F. Donahue*				Director
J. Christopher Donahue*				President and Director (Principal Executive Officer)
Richard B. Fisher				Vice President
Richard A. Novak*				Treasurer (Principal Financial Officer)
Thomas G. Bigley*				Director
John T. Conroy, Jr.*				Director
Nicholas P. Constantakis*				Director
John F. Cunningham*				Director
Lawrence D. Ellis, M.D.*				Director
Peter E. Madden*				Director
John E. Murray, Jr., J.D., S.J.D.*				Director
Thomas O’Neill*				Director
Marjorie P. Smuts*				Director
John S. Walsh*				Director
James F. Will*				Director
*By Power of Attorney

EX-99.CONSENT

Exhibit (j)(1) under Form N-1A

Exhibit 23 under Item 601/Reg. S-K

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the references to our firm under the captions “Financial Highlights” in the Class A Shares, Class B Shares, Class C Shares and Class F Shares Prospectus and Class K Shares Prospectus and under the caption “Independent Registered Public Accounting Firm” in the Class A Shares, Class B Shares, Class C Shares, Class F Shares and Class K Shares Statement of Additional Information in Post-Effective Amendment Number 77 to the Registration Statement (Form N-1A, No. 2-29786) of Federated American Leaders Fund, Inc., and to the incorporation by reference of our report dated May 20, 2008 on Federated American Leaders Fund, Inc., included in the Annual Shareholder Report for the fiscal year ended March 31, 2008.

Ernst & Young LLP

Boston, Massachusetts

May 27, 2008

EX-99.MCP

Exhibit (n)(2) under Form N-1A

Exhibit 99 under Item 601/Reg. S-K

MULTIPLE CLASS PLAN

This Multiple Class Plan (this "Plan") is adopted by the investment companies (the "Multiple Class Companies") identified in exhibits hereto (the "Class Exhibits") as offering separate classes of shares ("Classes").

1.           Purpose

This Plan is adopted pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended (the "Rule"), in connection with the issuance by the Multiple Class Companies and any series thereof (collectively the "Funds") of more than one Class of shares in reliance on the Rule.  In documenting the exchange features for each Class, this plan describes the arrangements whereby shares of Funds may be exchanged for or from certain other investment companies which are not part of this Plan.  In documenting the separate arrangement for distribution of each Class, this Plan also sets forth the schedules for variations in sales loads and contingent deferred sales charges required by Rules 22d-1 and 6c-10, respectively.

2.          Separate Arrangements/Class Differences

The arrangements for shareholders services or the distribution of shares, or both, for each Class shall be set forth in the applicable Class Exhibit hereto.

3.           Expense Allocations

Each Class shall be allocated those shareholder service fees and fees and expenses payable under a Rule 12b-1 Plan specified in the Class Exhibit.  In addition the following expenses may be specifically allocated to each Class to the extent that the Fund's officers determine that such expenses are actually incurred in a different amount by that Class, or that the Class receives services of a different kind or to a different degree than other Classes:

(a)           transfer agent fees;

(b) printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses, and proxies to current shareholders;

(c) blue sky registration fees;

(d) SEC registration fees;

(e) the expense of administrative personnel and services as required to support the shareholders;

(f) litigation or other legal expenses relating solely to one Class; or

(g) other expenses incurred on behalf of the Class or for events or activities pertaining exclusively to the Class.

4.           Conversion and Exchange Features

The conversion and exchange features for shares of each Class shall be as set forth in the applicable Class Exhibit hereto.

5.           Amendment

Any material amendment of this Plan or any Class Exhibit hereto by any Multiple Class Company is subject to the approval of a majority of the directors/trustees of the applicable Multiple Class Company and a majority of the directors/trustees of the Multiple Class Company who are not interested persons of the Multiple Class Company, pursuant to the Rule.

CLASS A SHARES EXHIBIT

TO

MULTIPLE CLASS PLAN

1.           Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class A Shares will consist of sales and shareholder servicing by financial intermediaries in consideration of the payment of a portion of the applicable sales load (“dealer reallowance”)and a shareholder service fee. When indicated on the Schedule to this Exhibit, the principal underwriter and financial intermediaries may also receive payments for distribution and/or administrative services under a 12b-1 Plan. In connection with this basic arrangement, Class A Shares will bear the following fees and expenses:

Fees and Expenses	Maximum Amount Allocated Class A Shares
Sales Load	Up to 5.5% of the public offering price
Contingent Deferred
Sales Charge ("CDSC")	0.00%
Shareholder Service Fee	Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee	As set forth in the attached Schedule
Redemption Fee	As set forth in the attached Schedule
Other Expenses	Itemized expenses incurred by the Fund with respect to holders of Class A Shares as described in Section 3 of the Plan

2.           Conversion and Exchange Privileges

For purposes of Rule 18f-3, Class A Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights:	None
Exchange Privilege:	Class A Shares may be exchanged for Class A Shares of any other Fund

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered.  Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

3.           Exceptions to Basic Arrangements

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales loads and contingent deferred sales charges are as follows:

(A)           BASIC SALES LOAD SCHEDULE

The basic schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

Purchase Amount	Sales Load as a Percentage of Public Offering Price
Less than $50,000	5.50%
$50,000 but less than $100,000	4.50%
$100,000 but less than $250,000	3.75%
$250,000 but less than $500,000	2.50%
$500,000 but less than $1 million	2.00%
$1 million or greater	0.00%

(B)           FIXED INCOME SALES LOAD SCHEDULE

The schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

Purchase Amount	Sales Charge as a Percentage of Public Offering Price
Less than $100,000	4.50%
$100,000 but less than $250,000	3.75%
$250,000 but less than $500,000	2.50%
$500,000 but less than $1 million	2.00%
$1 million or greater	0.00%

(C)           MODIFIED FIXED INCOME SALES LOAD SCHEDULE

The schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

Purchase Amount	Sales Charge as a Percentage of Public Offering Price
Less than $1 million	1.00%
$1 million or greater	0.00%

(D)           MONEY MARKET LOAD SCHEDULE

The Schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

Purchase Amount	Sales Charge as a Percentage of Public Offering Price
		All purchases	0.00%

(E)           ULTRASHORT BOND LOAD SCHEDULE

The Schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

Purchase Amount	Sales Charge as a Percentage of Public Offering Price
Less than $50,000	2.00%
$50,000 but less than $100,000	1.75%
$100,000 but less than $250,000	1.50%
$250,000 +	0.00%

(F)           "LARGE TICKET" PURCHASES

Unless otherwise indicated on the Schedule to this Exhibit, a financial intermediary that places an order to purchase $1,000,000 or more of Class A Shares shall receive from the principal underwriter an advance commission equal to 75 basis points (0.75%) of the public offering price. In such event, notwithstanding anything to the contrary in the Plan or this Exhibit, such Class A Shares shall be subject to a contingent deferred sales charge upon redemption within 24 months of purchase equal to 75 basis points (0.75%) of the lesser of (x) the purchase price of the Class A Shares or (y) the redemption price of the Class A Shares. Any contingent deferred sales charge received upon redemption of Class A Shares shall be paid to the principal underwriter in consideration of the advance commission.

(G)           REDUCING OR ELIMINATING THE SALES LOAD

Contingent upon notification to the Fund’s principal underwriter or transfer agent, in applying the exceptions set forth in this Section 3, the purchase amount shall take into account:

·   Discounts achieved by combining concurrent purchases of and/or current investment in Class A, Class B, Class C, Class F, and Class K Shares, made or held by (or on behalf of) the investor, the investor’s spouse, and the investor’s children under age 21 (regardless of whether the purchases or investments are made or held directly or through an investment professional or through a single-participant retirement account); provided that such purchases and investments can be linked using tax identification numbers (TINs), social security numbers (SSNs), or Broker Identification Numbers (BINs); and

·   Letters of intent to purchase a certain amount of Class A Shares within a thirteen month period.

(H)           WAIVER OF SALES LOAD

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no sales load shall be assessed on purchases of Class A Shares made:

·   within 120 days of redeeming shares of an equal or greater amount;

·   through a financial intermediary that did not receive a dealer reallowance on the purchase;

·   with reinvested dividends or capital gains;

·   by shareholders who originally became shareholders of a Fund pursuant to the terms of an agreement and plan of reorganization which permits the shareholders to acquire shares at net asset value;

·   by Federated Life Members (Federated shareholders who originally were issued shares through the "Liberty Account", which was an account for the Liberty Family of Funds on February 28, 1987, or who invested through an affinity group prior to August 1, 1987, into the Liberty Account);

·   by Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons; and

·   pursuant to the exchange privilege.

(I)              WAIVER OF CONTINGENT DEFFERED SALES CHARGE ON LARGE-TICKET PURCHASES

Contingent upon notification to the Fund’s principal underwriter or transfer agent, the 75 basis point (0.75%) CDSC applicable in connection with the “large-ticket” purchase program described above, will not be imposed on redemptions:

·   Following the death of the last surviving shareholder or post-purchase disability, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986;

·   representing minimum required distributions from an Individual Retirement Account or other retirement plan to a shareholder who has attained the age of 70 ½;

·   of Shares that were reinvested within 120 days of a previous redemption;

·   of Shares held by the by Directors, Trustees, employees, former employeesand sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;

·   of Shares purchased through a financial intermediary that did not receive an advance commission on the purchase;

·   of Shares purchased with reinvested dividends or capital gains;

·   imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and

·   of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

4.           Special Offer Program

[NOTE: The 30 month CDSC period connected with of this program expired in September of 2002]

During the Special Offer Program which took place in March, 2000, the sales load was waived on purchases of Class A Shares of Federated Aggressive Growth Fund, Federated Communications Technology Fund, Federated Large Cap Growth Fund, and Federated International Small Company Fund (the "Special Offer Funds").  Instead, the principal underwriter paid an advance commission of 2.00% of the offering price of the Special Offer Funds to intermediaries participating in the Special Offer Program.  Class A Shares purchased through this Special Offer were subject to a CDSC of 2.00% on redemptions which occurred within 30 months after the purchase, which amount was to be paid to the principal underwriter in consideration for advancing the commission to intermediaries.  Class A Shares of the Special Offer Funds purchased during the Special Offer Program could be exchanged with Class A Shares of other Special Offer Funds with no imposition of a sales load or CDSC fee.  Class A Shares of the Special Offer Funds purchased during the Special Offer Program which were exchanged for Class A Shares of other Funds during the 30 month CDSC period incurred the CDSC fee upon redemption.  However, no sales load was charged for such an exchange.

5.           Redemption Fee

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class A Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange.  The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class A Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; and (ii) redemptions or exchanges involving Class A Shares held in plans administered as college savings programs under Section 529 of the Code.

SCHEDULE OF FUNDS

OFFERING CLASS A SHARES

The Funds set forth on this Schedule each offer Class A Shares on the terms set forth in the Class A Shares Exhibit to the Multiple Class Plan, in each case as indicated below.  The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value.  Actual amounts accrued may be less.

1.      CLASS A SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated American Leaders Fund, Inc.	None	None
Federated Equity Funds
Federated Capital Appreciation Fund	0.05%	None
Federated InterContinental Fund	0.05%	2% on shares redeemed or exchanged within 30 days of purchase
Federated International Strategic Value Fund	0.05%	2% on shares redeemed or exchanged within 30 days of purchase
Federated Kaufmann Fund	0.25%	None
Federated Kaufmann Large Cap Fund	0.25%	None
Federated Kaufmann Small Cap Fund	0.25%	None
Federated Market Opportunity Fund	0.05%	None
Federated Mid-CapGrowth Strategies Fund	None	None
Federated Strategic Value Fund	0.05%	None
Federated Technology Fund	0.25%	None
Federated Equity Income Fund, Inc.	0.05%	None
Federated Income Securities Trust
Federated Capital Income Fund	None	None
Federated Muni and Stock Advantage Fund	0.05%	None
Federated Real Return Bond Fund	0.05%	None
Federated Stock and California Muni Fund	0.05%	None
Federated International Series, Inc.
Federated International Equity Fund	None	2% on shares redeemed or exchanged within 30 days of purchase
Federated MDT Series
Federated MDT All Cap Core Fund	0.05%	None
Federated MDT Balanced Fund	0.05%	None
Federated MDT Large Cap Growth Fund	0.05%	None
Federated MDT Large Cap Value Fund	0.05%	None
Federated MDT Mid Cap Growth Fund	0.05%	None
Federated MDT Small Cap Core Fund	0.05%	None
Federated MDT Small Cap Growth Fund	0.05%	None
Federated MDT Small Cap Value Fund	0.05%	None
Federated MDT Tax Aware/All Cap Core Fund	0.05%	None

1.  CLASS A SHARES SUBJECT TO THE BASIC LOAD SCHEDULE (continued)

Federated Managed Allocation Portfolios
Federated Balanced Allocation Fund	0.05%	None
Federated Target ETF Fund 2015	0.25%	None
Federated Target ETF Fund 2025	0.25%	None
Federated Target ETF Fund 2035	0.25%	None
Federated Stock and Bond Fund, Inc.	None	None
Federated World Investment Series, Inc.
Federated International Small-Mid Company Fund	0.25%	2% on shares redeemed or exchanged within 30 days of purchase
Federated International Value Fund	0.25%	2% on shares redeemed or exchanged within 30 days of purchase

2.  CLASS A SHARES SUBJECT TO THE FIXED INCOME LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated Fixed Income Securities, Inc.
Federated Strategic Income Fund	None	None
Federated Government Income Securities, Inc.	0.05%	None
Federated High Income Bond Fund, Inc.	None	2% on shares redeemed or exchanged within 90 days of purchase
Federated Income Securities Trust
Federated Fund for U.S. Government Securities	None	None
Federated International Series, Inc.
Federated International Bond Fund	0.25%	None
Federated Investment Series Funds, Inc.
Federated Bond Fund	0.025%	None
Federated Municipal Securities Fund, Inc.	None	None
Federated Municipal Securities Income Trust
Federated California Municipal Income Fund	0.05%	None
Federated Municipal High Yield Advantage Fund	0.05%	None
Federated New York Municipal Income Fund	0.05%	None
Federated Pennsylvania Municipal Income Fund	0.05%	None
Federated Total Return Series, Inc.
Federated Total Return Bond Fund	0.25%	None
Federated World Investment Series, Inc.
Federated International High Income Fund	0.05%	None

3.  CLASS A SHARES SUBJECT TO THE MODIFIED FIXED INCOME SALES LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated Income Securities Trust
Federated Short-Term Income Fund	0.50%	None
Federated Short-Intermediate Duration Municipal Trust (formerly Federated Short-Term Municipal Trust)	0.25%	None

4.CLASS A SHARES SUBJECT TO THE MONEY MARKET LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Money Market Obligations Trust
Liberty U.S. Government Money Market Trust	None	None

5.CLASS A SHARES SUBJECT TO THE ULTRASHORT BOND LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated Fixed Income Securities, Inc.
Federated Municipal Ultrashort Fund	0.25%	None
Federated Institutional Trust
Federated Government Ultrashort Duration Fund	0.25%	None
Federated Total Return Series, Inc.
Federated Ultrashort Bond Fund	0.30%	None

6.       CLASS A SHARES NOT PARTICIPATING IN THE LARGE TICKET PURCHASE PROGRAM

Multiple Class Company	Series
Federated Fixed Income Securities, Inc.	Federated Municipal Ultrashort Fund
Federated Institutional Trust	Federated Government Ultrashort Duration Fund
Federated Total Return Series, Inc.	Federated Ultrashort Bond Fund

CLASS B SHARES EXHIBIT

TO

MULTIPLE CLASS PLAN

1.      SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class B Shares will consist of sales by financial intermediaries in consideration of the payment of an advance commission paid by the principal underwriter.  Financial intermediaries may perform shareholder services and receive a shareholder service fee for their services. In consideration of advancing commissions and the provision of shareholder services, the principal underwriter will receive the contingent deferred sales charges paid upon redemption of Class B Shares, shareholder service fee sand fees under a 12b-1 plan. In connection with this basic arrangement, Class B Shares will bear the following fees and expenses:

Fees and Expenses	Maximum Amount Allocated Class B Shares
Sales Load	None
Contingent Deferred Sales Charge (“CDSC”)	Up to 5.5% of the share price at the time of purchase or redemption, whichever is lower
Shareholder Service Fee	Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee	Up to 75 basis points (0.75%) of the average daily net asset value
Redemption Fee	As set forth in the attached Schedule
Other Expenses	Itemized expenses incurred by the Fund with respect to holders of Class B Shares as described in Section 3 of the Plan

2.      CONVERSION AND EXCHANGE PRIVILEGES

For purposes of Rule 18f-3, Class B Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights:	After Class B Shares have been held for eight years from the date of purchase, they will automatically convert into Class A Shares on or about the last day of the following month
Exchange Privilege:	Class B Shares may be exchanged for Class B Shares of any other Fund.

In any conversion or exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered.  Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

3.      EXCEPTIONS TO BASIC ARRANGEMENTS

For purposes of Rules 6c-10 and 22d-1 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in contingent deferred sales charges payable upon redemption are as follows:

(A)                 BASIC CDSC SCHEDULE

Shares Held Up to: To:	Have A CDSC Of:
1 year	5.50 %
2 years	4.75 %
3 years	4.00 %
4 years	3.00 %
5 years	2.00 %
6 years	1.00 %
7 years	0.00 %
8 years	Convert to Class A Shares

(B)                 WAIVER OF CDSC

Contingent upon notification to the Fund's principal underwriter or transfer agent, no CDSC will be imposed on redemptions:

·   following the death of the last surviving shareholder or post-purchase disability, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986;

·   representing minimum required distributions from an Individual Retirement Account or other retirement plan to a shareholder who has attained the age of 70 ½;

·   of Shares that were reinvested within 120 days of a previous redemption;

·   of Shares held by the Directors, Trustees, employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;

·   of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase;

·   of shares purchased with reinvested dividends or capital gains;

·   imposed by the Fund when it closes an account for not meeting minimum balance requirements; and

·   of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

(C) SYSTEMATIC WITHDRAWAL PROGRAM

Contingent upon notification to the principal underwriter or the Fund’s transfer agent, no CDSC will be imposed on redemptions that are qualifying redemptions of Class B Shares under a Systematic Withdrawal Program as described in the applicable prospectus and statement of additional information.

4.      REDEMPTION FEE

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class B Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange.  The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class B Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; and (ii) redemptions or exchanges involving Class B Shares held in plans administered as college savings programs under Section 529 of the Code.

SCHEDULE OF FUNDS

OFFERING CLASS B SHARES

The Funds set forth on this Schedule each offer Class B Shares on the terms set forth in the Class B Shares Exhibit to the Multiple Class Plan, in each case as indicated below.  The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value.  Actual amounts accrued may be less.

CLASS B SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated American Leaders Fund, Inc.	0.75%	None
Federated Equity Funds:
Federated Capital Appreciation Fund	0.75%	None
Federated InterContinental Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Federated Kaufmann Fund	0.75%	None
Federated Kaufmann Small Cap Fund	0.75%	None
Federated Market Opportunity Fund	0.75%	None
Federated Mid-Cap Growth Strategies Fund	0.75%	None
Federated Technology Fund	0.75%	None
Federated Equity Income Fund, Inc.	0.75%	None
Federated Fixed Income Securities, Inc.:
Federated Strategic Income Fund	0.75%	None
Federated Government Income Securities, Inc.	0.75%	None
Federated High Income Bond Fund, Inc.	0.75%	2% on shares redeemed or exchanged within 90 days of purchase
Federated Income Securities Trust:
Federated Capital Income Fund	0.75%	None
Federated Fund for U.S. Government Securities	0.75%	None
Federated Muni and Stock Advantage Fund	0.75%	None
Federated International Series, Inc.:
Federated International Bond Fund	0.75%	None
Federated International Equity Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase

CLASS B SHARES SUBJECT TO THE BASIC LOAD SCHEDULE (continued)

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated Investment Series Funds, Inc.:
Federated Bond Fund	0.75%	None
Federated Managed Allocation Portfolios:
Federated Balanced Allocation Fund	0.75%	None
Federated MDT Series:
Federated MDT Large Cap Growth Fund	0.75%	None
Federated MDT Small Cap Growth Fund	0.75%	None
Federated Municipal Securities Fund, Inc.	0.75%	None
Federated Municipal Securities Income Trust:
Federated California Municipal Income Fund	0.75%	None
Federated Municipal High Yield Advantage Fund	0.75%	None
Federated New York Municipal Income Fund	0.75%	None
Federated Pennsylvania Municipal Income Fund	0.75%	None
Federated Stock and Bond Fund, Inc.	0.75%	None
Federated Total Return Series, Inc.:
Federated Total Return Bond Fund	0.75%	None
Federated World Investment Series, Inc.:
Federated International High Income Fund	0.75%	None
Federated International Small Company Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Federated International Value Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Money Market Obligations Trust:
Liberty U.S. Government Money Market Trust	0.75%	None

CLASS C SHARES EXHIBIT

TO

MULTIPLE CLASS PLAN

1.           Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class C Shares will consist of sales by financial intermediaries in consideration of an advance commission of up to 1.00% of the public offering price, paid by the principal underwriter. Financial intermediaries may also provide shareholder services and may receive shareholder services fees therefor.  Additionally, the principal underwriter and financial intermediaries may receive distribution and/or administrative service fees under the 12b-1 Plan. In cases where the principal underwriter has advanced a commission to the financial intermediary, such 12b-1 fees will be paid to the financial intermediary beginning in the thirteenth month after purchase.  In consideration of advancing commissions, the principal underwriter will receive the contingent deferred sales charges paid upon redemption of Class C Shares and payments made under the 12b-1 Plan for twelve months following the purchase.  In connection with this basic arrangement, Class C Shares will bear the following fees and expenses:

Fees and Expenses	Maximum Amount Allocated Class C Shares
Contingent Deferred Sales Charge (“CDSC”)	1.00% of the share price at the time of purchase or redemption, whichever is lower if redeemed within twelve months following purchase
Shareholder Service Fee	Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee	As set forth in the attached Schedule
Redemption Fee	As set forth in the attached Schedule
Other Expenses	Itemized expenses incurred by the Fund with respect to holders of Class C Shares as described in Section 3 of the Plan

2.           Conversion and Exchange Privileges

For purposes of Rule 18f-3, Class C Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights:	None
Exchange Privileges:	Class C Shares may be exchanged for Class C Shares of any other Fund.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered.  Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

3.           Exceptions to Basic Arrangements

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations contingent deferred sales charges are as follows:

(A)                  WAIVER OF CDSC

Contingent upon notification of the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions:

·   following the death of the last surviving shareholder or post-purchase disability, as defined in Section 72(m) (7) of the Internal Revenue Code of 1986;

·   representing minimum required distributions from an Individual Retirement Account or other retirement plan to a shareholder who has attained the age of 70 1/2;

·   of Shares that were reinvested within 120 days of a previous redemption;

·   of Shares held by Directors, Trustees, employees, former employeesand sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;

·   of Shares purchased through a financial intermediary that did not receive an advance commission on the purchase;

·   of Shares purchased with reinvested dividends or capital gains;

·   imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and

·   of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

·  

4.           Redemption Fee

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class C Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange.  The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class C Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; and (ii) redemptions or exchanges involving Class C Shares held in plans administered as college savings programs under Section 529 of the Code.

SCHEDULE OF FUNDS

OFFERING CLASS C SHARES

The Funds set forth on this Schedule each offer Class C Shares on the terms set forth in the Class C Shares Exhibit to the Multiple Class Plan, in each case as indicated below.  The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value.  Actual amounts accrued may be less.

CLASS C SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated American Leaders Fund, Inc.	0.75%	None
Federated Equity Funds:
Federated Capital Appreciation Fund	0.75%	None
Federated InterContinental Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Federated International Strategic Value Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Federated Kaufmann Fund	0.75%	None
Federated Kaufmann Small Cap Fund	0.75%	None
Federated Market Opportunity Fund	0.75%	None
Federated Mid CapGrowth Strategies Fund	0.75%	None
Federated Strategic Value Fund	0.75%	None
Federated Technology Fund	0.75%	None
Federated Equity Income Fund, Inc.	0.75%	None
Federated Fixed Income Securities, Inc.:
Federated Strategic Income Fund	0.75%	None
Federated Government Income Securities, Inc.	0.75%	None
Federated High Income Bond Fund, Inc.	0.75%	2% on shares redeemed or exchanged within 90 days of purchase
Federated Income Securities Trust:
Federated Capital Income Fund	0.75%	None
Federated Fund for U.S. Government Securities	0.75%	None
Federated Muni and Stock Advantage Fund	0.75%	None
Federated Real Return Bond Fund	0.75%	None
Federated Stock and California Muni Fund	0.75%	None
Federated Index Trust
Federated Max-Cap IndexFund	0.75%	None
Federated Mini-Cap IndexFund	0.75%	None

CLASS C SHARES SUBJECT TO THE BASIC LOAD SCHEDULE (continued)

Multiple Class Company Series	12b-1 Fee	Redemption Fee
Federated International Series, Inc.:
Federated International Bond Fund	0.75%	None
Federated International Equity Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Federated Investment Series Funds, Inc.:
Federated Bond Fund	0.75%	None
Federated Managed Allocation Portfolios:
Federated Balanced Allocation Fund	0.75%	None
Federated MDT Series:
Federated MDT All Cap Core Fund	0.75%	None
Federated MDT Balanced Fund	0.75%	None
Federated MDT Large Cap Growth Fund	0.75%	None
Federated MDT Large Cap Value Fund	0.75%	None
Federated MDT Mid Cap Growth Fund	0.75%	None
Federated MDT Small Cap Core Fund	0.75%	None
Federated MDT Small Cap Growth Fund	0.75%	None
Federated MDT Small Cap Value Fund	0.75%	None
Federated MDT Tax Aware/All Cap Core Fund	0.75%	None
Federated Municipal Securities Fund, Inc.	0.75%	None
Federated Municipal Securities Income Trust:
Federated Municipal High Yield Advantage Fund	0.75%	None
Federated Stock and Bond Fund, Inc.	0.75%	None
Federated Total Return Series, Inc.:
Federated Total Return Bond Fund	0.75%	None
Federated World Investment Series, Inc.:
Federated International High Income Fund	0.75%	None
Federated International Small Company Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Federated International Value Fund	0.75%	2% on shares redeemed or exchanged within 30 days of purchase
Money Market Obligations Trust:
Liberty U.S. Government Money Market Trust	0.75%	None

CLASS F SHARES* EXHIBIT

TO

MULTIPLE CLASS PLAN

1.           Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class F Shares will consist of sales by financial intermediaries in consideration of the payment of the sales load (“dealer reallowance”). Financial intermediaries may also provide shareholder services and may receive shareholder service fees therefor. Additionally, the principal underwriter may pay up to 100 basis points (1.00%) of the public offering price to financial intermediaries as an advance commission on sales.  In consideration of advancing this payment, the principal underwriter will receive any contingent deferred sales charges paid upon redemption of Class F Shares and distribution service fees under the 12b-1 Plan on an ongoing basis.  In connection with this basic arrangement Class F Shares will bear the following fees and expenses:

Fees and Expenses	Maximum Amount Allocated Class F Shares
Sales Load	Up to 100 basis points (1.00%) of the public offering price
Contingent Deferred Sales Charge ("CDSC")	Up to 100 basis points (1.00%) of the share price at the time of original purchase or redemption, whichever is lower
Shareholder Service Fee	Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee	As set forth in the attached Schedule
Other Expenses	Itemized expenses incurred by the Fund with respect to holders of Class F Shares as described in Section 3 of the Plan

2.           Conversion and Exchange Privileges

For purposes of Rule 18f-3, Class F Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights:	None
Exchange Privileges:	Class F Shares may be exchanged for Class F Shares of any other Fund.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered.  Exchanges to any other Class shall be treated as a redemption and purchase.

 

* Formerly Fortress Class of Shares

3.           Exceptions to Basic Arrangements

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales load and contingent deferred sales charges are as follows:

(A)                 BASIC SALES LOAD SCHEDULE*

Purchase Amount:	Sales Charge as Percentage of Offering Price	Sales Charge as a Percentage of NAV
Less than $1 million	1.00%	1.01%
$1 million or greater	0.00%	0.00%

(B)                 CDSC SCHEDULE

Unless otherwise indicated below, the Schedule of Contingent Deferred Sales Charges for each Fund is as follows:

Purchase Amount:	Shares Held:	Contingent Deferred Sales Charge:
Under $2 million	4 years or less	1.00%
$2 million but less than $5 million	2 years or less	0.50%
$ 5 million or greater	1 year or less	0.25%

(C)                 REDUCING OR ELIMINATING THE SALES LOAD

Contingent upon notification to the Fund’s principal underwriter or transfer agent, in applying the exceptions set forth in this Section 3, the purchase amount shall take into account:

·   Discounts achieved by combining concurrent purchases of and/or current investment in Class A, Class B, Class C, Class F, and Class K Shares, made or held by (or on behalf of) the investor, the investor’s spouse, and the investor’s children under age 21 (regardless of whether the purchases or investments are made or held directly or through an investment professional or through a single-participant retirement account); provided that such purchases and investments can be linked using tax identification numbers (TINs), social security numbers (SSNs), or Broker Identification Numbers (BINs); and

·   Letters of intent to purchase a certain amount of Class F Shares within a thirteen month period.

(D)                 WAIVER OF SALES LOAD

Contingent upon notification to the Fund's principal underwriter or transfer agent, no sales load will be assessed on purchases of Class F Shares made:

·   within 120 days of redeeming Shares of an equal or greater amount;

·   through a financial intermediary that did not receive a dealer reallowance on the purchase;

·   by shareholders who originally became shareholders of a Fund pursuant to the terms of an agreement and plan of reorganization which permits the shareholders to acquire shares at net asset value;

·   with reinvested dividends or capital gains;

·   by Directors, Trustees, employees, former employeesand sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons; and

·   pursuant to the exchange privilege.

(E)                 WAIVER OF CDSC

Contingent upon notification to the Fund's principal underwriter or transfer agent, no CDSC will be imposed on redemptions:

·   (Class F Shares of Federated Capital Income Fund Only) as a shareholder who owned Shares on September 30, 1989;

·   following the death of the last surviving shareholder or post-purchase disability, as defined in Section 72(m) (7) of the Internal Revenue Code of 1986;

·   representing minimum required distributions from an Individual Retirement Account or other retirement plan to a shareholder who has attained the age of 70 1/2;

·   of Shares purchased within 120 days of a previous redemption of an equal or lesser amount;

·   of Shares held by Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;

·   of Shares purchased through a financial intermediary that did not receive an advance commission on the purchase ;

·   of Shares purchased with reinvested dividends or capital gains;

·   imposed by the Fund when it closes an account for not meeting the minimum balance requirements;

·   of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period; and

·   representing a total or partial distribution from a qualified plan, which would not include account transfers, rollovers, or redemptions for the purpose of reinvestment.  For these purposes, qualified plans would not include an Individual Retirement Account, Keogh Plan or custodial account following retirement.

SCHEDULE OF FUNDS

OFFERING CLASS F SHARES

The Funds set forth on this Schedule each offer Class F Shares on the terms set forth in the Class F Shares Exhibit to the Multiple Class Plan, in each case as indicated below.  The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value.  Actual amounts accrued may be less.

CLASS F SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company Series	12b-1 Fee
Federated American Leaders Fund, Inc.	None
Federated Equity Income Fund, Inc	0.25%
Federated Fixed Income Securities, Inc.: Federated Strategic Income Fund	0.05%
Federated Government Income Securities, Inc.	None
Federated Income Securities Trust: Federated Capital Income Fund Federated Muni and Stock Advantage Fund	0.05% None
Federated Investment Series Funds, Inc.: Federated Bond Fund	None
Federated Municipal Securities Fund, Inc.	None
Federated Municipal Securities Income Trust: Federated Municipal High Yield Advantage Fund	0.05%
Federated World Investment Series, Inc.: Federated International High Income Fund	None
Money Market Obligations Trust: Liberty U.S. Government Money Market Trust	None

CLASS K SHARES EXHIBIT

TO

MULTIPLE CLASS PLAN

1.           Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class K Shares will consist of:

(i) Excepting Federated Kaufmann Fund, sales by financial intermediaries to retirement plans, with shareholder services provided by the retirement plan recordkeepers; and

(ii)  with respect to the Federated Kaufmann Fund, (a) sales by financial intermediaries to retirement plans; (b) the issuance of Class K Shares as provided in the Plan of Reorganization between the Federated-Kaufmann Fund and the Kaufmann Fund; (c) additional investments by former Kaufmann Fund shareholders and related persons; and (d) shareholder services provided by financial intermediaries..

Financial intermediaries and the principal underwriter may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan, in addition, financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Class K Shares will bear the following fees and expenses:

Fees and Expenses	Maximum Amount Allocated Class K Shares
Sales Load	None
Contingent Deferred Sales Charge ("CDSC")	None
Redemption Fee	As set forth in the attached Schedule.
Shareholder Service Fee	As set forth in the attached Schedule
12b-1 Fee	As set forth in the attached Schedule
Other Expenses	Itemized expenses incurred by the Fund with respect to holders of Class K Shares as described in Section 3 of the Multiple Class Plan

2.           Conversion and Exchange Privileges

For purposes of Rule 18f-3, Class K Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights:	None
Exchange Privilege:	With respect to the Kaufmann Fund, Class K Shares may be exchanged for Class A Shares or Class K Shares of any other Fund.  With respect to the other funds, Class K Shares may be exchanged for Class K Shares, including the Kaufmann Fund.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

3.           Redemption Fee

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class K Shares will be applied to fees incurred or amounts expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to Class K Shares redeemed or exchange by employer-sponsored retirement plans.

SCHEDULE OF FUNDS

OFFERING CLASS K SHARES

The Funds set forth on this Schedule each offer Class K Shares on the terms set forth in the Class K Shares Exhibit to the Multiple Class Plan, in each case as indicated below.  The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

Multiple Class Company Series	12b-1 Fee	Shareholder Services Fee	Redemption Fee
Federated American Leaders Fund, Inc.	0.50%	None	None
Federated Equity Funds:
Federated Capital Appreciation Fund	0.50%	None	None
Federated InterContinental Fund	0.50%	None	2% on shares redeemed or exchanged within 30 days of purchase
Federated Kaufmann Fund	0.50%	0.25%	0.20%
Federated Kaufmann Large Cap Fund	0.50%	None	None
Federated Kaufmann Small Cap Fund	0.50%	None	None
Federated Mid-Cap Growth Strategies Fund	0.50%	None	None
Federated Index Trust:
Federated Max-Cap Index Fund	0.50%	None	None
Federated Managed Allocation Portfolios:
Federated Target ETF Fund 2015	0.50%	None	None
Federated Target ETF Fund 2025	0.50%	None	None
Federated Target ETF Fund 2035	0.50%	None	None
Federated MDT Series:
Federated MDT All Cap Core Fund	0.50%	None	None
Federated MDT Balanced Fund	0.50%	None	None
Federated MDT Large Cap Value Fund	0.50%	None	None
Federated Stock and Bond Fund, Inc.	0.50%	None	None
Federated Total Return Series, Inc.:
Federated Total Return Bond Fund	0.50%	None	None
Federated U.S. Government Securities Fund: 2-5 Years	0.50%	None	None
Money Market Obligations Trust:
Automated Cash Management Trust	0.50%	None	None

EX-99.CODE

Exhibit (p)(2) under Form N-1A

Exhibit 99 under Item 601/Reg. S-K

Federated Investors, Inc.

Code of Ethics for Access Persons

Effective 1/01/2005

(As Revised 1/26/2005 and 8/19/2005)

Table of Contents

Page

1 RESPONSIBILITIES  2

1.1          GeneralPrinciples 2

1.2          Compliance with this Code is a condition of employment3

1.3          Personal Responsibility 4

1.4          Perceived ambiguity shall not excuse violations 4

1.5          Preclearance does not protect wrongdoing 4

2 REPORTING REQUIREMENTS  4

2.1          Initial Reporting Requirements 4

2.2          Quarterly Reporting Requirements 5

2.3          Annual Reporting Requirements 6

2.4          Independent Directors 7

2.5          Non-Federated Officers of Federated Funds or Proprietary Client Funds 7

2.6          Access Persons Acknowledgments of Receipt of Code of Ethics and

             Amendments 8

3 PRECLEARANCE REQUIREMENTS  9

3.1          Preclearance of Trades 9

3.2          Duration and Revocation 9

3.3          Preclearance Does Not Protect Wrongdoing 9

3.4          Options, Futures and/or Short Selling by Investment Personnel 9

3.5          Exceptions 9

3.6          Exception Procedure for Employee Stock Options of a Previous Employer 10

4 EXEMPT TRANSACTIONS  11

4.1          Exempt Securities 11

4.2          Discretionary Accounts 12

5 PROHIBITIONS AND RESTRICTIONS  12

5.1          General Prohibitions 12

5.2          Initial Public Offerings (or IPOs) are Prohibited 13

5.3          Private Placements Require Prior Compliance Approval 14

5.4          Prohibition of Short-Term Profits – 60-Day Rule – Individual Securities 14

5.5          Minimum Holding Period – Designated Federated Funds14

5.6          Prohibition on Insider Trading 15

5.7          Disclosure or Misuse of Fund Information 15

5.8          Blackout - - Recommendations / Restricted List 16

5.9          Blackout - - Fund Trades 16

5.10                                                                                                                                    Prior Knowledge 16

5.11                                                                                                                                    De Minimis Exceptions 17

5.12                                                                                                                                    Serving on Boards of Directors 17

5.13                                                                                                                                    Excessive Trading and Market Timing 19

5.14                                                                                                                                    Independent Directors 19

5.15                                                                                                                                    Restrictions on Investment Clubs 20

5.16                                                                                                                              & #160;     Disclosure of Personal Interests 20

6 PROHIBITIONS ON GIVING / RECEIVING GIFTS; POLITICAL AND CHARITABLE CONTRIBUTIONS  21

7 REVIEW, REPORTING, EDUCATION AND SANCTIONS  22

7.1          Management Review of Investment Personnel’ s Trading Activity 22

7.2          Compliance Review of Reports and Trading Activity, and this

Code of Ethics 22

7.3          Self-discovery and Reporting 23

7.4          Education 23

7.5          Sanctions 24

7.6          Factors For Consideration 24

7.7          Reporting of Violations 24

8 DEFINITIONS  24

8.1          1933 Act 24

8.2          1934 Act 25

8.3          1940 Act 25

8.4          Access Person 25

8.5          Adviser 25

8.6          Advisers Act 25

8.7          Associated Procedures 25

8.8          Automatic Investment Plan 26

8.9          Beneficial Ownership 26

8.10                                                                                                                                     Board26

8.11                                                                                                                                     Code26

8.12     Compliance Committee 26

8.13                                                                                                                                     Compliance Department26

8.14                                                                                                                                     Control26

8.15                                                                                                                              & #160;     Covered Security 26

8.16                                                                                                                              & #160;     Federal Securities Laws 27

8.17                                                                                                                              & #160;     Federated 27

8.18                                                                                                                              & #160;     Fund 27

8.19                                                                                                                              & #160;     Independent Director 27

8.20                                                                                                                                     Initial Public Offering28

8.21                                                                                                                                     Investment Person; Investment Personnel28

8.22                                                                                                                                     Private Placement28

8.23 Purchase or Sale………………………………………………………………………...28

8.24                                                                                                                              & #160;     Reportable Fund 28

8.25                                                                                                                                     SEC29

8.26                                                                                                                                     Security29

8.27                                                                                                                              & #160;     Supervised Person 29

8.28                                                                                                                                     Underwriter29

8.29                                                                                                                                     Vendor29

ADDENDUM

Access Persons Procedures A-1

Compliance Department Procedures B-1

CODE OF ETHICS FOR ACCESS PERSONS

Introduction

This Code sets forth a standard of conduct and professionalism that applies to all persons designated as Access Persons by the Compliance Department.  This Code was designed and established, and will be maintained and enforced, to protect Federated’s clients (or Funds) and Vendors by deterring misconduct and to guard against violations of the Federal Securities Laws.  This Code reinforces the value that Federated places on ethical conduct.  Each Access Person must comply with this Code and uphold Federated’s ethical standards at all times.  Each Access Person also is responsible for ensuring that spouses, children and others residing in the same household do not violate the provisions of this Code that are applicable to the Access Person.

It is Federated's policy that business must be conducted in accordance with the highest fiduciary, legal and ethical standards.  Federated's reputation for integrity is its most important asset and each Access Person must contribute to the care and preservation of that asset.  This reputation for integrity is the cornerstone of the public's faith and trust in Federated; it is what provides Federated an opportunity to serve investors, shareholders and other stakeholders.  A single Access Person's misconduct can do much damage to Federated's hard-earned reputation.  

This Code sets forth the fiduciary, legal and ethical requirements that must be satisfied to comply with this Code.  It also sets forth certain “best practices” that Federated believes must be followed.  In many cases, this Code also establishes procedures that Access Persons must follow in order to comply with this Code.

Capitalized terms are defined in Section 8 of this Code.

Access Persons.                                                Access Persons include:

(a) Designated employees of Federated, including those who work for a subsidiary that is an Adviser, an Underwriter for funds and employees of certain other subsidiaries;

(b) Independent Directors of a fund;

(c) Designated officers of Federated funds or proprietary funds who are not employed by Federated. (e.g., designated outside counsel who serve as secretary to one or more funds); and

(d) Investment Personnel.

Application to Access Persons.  This Code applies only to those individuals specified above, designated as Access Persons under this Code.  Moreover, certain of the requirements in this Code apply to Access Persons, while others may only apply to Investment Persons.  Section 2.4, 2.5(b) and 5.14 of this Code also clarify the applicability of certain provisions of this Code to Access Persons who are Independent Directors or non-Federated officers of Federated funds or proprietary funds.  

Application to Household Members of Access Persons.  As noted above, each Access Person also is responsible for ensuring that spouses, children and others residing in the same household do not violate the provisions of this Code that are applicable to the Access Person (even if the provisions of this Code do not specifically reference household members).  See the definitions of "Access Person" and "Investment Personnel" in Section 8 of this Code for further information.

Questions.  Please read the requirements of this Code carefully.  If you have any questions regarding how this Code applies to any conduct or practice, please contact the Compliance Department.  When in doubt, an Access Person should ask before acting.

Proprietary Funds.Notwithstanding the adoption of this Code by a Proprietary fund, this Code does not apply to any employee, officer, trustee or director of the Proprietary Fund or its investment adviser who (a) is not employed by Federated and (b) is subject to the terms of another code of ethics approved by the Board.

Compliance with Other Requirements Still Required.  This Code supercedes prior versions of this Code.  This Code does not supercede, or relieve an Access Person from complying with, other Federated standards, rules, procedures or policies (“Other Requirements”) applicable to the Access Person, whether contained in Federated’s employee handbook, compliance program or otherwise or arising under applicable law.  In particular, but without limitation, Access Persons are reminded of Federated’s Code of Business Conduct and Ethics and Federated's policies and procedures on suitability, best execution, soft dollars, directed brokerage, anti-money laundering, and privacy, and of the other matters addressed in any applicable policies, procedures or compliance program.  A violation of any of the Other Requirements by an Access Person may, depending upon the circumstances, also constitute a violation of this Code.

Sanctions for Violations of this Code.  Federated intends to enforce the provisions of this Code vigorously.  A violation of this Code may subject an Access Person to sanctions as set forth in Section 7 below (including, without limitation, termination), as well as, in some cases, civil and criminal liability.

Adoption.  Pursuant to Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act (as applicable), this Code has been adopted on behalf of each investment company that is served by the Board of Directors of the Federated funds, Federated's Advisers and Federated's Underwriters.

1   Responsibilities

1.1   General Principles

The following general principles govern all conduct of Access Persons, whether or not the conduct also is covered by more specific standards or procedures set forth below.

(a) Fiduciary Principles

Each Access Person must:

(i) place the Funds’ interests ahead of his or her personal interests;

(ii) avoid conflicts of interest (actual or potential) and the appearance of any conflict with the Funds or Vendors;

(iii) conduct his or her personal transactions in a manner, which is consistent with this Code and which does not interfere with Fund portfolio transactions or otherwise take unfair or inappropriate advantage of his or her position or relationship to a Fund or a Vendor;

(iv) not show inappropriate favoritism of one Fund over another Fund in a manner that would constitute a breach of fiduciary duty;

(v) not accept or offer inappropriate gifts, favors, entertainment, special accommodations or other things of material value that could influence decision-making by either Federated, an Adviser, a Fund or a Vendor;

(vi) safeguard material nonpublic Fund information and control its dissemination in a manner consistent with Federated’s policies and applicable legal requirements; and

(vii) otherwise act in good faith, in an open, honest, non-misleading, professional and unbiased manner, with integrity, and in a manner that instills trust and confidence and promotes independence in the investment decision-making process, in each aspect of the Access Person’s professional activities and business (including, without limitation, in all disclosures, advertisements and other communications, and dealings, with Funds, shareholders and accountholders).

For example, an Access Person’s failure to recommend or purchase a Covered Security for the Fund in order to purchase the Covered Security for the Access Person’s personal benefit may be considered a violation of this Code.

(b) Legal Principles

In addition to complying with the above fiduciary principles, each Access Person must comply with the Federal Securities Laws.

(Any Access Person who is a director, officer or employee of Federated should also refer to the "Compliance with Laws, Rules and Regulations" requirements in Federated's Code of Business Conduct and Ethics.  If you have questions concerning complying with applicable law, contact the Compliance Department or Federated's General Counsel.)

1.2   Compliance with this Code is a Condition of Employment

Every Access Person must adhere to the general principles set forth in Section 1.1 above, and comply with the specific provisions and Associated Procedures of this Code and the spirit of those provisions.  Literal compliance with specific provisions will not be sufficient where the transactions undertaken by an Access Person show a pattern of abuse of the Access Person’s fiduciary duty or of violation of applicable legal requirements.

1.3   Personal Responsibility

It is the responsibility of each Access Person to take all steps necessary before executing a personal trade, or taking other action, to verify that the trade or other action is in compliance with the provisions and intent of this Code.

1.4   Perceived Ambiguity shall not Excuse Violations

Any Access Person who believes a particular provision of this Code is ambiguous is required to contact the Compliance Department for a determination prior to executing a transaction or taking other action subject to that

1.5 Preclearance does not Protect Wrongdoing

Receipt of express prior preclearance approval does not exempt you from the prohibitions outlined in this Code.

2   Reporting Requirements

The Reporting Requirements in Section 2.1, 2.2, and 2.3 of this Code only apply to Access Persons and their household members.

Every Access Person is required to submit reports of all Covered Securities Beneficially Owned, all accounts in which any Securities are held and any transactions in Covered Securities as indicated below.  Covered Securities transactions of Access Persons will be reviewed for compliance with the provisions of this Code.  A violation may result from either a single transaction or multiple transactions if the Compliance Department determines that the transactions did not comply with provisions of this Code.

Information relating to the holdings and personal trades of Access Persons will be shared with Senior Management of Federated from time to time for purposes of reviewing Access Person trading patterns and practices.

2.1   Initial Reporting Requirements

Within ten (10) calendar days of becoming an Access Person, the Access Person will submit to the Compliance Department, a holdings report including:

(a) the full name (i.e., title), description (i.e., type), CUSIP or SEDOL or exchange ticker symbol, number of shares and principal amount of each Covered Security held in any form, including, without limitation, those shares of Federated funds included under this Code’s definition of “Covered Security,” that are held in all personal or household member accounts with a financial institution or intermediary (this does not include accounts held directly with Federated’s Transfer Agent or 401k Plan Administrator), in which the Access Person or household member had any direct or indirect Beneficial Ownership when the Access Person became an Access Person;

(b) open investment account information, including the name and address of any broker, dealer, bank or other financial institution maintaining an account in which any Securities are held for the Access Person’s or household member’s direct or indirect benefit, and the account numbers; and

(c) the date the Access Person submits the report.

Information provided by the Access Person must be current as of a date no more than 45 days before the report is submitted.

The Compliance Department will direct the broker, dealer, bank or other financial institution maintaining each account to provide duplicate confirmations of all transactions and account statements directly to the attention of the Compliance Department, in a timely fashion.  The Compliance Department also will obtain reports on accounts held directly with Federated’s Transfer Agent or 401k Plan Administrator.  Each Access Person must assure that such information is received.

2.2   Quarterly Reporting Requirements

By the date specified by the Compliance Department (but in no event later than thirty (30) calendar days after the end of the calendar quarter) every Access Person must review the information received by the Compliance Department relating to the personal transactions in any Covered Security, and each Access Person must complete (and submit to the Compliance Department) a quarterly Securities transaction report using TradeComply to:

(a) identify and confirm that all Covered Security transactions during the previous calendar quarter in all personal and household member accounts have been reported, including, without limitation, transactions in Federated funds included under this Code’s definition of “Covered Security” that are held in accounts with a financial institution or intermediary (this does not include accounts held directly with Federated’s Transfer Agent or 401k Plan Administrator);

(b) identify and confirm that all open investment account information, including names of brokers, dealers, banks and other financial institutions, addresses and account numbers, has been reported;

(c) identify and notify the Compliance Department of any new investment account(s) established with brokers, dealers, banks or other financial institutions during the quarter, the date the account was established and account number;

(d) identify the date the Access Person submits the report;

(e) resolve any discrepancies with the Compliance Department; and

(f) record an electronic signature on TradeComply.

Information provided by the Access Person must be current as of a date no more than 45 days before the report is submitted.

The information required in Sections 2.2(a) and (c) above shall include at least the following information about each transaction involving a Covered Security in which the Access Person or household member had, or as a result of a transaction acquired, any direct or indirect Beneficial Ownership:  (1) (A) the date of the transaction, (B) the full name (i.e., title), (C) description (i.e., type), and as applicable (D) CUSIP or SEDOL or exchange ticker symbol, (E) interest rate, (F) maturity date, (G) number of shares and (H) principal amount of each Covered Security involved, (2) the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition), (3) the price of the Security at which the transaction was effected, and (4) the name of the broker, dealer, bank or other financial institution with or through which the transaction was effected.

An Access Person need not submit a quarterly Securities transactions report: (1) with respect to Securities held in accounts over which the Access Person or household member had no direct or indirect influence or control (unless otherwise required under this Code, such as when required under Section 4.2 with respect to discretionary accounts,); or (2) with respect to transactions effected pursuant to an Automatic Investment Plan; or (3) to the extent that the report would duplicate information contained in broker trade confirmations or account statements delivered to Federated so long as such trade confirmations or account statements are received by the Compliance Department no later than 30 days after the end of the applicable calendar quarter.

2.3   Annual Reporting Requirements

On an annual basis and by the date specified by the Compliance Department (but in no event later than thirty (30) calendar days after a request) from the Compliance Department, every Access Person is required to provide a written acknowledgment (1) that he or she is subject to, has received a copy of and read this Code, and (2) of his or her understanding of and compliance with this Code, its requirements and Associated Procedures.  At the same time, the Access Person must review a current list of Securities held in the Access Person’s account(s) as reported to the Compliance Department for accuracy, and complete (and submit to the Compliance Department) an annual holdings report using TradeComply to:

(a) identify and confirm all covered Securities held in any form and/or in all personal and household member accounts, including the full name (i.e., title), description (i.e., type), CUSIP OR SEDOL or exchange ticker symbol, number of shares and principal amount of each Covered Security in which the Access Person or householdmember had any direct or indirect Beneficial Ownership, including, without limitation, shares of Federated funds included under this Code’s definition of “Covered Security” that are held in accounts with a financial institution or intermediary (this does not include accounts held directly with Federated’s Transfer Agent or 401k Plan Administrator);

(b) identify and confirm all open investment account information, including names of brokers, dealers, banks and other financial institutions, addresses and account numbers;

(c) identify the date the Access Person submits the report;

(d) resolve any discrepancies with the Compliance Department, and

(e) record an electronic signature on TradeComply.

Information provided by the Access Person must be current as of a date no more than 45 days before the report is submitted.

Except as provided in Section 4.2 with respect to discretionary accounts, an Access Person need not submit an initial holdings report with respect to Securities held in accounts over which the Access Person or household member had or has no direct or indirect influence or control.

2.4   Independent Directors

Independent Directors must report all holdings and transactions in shares of Federated funds included under this Code’s definition of “Covered Security” that are held in accounts with a financial institution or intermediary, (this does not include accounts held directly with Federated’s Transfer Agent or 401k Plan Administrator).

Except for holdings and transactions involving Federated funds, an Independent Director (unless previously identified by the Compliance Department as being an Access Person who cannot take advantage of this Section 2.4) is exempt from all other reporting requirements so long as, at the time of a personal transaction in a Covered Security, such Independent Director neither knew nor, in the ordinary course of fulfilling his or her official duties as a fund director, should have known that during the 15-day period immediately before or after the director's transaction that the Covered Security was purchased or sold by the Fund, or considered for Purchase or Sale.

Any Independent Director who is identified by the Compliance Department as being an Access Person who cannot take advantage of this Section 2.4 must comply with all reporting requirements applicable to Access Persons set forth in this Code or its Associated Procedures.

2.5   Non-Federated Officers of Federated Funds or Proprietary Client Funds

(a) Non-Federated personnel serving as officers of a fund who are specifically designated as Access Persons subject to this provision shall be so notified by the Compliance Department and shall be deemed to be Access Persons.

(b) Such specially designated Access Persons shall be subject to all provisions under this Code applicable to Access Persons (as applicable), except that only the following provisions apply:

Section 1                                      Responsibilities

Section 2                                      Reporting Requirements

   Section 5.1                              General Prohibitions

                            Section 5.2                              Initial Public Offerings (or IPOs) are Prohibited

    Section 5.3                                          Private Placements Require Prior Compliance Approval

    Section 5.5                                          Minimum Holding Period – Designated Federated Funds

    Section 5.6 Prohibition on Insider Trading

    Section 5.7                                          Disclosure or Misuse of Fund Information

    Section 5.10                                          Prior Knowledge

    Section 5.13                                          Excessive Trading and Market Timing

    Section 5.15                                          Investment Clubs

    Section 5.16                                          Disclosure of Personal Interests

    Section 6                                          Prohibitions on Giving/Receiving Gifts; Political and

Charitable Contributions

    Section 7                                          Review, Reporting, Education and Sanctions

    Section 8                                          Definitions

(c) Each specially designated Access Person must notify the Compliance Department of any positions held on the Board of Directors of any publicly held company and any “for-profit” private company.  In the event that the Access Person, thereafter, should be advised of an issue relating to any such company, the Access Person must recuse himself or herself from any discussion or consideration of such issues.

(d) Violations of this Code and/or suspicious trading activity shall be reported by the Compliance Department to the Senior Manager of such Access Person.  A report by the employer of the steps taken in response to the issues raised shall be requested by the Compliance Department and reported to Federated management, and, in the case of a personal transaction that conflicts with a mutual fund transaction, the fund’s Audit Committee and, ultimately, the fund’s Board of Directors.

2.6   Access Persons Acknowledgments of Receipt of Code of Ethics and Amendments

(a) The Compliance Department shall provide each Access Person with a copy of this Code annually.  The Compliance Department also shall provide each Access Person with a copy of any amendment to this Code promptly after such amendments are adopted (and, to the extent possible, prior to their effectiveness).

(b) Within thirty (30) calendar days of a request from the Compliance Department after receiving the copy of this Code or an amendment to this Code, every Access Person is required to provide the Compliance Department with a written or electronic acknowledgment (1) that he or she has received and read this Code or such amendment, and (2) of his or her understanding of and compliance with this Code or such amendment, its requirements and any Associated Procedures.  An Access Person who provides a written acknowledgement of receipt of a copy of this Code on an annualized basis under Section 2.3 above need not provide a separate acknowledgment under this Section 2.6 (except for acknowledgments of receipt of any amendments to this Code).

3   Preclearance Requirements

3.1   Preclearance of Trades

Unless subject to a preclearance exception, all Access Persons must preclear every Purchase or Sale of a Covered Security in which the Access Person has Beneficial Ownership (including, without limitation, transactions in pension or profit-sharing plans, Initial Public Offerings (or IPOs) (to the extent approved as satisfying the limited exceptions in Sections 5.2(a) or (b) to the general prohibition), and Private Placements), in accordance with the Associated Procedures governing preclearance.

(a) Domestic Securities must be precleared using TradeComply.

(b) Access Persons without access to TradeComply must contact the Compliance Department for forms to be used when submitting preclearance requests.

3.2   Duration and Revocation

Preclearance approval remains in effect until the end of the following business day.  Preclearance approval may be revoked at any time upon notification of revocation being provided by the Compliance Department.  Any revocation shall not affect any transaction made prior to such revocation notice being delivered during a time when the preclearance approval was effective.

3.3   Preclearance Does Not Protect Wrongdoing

Preclearance approval and the receipt of express prior preclearance approval does not exempt an Access Person from the prohibitions outlined in this Code.

3.4   Options, Futures and/or Short Selling by Investment Personnel

Investment Personnel trading in options or futures contracts, or engaging in short sales of Covered Securities, must obtain both (a) approval by the senior manager designated in this section and (b) preclearance of the trade through TradeComply.

Transactions by Research Analysts and other Research staff members reporting to the Head of Research - Equity, that involve options, futures and/or short selling must be first pre-approved by the Head of Research - Equity, or his designee, and then precleared through TradeComply.  Transactions by all other Investment Personnel that involve options, futures and/or short selling must be first pre-approved by the Chief Investment Officer having responsibility for the Security type, or his or her designee, and then precleared through TradeComply.

3.5   Exceptions

Preclearance requirements do not apply to:

(a) Shares of any registered open end investment companies, including, without limitation, Federated funds included under this Code’s definition of “Covered Security”.

(b) Non-volitional purchases or sales.

(c) Automatic Investment Plans, including, without limitation, dividend reinvestment plans; or automatic payroll deduction plan purchases that are either (a) made solely with the dividend proceeds, or (b) whereby an employee purchases Securities issued by an employer.

(d) Exercise of rights to purchase and any sales of such rights issued by an issuer pro rata to all holders of a class of its Covered Securities, to the extent such rights were acquired from such issuer.

(e) Exercise of rights to tender Securities when an offer is made on a pro rata basis to all holders of a class of Covered Securities.

(f) Gifts or charitable donations of a Covered Security.

(g) Purchases and sales of Covered Securities executed by an Independent Director.

Notwithstanding anything in this Section 3.5 to the contrary, Initial Public Offerings (or IPOs) (to the extent approved as satisfying the limited exceptions in Sections 5.2(a) or (b) to the general prohibition) and Private Placements shall in no event be excepted from the preclearance requirements.

3.6   Exception Procedure for Employee Stock Options of a Previous Employer

Subject to the conditions indicated, an Access Person or Investment Person may exercise employee stock options for Securities of a previous employer, as follows:

(a) Access Persons and Investment Personnel may exercise such an employee stock option for cash and hold the stock thereafter, without restriction that would otherwise be imposed by concurrent fund transactions after a determination is made by the Compliance Department that no material conflict of interest exists.

(b) Access Persons and Investment Personnel may utilize a cashless exercise of an option by applying previously held shares in payment for a greater number of new shares, without restriction that would otherwise be imposed by concurrent fund transactions or the 60-day rule, after a determination is made by the Compliance Department that no material conflict of interest exists.

(c) Access Persons and Investment Personnel may exercise a cashless exercise involving a sale of shares, subject only to a blackout on the day of a fund trade, and without regard to the 60-day rule, if the exercise is approved, in writing, by the President of the Advisers.  Any such exercise by the President of the Advisers would require written approval by the Chief Executive Officer of Federated Investors, Inc.

(d) All such exception provisions for the exercise of employee stock options shall be conditioned on:

(i) Access Persons and Investment Personnel must notify the Compliance Department of the existence of all employee stock options held in a previous employer and request approval to proceed with each exercise.

(ii) Prior to granting approval of the requested exercise, the Compliance Department must document that no apparent conflict of interest has been identified that would prohibit the exercise.

(iii) Approval of any such exercise shall be conditioned on full disclosure to the Compliance Department of all communications concerning that Security within Federated by the Access Person or Investment Person during the seven days prior to the exercise of an employee stock option.

(iv) Following the exercise of such an option, the Compliance Department shall further review any fund transaction in the same Security during what otherwise would have been an applicable blackout period and any other activity by the Access Person or Investment Person to determine and document that no apparent conflict of interest can be identified that would have prohibited the exercise.  Should such an apparent conflict be identified, it shall be reported to the President of the Advisers and the Chief Executive Officer of Federated Investors, Inc., and investigated further for determination as to whether a violation has occurred.

Notwithstanding anything in this Section 3.6 to the contrary, Initial Public Offerings (or IPOs) (to the extent approved as satisfying the limited exceptions in Sections 5.2(a) or (b) to the general prohibition) and Private Placements shall in no event be excepted from the preclearance requirements.

4   Exempt Transactions

4.1   Exempt Securities

Unless otherwise specified within this Code, purchases or sales of the following Securities are not subject to the Preclearance (Section 3) or Prohibitions and Restrictions (Section 5) sections of this Code:

(a) direct obligations of the Government of the United States and U. S. Government Agencies;

(b) bankers’ acceptances;

(c) bank certificates of deposit;

(d) commercial paper;

(e) high quality short-term debt instruments, including, without limitation, repurchase agreements; and

(f) shares of registered open-end investment companies that are not included under this Code’s definition of “Covered Security”.

(Note specified provisions of this Code are applicable to investment in Federated funds included under this Code’s definition of “Covered Security”.)

4.2   Discretionary Accounts

Discretionary accounts over which the Access Person (or household member) has no direct or indirect influence or control are not subject to preclearance requirements (Section 3), prohibition of short-term profits (Section 5.4) or blackout periods caused by fund transactions (Sections 5.8 and 5.9), but retain the prohibition on Initial Public Offerings (or IPOs) (Section 5.2), the limitations of Private Placements (Section 5.3), and minimum holding period (Section 5.5) specified in this Code and are subject to all reporting requirements (Section 2).

Access Persons establishing discretionary accounts and the individuals accepting discretionary authority over such accounts are required to acknowledge, in writing, their understanding and acceptance of the restrictions applicable to such accounts.  Access Persons must provide information relating to the investment objective and any restrictions placed on his or her (or household member's) discretionary account(s) and any changes made to those objectives or restrictions to the Compliance Department.

5   Prohibitions and Restrictions

5.1   General Prohibitions

Every Access Person is prohibited, in connection with the Purchase or Sale, directly or indirectly, by the Access Person, of a Security Held or to be Acquired by a Fund from:

(a) employing any device, scheme or artifice to defraud the Fund;

(b) making any untrue statement of a material fact to the Fund or omitting to state a material fact necessary in order to make the statements made to the Fund, in light of the circumstances under which they are made, not misleading;

(c) engaging in any act, practice or course of business that operates or would operate as a fraud or deceit on the Fund; or

(d) engaging in any manipulative practice with respect to the Fund.

Examples: Causing the Fund to purchase a Covered Security owned by the Access Person for the purpose of supporting or driving up the price of the Covered Security, and causing the Fund to refrain from selling a Covered Security in an attempt to protect the value of the Access Person's investment, such as an outstanding option.

     Without limiting the foregoing:

(i)   Each Access Person also is prohibited from usurping investment or other business opportunities of a Fund for personal benefit (or for the inappropriate benefit of Federated).  Each Access Person owes a duty to the Funds to advance the Funds’ legitimate interests when the opportunity to do so arises.  This duty of loyalty is violated if an Access Person personally profits (or allows Federated to inappropriately profit) from an investment or otherbusiness opportunity that rightfully belongs to a Fund.  This problem could arise, for example, if an Access Person becomes aware through the use of Federated or Fund property, information or relationships of an investment opportunity (either a loan or equity transaction) in which the Fund is or may be interested, and then participates in the transaction personally or informs others of the opportunity before offering it to the Fund.  An Access Person is prohibited from using Federated or Fund property, information or relationships for personal gain (or for the inappropriate gain of Federated);

(ii)   Each Access Person also is prohibited taking inappropriate or unfair advantage of his or her relationship with a Fund or a Vendor.  Under this duty of fair dealing, no Access Person should take advantage of a Fund or a Vendor, or another person or entity, through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair dealing practice.  All business conducted on behalf of Federated is to be done with integrity and high fiduciary, legal and ethical business standards;

(iii)   Each Access Person is prohibited from misappropriating Federated or Fund assets; and

(iv)   Each Access Person is prohibited from taking any action to fraudulently influence, control, coerce, manipulate or mislead any independent accountants engaged in the performance of an audit of Federated's or a Fund's financial statements for the purpose of rendering such financial statements materially misleading.

(Any Access Person who is a director, officer or employee of Federated should also refer to the "Corporate Opportunities," "Fair Dealing," "Protection and Proper Use of Company Assets" and "Improper Influence on the Conduct of Audits" requirements in Federated's Code of Business Conduct and Ethics.  If you have questions concerning the duty of loyalty, duty of fair dealing, use of assets or audits, contact the Compliance Department or Federated’s General Counsel.)

5.2   Initial Public Offerings (or IPOs) are Prohibited

Access Persons may not directly or indirectly acquire Beneficial Ownership in any Security in an Initial Public Offering (or IPO) without prior approval.  Exceptions may be approved in the following instances:

(a) Initial Public Offerings (or IPOs) relating to Securities of the employer of a spouse, when offered to all employees at the spouse’s level, or the demutualization of insurance companies, banks or savings and loans are allowed, and

(b) initial offering of diversified investment funds, including, without limitation, closed-end funds and unit investment trusts (or "UITs") are allowed.

All such exceptions require reporting and preclearance approval in accordance with the provisions of Sections 2 and 3 above.

5.3   Private Placements Require Prior Compliance Approval

Access Persons may not directly or indirectly acquire Beneficial Ownership in any Private Placement Security without prior approval.  Any such transaction requires reporting and preclearance approval in accordance with the provisions of Sections 2 and 3 above.  No Access Person will be allowed to invest in a Private Placement Security in which a Fund has an investment or contemplates participation.

If an Investment Person receives prior approval and acquires a Private Placement, Security the Investment Person must disclose this investment to the Chief Investment Officer (or the Chief Investment Officer’s designee) before the Investment Person may participate in any subsequent consideration of any potential investment by a Fund in the issuer of that Security.

Following a purchase by an Investment Person in an approved personal transaction, any purchase by a Fund of Securities issued by the same company (other than secondary market purchases of publicly traded Securities) will be subject to an independent review by the Compliance Department.

5.4   Prohibition of Short-Term Profits – 60-Day Rule – Individual Securities

As a general rule, personal Securities transactions of Access Persons should be for long-term investment purposes and should not be initiated for short-term profits.  Profits realized on the sale of an individual Security held less than 60 days must be disgorged.

(a) When a new purchase results in multiple lots of a Security held in personal portfolios, no lot of the same Security may be sold within 60 days if sale of any lot of the Security would result in a gain.

(b) Similarly, no Security may be purchased within 60 days of the sale of the same Security, unless the Security is purchased at a price greater than the price of any sale of the Security within the prior 60 days.

5.5   Minimum Holding Period – Designated Federated Funds

Any holding of Federated funds designated as “Covered Securities” under this Code will be required to be held for a minimum time period before it may be sold.  In addition, the frequency in which an Access Person may adjust the asset allocation among Federated funds is restricted.  The following conditions apply:

(a)   The minimum required holding period for Federated funds is 60 days, unless the particular fund has a redemption fee provision lasting for a longer period, in which case the minimum holding period will be the same as the redemption fee period.  Holding periods will be measured for fund transactions on a "first in, first out" (FIFO) accounting basis.

(b)   Asset allocation adjustments to investments in Federated funds may be made no more frequently than once every 31 days by each Access Person.

(c)   Neither systematic purchases (periodic contributions or 401k deferrals) nor systematic or periodic withdrawals, that are part of a regular pattern, as determined by the Compliance Department, will generally trigger a holding period violation.  Similarly, required income distributions by a trust, minimum required individual retirement account (or "IRA") distributions and 529 Plan distributions for education expenses will not generally trigger a holding period violation.

(d)   The Compliance Department shall be authorized to grant further exception from the required holding period in cases of exceptional hardship that could not be reasonably foreseen by an Access Person.

5.6   Prohibition on Insider Trading

Use of material, non-public information about any issuer of Securities by an access person is prohibited, regardless of whether such Securities are held by or have been recommended for any Fund.  “Material non-public information” relates not only to issuers, but also includes, without limitation, an Adviser’s Securities recommendations and Fund Securities holdings and transactions.

(See the Federated “Confidentiality and Insider Trading Policy” for more information.  Also, any Access Person who is a director, officer or employee of Federated should also refer to the "Insider Trading" requirements in Federated's Code of Business Conduct and Ethics.  If you have questions concerning insider trading issues, contact the Compliance Department or Federated’s General Counsel.)

5.7   Disclosure or Misuse of Fund Information

Selective disclosure to third parties or misuse of any material, nonpublic Fund-related information by an access person is prohibited.  No portfolio holdings or any other material, nonpublic information regarding a Fund may be disclosed, unless the same data is posted on the public website for other investors or is otherwise publicly available on a simultaneous basis.  “Material” information is defined as any Fund-related information that might be expected to impact an investor's decision to buy, sell or hold a Fund or Security, and may include, without limitation, holdings, trading strategies, pending transactions, performance or performance attribution, duration, yields or other key statistics.  Requests for public disclosure of previously undisclosed information or to release information on a more frequent schedule must be approved by the President of the Advisers and the Chief Compliance Officer.

The Purchase or Sale of Federated fund shares based on material, nonpublic information about the fund's portfolio is similarly prohibited.

(See the Federated “Fund Information Disclosure Policy” for more information. Also, any Access Person who is a director, officer or employee of Federated should also refer to the "Confidentiality" requirements in Federated's Code of Business Conduct and Ethics.  If you have questions concerning disclosure or misuse of Fund information, contact the Compliance Department or Federated’s General Counsel.)

5.8   Blackout - Recommendations / Restricted List

Research analysts covering, recommending or trading a Security in a model portfolio may not execute a personal transaction in that Covered Security within seven (7) days before or after a recommendation is made to “buy” or “sell” that Security or it is added to the “restricted list” or the model portfolio trade occurs.  This provision supersedes both the de minimis rule provided below (Section 5.11) and any prior preclearance.

Other Investment Personnel not involved in recommending a Security may not execute a personal transaction in a Covered Security within seven (7) calendar days after a recommendation is made to “buy” or “sell” that Security or it is added to the “restricted list.”  This provision supersedes both the de minimis rule provided below (Section 5.11) and any prior preclearance.

Other Access Persons are restricted from executing a personal transaction in any Covered Security for one business day after a recommendation is made to “buy” or “sell” that Security or it is added to the “restricted list”, subject to the de minimis rule, provided below (Section 5.11), and prior preclearance.

5.9   Blackout - Fund Trades

Portfolio managers of a Fund and research analysts covering or recommending a Covered Security are prohibited from purchasing or selling that Security within seven (7) days before or after the Fund purchases or sells that Security.  This provision supersedes both the de minimis rule provided below (Section 5.11) and any prior preclearance

Investment Personnel not involved in recommending a Security or ordering a trade in that Security may not purchase or sell a Covered Security within seven (7) calendar days after the Fund purchases or sells the same Covered Security, subject to the de minimis rule provided below (Section 5.11), and prior preclearance.

Access Persons are restricted from executing a personal transaction in any Covered Security at any time during which the Fund has a pending “buy” or “sell” order for that Covered Security, until the Fund's orders are either executed or withdrawn, subject to the de minimis rule, provided below (Section 5.11) and prior preclearance.

5.10   Prior Knowledge

No Access Person may execute a personal transaction, directly or indirectly, in any Covered Security, and neither the de minimis rule provided below nor any prior preclearance will apply, when he or she knows, or should have known, that the Covered Security:

(a)   is being considered for Purchase or Sale by the Fund; or

(b)   is being purchased or sold by the Fund.

5.11   De Minimis Exceptions

Unless otherwise specified, blackout periods do not apply for a personal transaction in any large cap Security (defined as companies with equity market capitalization equaling or exceeding $7 billion) when the total value of the transaction is:

(a)   $10,000 or less for any large cap EQUITY Security, or

(b)   $25,000 or less for any large cap FIXED INCOME Security

The de minimis allowance is a single exception to the entire blackout period, regardless of the length of time during which the blackout may be in effect.  For example, an Investment Person may enter into only one de minimis transaction per Security during any seven (7) day period.

These de minimis provisions do not apply to specified Investment Personnel, as provided in Sections 5.8 and 5.9 above.

De Minimis rules do not protect wrongdoing.  Any Purchase or Sale by any Access Person undertaken in reliance on this provision remains subject to the prohibitions enumerated in this Code and the judgment of the Compliance Department, notwithstanding any other provisions of this Code.

5.12   Serving on Boards of Directors or Trustees

This Section 5.12 applies to Access Persons, but not any household members of such Access Persons.

While serving the community is a worthy objective, a director or trustee of any organization has access to sensitive information and charts the course of that entity.  Federated must take safeguards to shield Federated and Access Persons (including, without limitation, Investment Personnel) from even the appearance of impropriety.  To that end:

(a) All Access Persons are prohibited from serving on the boards of directors or trustees of any organization (whether “for profit,” “not for profit,” “charitable” or otherwise) unless written approval is granted by the Compliance Committee.

(b) All Access Persons must notify the Chief Compliance Officer in writing of any boards on which such Access Person serves in compliance with this Section 5.12: (1) initially upon becoming an Access Person or, (2) before they accept and begin to serve on another board, and/or (3) upon resigning from any board.

(c) If approval to serve as a director of an organization is granted, an Access Person has an affirmative duty to (1) recuse himself or herself from participating in any deliberations inside Federated regarding such organization, and (2) not share non-public information of such organization with any Federated personnel (including, without limitation, any Investment Personnel).

(d) The President of the Advisory Companies and all Investment Personnel reporting directly or indirectly to him are further prohibited from serving on the boards of directors of any publicly issued or privately held issuer of a Security (whether “for profit,” “not for profit,” “charitable” or otherwise) that is or may become an eligible investment for a Fund unless an exception is granted by the Compliance Committee pursuant to the following provisions:

(i) In the case of charitable and/or eleemosynary organizations only, if the organization has no securities outstanding or if all Chief Investment Officers confirm in writing that the securities of the issuer either are not qualified for investment by the funds or that adequate alternative investments are available, and the President of the Advisory Companies approves, then the Compliance Committee may approve service on the board by an Investment Person, subject to semi-annual confirmation by the Chief Investment Officers and approval by the President of the Advisory Companies that these conditions have not changed.

(ii) In the instances specified in Section 5.12 d.(i), above, the Compliance Department shall maintain the organization on the Funds Restricted List.  Inclusion on the Restricted List shall make any security of the issuer an ineligible investment for the funds.  The Compliance Department shall communicate the Restricted List to all Chief Investment Officers and the President of the Advisory Companies semi-annually.

(iii) If an Investment Person, at the time of adoption of this amended provision of the Code or, in the case of a new hire, at the time of his or her employment, is serving on the board of a charitable or eleemosynary organization that has issued securities eligible for or owned by the funds, then the Investment Person shall recuse himself or herself from all discussions concerning possible investment by the funds in such security and may request that his or her current term on such board may be completed.  The Compliance Committee may approve completion of terms under such circumstances if it deems the remaining term reasonable.   Approval to continue a current term will not permit the Investment Person to begin another term on the board.

(iv) If a Security issued by a charitable or eleemosynary organization becomes an eligible investment for a Fund while an Investment Person is serving on such a board, the Investment Person shall be subject to the same terms as are provided in Section 5.12(d)(iii), above.

(v) If a Security issued by any organization that is not a charitable or eleemosynary organization becomes an eligible investment for a Fund after an Investment Person has begun serving on such a board, the Investment Person must immediately resign from such board and recuse himself or herself from all board matters.

(e) If an Access Person serves on the board of a non-public organization, and the organization seeks to issue securities, such Access Person must, promptly after the company’s intention to issue securities becomes public, take steps to notify the Chief Compliance Officer in writing.  If an exception has not been reconfirmed under Section 5.12(a) or if continued service would be prohibited under Section 5.12(d), as of the time when the organization’s securities are first offered to the public, then the Access Person must immediately resign from such board and recuse himself or herself from all board matters.

(g) Nothing in this Section 5.12 limits or restricts service on the Board of Federated, its subsidiaries, Federated Funds, Proprietary Funds, or other funds administered by subsidiaries of Federated.

(Any Access Person who is a director, officer or employee of Federated should also refer to the "Corporate Boards" requirements in Federated's Code of Business Conduct and Ethics.)

5.13   Excessive Trading and Market Timing

(a) Access Persons are strongly discouraged from trading excessively.  This applies to both individual Securities and registered investment company Securities included under this Code’s definition of “Covered Security.”  The Chief Investment Officers and the President of the Advisers will review the transaction volume of Investment Personnel on a monthly basis.  The transaction volume of other Access Persons may be reviewed with other managers periodically.

(b) Access Persons are prohibited from market timing.  This includes, without limitation, entering into any agreement or arrangement to permit market timing by any Fund, shareholder or accountholder or in any Fund, or by any broker, dealer, bank or other financial institution, person or entity.  Frequent or short-term trading into and out of Funds can have adverse consequences for the Funds, shareholders and accountholders who use the Funds as a long-term investment vehicles.  Such trading in significant amounts can disrupt the Funds' investment strategies (e.g., by requiring the Funds to sell investments at inopportune times or maintain excessive short-term or cash positions to support redemptions or cash flow needs), increase brokerage and administrative costs and affect the timing and amount of taxable gains distributed by or in respect of the Funds.  Such trading may also seek to profit by estimating changes in a fund’s net asset value in advance of the time as of which net asset value is calculated.

5.14   Independent Directors

Notwithstanding the other restrictions or exemptions provided under this Code, Independent Directors (other than Independent Directors identified by the Compliance Department as being Access Persons subject to additional provisions of this Code) are subject only to the following subsections of this Section 5:

Section 5.1                              General Prohibitions

Section 5.5                              Minimum Holding Period – Designated Federated Funds

Section 5.6                              Prohibition on Insider Trading

Section 5.7                              Disclosure or Misuse of Fund Information

Section 5.10                              Prior Knowledge

Section 5.13                              Excessive Trading and Market Timing

No other provisions of this Section 5 apply to Independent Directors or their household members.

5.15   Restrictions on Investment Clubs

Investment Personnel who wish to participate in an investment club must request Chief Investment Officer approval prior to joining in the club activity.  Names of other club members must be disclosed.  The Chief Investment Officer shall notify the Compliance Department when such approval is granted.

Access Persons will be deemed to have a Beneficial Ownership in any trade by the club.  All investment club activity by any Access Person (including, without limitation, any Investment Person) will require preclearance and must be reported by duplicate confirms and statements.

5.16                  Disclosure of Personal Interests

All Access Persons (including, without limitation, Investment Personnel) are prohibited from:

(a) recommending, implementing or considering any Securities transaction for a Fund, or

(b) negotiating any agreement or otherwise arranging for any relationship with any Vendor,

without having disclosed in writing to the Chief Investment Officer (in the case of Investment Personnel) (or another person designated by the Chief Investment Officer) or the Compliance Department (in the case of all other Access Persons):

(i)   any material Beneficial Ownership, business or personal relationship, or other material interest, that the Access Person has in an issuer or its affiliates, or in a Vendor, or

(ii)   other material conflict of interest that the Access Person has with an issuer or its affiliates or with a Vendor.

If the Chief Investment Officer (or other designated person) or Compliance Department determines that the disclosed interest is a material conflict of interest, then the Access Person may not participate in (a) any decision-making process regarding the Securities of that issuer, or (b) any negotiations or discussions with the Vendor.

In addition to the specific requirements above, each Access Person has the responsibility to use his or her best judgment to assess objectively whether there might be even the appearance of acting for reasons of personal gain (or the inappropriate gain of Federated to the detriment of a Fund, an issuer or its affiliates or a Vendor).  If you have questions regarding disclosure of personal interests and conflicts of interest, contact the Compliance Department or Federated’s General Counsel).

(Any Access Person who is a director, officer or employee of Federated should also refer to the "Conflicts of Interest" and "Personal Financial Interests; Outside Business Interests" requirements in Federated's Code of Business Conduct and Ethics.)

6   Prohibitions on Giving/Receiving Gifts; Political and Charitable Contributions

Access Persons are in a position of trust and must exercise great care to preserve their independence.  As a general rule, no Access Person should ever receive, solicit, make or offer an inappropriate payment or anything of value in exchange for a decision involving Federated's, a Fund's or a Vendor's business.  Decisions must be made in an unbiased manner.  Bribery, kickbacks and other improper payments have no place in Federated's business.

Without limiting the foregoing general principles:

(a) Every Access Person is prohibited from giving, either individually or in the aggregate with all other Access Persons, or receiving any gift, favor, preferential treatment, valuable consideration, or other thing of more than a de minimis value in any year to or from any Fund, or other person or entity, from, to or through whom Fund purchases or sells Securities, or an issuer of Securities or its affiliates or a Vendor.  For purposes of this Code, “de minimis value” is equal to $100 or less.  This prohibition does not apply to:

(i)   salaries, wages, fees or other compensation paid, or expenses paid or reimbursed, in the usual scope of an Access Person's employment responsibilities for the Access Person's employer;

(ii)   meals, refreshments or entertainment of reasonable value in the course of a meeting or other occasion, the purpose of which is to hold bona fide business discussions;

(iii)   advertising or promotional material of nominal value, such as pens, pencils, note pads, key chains, calendars and similar items;

(iv)   the acceptance of gifts, meals, refreshments, or entertainment of reasonable value that are related to commonly recognized events or occasions, such as a promotion, new job or recognized holiday; or

(v)   the acceptance of awards, from an employer to an employee, for recognition of service and accomplishment.

(b) Every Access Person is prohibited from (i) making political or charitable contributions solely for the purpose of obtaining or retaining assets from, or advisory contracts or other business relationships with, federal, state, local or foreign governments or governmental agencies, or political subdivisions of any other them, or charitable organizations; and (ii) considering an Adviser’s or Federated’s current or anticipated business relationships as a factor in soliciting political or charitable donations.

(Any Access Person who is a director, officer or employee of Federated should also refer to the "Payments and Gifts" requirements in Federated's Code of Business Conduct and Ethics.  Any Access Persons who are subject to the Broker-Dealer Written Supervisory Policies and Procedures also should consult those procedures for additional guidance on the receipt of gifts and gratuities. If you have questions regarding the receipt of gifts or political and charitable contributions, contact the Compliance Department or Federated’s General Counsel.)

7   Review, Reporting, Education and Sanctions

7.1   Management Review of Investment Personnel’s Trading Activity

The President of the Advisers, the Chief Investment Officers and such additional managers as the President of the Advisers may designate will receive regular reports of investment-related activity by Investment Personnel, such as preclearance requests and completed transactions.  Personal investment data will be reviewed to determine whether the transactions conflict with any Fund activity and whether the transactions appear appropriate and consistent with the position and responsibility of the Investment Person.

7.2   Compliance Review of Reports and Trading Activity, and this Code of Ethics

Federated’s Compliance Department will review all initial holdings reports, quarterly transaction reports, annual holdings reports and other reports and information required to be submitted under this Code to identify improper trading activity or patterns of trading, and to otherwise seek to verify compliance with this Code.  Without limiting the foregoing, the Compliance Department will review personal trading activity and trading records to identify possible violations, including:

(a) delay in reporting individual investments or investment accounts;

(b) failure to report individual investments or investment accounts;

(c) filing false or incomplete reports;

(d) failure to preclear individual trades;

(e) executing trades that violate provisions of this Code; and

(f) failure to comply with the receipt of gifts provision.

In addition, the review may also include (as applicable, and in the Compliance Department's discretion): (i) a comparison of personal trading to applicable restricted lists; (ii) an assessment of whether an Access Person is trading for his or her own account in the same Securities he or she is trading for Funds (and, if so, whether the Funds are receiving terms as favorable as the Access Person takes for himself or herself); (iii) an assessment of Access Person trading patterns for indications of abuse (including, without limitation, "market timing"); (iv) an analysis of any substantial disparities between the quality of performance an Access Person receives for his or her own account and that he or she receives for Funds; and (iv) an analysis of any substantial disparities between the percentage of personal trades that are profitable and the percentage that are profitable when he or she places trades for Funds.

Violations noted will be identified as being technical, substantive or material.

Federated's Compliance Department also will review this Code, and the implementation, effectiveness and enforcement of this Code, at least once annually or more frequently in response to material changes in legal requirements or business practices, as contemplated by Federated's written compliance program.

7.3   Self-discovery and Reporting

(a) Each Access Person is required to report violations or suspected violations by any party of this Code promptly to the Compliance Department.  If the person within the Compliance Department that receives the report is not the Chief Compliance Officer, that person must report all violations reported to the Chief Compliance Officer.

(b) Immediate disclosure by an Access Person to the Compliance Department of a self-discovered violation and correction of that violation (including, without limitation, the immediate disgorging of any gain) will generally be treated as an “exception” to be recorded, but not as a material violation, if the Access Person is not benefited by the transaction and the Compliance Department determines that the violation was not intentional.

(c) It is Federated's policy that retaliation against Access Persons who report actual or suspected violations of this Code is prohibited.  Any actual or attempted retaliation will be treated as a separate violation of this Code, which will be subject to sanction in accordance with Section 7.5 below (including, without limitation, termination).

(Any Access Person who is a director, officer or employee of Federated should also refer to the "Reporting of any Illegal or Unethical Behavior" requirements in Federated's Code of Business Conduct and Ethics.  If you have questions concerning reporting violations, contact the Compliance Department or Federated’s General Counsel.)

7.4   Education

From time to time the Compliance Department will schedule training sessions or may otherwise distribute educational materials regarding this Code.  Access Persons are required to sign-up for and attend any training session scheduled for such Access Persons by the Compliance Department, or, if an Access Person cannot attend a scheduled training session, to contact the Compliance Department to schedule a make-up session.  Access Persons will be required to provide a written acknowledgment of attendance at any such training sessions.  If educational materials are distributed, an Access Person may be asked to provide a written acknowledgment that the Access Person received, read and understood the educational materials.

7.5   Sanctions

Upon determining that a violation of this Code or its Associated Procedures has occurred, the Chief Compliance Officer may take such actions or impose such sanctions, if any, as it deems appropriate, including, without limitation:

(a) issue a letter of censure;

(b) assess a fine, either nominal or substantial;

(c) require the unwinding of trades;

(d) require the disgorging of profits;

(e) disallow discretionary accounts or required preclearance of discretionary account trades;

(f) prohibit or place further restrictions on personal trading or other activities;

(g) recommend suspension;

(h) recommend a reassignment of duties or job functions; or

(i) recommend that the employment of the violator be terminated.

7.6   Factors for Consideration

Sanctions listed above may be assessed individually or in combination.  Prior violations of the Access Person and the degree of responsibility exercised by the Access Person will be taken into consideration in the assessment of sanctions.

In instances where a member of the Access Person’s household commits the violation, any sanction will be imposed on the Access Person.

7.7   Reporting of Violations

(a) Violations of Investment Personnel and proposed sanctions will be reported to the responsible Chief Investment Officer and/or Manager.  Violations of other Access Persons, and proposed sanctions, will be reported to the responsible Senior Manager. All violations and the proposed sanction will be reported to the General Counsel and the Chief Audit Executive of Federated.

(b) All substantive or material violations of this Code, any sanctions imposed with respect thereto, any patterns or trends noted and any difficulties in administration of this Code shall be reported to Senior Management and, in the case of a personal transaction that conflicts with a mutual fund transaction, to the Board of the fund, or its Audit Committee, at least annually.

8   Definitions

8.1   1933 Act

The “1933 Act” means the Securities Act of 1933, as amended.

8.2   1934 Act

The “1934 Act” means the Securities Exchange Act of 1934, as amended.

8.3   1940 Act

The “1940 Act” means the Investment Company Act of 1940, as amended.

8.4   Access Person

“Access Person” means any person who participates in or who, in connection with his or her duties, obtains or could obtain any information concerning recommendations on Covered Securities being made by the investment adviser to any Fund.  It includes, without limitation, a director, trustee, officer, managing general partner, general partner, or Investment Person of a Fund, of the Underwriter, and of the Adviser and other persons designated by the Compliance Department,  any trust in which a Federated Access Person is a trustee with investment discretion and in which such Access Person is directly or indirectly a beneficiary, any closely-held entity (such as a partnership, limited liability company or corporation) in which an Access Person holds a Controlling interest and with respect to which he or she has investment discretion, and any account (including, without limitation, any retirement, pension, deferred compensation or similar account) in which an Access Person directly or indirectly has a substantial economic interest and over which he or she exercise investment discretion.   Without limiting the foregoing, “Access Person” also means any Investment Person who has access to nonpublic information regarding any Fund’s Purchase or Sale of Securities, or nonpublic information regarding the portfolio holdings of any Reportable Fund, or who is involved in making Securities recommendations to Funds, or has access to such recommendations that are nonpublic.

Activity (including, without limitation, trading activity) by an Access Person’s household members will generally be attributed to the Access Person.  (If non-family members also reside in the household, the Access Person must either declare that the Access Person has no influence on the investment or other decisions of the other party or the Access Person must report the party as an Access Person.).

8.5   Adviser

“Adviser” means any subsidiary of Federated registered as an investment adviser with the SEC.

8.6   Advisers Act

“Advisers Act” means the Investment Advisers Act of 1940, as amended.

8.7   Associated Procedures

“Associated Procedures” means those procedures and/or statements that have been adopted by the Underwriter, the Adviser, a Fund or the Compliance Department, and which are designed to supplement this Code and its provisions.

8.8   Automatic Investment Plan

“Automatic Investment Plan” means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation.  An “Automatic Investment Plan” includes, without limitation, a dividend reimbursement plan.

8.9   Beneficial Ownership

“Beneficial Ownership” will be attributed to an Access Person in all instances where the Access Person directly or indirectly (i) possesses the ability to purchase or sell the Covered Securities (or the ability to direct the disposition of the Covered Securities); (ii) possesses voting power (including the power to vote or to direct the voting) over such Covered Securities; or (iii) receives any benefits substantially equivalent to those of ownership.  It is the intent of Federated that “Beneficial Ownership” be interpreted in the same manner as it would be under 17 C.F.R. § 240.16a-1(a)(2) in determining whether a person has Beneficial Ownership of a Security for purposes of Section 16 of the 1934 Act and the rules and regulations thereunder.

8.10   Board

The “Board” means, with respect to a fund, the board of directors or trustees or any other group serving a similar function that has adopted this Code on behalf of the fund.

8.11   Code

“Code” means this Code of Ethics and any Associated Procedures.

8.12   Compliance Committee

“Compliance Committee” means that committee referenced under the Federated Code of Business Conduct and Ethics, consisting of, among others, the Chief Compliance Officer, the General Counsel and the Chief Audit Executive.

8.13   Compliance Department

The “Compliance Department” means the Chief Compliance Officer of Federated and those other individuals designated by him or her as responsible for implementing this Code and the Associated Procedures.

8.14   Control

“Control” has the same meaning as that set forth in Section 2(a)(9) of the 1940 Act.

8.15   Covered Security

“Covered Security” means any Security, or interest in a Security held in any form, not expressly excluded by provisions of this Code, including, without limitation:  equity and debt Securities; derivative Securities, including, without limitation, options on and warrants to purchase equity or debt Securities; shares of closed-end investment companies; investments in unit investment trusts; and any related instruments and Securities.  “Covered Security” also means shares of any Reportable Funds and any 529 Plan or annuity employing such funds, unless specifically excluded in the paragraph below.  Also included are futures, swaps and other derivative contracts.

“Covered Security” does not include:  (1) direct obligations of the Government of the United States or U. S. Government Agencies (regardless of their maturities); (2) bankers' acceptances; bank certificates of deposit; commercial paper; high quality short-term debt instruments, including repurchase agreements; (3) shares of 1940 Act registered investment companies that are designated as money market funds; (4) shares issued by 1940 Act registered open-end investment companies (other than Reportable Funds) in a direct account with a mutual fund, or 529 Plan or annuity offeror when that account may only hold registered open-end investment company Securities; or (5) shares issued by unit investment trusts (or "UITs") that are invested exclusively in one or more open-end funds, none of which are Reportable Funds.

8.16   Federal Securities Laws

“Federal Securities Laws” means (a) the 1933 Act, (b) the 1934 Act, (c) the Sarbanes-Oxley Act of 2002, (d) the 1940 Act, (e) the Advisers Act, (f) Title V of the Gramm-Leach Bliley Act, (g) any rules of the SEC promulgated under any of the statutes identified in (a) through (f) above, (h) the Bank Secrecy Act as it applies to registered mutual funds and investment advisers, and (i) any rules adopted under the Bank Secrecy Act by the SEC or the Department of Treasury.

8.17   Federated

“Federated” means Federated Investors, Inc. and any of its subsidiaries as the context may require.

8.18   Fund

“Fund” means (i) each investment company registered under the 1940 Act (and any series or portfolios of such company) for which an Advisers serves as an investment adviser (as defined in § 2(a)(20) of the 1940 Act or an Underwriter serves as a principal underwriter (as defined in §§ 2(a)(29) and (40) of the 1940 Act) and (ii) any other investment account or portfolio over which an Adviser exercises investment discretion (whether pursuant to a direct advisory agreement, through a managed account or "wrap fee" program, or otherwise), and (iii) any investment adviser, broker, dealer, bank, or other financial institution to which Federated provides non-discretionary investment advisory services.

8.19   Independent Director

“Independent Director” means a member of the Federated Funds’ Board who is not an “interested person” of the Fund within the meaning of Section 2(a)(19) of the 1940 Act.

8.20   Initial Public Offering

“Initial Public Offering” means an offering of Securities registered under the 1933 Act, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the 1934 Act.

8.21   Investment Person; Investment Personnel

“Investment Person” or “Investment Personnel” means (a) Access Persons with direct responsibility and authority to make investment decisions affecting the Fund (such as portfolio managers and Chief Investment Officers) and individuals who provide information and advice to such portfolio managers (such as Securities analysts); and (b) those who assist in executing investment decisions for the Fund (such as traders) and their related staff members.  “Investment Person” or “Investment Personnel” further means any trust in which an Investment Person is a trustee with investment discretion and in which such Investment Person is directly or indirectly a beneficiary, any closely-held entity (such as a partnership, limited liability company or corporation) in which an Investment Person holds a Controlling interest and with respect to which he or she has investment discretion, and any account (including, without limitation, any retirement, pension, deferred compensation or similar account) in which an investment person, directly or indirectly, has a substantial economic interest and over which said Investment Person or family member exercise investment discretion.  Investment Person is intended to include and includes persons deemed to be Supervised Persons pursuant to Rule 204A-1 under the investments Advisers Act of 1940, as further defined hereunder.

Trading activity by an Investment Person’s household members will generally be attributed to the Investment Person.  (If non-family members also reside in the household, the Investment Person must either declare that the Investment Person has no influence on the investment decisions of the other party or the Investment Person must report the party as an Investment Person.)

8.22   Private Placement

“Private Placement” (or “limited offering”) means an offering that is exempt from registration under the 1933 Act pursuant to Section 4(2) or Section 4(6) of the 1933 Act or pursuant to rule 504, rule 505 or rule 506 under the 1933 Act.

8.23   Purchase or Sale

“Purchase or Sale” of a Security or Covered Security includes, among other things, the writing of an option, future or other derivative contract to purchase or sell a Security or Covered Security.

8.24     Reportable Fund

“Reportable Fund” means any 1940-Act registered open end investment company for which an Adviser serves as investment adviser as defined in Section 2(a)(2) of the 1940 Act, or any 1940-Act registered investment company whose investment adviser or principal underwriter Controls an Adviser, is Controlled by an Adviser or is under common Control with an Adviser.

8.25   SEC

The “SEC” means the Securities and Exchange Commission of the United States, and any successor thereto.

8.26   Security

“Security” or "Securities" means any security as defined in Section 2(a)(36) of the 1940 Act or Section 202(a)(18) of the Advisers Act.

8.27   Supervised Person

"Supervised Person" means directors, officers and partners of an Adviser (or other persons occupying a similar status or performing similar functions), employees of an Adviser, and any other person who provides advice on behalf of an Adviser and is subject to the Adviser’s supervision and control.

8.28   Underwriter

“Underwriter” means any subsidiary of Federated registered as a broker/dealer with the SEC.

8.29   Vendor

"Vendor" means any borrower, lender, tenant, landlord, supplier, service provider (including, without limitation, a service provider to a mutual fund) or other vendor of Federated (including, without limitation, any Adviser or any other affiliate), any managed account or "wrap fee" program sponsor or turn key platform provider, or any other third party that has or is seeking a relationship with Federated (including, without limitation, any Adviser or other affiliate).

Approved by: /s/Keith M. Schappert                                                                                     Date: 8/19/2005

President of the Advisory Companies

Approved by:                                /s/Brian P. Bouda                                                                Reviewed by: /s/James R. Risbon

Compliance                                                                      Internal Audit

Addendum

ACCESS PERSONS PROCEDURES

1 Preclearance Approval Using TradeComply

(a)   All Access Persons  who wish to effect a personal Securities transaction, whether a purchase, sale, or other disposition, must preclear the Covered Security in TradeComply prior to engaging in the transaction.  Because TradeComply does not include Securities being contemplated for purchase by the Federated Global Management portfolio managers, Access Persons executing transactions in foreign Securities must complete additional preclearance steps.  See “Preclearing Foreign Securities”.

(b)   When trading options, the Access Person must preclear the underlying Security before entering into the option contract.

(c)   Based on established criteria, TradeComply determines whether the contemplated transaction should be permitted.  The primary criterion applied is whether the Covered Security is on the Federated Equity Restricted List or Open Order lists, or whether the Covered Security was traded by any of the Federated advised Funds (fund trade information is updated nightly in TradeComply).

(d)   Approval is either granted or denied immediately in TradeComply.

(e)   If approval is denied, the contemplated personal transaction in that Covered Security is prohibited until prior approval is subsequently granted upon request in TradeComply.

(f)   If approval is granted, the Access Person is free to effect the personal transaction in that Covered Security until the end of the next trading day only (subject to revocation as contemplated in Section 3.2 of this Code).  In this regard, open orders extending beyond the next trading day (good till cancel) must be resubmitted for approval in TradeComply to comply with this Code.

(g)   All trade requests and their dispositions are maintained in TradeComply and reviewed by the Compliance Department in conjunction with other information provided by Access Persons in accordance with this Code.

(h)   The Compliance Department reviews all exceptions generated by TradeComply after Fund trades and personal trades have been compared and determines the appropriate action to be taken to resolve each exception.

2  Investment Company Compliance Review

Access Persons must provide all relevant information concerning investments in Federated funds held in accounts with financial institutions or intermediaries (banks, brokers, dealers, etc.) to the Compliance Department in the same manner and subject to the same timing requirements as individual Securities.

3  Non-U.S. Based Federated Access Persons

(a)       Access Persons who are not located in the U.S. must request preclearance approval from the Compliance Department via email.  Access Persons must provide specific trade details including the issuer name, anticipated date of transaction, full name of Security (i.e., title), description (i.e., type), CUSIP or SEDOL number or exchange ticker symbol, number of shares and principal amount, interest rate and maturity date (if applicable), type of transaction (purchase or sale) and an indication of whether the anticipated proceeds of the transaction will exceed $10,000 (USD).

(b)       The Compliance Department requests preclearance for the transaction through TradeComply on the business day the request is received.  The Compliance Department notifies the Access Person via email of the results of the preclearance request.

(c)       If the trade request is approved, the Access Person must execute the trade no later than the close of business on the business day following the date of the request (subject to revocation as contemplated in Section 3.2 of this Code).

4  Non-Federated Access Persons

(a) Transaction and holdings information of non-Federated officers of Federated and/or proprietary funds shall be reviewed on a quarterly basis to determine whether any patterns of conflict are exhibited with any Funds for which Federated has access to Fund transaction information, and

(b) Data relating to the trades of all personnel designated as Access Persons of a Fund for which Federated does not have access to Fund transaction information will be submitted to Compliance Department or other appropriate personnel of the Fund’s adviser for review on a quarterly basis.

If extraordinary circumstances exist, an appeal may be directed to the Compliance Department.  Appeals are solely within the discretion of the Chief Compliance Officer.

COMPLIANCE DEPARTMENT PROCEDURES

1   Preclearance

(a)       Preclearance approval and a statement that the Access Person was not aware of any consideration of a Security by research analysts or Fund portfolio managers for a recommendation, an actual Fund trade or an anticipated transaction, shall be conclusive for purposes of reviewing a personal transaction, unless additional facts or a preponderance of circumstances suggest otherwise.  This conclusive presumption does not apply to research analysts covering or recommending a Covered Security involved in a Fund trade or portfolio managers of a Fund making a trade in that Security.

(b)       Before approving a preclearance request for a Private Placement, submitted by an Access Person, the Compliance Department shall inquire of Fund managers and head traders as to whether an order is pending or expected to be entered for the same Security.  In cases where an Investment Person has submitted the request for preclearance, the Compliance Department shall also notify the Chief Investment Officer to whom the Investment Person reports.

2  Initial Reporting Process

(a)      A member of the Compliance Department meets with each new Access Person and reviews this Code, the Insider Trading Policy and the procedures for preclearing personal Securities transactions through TradeComply.

(b)     The Access Person is required to complete the “Certification and Acknowledgment Form” to acknowledge his/her understanding of this Code and return it to the designated Compliance Assistant within ten (10) calendar days.

(c)      In addition, the Access Person is required to complete the “Personal Security Portfolio Form” which includes the following information:

(i)   the full name (i.e., title), description (i.e., type), CUSIP or SEDOL or exchange ticker symbol), number of shares and principal amount of each Covered Security in which the Access Person (or household member) had any direct or indirect Beneficial Ownership when the person became an Access Person;

(ii)   open account information, including the name and address of any broker, dealer, bank or other financial institution maintaining an account in which any Securities are held for the Access Person's or household member's direct or indirect benefit, and the account numbers; and

(iii)   the date the Access Person submits the report.

Information provided by the Access Person must be current as of a date no more than 45 days before the report is submitted.

Except as provided in Section 4.2 of this Code with respect to discretionary accounts, an Access Person need not submit an initial holdings report with respect to Securities held in accounts over which the Access Person or household member had or has no direct or indirect influence or control.

(d)   A separate form must be completed for the Access Person and all household members as defined in Section 8.2 of this Code.  The signed form(s) must be returned to the Compliance Department within ten (10) calendar days.

(e)   A member of the Compliance Department inputs current portfolio holdings information into TradeComply as “initial” holdings.

(f)   The Compliance Department notifies each broker, dealer, bank or other financial institution that duplicate confirmations and statements for the Access Person and household members, if applicable, must be sent to the Chief Compliance Officer, effective immediately. The Compliance Department also will obtain reports on accounts held directly with Federated’s Transfer Agent or 401k Plan Administrator.

3  Quarterly Reporting Process

(a)   On the first business day after each calendar quarter end, the Compliance Assistant sends an e-mail to each Access Person giving step-by-step instructions on how to complete the quarterly reporting requirements using TradeComply.

(b)   By the date specified by the Compliance Department (but no later than thirty (30) calendar days of the quarter end), the Access Person is required to:

(i)   review for accuracy all Covered Security transactions recorded during the previous calendar quarter in all personal and household member accounts;

(ii)   review all open account information, including names of brokers, dealers, banks and other financial institutions, addresses and account numbers;

(iii)   notify the Compliance Department of any new accounts established with broker-dealers, banks or other financial institutions during the quarter and the date the account was established;

(iv)   identify the date the access person submits the report;

(v)   resolve any discrepancies with the Compliance Department;

(vi)   record an electronic signature on TradeComply.

Information provided by the Access Person must be current as of a date no more than 45 days before the report is submitted.

The information required shall include at least the following information about each transaction involving a Covered Security in which the Access Person or household member had, or as a result of a transaction acquired, any direct or indirect Beneficial Ownership:  (1) (A) the date of the transaction, (B) the full name (i.e., title), (C) description (i.e., type), and as applicable (D) CUSIP OR SEDOL or exchange ticker symbol, (E) interest rate, (F) maturity date, (G) number of shares and (H) principal amount of each Covered Security involved, (2) the nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition), (3) the price of the Security at which the transaction was effected, and (4) the name of the broker, dealer, bank or other financial institution with or through which the transaction was effected.

An Access Person need not submit a quarterly Securities transactions report: (1) except as provided in Section 4.2 with respect to discretionary accounts, with respect to Securities held in accounts over which the Access Person or household member had no direct or indirect influence or control (unless otherwise required under this Code); or (2) with respect to transactions effected pursuant to an Automatic Investment Plan; or (3) to the extent that the report would duplicate information contain in broker trade confirmations or account statements delivered to Federated so long as such trade confirmations or account statements are received by the Compliance Department by the date specified by the Compliance Department (but in no later than 30 days after the end of the applicable calendar quarter).

(c)   David J. Brennen, Compliance Officer, reviews Covered Security transactions executed by any Access Person during the calendar quarter periodically throughout the quarter using the Compliance Monitor function in TradeComply.

(d)   The Compliance Department issues memos to each Access Person if any transactions he or she has executed during the quarter have been deemed to be either exceptions to or violations of this Code’s requirements.

(e)   Based on the activity and the responses to the memos, the Chief Compliance Officer may impose or recommend any of the sanctions identified in Section 7 of this Code.

4  Annual Reporting Process

(a)   At least annually, the Compliance Department requires that each Access Person read this Code and certify and acknowledge his/her understanding of this Code and its requirements.

(b)   This re-certification is required to be completed within thirty (30) calendar days of the request.  The Compliance Department monitors compliance with this requirement through the electronic signatures on TradeComply.

(c)   At the same time, the Compliance Department provides each Access Person with a current list of Securities held in the Access Person’s account(s) on TradeComply.

(d)   By the date specified by the Compliance Department (but not later than thirty (30) calendar days after the request), the Access Person is required to:

(i)   review for accuracy all Securities held in all personal and household member accounts, including the full name (i.e., title), description (i.e., type), CUSIP or SEDOL or exchange ticker symbol, number of shares and principal amount of each Covered Security in which the Access Person or household member had any direct or indirect Beneficial Ownership;

(ii)   review all open account information, including names of brokers, dealers, banks and other financial institutions, addresses and account numbers;

(iii)   identify the date the Access Person submits the report;

(iv)   resolve any discrepancies with the Compliance Department; and

(v)   record an electronic signature on TradeComply.

Except as provided in Section 4.2 with respect to discretionary accounts, an Access Person need not submit an initial holdings report with respect to Securities held in accounts over which the Access Person or household member had or has no direct or indirect influence or control.

5  Reportable Funds Transactions

On a quarterly basis, the Compliance Department will request and review a report of registered investment company Securities transactions by Access Persons and Investment Personnel from both the Federated Transfer Agent and the 401k Plan Administrator and from other accounts reported by Access Persons and Investment Personnel.  Any issues relating to such trading will be communicated to the Compliance Department, which will review the documented circumstances, discuss the issue with management and take appropriate action, including, without limitation, possible sanctions.

6  Reporting to the Board of Directors

(a)   Each quarter, the Compliance Department will provide reports of any substantive or material violations of this Code to the Board of Directors' Audit Committee.  The Compliance Department will also report any difficulties in administration of this Code and any trends or patterns of personal Securities trading which are deemed by the Compliance Department to be violations of this Code.

(b)   The Compliance Department provides the Board with the name of the Access Person; the type of violation; the details of the transaction(s); and the types of sanctions imposed, if any.

(c)   At least annually, the Compliance Department shall certify that the Fund, investment adviser or principal underwriter, as applicable, has adopted procedures reasonably necessary to prevent Access Persons from violating this Code.

7  Record Keeping Requirements

The Compliance Department maintains the following books and records in TradeComply for a period equal to (a) no less than six (6) calendar years or (b) any longer period that may be required under applicable law:

(a)   a copy of this Code (current and for the past five years)

(b)   a record of any violation of this Code and any action taken as a result of the violation;

(c)   a record of all written acknowledgments of access persons (current and for the past five years).

(d)   a record of each report made by an Access Person, including initial, quarterly and annual reporting (and including any information on a broker trade confirmation or account statement that was submitted in lieu of such reports);

(e)   a record of all Access Persons (current and for the past five years);

(f)   a record of any decision, and the reasons supporting the decision, to approve the acquisition of Securities by Access Persons in an Initial Public Offering (or IPO) (to the extent approved as satisfying the limited exceptions in Sections 5.2(a) or (b) to the general prohibition) or Private Placement;

(g)   a record of persons responsible for reviewing reports; and

(h)   a copy of any supporting documentation used in making decisions regarding action taken by the Compliance Department with respect to personal Securities trading.

Such records will be kept in such locations, and for such periods, as required under the Advisers Act and the 1940 Act.