Invest with Caution: Understanding the Risks Involved
Investing in asset-backed securities can be affected by fluctuations in interest rates. Despite having government or private guarantees and insurance, there is no guarantee that these entities will meet their obligations.
Your Money, Your Risk
Investing in the Prime Cash Obligations Fund carries a risk of losing your money. While the fund aims to maintain a share value of $1.00, it cannot guarantee it will do so. The fund may charge a fee when selling shares or temporarily restrict share sales if market conditions or other factors lead to insufficient liquidity. This investment does not have insurance or guarantees from the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor is not legally obligated to provide financial assistance to the fund at any time.
Voluntary Support and Expenses
The adviser and certain fund service providers have voluntarily waived fees or reimbursed the fund for some operating expenses. These waivers can be modified or terminated, causing the fund’s expenses to fluctuate throughout the fiscal year. While these waivers increase the fund’s income and returns to investors, they are not contractually binding.
Focus on Total Return and Yield
Total return reflects the investment’s value change after reinvesting all income and capital gains. Yield quotations provide a closer reflection of the fund’s current earnings than total return quotations. For periods of less than one year, total returns are cumulative.
Benchmarks and Ratings
The Prime Cash Obligations Fund is benchmarked against the iMoneyNet MFR – Prime Retail index. Ratings are assigned based on credit quality, asset diversification and maturity, management strength, and operational capabilities. Ratings may change over time and do not eliminate market risk.
Understanding Money Market Fund Ratings
Money market funds rated AAAm by Standard & Poor’s and Aaa-mf by Moody’s are considered to have investment quality comparable to the highest-rated fixed income obligations. Fitch’s money market fund ratings assess a fund’s ability to maintain principal and provide liquidity while managing credit, market, and liquidity risks. For more information on credit ratings, you can visit standardandpoors.com, moodys.com, and fitchratings.com.
Liquidity Requirements and Portfolio Adjustments
Rule 2a-7 requires money market funds to maintain a minimum of 10% daily liquidity assets and 30% weekly liquidity assets. However, these percentages may vary due to market conditions. In such cases, the portfolio manager must purchase securities to meet the liquidity thresholds before investing in longer-term securities. It’s important to note that the liquidity definitions set by the SEC may differ from those used in the calculation of the “Effective Maturity Schedule.” Therefore, the percentages in the 2a-7 Liquidity table may not match the amounts shown in the “Effective Maturity Schedule.”
Flexibility in Portfolio Holdings
The Prime Cash Obligations Fund is a managed portfolio, and its holdings are subject to change. The percentages of holdings mentioned are based on net assets at the close of business on the given date and may not reflect adjustments made for formal financial statements.
Proceed with Care
Current and future portfolio holdings are inherently risky. Investors should thoroughly analyze the fund’s investment objectives, risks, charges, and expenses before making any investment decisions. For a comprehensive overview, please contact us or refer to the accompanying summary prospectus or prospectus available on this website. It is crucial to carefully review the provided documents prior to investing.
Federated Securities Corp., Distributor
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