N-CSR 1 fmap.htm 

                                United States
                      Securities and Exchange Commission
                            Washington, D.C. 20549

                                  Form N-CSR
  Certified Shareholder Report of Registered Management Investment Companies




                                   811-7129

                     (Investment Company Act File Number)


                   Federated Managed Allocation Portfolios
       _______________________________________________________________

              (Exact Name of Registrant as Specified in Charter)



                          Federated Investors Funds
                             5800 Corporate Drive
                     Pittsburgh, Pennsylvania 15237-7000


                                (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)






                      Date of Fiscal Year End: 11/30/03


             Date of Reporting Period: Fiscal year ended 11/30/03







Item 1.     Reports to Stockholders

[Logo of Federated Investors]

Federated Conservative Allocation Fund

A Portfolio of Federated Managed Allocation Portfolios

(formerly, Federated Managed Conservative Growth Portfolio)



ANNUAL SHAREHOLDER REPORT

November 30, 2003

Institutional Shares
Select Shares

FINANCIAL HIGHLIGHTS
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
BOARD OF TRUSTEES AND TRUST OFFICERS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES

NOT FDIC INSURED   •   MAY LOSE VALUE   •   NO BANK GUARANTEE

Financial Highlights -- Institutional Shares

(For a Share Outstanding Throughout Each Period)

Year Ended November 30

 

2003

   

 

2002

   

 

2001

   

 

2000

   

 

1999

 

Net Asset Value, Beginning of Period

   

$ 9.70

   

   

$10.22

   

   

$11.19

   

   

$11.82

   

   

$12.15

   

Income From Investment Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

0.24

1

 

0.31

2

 

0.35

 

 

0.48

1

 

0.45

 

Net realized and unrealized gain (loss)
on investments, foreign currency transactions
and futures contracts

 

0.81

 

 

(0.57

)2

 

(0.43

)

 


(0.40

)

 

0.14

 

Total from investment operations

1.05

 

 

(0.26

)

 

(0.08

)

 

0.08

 

 

0.59

 

Less Distributions:

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

Distributions from net investment income

 

(0.25

)

 

(0.26

)

 

(0.37

)

 

(0.45

)

 

(0.45

)

Distributions from net realized gain
on investments, foreign currency transactions
and futures contracts

 

--

 

 

--

 

 

(0.52

)

 

(0.26

)

 

(0.47

)

TOTAL DISTRIBUTIONS

 

(0.25

)

 

(0.26

)

 

(0.89

)

 

(0.71

)

 

(0.92

)

Net Asset Value, End of Period

   

$10.50

   

   

$ 9.70

   

   

$10.22

   

   

$11.19

   

   

$11.82

   

Total Return3

 

10.99

%

 

(2.56

)%

 

(0.75

)%

 

0.60

%

 

5.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

1.23

%

 

1.15

%

 

1.13

%

 

1.06

%

 

1.04

%

Net investment income

 

2.39

%

 

3.01

%2

 

3.62

%

 

4.11

%

 

3.78

%

Expense waiver/reimbursement4

 

0.21

%

 

0.20

%

 

0.20

%

 

0.20

%

 

0.20

%

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000 omitted)

 

$74,512

 

 

$76,842

 

 

$110,413

 

 

$121,563

 

 

$51,961

 

Portfolio turnover

 

103

%

 

11

%

 

20

%

 

43

%

 

94

%
                               

1 Based on average shares outstanding.

2 Effective December 1, 2001, the Fund adopted the provisions of the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the year ended November 30, 2002 was to decrease net investment income per share by $0.02, increase net realized gain (loss) per share by $0.02, and decrease the ratio of net investment income to average net assets from 3.12% to 3.01%. Per share, ratios and supplemental data for periods prior to December 1, 2001 have not been restated to reflect this change in presentation.

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

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

See Notes which are an integral part of the Financial Statements

Financial Highlights -- Select Shares

(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)

Year Ended November 30

 

 

2003

   

 

2002

   

 

2001

   

 

2000

   

 

1999

 

Net Asset Value, Beginning of Period

   

   

$ 9.69

   

   

$10.22

   

   

$11.17

   

   

$11.80

   

   

$12.14

   

Income From Investment Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   

Net investment income

 

 

0.17

1

 

0.23

2

 

0.34

 

 

0.40

1

 

0.37

 

Net realized and unrealized gain (loss)
on investments, foreign currency transactions
and futures contracts

 

 

0.81

 

 

(0.57

)2

 

(0.48

)

 


(0.40

)

 

0.13

 

Total from investment operations

 

 

0.98

 

 

(0.34

)

 

(0.14

)

 

--

 

 

0.50

 

Less Distributions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions from net investment income

 

 

(0.18

)

 

(0.19

)

 

(0.29

)

 

(0.37

)

 

(0.37

)

Distributions from net realized gain
on investments, foreign currency transactions
and futures contracts

 

 

--

 

 

--

 

 

(0.52

)

 

(0.26

)

 

(0.47

)

TOTAL DISTRIBUTIONS

 

 

(0.18

)

 

(0.19

)

 

(0.81

)

 

(0.63

)

 

(0.84

)

Net Asset Value, End of Period

   

   

$10.49

   

   

$9.69

   

   

$10.22

   

   

$11.17

   

   

$11.80

   

Total Return3

 

 

10.22

%

 

(3.31

)%

 

(1.33

)%

 

(0.11

)%

 

4.29

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

1.93

%

 

1.85

%

 

1.83

%

 

1.76

%

 

1.74

%

Net investment income

 

 

1.68

%

 

2.31

%2

 

2.92

%

 

3.42

%

 

3.08

%

Expense waiver/reimbursement4

 

 

0.26

%

 

0.25

%

 

0.25

%

 

0.25

%

 

0.25

%

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000 omitted)

 

 

$38,975

 

 

$38,481

 

 

$50,413

 

 

$55,004

 

 

$64,972

 

Portfolio turnover

 

 

103

%

 

11

%

 

20

%

 

43

%

 

94

%
                                 

1 Based on average shares outstanding.

2 Effective December 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the year ended November 30, 2002 was to decrease net investment income per share by $0.02, increase net realized gain (loss) per share by $0.02, and decrease the ratio of net investment income to average net assets from 2.42% to 2.31%. Per share, ratios and supplemental data for periods prior to December 1, 2001 have not been restated to reflect this change in presentation.

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

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

See Notes which are an integral part of the Financial Statements

Management's Discussion of Fund Performance

For the twelve month reporting period ended November 30, 2003, a shareholder in the Federated Conservative Allocation Fund's Institutional Shares had a total return of 10.99%1 while a shareholder in the fund's Select Shares had a total return of 10.22%.1

The primary influences on the returns of the fund were the diversified nature of the portfolio and the disciplined design of the fund. The fund has, by design, the lowest allocation to stocks of the funds in the Federated Managed Allocation Portfolio series. The higher relative returns for stocks versus bonds during the 12-month reporting period resulted in this fund having the lowest returns of the other funds in the series. Returns were improved by a higher than normal allocation to stocks that was maintained during the entire reporting period.

The stock portion of the fund is invested in a diversified portfolio of domestic and foreign stocks. Early in the 12-month reporting period, stock prices were depressed by concerns about a war in Iraq and weaker economic data. A successful end to the Iraqi conflict combined with indications of faster growth of the U.S. economy and faster growth of corporate earnings resulted in a strong rally in stock prices. The continuation of the rally was supported by unusually strong economic growth during the third quarter of 2003. Small-cap stocks benefited the most from this recovery as indicated by a 36.28% return for the Russell 2000 Index.2,3 Returns of the fund were enhanced by investing a portion of the stock allocation in small-cap stocks.

The bond portion of the fund is invested in a diversified portfolio of domestic and foreign bonds. Returns within the bond categories were highly varied. Riskier bonds such as high yield, non-investment grade bonds had exceptionally high returns while less risky bonds like U.S. Treasury bonds had much lower returns. High yield bonds often have high returns during periods of economic recovery because the improving economic environment reduces the risk of default. High quality bonds often perform poorly during these periods because of concerns that stronger economic growth will bring higher inflation rates and less accommodation by the Federal Reserve Board. Fund returns were enhanced by allocations to high yield bonds and investment-grade bonds. Although the gains were not as large as for high yield bonds, investment-grade corporate bonds also benefited from the economic recovery.4

The fund benefited from investments in both foreign stocks and bonds.5 Investor concerns about the high U.S. current account deficit helped fuel a decline in the value of the dollar and corresponding rise in the value of foreign currencies. This resulted in most types of foreign securities outperforming their U.S. counterparts.

1 Performance quoted is based on net asset value, reflects past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance is available at our website www.federatedinvestors.com or by calling 1-800-341-7400.

2 The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. Investments cannot be made in an index.

3 Small company stocks may be less liquid and subject to greater price volatility than large capitalization stocks.

4 Lower rated bonds involve a higher degree of risk than investment grade bonds in return for higher yield potential.

5 International investing involves special risks including currency risk, increased volatility of foreign securities, and differences in auditing and other financial standards.

GROWTH OF A $25,000 INVESTMENT -- INSTITUTIONAL SHARES

The graph below illustrates the hypothetical investment of $25,000 40% Standard & Poor's 500 Index/60% Lehman Brothers Aggregate Bond Index (40% S&P 500/60% LBAB)2

Average Annual Total Return for the Period Ended 11/30/2003

   

1 Year

 

10.99

%

5 Years

 

2.57

%

Start of Performance (5/25/1994)

 

6.41

%

GROWTH OF $25,000 AS OF NOVEMBER 30, 2003

Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of Fund shares. For after-tax returns, visit www.federatedinvestors.com. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1 The Fund's performance assumes the reinvestment of all dividends and distributions.The LBAB and the 40% S&P 500/60% LBAB have been adjusted to reflect reinvestment of dividends on securities in the indexes.

2 The LBAB and the 40% S&P 500/60% LBAB are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The indexes are unmanaged and investments cannot be made in indexes.

GROWTH OF A $10,000 INVESTMENT -- SELECT SHARES

The graph below illustrates the hypothetical investment of $10,0001 in Federated Conservative Allocation Fund (Select Shares) (the "Fund") from May 25, 1994 (start of performance) to November 30, 2003, compared to the Lehman Brothers Aggregate Bond Index (LBAB)2 and the 40% Standard & Poor's 500 Index/60% Lehman Brothers Aggregate Bond Index (40% S&P 500/60% LBAB)2

Average Annual Total Return for the Period Ended 11/30/2003

   

1 Year

 

10.22

%

5 Years

 

1.84

%

Start of Performance (5/25/1994)

 

5.68

%

GROWTH OF $10,000 AS OF NOVEMBER 30, 2003

Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. For after-tax returns, visit www.federatedinvestors.com. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1 The Fund's performance assumes the reinvestment of all dividends and distributions. The LBAB and the 40% S&P 500/60% LBAB have been adjusted to reflect reinvestment of dividends on securities in the indexes.

2 The LBAB and the 40% S&P 500/60% LBAB are not adjusted to reflect sales charges, expenses or other fees that the SEC requires to be reflected in the Fund's performance. The indexes are unmanaged and investments cannot be made in indexes.

Portfolio of Investments

November 30, 2003

Shares or
Principal
Amount

   

   

   

Value in
U.S. Dollars

 

 

 

MUTUAL FUNDS-90.7%1

 

 

 

 

4,175,951

 

Capital Appreciation Core Fund

 

$

42,328,653

 

79,354

 

Emerging Markets Fixed Income Core Fund

 

 

1,141,979

 

1,437,678

 

Federated Intermediate Income Fund, Class IS

 

 

14,721,819

 

598,664

 

Federated International Capital Appreciation Fund, Class A

 

 

4,777,336

 

1,772,476

 

Federated Mortgage Core Portfolio

 

 

17,972,906

 

1,128,721

 

Federated U.S. Government Securities Fund: 2-5 Years, Class IS

 

 

12,946,435

 

675,032

 

High Yield Bond Portfolio

 

 

4,610,467

 

4,402,066

 

Prime Value Obligations Fund, IS Shares

 

 

4,402,066

 

 

 

TOTAL MUTUAL FUNDS (IDENTIFIED COST $102,563,587)

 

 

102,901,661

 

 

 

TREASURY SECURITIES-9.3%

 

 

 

$

5,300,000

2

United States Treasury Bill, 1/29/2004 (security held as
collateral for futures contracts)

 

 

5,292,262

 

4,710,000

 

United States Treasury Bond, 6.125%, 11/15/2027

 

 

5,267,099

 

 

 

TOTAL TREASURY SECURITIES (IDENTIFIED COST $10,412,004)

 

 

10,559,361

 

 

 

TOTAL INVESTMENTS--100%
(IDENTIFIED COST $112,975,591)3

 

 

113,461,022

 

 

 

OTHER ASSETS AND LIABILITIES-NET--0.0%

 

 

25,874

 

 

 

TOTAL NET ASSETS--100%

 

$

113,486,896
             

1 Affiliated companies.

2 The Fund purchases index futures contracts to efficiently manage cash flows resulting from shareholder purchases and redemptions, dividend and capital gain payments to shareholders and corporate actions while maintaining exposure to the index and minimizing trading costs. The underlying face amount, at value, of open index futures contracts was $5,553,450 at November 30, 2003.

3 The cost of investments for federal tax purposes amounts to $113,163,374.

Note: The categories of investments are shown as a percentage of total net assets at November 30, 2003.

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

November 30, 2003

Assets:

 

 

 

 

 

 

 

Total investments in securities, at value including $102,901,661 of investments
in affiliated issuers (Note 6) (identified cost $112,975,591)

 

 

 

 

$

113,461,022

 

Cash

 

 

 

 

 

48,783

 

Cash denominated in foreign currencies (identified cost $11,343)

 

 

 

 

 

11,482

 

Income receivable

 

 

 

 

 

36,943

 

Receivable for daily variation margin

 

 

 

 

 

5,775

 

Receivable for shares sold

 

 

 

 

 

22,681

 

TOTAL ASSETS

 

 

 

 

 

113,586,686

 

Liabilities:

 

 

 

 

 

 

 

Payable for shares redeemed

 

$

31,736

 

 

 

 

Payable for custodian fees

 

 

15,963

 

 

 

 

Payable for transfer and dividend disbursing agent fees and expenses (Note 6)

 

 

15,769

 

 

 

 

Payable for Directors'/Trustees' fees

 

 

111

 

 

 

 

Payable for portfolio accounting fees (Note 6)

 

 

4,933

 

 

 

 

Payable for distribution services fee (Note 6)

 

 

15,924

 

 

 

 

Payable for shareholder services fee (Note 6)

 

 

11,015

 

 

 

 

Accrued expenses

 

 

4,339

 

 

 

 

TOTAL LIABILITIES

 

 

 

 

 

99,790

 

Net assets for 10,808,929 shares outstanding

 

 

 

 

$

113,486,896

 

Net Assets Consist of:

 

 

 

 

 

 

 

Paid in capital

 

 

 

 

$

115,681,230

 

Net unrealized appreciation of investments, translation of assets and liabilities
in foreign currency and futures contracts

 


 

 

 

 

660,868

 

Accumulated net realized loss on investments, foreign currency transactions
and futures contracts

 

 

 

 

 

(4,234,157

)

Undistributed net investment income

 

 

 

 

 

1,378,955

 

TOTAL NET ASSETS

 

 

 

 

$

113,486,896

 

Net Asset Value, Offering Price and Redemption Proceeds Per Share

 

 

 

 

 

 

 

Institutional Shares:

 

 

 

 

 

 

 

$74,512,020 ÷ 7,094,615 shares outstanding

 

 

 

 

 

$10.50

 

Select Shares:

 

 

 

 

 

 

 

$38,974,876 ÷ 3,714,314 shares outstanding

 

 

 

 

 

$10.49

 
               

See Notes which are an integral part of the Financial Statements

Statement of Operations

Year Ended November 30, 2003

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

Dividends (including $1,277,660 received from affiliated issuers (Note 6) and net of foreign taxes withheld of $8,187)

 

 

 

 

 

 

 

 

 

$

1,978,640

 

Interest

 

 

 

 

 

 

 

 

 

 

2,005,803

 

Income allocated from partnership (Note 6)

 

 

 

 

 

 

 

 

 

 

61,465

 

TOTAL INCOME

 

 

 

 

 

 

 

 

 

 

4,045,908

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Investment adviser fee (Note 6)

 

 

 

 

 

$

838,362

 

 

 

 

 

Administrative personnel and services fee (Note 6)

 

 

 

 

 

 

157,877

 

 

 

 

 

Custodian fees

 

 

 

 

 

 

44,986

 

 

 

 

 

Transfer and dividend disbursing agent fees and expenses (Note 6)

 

 

 

 

 

 

129,052

 

 

 

 

 

Directors'/Trustees' fees

 

 

 

 

 

 

3,583

 

 

 

 

 

Auditing fees

 

 

 

 

 

 

6,556

 

 

 

 

 

Legal fees

 

 

 

 

 

 

5,296

 

 

 

 

 

Portfolio accounting fees (Note 6)

 

 

 

 

 

 

68,830

 

 

 

 

 

Distribution services fee--Select Shares (Note 6)

 

 

 

 

 

 

281,974

 

 

 

 

 

Shareholder services fee--Institutional Shares (Note 6)

 

 

 

 

 

 

185,463

 

 

 

 

 

Shareholder services fee--Select Shares (Note 6)

 

 

 

 

 

 

93,991

 

 

 

 

 

Share registration costs

 

 

 

 

 

 

37,282

 

 

 

 

 

Printing and postage

 

 

 

 

 

 

31,660

 

 

 

 

 

Insurance premiums

 

 

 

 

 

 

1,911

 

 

 

 

 

Miscellaneous

 

 

 

 

 

 

4,370

 

 

 

 

 

EXPENSES BEFORE ALLOCATION

 

 

 

 

 

 

1,891,193

 

 

 

 

 

Expenses allocated from partnership

 

 

 

 

 

 

1,310

 

 

 

 

 

TOTAL EXPENSES

 

 

 

 

 

 

1,892,503

 

 

 

 

 

Waivers and Reimbursements (Note 6):

 

 

 

 

 

 

 

 

 

 

 

 

Reimbursement of investment adviser fee

 

$

(3,227

)

 

 

 

 

 

 

 

 

Waiver of administrative personnel and services fee

 

 

(2,784

)

 

 

 

 

 

 

 

 

Waiver of distribution services fee--Select Shares

 

 

(93,991

)

 

 

 

 

 

 

 

 

Waiver/reimbursement of shareholder services fee--Institutional Shares

 

 

(148,764

)

 

 

 

 

 

 

 

 

Reimbursement of shareholder services fee--Select Shares

 

 

(205

)

 

 

 

 

 

 

 

 

TOTAL WAIVERS AND REIMBURSEMENTS

 

 

 

 

 

 

(248,971

)

 

 

 

 

Net expenses

 

 

 

 

 

 

 

 

 

 

1,643,532

 

Net investment income

 

 

 

 

 

 

 

 

 

 

2,402,376

 

Realized and Unrealized Gain (Loss) on Investments,
Foreign Currency Transactions and Futures Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain on investments and foreign currency
transactions (including realized loss of $149,238 on sales of investments in affiliated issuers) (Note 6)

 

 

 

 

 

 

 

 

 

 

1,173,554

 

Net realized gain on futures contracts

 

 

 

 

 

 

 

 

 

 

1,944,398

 

Net realized loss allocated from partnership

 

 

 

 

 

 

 

 

 

 

(40,180

)

Net change in unrealized depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts

 

 

 

 

 

 

 

 

 

 

5,882,858

 

Net realized and unrealized gain on investments, foreign currency transactions and futures contracts

 

 

 

 

 

 

 

 

 

 

8,960,630

 

Change in net assets resulting from operations

 

 

 

 

 

 

 

 

 

$

11,363,006

 
                         

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

Year Ended November 30

 

   

2003

   

 

   

2002

   

Increase (Decrease) in Net Assets

 

 

 

 

 

 

 

 

Operations:

 

 

 

 

 

 

 

 

Net investment income

 

$

2,402,376

 

 

$

3,775,141

 

Net realized gain (loss) on investments, foreign currency transactions
and futures contracts

 

 

3,077,772

 

 

 

(3,114,638

)

Net realized gain on capital gain distributions from other
investment companies

 

 

--

 

 

 

325

 

Net change in unrealized appreciation/depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts

 

 

5,882,858

 

 

 

(5,166,001

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

 

 

11,363,006

 

 

 

(4,505,173

)

Distributions to Shareholders:

 

 

 

 

 

 

 

 

Distributions from net investment income

 

 

 

 

 

 

 

 

Institutional Shares

 

 

(1,878,257

)

 

 

(2,477,875

)

Select Shares

 

 

(678,228

)

 

 

(899,714

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS

 

 

(2,556,485

)

 

 

(3,377,589

)

Share Transactions:

 

 

 

 

 

 

 

 

Proceeds from sale of shares

 

 

19,029,377

 

 

 

18,592,054

 

Net asset value of shares issued to shareholders in payment
of distributions declared

 

 

1,994,868

 

 

 

2,489,235

 

Cost of shares redeemed

 

 

(31,667,013

)

 

 

(58,701,372

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

 

 

(10,642,768

)

 

 

(37,620,083

)

Change in net assets

 

 

(1,836,247

)

 

 

(45,502,845

)

Net Assets:

 

 

 

 

 

 

 

 

Beginning of period

 

 

115,323,143

 

 

 

160,825,988

 

End of period (including undistributed net investment income of $1,378,955 and $130,669, respectively)

 

$

113,486,896

 

 

$

115,323,143

 
                 

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

November 30, 2003

1. ORGANIZATION

Federated Managed Allocation Portfolios (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of four diversified portfolios. The financial statements included herein are only those of Federated Conservative Allocation Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to seek total return with an emphasis on income and capital appreciation. Effective October 6, 2003, the Fund changed its name from Federated Managed Conservative Growth Portfolio to Federated Conservative Allocation Fund. The Fund offers two classes of shares: Institutional Shares and Select Shares.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles ("GAAP") in the United States of America.

Investment Valuation

Listed equity securities are valued at the last sale price reported on a national securities exchange. U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities and unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at fair value as determined in good faith using methods approved by the Board of Trustees (the "Trustees").

With respect to valuation of foreign securities, trading in foreign cities may be completed at times which vary from the closing of the New York Stock Exchange. Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded prior to the closing of the New York Stock Exchange. Foreign securities quoted in foreign currencies are translated into U.S. dollars at the foreign exchange rate in effect at noon, Eastern Time, on the day the value of the foreign security is determined.

Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in Federated Core Trust II (the "Core Trust II") which is independently managed by Federated Global Investment Management Corp. Core Trust II is a limited partnership established under the laws of the State of Delaware, on November 13, 2000, registered under the Act, and offered only to registered investment companies and other accredited investors. The Fund may invest in common stock (including American Depositary Receipts) of companies with large- and medium-market capitalizations that offer superior growth prospects or of companies whose stock is undervalued primarily by investing in Capital Appreciation Core Fund ("CACORE"), a portfolio of Core Trust II. The investment objective of CACORE is to provide capital appreciation. The Fund records daily its proportionate share of income, expenses, unrealized gains and losses and realized gains and losses from CACORE. Additional information regarding CACORE is available upon request.

Repurchase Agreements

It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement.

The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Trustees. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair market value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Premium and Discount Amortization

All premiums and discounts on fixed income securities are amortized/accreted for financial statement purposes.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.

Withholding taxes on foreign interest and dividends have been provided for in accordance with the applicable country's tax rules and rates.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Futures Contracts

The Fund purchases stock index futures contracts to manage cashflows, enhance yield and to potentially reduce transaction costs. Upon entering into a stock index futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. For the year ended November 30, 2003, the Fund had realized gain of $1,944,398 on futures contracts.

Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities.

At November 30, 2003, the Fund had outstanding futures contracts as set forth below:

Expiration Date

   

Contracts to Receive

   

Position

   

Unrealized
Appreciation

December 2003

 

21 S&P 500 Index Futures

 

Long

 

$175,087

Foreign Exchange Contracts

The Fund may enter into foreign currency commitments for the delayed delivery of securities or foreign currency exchange transactions. The Fund may enter into foreign currency contract transactions to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies; whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign currency transactions are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date. At November 30, 2003, the Fund had no outstanding foreign currency commitments.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies ("FC") are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. Differences between income and expense amounts recorded and collected or paid are adjusted when reported by the custodian bank. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis.

3. CHANGE IN ACCOUNTING POLICY

Effective December 1, 2001, the Fund has adopted the provisions of the revised AICPA Audit and Accounting Guide for Investment Companies (the "Guide"). For financial statement purposes, the revised Guide requires the Fund to amortize premium and discount on all fixed income securities and to classify gains and losses realized on principal payments received on mortgage-backed securities (paydown gains and losses) as part of investment income.

Upon initial adoption, the Fund adjusted its cost of fixed income securities by the cumulative amount of amortization that would have been recognized had amortization been in effect from the purchase date of each holding with a corresponding reclassification between unrealized appreciation/depreciation on investments and undistributed net investment income. Adoption of these accounting principles does not affect the Fund's net asset value or distributions, but changes the classification of certain amounts between interest income and realized and unrealized gain/loss on the Statement of Operations. The cumulative effect to the Fund resulting from the adoption of premium and discount amortization and recognition of paydown gains and losses as part of interest income on the financial statements is as follows:

   

   

As of 12/1/2001

   

For the Year Ended
11/30/2002

   

 

Cost of
Investments

 

Accumulated
Net Realized
Gain (Loss)

 

Undistributed
Net Investment
Income

 

Net
Investment
Income

 

Net
Unrealized
Appreciation
(Depreciation)

 

Net
Realized
Gain
(Loss)

Increase
(Decrease)

 

$(476,028)

 

$609

 

$(476,637)

 

$(153,941)

 

$(142,161)

 

$296,102

The Statement of Changes in Net Assets and Financial Highlights for prior periods have not been restated to reflect this change in presentation.

4. SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. Transactions in shares were as follows:

Year Ended November 30

   

2003

   

   

   

2002

   

Institutional Shares:

   

Shares

   

   

   

Amount

   

   

   

Shares

   

   

   

Amount

   

Shares sold

 

1,503,111

 

 

$

14,823,213

 

 

 

1,343,155

 

 

$

13,288,599

 

Shares issued to shareholders in payment of distributions declared

 

140,490

 

 

 

1,388,848

 

 

 

171,487

 

 

 

1,696,546

 

Shares redeemed

 

(2,470,974

)

 

 

(24,369,765

)

 

 

(4,392,552

)

 

 

(43,299,445

)

NET CHANGE RESULTING
FROM INSTITUTIONAL
SHARE TRANSACTIONS

 

(827,373

)

 

$

(8,157,704

)

 

 

(2,877,910

)

 

$

(28,314,300

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended November 30

   

2003

   

   

   

2002

   

Select Shares:

   

Shares

   

   

   

Amount

   

   

   

Shares

   

   

   

Amount

   

Shares sold

 

421,880

 

 

$

4,206,164

 

 

 

536,070

 

 

$

5,303,455

 

Shares issued to shareholders in payment
of distributions declared

 

61,334

 

 

 

606,020

 

 

 

80,109

 

 

 

792,689

 

Shares redeemed

 

(740,182

)

 

 

(7,297,248

)

 

 

(1,579,237

)

 

 

(15,401,927

)

NET CHANGE RESULTING FROM
SELECT SHARE TRANSACTIONS

 

(256,968

)

 

$

(2,485,064

)

 

 

(963,058

)

 

$

(9,305,783

)

NET CHANGE RESULTING FROM
SHARE TRANSACTIONS

 

(1,084,341

)

 

$

(10,642,768

)

 

 

(3,840,968

)

 

$

(37,620,083

)
                               

5. FEDERAL TAX INFORMATION

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due in part to differing treatments for foreign currency transactions, discount accretion/premium amortization on debt securities and tax allocated income from partnership.

For the year ended November 30, 2003, permanent differences identified and reclassified among the components of net assets was as follows:

   

   

Increase (Decrease)

   

   

Paid-In Capital

 

Undistributed Net
Investment Income

 

Accumulated Net
Realized Loss

$(27,641)

 

$1,402,395

 

$(1,374,754)

Net investment income, net realized gains (losses), as disclosed on the Statement of Operations, and net assets were not affected by this reclassification.

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended November 30, 2003 and 2002 was as follows:

   

 

2003

   

2002

Ordinary Income1

 

$2,556,485

 

$3,377,589

1 For tax purposes short-term capital gain distributions are considered ordinary income distributions.

As of November 30, 2003, the components of distributable earnings on a tax basis were as follows:

Undistributed ordinary income

 

$

1,426,614

Net unrealized appreciation

 

$

473,085

Capital loss carryforward

 

$

3,918,945

The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable in part to differing treatments for the deferral of losses from wash sales and discount accretion/premium amortization on debt securities.

At November 30, 2003, the cost of investments for federal tax purposes excluding any unrealized appreciation resulting from changes in foreign currency exchange rates was $113,163,374. The net unrealized appreciation of investments for federal tax purposes was $297,648. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $1,420,473 and net unrealized depreciation from investments for those securities having an excess of cost over value of $1,122,825.

At November 30, 2003, the Fund had a capital loss carryforward of $3,918,945, which will reduce the Fund's taxable income arising from future net realized gains on investment, if any, to the extent permitted by the Code and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such a capital loss carryforward will expire as follows:

Expiration Year

 

Expiration Amount

2009

 

$1,604,810

2010

 

$2,314,135

6. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.75% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Certain of the Fund's assets are managed by Federated Global Investment Management Corp. (the "Sub-Adviser"). Under the terms of a sub-adviser agreement between the Adviser and the Sub-Adviser, the Sub-Adviser receives an allocable portion of the Fund's adviser fee. The fee is paid by the Adviser out of its resources and is not an incremental Fund expense.

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in other funds, which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse certain investment adviser fees as a result of these transactions. Income distributions earned from investments in these funds are recorded as income in the accompanying financial statements and are listed below.

Capital Appreciation Core Fund

 

$ 58,295

Emerging Markets Fixed Income Core Fund

 

$ 3,170

Federated Intermediate Income Fund

 

$ 11,890

Federated Mortgage Core Portfolio

 

$815,318

Federated U.S. Government Securities Fund: 2-5 Years

 

$ 14,084

High Yield Bond Portfolio

 

$432,699

Prime Value Obligations Fund

 

$ 3,669

Administrative Fee

Federated Administrative Services ("FAS"), under the Administrative Services Agreement ("Agreement"), provides the Fund with administrative personnel and services. The fee paid to FAS is based on the aggregate daily net assets of all Federated funds as specified below:

Maximum Administrative Fee

 

Average Aggregate Daily Net
Assets of the Federated Funds

0.150%

 

on the first $5 billion

0.125%

 

on the next $5 billion

0.100%

 

on the next $10 billion

0.075%

 

on assets in excess of $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 choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.

Prior to November 1, 2003, Federated Services Company ("FServ") provided the Fund with administrative personnel and services. The fee paid to FServ was based on the average aggregate daily net assets of all Federated funds as specified below.

Maximum Administrative Fee

   

Average Aggregate Daily Net
Assets of the Federated Funds

0.150%

 

on the first $250 million

0.125%

 

on the next $250 million

0.100%

 

on the next $250 million

0.075%

 

on assets in excess of $750 million

The administrative fee received during any fiscal year was at least $125,000 per portfolio and $30,000 per each additional class of Shares.

For the year ended November 30, 2003 the fees paid to FAS and FServ were $12,832 and $142,261, respectively, after voluntary waiver, if applicable.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Select Shares. The Plan provides that the Fund may incur distribution expenses of up to 0.75% of average net assets, annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund's shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive and/or reimburse any portion of its fee. FSSC can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntarily waiver at any time at its sole discretion.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. FServ may voluntarily choose to waive any portion of its fee. FServ can modify or terminate this voluntarily waiver at any time at its sole discretion.

General

Certain of the Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.

7. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations (and in-kind contributions), for the year ended November 30, 2003, were as follows:

Purchases

 

$97,334,042

Sales

 

$92,233,082

8. CONCENTRATION OF CREDIT RISK

The Fund invests in securities of non-U.S. issuers. Although the Fund maintains a diversified investment portfolio, the political or economic developments within a particular country or region may have an adverse effect on the stability of domiciled issuers to meet their obligations. Additionally, political or economic developments may have an effect on the liquidity and volatility of portfolio securities and currency holdings.

9. LEGAL PROCEEDINGS

In October, 2003, Federated Investors, Inc. and various subsidiaries thereof (collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits filed in the United States District Court for the Western District of Pennsylvania seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. Although Federated does not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from related regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

10. FEDERAL TAX INFORMATION (UNAUDITED)

For the year ended November 30, 2003, the Fund did not designate any long-term capital gain dividends.

For the fiscal year ended November 30, 2003, 18.54% of the distributions from net investment income paid by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15% as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information will be reported in conjunction with your 2003 Form 1099-DIV.

Independent Auditors' Report

TO THE BOARD OF TRUSTEES OF FEDERATED MANAGED ALLOCATION
PORTFOLIOS AND SHAREHOLDERS OF FEDERATED CONSERVATIVE
ALLOCATION FUND:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Federated Conservative Allocation Fund (the "Fund") as of November 30, 2003, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to provide reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at November 30, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of the Federated Conservative Allocation Fund as of November 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts
January 23, 2004

Board of Trustees and Trust Officers

The Board is responsible for managing the Trust's business affairs and for exercising all the Trust's powers except those reserved for the shareholders. The following tables give information about each Board member and the senior officers of the Funds. 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. The Trust comprises three portfolios and the Federated Fund Complex consists of 44 investment companies (comprising 138 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees all portfolios in the Federated Fund Complex; serves for an indefinite term; and also serves as a Board member of the following investment company complexes: Banknorth Funds--four portfolios; Golden Oak® Family of Funds--seven portfolios and WesMark Funds--five portfolios. The Fund`s Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.

INTERESTED TRUSTEES BACKGROUND

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began





 




Principal Occupation(s), Previous Position(s)
and Other Directorships Held

John F. Donahue*
 Birth Date: July 28, 1924
CHAIRMAN AND TRUSTEE
Began serving: November 1993


 

Principal Occupations: Chairman and Director or Trustee
of the Federated Fund Complex; Chairman and Director,
Federated Investors, Inc.

Previous Positions: Trustee, Federated Investment Management Company and Chairman and Director, Federated Investment Counseling.

 

 

 

J. Christopher Donahue*
 Birth Date: April 11, 1949
PRESIDENT AND TRUSTEE
Began serving: January 2000

 

Principal Occupations: Principal Executive Officer and President of the Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Passport Research, Ltd.; Trustee, Federated Shareholder Services Company; Director, Federated Services Company.

Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport
Research Ltd.

 

 

 

Lawrence D. Ellis, M.D.*
 Birth Date: October 11, 1932
3471 Fifth Avenue
Suite 1111
Pittsburgh, PA
TRUSTEE
Began serving: November 1993

 
Principal Occupations: Director or Trustee of the Federated Fund Complex; Professor of Medicine, University of Pittsburgh; Medical Director, University of Pittsburgh Medical Center Downtown; Hematologist, Oncologist and Internist, University of Pittsburgh Medical Center.

Other Directorships Held: Member, National Board of Trustees, Leukemia Society of America.

Previous Positions: Trustee, University of Pittsburgh; Director,
University of Pittsburgh Medical Center.

 

 

 

* Family relationships and reasons for "interested" status: John F. Donahue is the father of J. Christopher Donahue; both are "interested" due to the positions they hold with Federated Investors, Inc. and its subsidiaries. Lawrence D. Ellis, M.D. is "interested" because his son-in-law is employed by the Fund's principal underwriter, Federated Securities Corp.

INDEPENDENT TRUSTEES BACKGROUND

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began

 

Principal Occupation(s), Previous Position(s)
and Other Directorships Held

Thomas G. Bigley
 Birth Date: February 3, 1934
15 Old Timber Trail
Pittsburgh, PA
TRUSTEE
Began serving: November 1994

 

Principal Occupation: Director or Trustee of the Federated Fund Complex.

Other Directorships Held: Director, Member of Executive Committee, Children's Hospital of Pittsburgh; Director, University of Pittsburgh.

Previous Position: Senior Partner, Ernst & Young LLP.

 

 

 

John T. Conroy, Jr.
 Birth Date: June 23, 1937
Grubb & Ellis/Investment
Properties Corporation
3838 North Tamiami Trail
Suite 402
Naples, FL
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida.

Previous Positions: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village Development Corporation.

 

 

 

Nicholas P. Constantakis
 Birth Date: September 3, 1939
175 Woodshire Drive
Pittsburgh, PA
TRUSTEE
Began serving: January 2000

 

Principal Occupations: Director or Trustee of the Federated Fund Complex.

Other Directorships Held: Director and Member of the Audit Committee, Michael Baker Corporation (engineering and energy services worldwide).

Previous Position: Partner, Andersen Worldwide SC.

 

 

 

John F. Cunningham
 Birth Date: March 5, 1943
353 El Brillo Way
Palm Beach, FL
TRUSTEE
Began serving: January 1999

 

Principal Occupation: Director or Trustee of the Federated Fund Complex.

Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting);
Trustee Associate, Boston College.

Previous Positions: Director, Redgate Communications and EMC Corporation (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. Madden
 Birth Date: March 16, 1942
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
TRUSTEE
Began serving: November 1993

 

Principal Occupation: Director or Trustee of the Federated Fund Complex; Management Consultant.

Other Directorships Held: Board of Overseers, Babson College.

Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange.

 

 

 

Charles F. Mansfield, Jr.
 Birth Date: April 10, 1945
80 South Road
Westhampton Beach, NY
TRUSTEE
Began serving: January 1999

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant; Executive Vice President, DVC Group, Inc. (marketing communications and technology) (prior to 9/1/00).

Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank;
Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance,
Frank G. Zarb School of Business, Hofstra University.

 

 

 

John E. Murray, Jr., J.D., S.J.D.
 Birth Date: December 20, 1932
Chancellor, Duquesne University
Pittsburgh, PA
TRUSTEE
Began serving: February 1995

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Chancellor and Law Professor, Duquesne University;
Partner, Murray Hogue and Lannis.

Other Directorships Held: Director, Michael Baker Corp.
(engineering, construction, operations and technical services).

Previous Positions: President, Duquesne University; Dean and Professor of Law, University of Pittsburgh School of Law; Dean and Professor of Law, Villanova University School of Law.

 

 

 

Marjorie P. Smuts
 Birth Date: June 21, 1935
4905 Bayard Street
Pittsburgh, PA
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Public Relations/Marketing Consultant/Conference Coordinator.

Previous Positions: National Spokesperson, Aluminum Company of America; television producer; President, Marj Palmer Assoc.;
Owner, Scandia Bord.

 

 

 

John S. Walsh
 Birth Date: November 28, 1957
2604 William Drive
Valparaiso, IN
TRUSTEE
Began serving: January 1999

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc.

Previous Position: Vice President, Walsh & Kelly, Inc.

 

 

 

OFFICERS

 

 

 

Name
Birth Date
Address
Positions Held with Trust

 




Principal Occupation(s) and Previous Position(s)

John W. McGonigle
Birth Date: October 26, 1938
EXECUTIVE VICE PRESIDENT
AND SECRETARY
Began serving: November 1993

 

Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Executive Vice President, Secretary and Director, Federated Investors, Inc.

 

 

 

Richard J. Thomas
Birth Date: June 17, 1954
TREASURER
Began serving: November 1998

 

Principal Occupations: Principal Financial Officer and Treasurer of
the Federated Fund Complex; Senior Vice President, Federated Administrative Services.

 

 

 

Richard B. Fisher
Birth Date: May 17, 1923
VICE PRESIDENT
Began serving: November 1993

 

Principal Occupations: Vice Chairman or President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp.

Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc. and Director and Chief Executive Officer, Federated
Securities Corp.

 

 

 

John W. Harris
Birth Date: June 6, 1954
VICE PRESIDENT
Began serving: November 1999

 

John W. Harris is Vice President of the Trust. Mr. Harris initially joined Federated in 1987 as an Investment Analyst. He served as an Investment Analyst and an Assistant Vice President from 1990 through 1992 and as a Senior Investment Analyst and Vice President through May 1993. After leaving the money management field to travel extensively, he rejoined Federated in 1997 as a Senior Investment Analyst and became a Portfolio Manager and an Assistant Vice President of the Fund's Adviser in December 1998. In January 2000, Mr. Harris became a Vice President of the Fund's Adviser. Mr. Harris is a Chartered Financial Analyst. He received his M.B.A. from the University of Pittsburgh.

 

 

 

Mutual funds are not bank deposits or obligations, are not 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. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. This information is also available from the EDGAR database on the SEC's Internet site at http://www.sec.gov.

[Logo of Federated Investors]

Federated Conservative Allocation Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com

Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact

Federated Securities Corp., Distributor

Cusip 314212408
Cusip 314212309

G00872-01 (1/04)

Federated is a registered mark of Federated Investors, Inc.
2004 © Federated Investors, Inc.

[Logo of Federated Investors]

Federated Growth
Allocation Fund

A Portfolio of Federated Managed Allocation Portfolios
(formerly, Federated Managed Growth Portfolio)



ANNUAL SHAREHOLDER REPORT

November 30, 2003

Institutional Shares
Select Shares

 

FINANCIAL HIGHLIGHTS
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS REPORT
BOARD OF TRUSTEES AND TRUST OFFICERS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES

Not FDIC Insured   •   May Lose Value   •   No Bank Guarantee

Financial Highlights -- Institutional Shares

(For a Share Outstanding Throughout Each Period)

Year Ended November 30

   

2003

   

 

2002

   

 

2001

   

 

2000

   

 

1999

 

Net Asset Value, Beginning of Period

   

$ 9.93

   

   

$11.39

   

   

$13.42

   

   

$15.17

   

   

$14.12

   

Income From Investment Operations:

   

   

   

   

   

   

   

   

   

   

   

   

   

   

Net investment income

   

0.08

1

 

0.12

2

 

0.18

 

 

0.27

1

 

0.22

 

Net realized and unrealized gain (loss) on investments, foreign currency transactions and futures contracts

 

1.36

 

 

(1.47

)2

 

(1.39

)

 


(1.02

)

 

1.75

 

TOTAL FROM
INVESTMENT OPERATIONS

 

1.44

 

 

(1.35

)

 

(1.21

)

 

(0.75

)

 

1.97

 

Less Distributions:

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

Distributions from net investment income

 

(0.07

)

 

(0.11

)

 

(0.18

)

 

(0.22

)

 

(0.20

)

Distributions from paid in capital3

 

--

 

 

--

 

 

(0.03

)

 

--

 

 

--

 

Distributions from net realized gain on investments, foreign currency transactions and futures contracts

 

--

 

 

--

 

 

(0.61

)

 

(0.78

)

 

(0.72

)

TOTAL DISTRIBUTIONS

 

(0.07

)

 

(0.11

)

 

(0.82

)

 

(1.00

)

 

(0.92

)

Net Asset Value, End of Period

   

$11.30

   

   

$ 9.93

   

   

$11.39

   

   

$13.42

   

   

$15.17

   

Total Return4

   

14.56

%

 

(11.95

)%

 

(9.55

)%

 

(5.48

)%

 

14.83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios to Average Net Assets:

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

1.41

%

 

1.28

%5

 

1.27

%

 

1.16

%

 

1.15

%

Net investment income

 

0.78

%

 

0.98

%2

 

1.52

%

 

1.81

%

 

1.53

%

Expense waiver/reimbursement6

 

0.22

%

 

0.20

%

 

0.20

%

 

0.20

%

 

0.22

%

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000 omitted)

 

$46,069

 

 

$48,840

 

 

$69,632

 

 

$83,495

 

 

$93,453

 

Portfolio turnover

 

145

%

 

14

%

 

43

%

 

86

%

 

113

%
                               

1 Based on average shares outstanding.

2 Effective December 1, 2001, the Fund adopted the provisions of the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. For the year ended November 30, 2002, this change had no effect on net investment income per share or net realized and unrealized gain (loss) on investments per share, but decreased the ratio of net investment income to average net assets from 1.01% to 0.98%. Per share, ratios and supplemental data for periods prior to December 1, 2001 have not been restated to reflect this change in presentation.

3 Represents a return of capital for federal income tax purposes.

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

5 The expense ratio is calculated without the reduction for fees paid indirectly for directed brokerage arrangements.

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

See Notes which are an integral part of the Financial Statements

Financial Highlights -- Select Shares

(For a Share Outstanding Throughout Each Period)

Year Ended November 30

 

2003

   

 

2002

   

 

2001

   

 

2000

   

 

1999

 

Net Asset Value, Beginning of Period

   

$ 9.92

   

   

$11.38

   

   

$13.40

   

   

$15.15

   

   

$14.10

   

Income From Investment Operations:

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

Net investment income

   

0.01

1

 

0.03

2

 

0.10

 

 

0.17

1

 

0.12

 

Net realized and unrealized gain (loss) on investments, foreign currency transactions and futures contracts

 

1.36

 

 

(1.46

)2

 

(1.39

)

 


(1.02

)

 

1.75

 

TOTAL FROM
INVESTMENT OPERATIONS

 

1.37

 

 

(1.43

)

 

(1.29

)

 

(0.85

)

 

1.87

 

Less Distributions:

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

Distributions from net investment income

 

(0.01

)

 

(0.03

)

 

(0.10

)

 

(0.12

)

 

(0.10

)

Distributions from paid in capital3

 

--

 

 

--

 

 

(0.02

)

 

--

 

 

--

 

Distributions from net realized gain on investments, foreign currency transactions and futures contracts

 

--

 

 

--

 

 

(0.61

)

 

(0.78

)

 

(0.72

)

TOTAL DISTRIBUTIONS

 

(0.01

)

 

(0.03

)

 

(0.73

)

 

(0.90

)

 

(0.82

)

Net Asset Value, End of Period

   

$11.28

   

   

$ 9.92

   

   

$11.38

   

   

$13.40

   

   

$15.15

   

Total Return4

   

13.81

%

 

(12.60

)%

 

(10.18

)%

 

(6.15

)%

 

14.05

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios to Average Net Assets:

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

2.11

%

 

1.98

%5

 

1.97

%

 

1.86

%

 

1.85

%

Net investment income

 

0.08

%

 

0.28

%2

 

0.82

%

 

1.13

%

 

0.83

%

Expense waiver/reimbursement6

 

0.27

%

 

0.25

%

 

0.25

%

 

0.25

%

 

0.27

%

Supplemental Data:

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000 omitted)

 

$38,481

 

 

$38,719

 

 

$59,463

 

 

$72,377

 

 

$68,512

 

Portfolio turnover

 

145

%

 

14

%

 

43

%

 

86

%

 

113

%
                               

1 Based on average shares outstanding.

2 Effective December 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. For the year ended November 30, 2002, this change had no effect on net investment income per share or net realized and unrealized gain (loss) on investments per share, but decreased the ratio of net investment income to average net assets from 0.31% to 0.28%. Per share, ratios and supplemental data for periods prior to December 1, 2001 have not been restated to reflect this change in presentation.

3 Represents a return of capital for federal income tax purposes.

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

5 The expense ratio is calculated without the reduction for fees paid indirectly for directed brokerage arrangements.

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

See Notes which are an integral part of the Financial Statements

Management's Discussion of Fund Performance

For the twelve month reporting period ended November 30, 2003, a shareholder in the Federated Growth Allocation Fund's Institutional Shares had a total return of 14.56%1 while a shareholder in the fund's Select Shares had a total return of 13.81%.1

The primary influences on the returns of the fund were the diversified nature of the portfolio and the disciplined design of the fund. The fund has, by design, the highest allocation to stocks of the funds in the Federated Managed Allocation Portfolio series. The higher relative returns for stocks versus bonds during the 12-month reporting period resulted in this fund having the highest returns of the other funds in the series. Returns were further enhanced by a higher than normal allocation to stocks that was maintained during the entire reporting period.

The stock portion of the fund is invested in a diversified portfolio of domestic and foreign stocks. Early in the 12-month reporting period, stock prices were depressed by concerns about a war in Iraq and weaker economic data. A successful end to the Iraqi conflict combined with indications of faster growth of the U.S. economy and faster growth of corporate earnings resulted in a strong rally in stock prices. The continuation of the rally was supported by unusually strong economic growth during the third quarter of 2003. Small-cap stocks benefited the most from this recovery as indicated by a 36.28% return for the Russell 20002 Index. Returns of the fund were enhanced by investing a portion of the stock allocation in small-cap stocks.3

The bond portion of the fund is invested in a diversified portfolio of domestic and foreign bonds. Returns within the bond categories were highly varied. Riskier bonds such as high yield, non-investment grade bonds had exceptionally high returns while less risky bonds like U.S. Treasury bonds had much lower returns. High yield bonds often have high returns during periods of economic recovery because the improving economic environment reduces the risk of default. High quality bonds often perform poorly during these periods because of concerns that stronger economic growth will bring higher inflation rates and less accommodation by the Federal Reserve Board. Fund returns were enhanced by allocations to high yield bonds and investment-grade corporate bonds. Although the gains were not as large as for high yield bonds, investment grade corporate bonds also benefited from the economic recovery.4

The fund benefited from investments in foreign stocks.5 Investor concerns about the high U.S. current account deficit helped fuel a decline in the value of the dollar and corresponding rise in the value of foreign currencies. This resulted in most types of foreign securities outperforming their U.S. counterparts.

1 Performance quoted is based on net asset value, reflects past performance, and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance information is available at our website www.federatedinvestors.com or by calling 1-800-341-7400.

2 The Russell 2000 Index is an unmanaged index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. Investments cannot be made in an index.

3 Small company stocks may be less liquid and subject to greater price volatility than large capitalization stocks.

4 Lower rated bonds involve a higher degree of risk than investment grade bonds in return for higher yield potential.

5 International investing involves special risks including currency risk, increased volatility of foreign securities, and differences in auditing and other financial standards.

GROWTH OF A $25,000 INVESTMENT -- INSTITUTIONAL SHARES

The graph below illustrates the hypothetical investment of $25,0001 in the Federated Growth Allocation Fund (Institutional Shares) (the "Fund") from May 25, 1994 (start of performance) to November 30, 2003 compared to the Standard and Poor's 500 Index (S&P 500)2 and the 80% Standard & Poor's 500 Index/
20% Lehman Brothers Aggregate Bond Index (80% S&P 500/20% LBAB).2

Average Annual Total Return for the Period Ended 11/30/2003

 

   

   

1 Year

 

14.56

%

5 Years

 

(0.15

)%

Start of Performance (5/25/1994)

 

6.02

%

GROWTH OF $25,000 AS OF NOVEMBER 30, 2003

Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. For after-tax returns, visit www.federatedinvestors.com. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1 The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the 80% S&P 500/20% LBAB have been adjusted to reflect reinvestment of dividends on securities in the indexes.

2 The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The S&P 500 and the 80% S&P 500/20% LBAB are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The indexes are unmanaged and investments cannot be made in indexes.

GROWTH OF A $10,000 INVESTMENT-- SELECT SHARES

The graph below illustrates the hypothetical investment of $10,0001 in the Federated Growth Allocation Fund (Select Shares) (the "Fund") from May 25, 1994 (start of performance) to November 30, 2003 compared to the Standard and Poor's 500 Index (S&P 500)2 and the 80% Standard & Poor's 500 Index/
20% Lehman Brothers Aggregate Bond Index (80% S&P 500/20% LBAB).2

Average Annual Total Return for the Period Ended 11/30/2003

 

   

   

1 Year

 

13.81

%

5 Years

 

(0.86

)%

Start of Performance (5/25/1994)

 

5.29

%

GROWTH OF $10,000 AS OF NOVEMBER 30, 2003

Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. For after-tax returns, visit www.federatedinvestors.com. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1 The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the 80% S&P 500/20% LBAB have been adjusted to reflect reinvestment of dividends on securities in the indexes.

2 The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The S&P 500 and the 80% S&P 500/20% LBAB are not adjusted to reflect sales charges, expenses, or other fees that the SEC requires to be reflected in the Fund's performance. The indexes are unmanaged and investments cannot be made in indexes.

Portfolio of Investments

November 30, 2003

Shares or Principal
Amount

 

   

 

   

Value in
U.S. Dollars

 

 

 

MUTUAL FUNDS--85.0%1

 

 

 

 

5,981,834

 

Capital Appreciation Core Fund

 

$

60,633,616

 

828,171

 

Federated International Capital Appreciation Fund, Class A

 

 

6,608,806

 

183,183

 

Federated Mortgage Core Portfolio

 

 

1,857,479

 

297,590

 

High Yield Bond Portfolio

 

 

2,032,538

 

739,431

 

Prime Value Obligations Fund, IS Shares

 

 

739,431

 

 

 

TOTAL MUTUAL FUNDS (IDENTIFIED COST $71,072,202)

 

 

71,871,870

 

 

 

TREASURY SECURITIES--10.5%

 

 

 

$

1,800,000

2

United States Treasury Bill, 1/29/2004
(security held as collateral for futures contracts)

 

 

1,797,372
  3,000,000 2 United States Treasury Bill, 2/26/2004
(security held as collateral for futures contracts)		     2,993,550

 

315,000

 

United States Treasury Bond, 6.125%, 11/15/2027

 

 

352,258

 

1,800,000

 

United States Treasury Bond, 8.125%, 5/15/2021

 

 

2,433,096

 

850,000

 

United States Treasury Note, 1.875%, 9/30/2004

 

 

854,182

 

405,000

 

United States Treasury Note, 6.500%, 10/15/2006

 

 

449,931

 

 

 

TOTAL TREASURY SECURITIES
(IDENTIFIED COST $8,431,925)

 

 

8,880,389

 

 

 

TOTAL INVESTMENTS--95.5%
(IDENTIFIED COST $79,504,127)3

 

 

80,752,259

 

 

 

OTHER ASSETS AND LIABILITIES--NET--4.5%

 

 

3,797,600

 

 

 

TOTAL NET ASSETS--100%

 

$

84,549,859
             

1 Affiliated companies.

2 The Fund purchases index futures contracts to efficiently manage cash flows resulting from shareholder purchases and redemptions, dividend and capital gain payments to shareholders and corporate actions while maintaining exposure to the index and minimizing trading costs. The underlying face amount, at value, of open index futures contracts was $4,760,100 at November 30, 2003.

3 The cost of investments for federal tax purposes amounts to $79,610,271.

Note: The categories of investments are shown as a percentage of total net assets at November 30, 2003.

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

November 30, 2003

Assets:

 

 

 

 

 

 

 

Total investments in securities, at value including $71,871,870 of investments in affiliated issuers (Note 6) (identified cost $79,504,127)

 

 

 

 

$

80,752,259

 

Cash

 

 

 

 

 

2,132

 

Cash denominated in foreign currency (identified cost $50,457)

 

 

 

 

 

51,006

 

Income receivable

 

 

 

 

 

82,271

 

Receivable for daily variation margin

 

 

 

 

 

4,950

 

Receivable for investments sold

 

 

 

 

 

3,745,995

 

Receivable for shares sold

 

 

 

 

 

63,293

 

TOTAL ASSETS

 

 

 

 

 

84,701,906

 

Liabilities:

 

 

 

 

 

 

 

Payable for shares redeemed

 

$

70,245

 

 

 

 

Payable for custodian fees

 

 

8,141

 

 

 

 

Payable for transfer and dividend disbursing agent fees and expenses (Note 6)

 

 

26,994

 

 

 

 

Payable for portfolio accounting fees (Note 6)

 

 

4,902

 

 

 

 

Payable for distribution services fee (Note 6)

 

 

15,679

 

 

 

 

Payable for shareholder services fee (Note 6)

 

 

9,721

 

 

 

 

Accrued expenses

 

 

16,365

 

 

 

 

TOTAL LIABILITIES

 

 

 

 

 

152,047

 

Net assets for 7,487,075 shares outstanding

 

 

 

 

$

84,549,859

 

Net Assets Consist of:

 

 

 

 

 

 

 

Paid in capital

 

 

 

 

$

97,734,502

 

Net unrealized appreciation of investments, translation of assets and
liabilities in foreign currency and futures contracts

 


 

 

 

 

1,281,899

 

Accumulated net realized loss on investments, foreign currency transactions
and futures contracts

 

 

 

 

 

(14,506,795

)

Undistributed net investment income

 

 

 

 

 

40,253

 

TOTAL NET ASSETS

 

 

 

 

$

84,549,859

 

Net Asset Value, Offering Price and Redemption Proceeds Per Share

 

 

 

 

 

 

 

Institutional Shares:

 

 

 

 

 

 

 

$46,068,633 ÷ 4,075,302 shares outstanding

 

 

 

 

 

$11.30

 

Select Shares:

 

 

 

 

 

 

 

$38,481,226 ÷ 3,411,773 shares outstanding

 

 

 

 

 

$11.28

 
               

See Notes which are an integral part of the Financial Statements

Statement of Operations

Year Ended November 30, 2003

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

Dividends (including $305,358 received from affiliated issuers (Note 6) and net of foreign taxes withheld of $31,985)

 

 

 

 

 

 

 

 

 

$

1,413,892

 

Interest

 

 

 

 

 

 

 

 

 

 

286,805

 

Income allocated from partnership (Note 6)

 

 

 

 

 

 

 

 

 

 

68,849

 

TOTAL INCOME

 

 

 

 

 

 

 

 

 

 

1,769,546

 

Expenses:

 

   

   

   

   

   

   

   

   

   

   

   

Investment adviser fee (Note 6)

 

 

 

 

 

$

605,500

 

 

 

 

 

Administrative personnel and services fee (Note 6)

 

 

 

 

 

 

157,877

 

 

 

 

 

Custodian fees

 

 

 

 

 

 

20,832

 

 

 

 

 

Transfer and dividend disbursing agent fees and expenses (Note 6)

 

 

 

 

 

 

151,492

 

 

 

 

 

Directors'/Trustees' fees

 

 

 

 

 

 

3,242

 

 

 

 

 

Auditing fees

 

 

 

 

 

 

21,608

 

 

 

 

 

Legal fees

 

 

 

 

 

 

5,480

 

 

 

 

 

Portfolio accounting fees (Note 6)

 

 

 

 

 

 

69,933

 

 

 

 

 

Distribution services fee--Select Shares (Note 6)

 

 

 

 

 

 

271,661

 

 

 

 

 

Shareholder services fee--Institutional Shares (Note 6)

 

 

 

 

 

 

111,280

 

 

 

 

 

Shareholder services fee--Select Shares (Note 6)

 

 

 

 

 

 

90,554

 

 

 

 

 

Share registration costs

 

 

 

 

 

 

34,783

 

 

 

 

 

Printing and postage

 

 

 

 

 

 

34,772

 

 

 

 

 

Insurance premiums

 

 

 

 

 

 

1,883

 

 

 

 

 

Miscellaneous

 

 

 

 

 

 

5,108

 

 

 

 

 

EXPENSES BEFORE ALLOCATION

 

 

 

 

 

 

1,586,005

 

 

 

 

 

Expenses allocated from partnership

 

 

 

 

 

 

1,796

 

 

 

 

 

TOTAL EXPENSES

 

 

 

 

 

 

1,587,801

 

 

 

 

 

Waivers and Reimbursements (Note 6):

 

   

   

   

   

   

   

   

   

   

   

   

Waiver/reimbursement of investment adviser fee

 

$

(13,342

)

 

 

 

 

 

 

 

 

Waiver of administrative personnel and services fee

 

 

(2,808

)

 

 

 

 

 

 

 

 

Waiver of distribution services fee--Select Shares

 

 

(90,554

)

 

 

 

 

 

 

 

 

Waiver/reimbursement of shareholder services fee--Institutional Shares

 

 

(89,450

)

 

 

 

 

 

 

 

 

Reimbursement of shareholder services fee--Select Shares

 

 

(355

)

 

 

 

 

 

 

 

 

TOTAL WAIVERS AND REIMBURSEMENTS

 

 

 

 

 

 

(196,509

)

 

 

 

 

Net expenses

 

 

 

 

 

 

 

 

 

 

1,391,292

 

Net investment income

 

 

 

 

 

 

 

 

 

 

378,254

 

Realized and Unrealized Gain on Investments,
Foreign Currency Transactions and Futures Contracts:

 

   

   

   

   

   

   

   

   

   

   

   

Net realized gain on investments and foreign currency transactions (including realized loss of $172,138 on sales of investments in affiliated issuers) (Note 6)

 

 

 

 

 

 

 

 

 

 

3,020,564

 

Net realized gain on futures contracts

 

 

 

 

 

 

 

 

 

 

520,826

 

Net realized loss allocated from partnership

 

 

 

 

 

 

 

 

 

 

(55,806

)

Net change in unrealized depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts

 


 


 


 

 


 


 

 

 

 

6,457,272

 

Net realized and unrealized gain on investments, foreign currency transactions and futures contracts

 

 

 

 

 

 

 

 

 

 

9,942,856

 

Change in net assets resulting from operations

 

 

 

 

 

 

 

 

 

$

10,321,110

 
                         

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

 

Year Ended November 30

 

   

2003

   

   

   

2002

   

Increase (Decrease) in Net Assets

 

   

   

   

   

   

   

   

Operations:

 

   

   

   

   

   

   

   

Net investment income

 

$

378,254

 

 

$

708,791

 

Net realized gain (loss) on investments, foreign currency transactions and futures contracts

 

 

3,485,584

 

 

 

(7,537,622

)

Net realized gain on capital gain distributions from other
investment companies

 

 

--

 

 

 

64

 

Net change in unrealized appreciation/depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts

 

 

6,457,272

 

 

 

(7,628,290

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

 

 

10,321,110

 

 

 

(14,457,057

)

Distributions to Shareholders:

 

   

   

   

   

   

   

   

Distributions from net investment income

 

 

 

 

 

 

 

 

Institutional Shares

 

 

(298,339

)

 

 

(602,693

)

Select Shares

 

 

(30,072

)

 

 

(141,316

)

CHANGE IN NET ASSETS RESULTING FROM
DISTRIBUTIONS TO SHAREHOLDERS

 

 

(328,411

)

 

 

(744,009

)

Share Transactions:

   

   

   

   

   

   

   

   

Proceeds from sale of shares

   

 

15,472,010

 

 

 

23,966,439

 

Net asset value of shares issued to shareholders in
payment of distributions declared

   

 

283,273

 

 

 

646,713

 

Cost of shares redeemed

 

 

(28,756,677

)

 

 

(50,949,210

)

CHANGE IN NET ASSETS RESULTING FROM
SHARE TRANSACTIONS

 

 

(13,001,394

)

 

 

(26,336,058

)

Change in net assets

 

 

(3,008,695

)

 

 

(41,537,124

)

Net Assets:

 

   

   

   

   

   

   

   

Beginning of period

 

 

87,558,554

 

 

 

129,095,678

 

End of period (including undistributed net investment income
of $40,253 and $31,498, respectively)

 

$

84,549,859

 

 

$

87,558,554

 
                 

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

November 30, 2003

1. ORGANIZATION

Federated Managed Allocation Portfolios (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end, management investment company. The Trust consists of four diversified portfolios. The financial statements included herein are only those of Federated Growth Allocation Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to seek capital appreciation. Effective October 6, 2003, the Fund changed its name from Federated Managed Growth Portfolio to Federated Growth Allocation Fund. The Fund offers two classes of shares: Institutional Shares and Select Shares.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles (GAAP) in the United States of America.

Investment Valuation

Listed equity securities are valued at the last sale price reported on a national securities exchange. U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities and unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at fair value as determined in good faith using methods approved by the Board of Trustees (the "Trustees").

With respect to valuation of foreign securities, trading in foreign cities may be completed at times which vary from the closing of the New York Stock Exchange. Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded prior to the closing of the New York Stock Exchange. Foreign securities quoted in foreign currencies are translated into U.S. dollars at the foreign exchange rate in effect at noon, Eastern Time, on the day the value of the foreign security is determined.

Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in Federated Core Trust II (the "Core Trust II") which is independently managed by Federated Global Investment Management Corp. Core Trust II is a limited partnership established under the laws of the State of Delaware, on November 13, 2000, registered under the Act, and offered only to registered investment companies and other accredited investors. The Fund may invest in common stock (including American Depositary Receipts) of companies with large- and medium-market capitalization that offer superior growth prospects or of companies whose stock is undervalued primarily by investing in Capital Appreciation Core Fund ("CACORE"), a portfolio of Core Trust II. The investment objective of CACORE is to provide capital appreciation. The Fund records daily its proportionate share of income, expenses, unrealized gains and losses and realized gains and losses from CACORE. Additional information regarding CACORE is available upon request.

Repurchase Agreements

It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement.

The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Trustees. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair market value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Distributions are determined in accordance with income tax regulations which may differ from GAAP. These distributions do not represent a return of capital for federal income tax purposes.

Premium and Discount Amortization

All premiums and discounts on fixed income securities are amortized/accreted for financial statement purposes.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.

Withholding taxes on foreign interest and dividends have been provided for in accordance with the applicable country's tax rules and rates.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Futures Contracts

The Fund purchases stock index futures contracts to manage cash flows, enhance yield and to potentially reduce transaction costs. Upon entering into a stock index futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. For the year ended November 30, 2003, the Fund had net realized gain of $520,826 on futures contracts.

Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities.

At November 30, 2003, the Fund had outstanding futures contracts as set forth below:

Expiration Date

 

Contracts to Receive

 

Position

 

Unrealized
Appreciation

December 2003

 

18 S&P 500 Index Futures

 

Long

 

$32,346

Foreign Exchange Contracts

The Fund may enter into foreign currency commitments for the delayed delivery of securities or foreign currency exchange transactions. The Fund may enter into foreign currency contract transactions to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies; whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign currency transactions are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date. At November 30, 2003, the Fund had no outstanding foreign currency commitments.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies ("FC") are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. Differences between income and expense amounts recorded and collected or paid are adjusted when reported by the custodian bank. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis.

3. CHANGE IN ACCOUNTING POLICY

Effective December 1, 2001, the Fund adopted the provisions of the revised AICPA Audit and Accounting Guide for Investment Companies (the "Guide"). For financial statement purposes, the revised Guide requires the Fund to amortize premium and discount on all fixed income securities and to classify gains and losses realized on principal payments received on mortgage-backed securities (paydown gains and losses) as part of investment income.

Upon initial adoption, the Fund adjusted its cost of fixed income securities by the cumulative amount of amortization that would have been recognized had amortization been in effect from the purchase date of each holding with a corresponding reclassification between unrealized appreciation/ depreciation on investments and undistributed net investment income. Adoption of these accounting principles does not affect the Fund's net asset value or distributions, but changes the classification of certain amounts between interest income and realized and unrealized gain/loss on the Statement of Operations. The cumulative effect to the Fund resulting from the adoption of premium and discount amortization and recognition of paydown gains and losses as part of interest income on the financial statements is as follows:

   

   

As of 12/1/2001

 

For the Year Ended
11/30/2002

   

   

Cost of
Investments

   

Undistributed
Net Investment
Income

   

Net
Investment
Income

   

Net Unrealized
Appreciation
(Depreciation)

   

Net
Realized
Gain (Loss)

Increase (Decrease)

 

$(51,726)

 

$(51,726)

 

$(28,241)

 

$(29,296)

 

$57,537

The Statement of Changes in Net Assets and Financial Highlights for prior periods have not been restated to reflect this change in presentation.

4. SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. Transactions in shares were as follows:

Year Ended November 30

   

2003

   

   

2002

   

Institutional Shares:

   

Shares

   

   

   

Amount

   

   

Shares

   

   

   

Amount

   

Shares sold

 

1,017,141

 

 

$

10,317,113

 

 

1,482,462

 

 

$

15,964,791

 
Shares issued to shareholders in payment
of distributions declared		   25,784       254,443     47,485       512,172  

Shares redeemed

 

(1,886,915

)

 

 

(18,773,438

)

 

(2,725,225

)

 

 

(28,835,905

)

NET CHANGE RESULTING FROM
INSTITUTIONALSHARE TRANSACTIONS

 

(843,990

)

 

$

(8,201,882

)

 

(1,195,278

)

 

$

(12,358,942

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended November 30

   

2003

   

   

2002

   

Select Shares:

   

Shares

   

   

   

Amount

   

   

Shares

   

   

   

Amount

   

Shares sold

 

513,511

 

 

$

5,154,897

 

 

748,013

 

 

$

8,001,648

 

Shares issued to shareholders in payment
of distributions declared

 

3,068

 

 

 

28,830

 

 

12,287

 

 

 

134,541

 

Shares redeemed

 

(1,008,644

)

 

 

(9,983,239

)

 

(2,083,775

)

 

 

(22,113,305

)

NET CHANGE RESULTING FROM
SELECT SHARE TRANSACTIONS

 

(492,065

)

 

$

(4,799,512

)

 

(1,323,475

)

 

$

(13,977,116

)

NET CHANGE RESULTING FROM
SHARE TRANSACTIONS

 

(1,336,055

)

 

$

(13,001,394

)

 

(2,518,753

)

 

$

(26,336,058

)
                             

5. FEDERAL TAX INFORMATION

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due in part to differing treatments for foreign currency transactions, discount accretion/premium amortization on debt securities and tax allocated income from partnership.

For the year ended November 30, 2003, permanent differences identified and reclassified among the components of net assets was as follows:

Increase (Decrease)

Paid-In Capital

 

Undistributed
Net Investment
Income

 

Accumulated
Net Realized
Loss

$(26,590)

 

$(41,088)

 

$67,678

Net investment income, net realized gains (losses), as disclosed on the Statement of Operations, and net assets were not affected by this reclassification.

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended November 30, 2003 and 2002 was as follows:

   

 

2003

 

2002

Ordinary income1

 

$328,411

 

$744,009

1 For tax purposes short-term capital gain distributions are considered ordinary income distributions.

As of November 30, 2003, the components of distributable earnings on a tax basis were as follows:

Undistributed ordinary income

 

$40,253

Net unrealized appreciation

 

$1,175,485

Capital loss carryforward

 

$14,368,305

The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable in part to differing treatments for the deferral of losses from wash sales and discount accretion/premium amortization on debt securities.

At November 30, 2003, the cost of investments for federal tax purposes was $79,610,271. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation resulting from changes in foreign currency exchange rates was $1,141,988. This consists of net unrealized appreciation from investments for those securities having an excess of value over cost of $1,466,072 and net unrealized depreciation from investments for those securities having an excess of cost over value of $324,084.

At November 30, 2003, the Fund had a capital loss carryforward of $14,368,305, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such a capital loss carryforward will expire as follows:

Expiration Year

 

Expiration Amount

2009

 

$7,242,673

2010

 

$7,125,632

6. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.75% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Certain of the Fund's assets are managed by Federated Global Investment Management Corp. (the "Sub-Adviser"). Under the terms of a sub-adviser agreement between the Adviser and the Sub-Adviser, the Sub-Adviser receives an allocable portion of the Fund's adviser fee. The fee is paid by the Adviser out of its resources and is not an incremental Fund expense.

Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in other funds, which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse certain investment adviser fees as a result of these transactions. Income distributions earned from investments in these funds are recorded as income in the accompanying financial statements and are listed below.

Capital Appreciation Core Fund

 

$

68,849

Federated Mortgage Core Portfolio

 

$

103,426

High Yield Bond Portfolio

 

$

200,194

Prime Value Obligations Fund

 

$

1,738

Administrative Fee

Federated Administrative Services ("FAS"), under the Administrative Services Agreement ("Agreement"), provides the Fund with administrative personnel and services. The fee paid to FAS is based on the aggregate daily net assets of all Federated funds as specified below:

Maximum Administrative Fee

 

Average Aggregate Daily
Net Assets of the Federated Funds

0.150%

 

on the first $5 billion

0.125%

 

on the next $5 billion

0.100%

 

on the next $10 billion

0.075%

 

on assets in excess of $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 choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.

Prior to November 1, 2003, Federated Services Company ("FServ") provided the Fund with administrative personnel and services. The fee paid to FServ was based on the average aggregate daily net assets of all Federated funds as specified below.

Maximum Administrative Fee

 

Average Aggregate Daily
Net Assets of the Federated Funds

0.150%

 

on the first $250 million

0.125%

 

on the next $250 million

0.100%

 

on the next $250 million

0.075%

 

on assets in excess of $750 million

The administrative fee received during any fiscal year was at least $125,000 per portfolio and $30,000 per each additional class of Shares.

For the year ended November 30, 2003 the fees paid to FAS and FServ were $12,808 and $142,261, respectively, after voluntary waiver, if applicable.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Select Shares. The Plan provides that the Fund may incur distribution expenses of up to 0.75% of average net assets, annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund's shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive and/or reimburse any portion of its fee. FSSC can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. FServ may voluntarily choose to waive any portion of its fee. FServ can modify or terminate this voluntary waiver at any time at its sole discretion.

General

Certain of the Officers and Trustees of the Fund are Officers and Directors or Trustees of the above companies.

7. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations (and in-kind contributions), for the year ended November 30, 2003, were as follows:

Purchases

 

$104,266,602

Sales

 

$115,108,200

8. CONCENTRATION OF CREDIT RISK

The Fund invests in securities of non-U.S. issuers. Although the Fund maintains a diversified investment portfolio, the political or economic developments within a particular country or region may have an adverse effect on the stability of domiciled issuers to meet their obligations. Additionally, political or economic developments may have an effect on the liquidity and volatility of portfolio securities and currency holdings.

9. LEGAL PROCEEDINGS

In October, 2003, Federated Investors, Inc. and various subsidiaries thereof (collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits filed in the United States District Court for the Western District of Pennsylvania seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respective counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. Although Federated does not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from related regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

10. FEDERAL TAX INFORMATION (UNAUDITED)

For the year ended November 30, 2003, the Fund did not designate any long-term capital gain dividends.

For the fiscal year ended November 30, 2003, 100% of the distributions from net investment income paid by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15% as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information will be reported in conjunction with your 2003 From 1099-DIV.

Independent Auditors' Report

TO THE BOARD OF TRUSTEES OF FEDERATED MANAGED ALLOCATION
PORTFOLIOS AND SHAREHOLDERS OF FEDERATED GROWTH ALLOCATION FUND:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Federated Growth Allocation Fund (the "Fund") as of November 30, 2003, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to provide reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at November 30, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of the Federated Growth Allocation Fund as of November 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts
January 23, 2004

Board of Trustees and Trust Officers

The Board is responsible for managing the Trust's business affairs and for exercising all the Trust's powers except those reserved for the shareholders. The following tables give information about each Board member and the senior officers of the Funds. 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. The Trust comprises three portfolios and the Federated Fund Complex consists of 44 investment companies (comprising 138 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees all portfolios in the Federated Fund Complex; serves for an indefinite term; and also serves as a Board member of the following investment company complexes: Banknorth Funds--four portfolios; Golden Oak® Family of Funds--seven portfolios and WesMark Funds--five portfolios. The Fund's Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.

INTERESTED TRUSTEES BACKGROUND

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began

 

Principal Occupation(s), Previous Position(s)
and Other Directorships Held

John F. Donahue*
 Birth Date: July 28, 1924
CHAIRMAN AND TRUSTEE
Began serving: November 1993

 

Principal Occupations: Chairman and Director or
Trustee of the Federated Fund Complex;
Chairman and Director, Federated Investors, Inc.

Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd.

 

 

 

J. Christopher Donahue*
 Birth Date: April 11, 1949
PRESIDENT AND TRUSTEE
Began serving: January 2000

 

Principal Occupations: Principal Executive Officer and President of the
Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director,
Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Passport Research, Ltd.; Trustee, Federated Shareholder Services Company; Director, Federated Services Company

Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment, Management Company, Federated Global Investment Management Corp. and Passport Research Ltd.

 

 

 

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began

 

Principal Occupation(s), Previous Position(s)
and Other Directorships Held

Lawrence D. Ellis, M.D.*
 Birth Date: October 11, 1932
3471 Fifth Avenue
Suite 1111
Pittsburgh, PA
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the
Federated Fund Complex; Professor of Medicine,
University of Pittsburgh; Medical Director,
University of Pittsburgh Medical Center Downtown; Hematologist,
Oncologist and Internist, University of Pittsburgh Medical Center.

Other Directorships Held: Member, National Board of Trustees,
Leukemia Society of America.

Previous Positions: Trustee, University of Pittsburgh; Director,
University of Pittsburgh Medical Center.

 

 

 

* Family relationships and reasons for "interested" status: John F. Donahue is the father of J. Christopher Donahue; both are "interested" due to the positions they hold with Federated Investors, Inc. and its subsidiaries. Lawrence D. Ellis, M.D. is "interested" because his son-in-law is employed by the Fund's principal underwriter, Federated Securities Corp.

INDEPENDENT TRUSTEES BACKGROUND

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began

 

Principal Occupation(s), Previous Position(s)
and Other Directorships Held

Thomas G. Bigley
 Birth Date: February 3, 1934
15 Old Timber Trail
Pittsburgh, PA
TRUSTEE
Began serving: November 1994

 

Principal Occupation: Director or Trustee of the Federated
Fund Complex.

Other Directorships Held: Director, Member of Executive Committee, Children's Hospital of Pittsburgh; Director, University of Pittsburgh.

Previous Position: Senior Partner, Ernst & Young LLP.

 

 

 

John T. Conroy, Jr.
 Birth Date: June 23, 1937
Grubb & Ellis/Investment
Properties Corporation
3838 North Tamiami Trail
Suite 402
Naples, FL
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida.

Previous Positions: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village
Development Corporation.

 

 

 

Nicholas P. Constantakis
 Birth Date: September 3, 1939
175 Woodshire Drive
Pittsburgh, PA
TRUSTEE
Began serving: January 2000

 

Principal Occupations: Director or Trustee of the Federated Fund Complex.

Other Directorships Held: Director and Member of the Audit Committee, Michael Baker Corporation (engineering and energy services worldwide).

Previous Position: Partner, Andersen Worldwide SC.

 

 

 

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began

 

Principal Occupation(s), Previous Position(s)
and Other Directorships Held

John F. Cunningham
 Birth Date: March 5, 1943
353 El Brillo Way
Palm Beach, FL
TRUSTEE
Began serving: January 1999

 

Principal Occupation: Director or Trustee of the Federated
Fund Complex.

Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting);
Trustee Associate, Boston College.

Previous Positions: Director, Redgate Communications and EMC Corporation (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. Madden
 Birth Date: March 16, 1942
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
TRUSTEE
Began serving: November 1993

 

Principal Occupation: Director or Trustee of the Federated Fund Complex; Management Consultant.

Other Directorships Held: Board of Overseers, Babson College.

Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange.

 

 

 

Charles F. Mansfield, Jr.
 Birth Date: April 10, 1945
80 South Road
Westhampton Beach, NY
TRUSTEE
Began serving: January 1999

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant; Executive Vice President, DVC Group, Inc. (marketing communications and technology) (prior to 9/1/00).

Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank;
Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University.

 

 

 

John E. Murray, Jr., J.D., S.J.D.
 Birth Date: December 20, 1932
Chancellor, Duquesne University
Pittsburgh, PA
TRUSTEE
Began serving: February 1995

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Chancellor and Law Professor, Duquesne University; Partner, Murray, Hogue and Lannis.

Other Directorships Held: Director, Michael Baker Corp.
(engineering, construction, operations and technical services).

Previous Positions: President, Duquesne University; Dean and Professor of Law, University of Pittsburgh School of Law; Dean and Professor of Law, Villanova University School of Law.

 

 

 

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began

 

Principal Occupation(s), Previous Position(s)
and Other Directorships Held

Marjorie P. Smuts
 Birth Date: June 21, 1935
4905 Bayard Street
Pittsburgh, PA
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Public Relations/Marketing Consultant/Conference Coordinator.


Previous Positions: National Spokesperson, Aluminum Company of America; television producer; President, Marj Palmer Assoc.; Owner, Scandia Bord.

 

 

 

John S. Walsh
 Birth Date: November 28, 1957
2604 William Drive
Valparaiso, IN
TRUSTEE
Began serving: January 1999

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc.

Previous Position: Vice President, Walsh & Kelly, Inc.

 

 

 

OFFICERS

 

 

 

Name
Birth Date
Positions Held with Trust
Date Service Began

 




Principal Occupation(s) and Previous Position(s)

John W. McGonigle
 Birth Date: October 26, 1938
EXECUTIVE VICE PRESIDENT
AND SECRETARY
Began serving: November 1993

 

Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Executive Vice President, Secretary and Director, Federated Investors, Inc.

 

 

 

Richard J. Thomas
 Birth Date: June 17, 1954
TREASURER
Began serving: November 1998

 

Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Complex; Senior Vice President, Federated
Administrative Services.

 

 

 

Richard B. Fisher
 Birth Date: May 17, 1923
VICE PRESIDENT
Began serving: November 1993

 

Principal Occupations: Vice Chairman or President of some of the Funds
in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp.

Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc. and Director and Chief Executive Officer,
Federated Securities Corp.

 

 

 

 

 

 

Name
Birth Date
Positions Held with Trust
Date Service Began

 




Principal Occupation(s) and Previous Position(s)

John W. Harris
 Birth Date: June 6, 1954
VICE PRESIDENT
Began serving: November 1999

 

John W. Harris is Vice President of the Trust. Mr. Harris initially joined Federated in 1987 as an Investment Analyst. He served as an Investment Analyst and an Assistant Vice President from 1990 through 1992 and as
a Senior Investment Analyst and Vice President through May 1993. After leaving the money management field to travel extensively, he rejoined Federated in 1997 as a Senior Investment Analyst and became a Portfolio Manager and an Assistant Vice President of the Fund's Adviser in
December 1998. In January 2000, Mr. Harris became a Vice President
of the Fund's Adviser. Mr. Harris is a Chartered Financial Analyst.
He received his M.B.A. from the University of Pittsburgh.

 

 

 

Mutual funds are not bank deposits or obligations, are not 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. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus, which contains facts concerning its objective and policies, management fees, expenses and other information.

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. This information is also available from the EDGAR database on the SEC's Internet site at http://www.sec.gov.

[Logo of Federated Investors]

Federated Growth Allocation Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com

Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact

Federated Securities Corp., Distributor

Cusip 314212200
Cusip 314212101

G00769-01 (1/04)

Federated is a registered mark of Federated Investors, Inc.
2004 © Federated Investors, Inc.

[Logo of Federated Investors]

Federated Moderate Allocation Fund

A Portfolio of Federated Managed Allocation Portfolios
(formerly, Federated Managed Moderate Growth Portfolio)



ANNUAL SHAREHOLDER REPORT

November 30, 2003

Institutional Shares
Select Shares

FINANCIAL HIGHLIGHTS
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
FINANCIAL STATEMENTS
INDEPENDENT AUDITORS' REPORT
BOARD OF TRUSTEES AND TRUST OFFICERS
VOTING PROXIES ON FUND PORTFOLIO SECURITIES

NOT FDIC INSURED   •   MAY LOSE VALUE   •   NO BANK GUARANTEE

Financial Highlights -- Institutional Shares

(For a Share Outstanding Throughout Each Period)

Year Ended November 30

 

2003

   

 

2002

   

 

2001

   

 

2000

   

 

1999

 

Net Asset Value, Beginning of Period

 

$ 9.99

   

 

$10.91

   

 

$12.33

   

 

$13.55

   

 

$13.15

   

Income From Investment Operations:

 

   

   

 

   

   

 

   

   

 

   

   

 

   

   

Net investment, income

 

0.17

1

 

0.22

2

 

0.29

 

 

0.39

1

 

0.35

 

Net realized and unrealized gain (loss)
on investments, foreign currency transactions and futures contracts

 

1.18

 

 


(0.95

)2

 

(0.89

)

 

(0.64

)

 

1.00

 

TOTAL FROM
INVESTMENT OPERATIONS

 

1.35

 

 

(0.73

)

 

(0.60

)

 

(0.25

)

 

1.35

 

Less Distributions:

 

   

   

 

   

   

 

   

   

 

   

   

 

   

   

Distributions from net investment income

 

(0.17

)

 

(0.19

)

 

(0.30

)

 

(0.36

)

 

(0.35

)

Distributions from net realized gain
on investments, foreign currency transactions and futures contracts

 

--

 

 

--

 

 

(0.52

)

 

(0.61

)

 

(0.60

)

TOTAL DISTRIBUTIONS

 

(0.17

)

 

(0.19

)

 

(0.82

)

 

(0.97

)

 

(0.95

)

Net Asset Value, End of Period

 

$11.17

   

 

$ 9.99

   

 

$10.91

   

 

$12.33

   

 

$13.55

   

Total Return3

 

13.68

%

 

(6.76

)%

 

(5.17

)%

 

(2.19

)%

 

11.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

1.20

%

 

1.09

%

 

1.09

%

 

1.07

%

 

1.06

%

Net investment income

 

1.69

%

 

2.16

%2

 

2.70

%

 

2.89

%

 

2.69

%

Expense waiver/reimbursement4

 

0.20

%

 

0.20

%

 

0.20

%

 

0.20

%

 

0.20

%

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000 omitted)

 

$91,789

 

 

$95,288

 

 

$125,741

 

 

$161,366

 

 

$168,702

 

Portfolio turnover

 

121

%

 

23

%

 

36

%

 

72

%

 

113

%
                               

1 Based on average shares outstanding.

2 Effective December 1, 2001, the Fund adopted the provisions of the American Institute of Certified Public Accountants ("AICPA") Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the fiscal year ended November 30, 2002 was to decrease net investment income per share by $0.01, increase net realized gain/loss per share by $0.01, and decrease the ratio of net investment income to average net assets from 2.25% to 2.16%. Per share, ratios and supplemental data for periods prior to November 30, 2002 have not been restated to reflect this change in presentation.

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

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

See Notes which are an integral part of the Financial Statements

Financial Highlights -- Select Shares

(For a Share Outstanding Throughout Each Period)

Year Ended November 30

 

2003

   

 

2002

   

 

2001

   

 

2000

   

 

1999

 

Net Asset Value, Beginning of Period

 

$ 9.96

   

 

$10.87

   

 

$12.29

   

 

$13.51

   

 

$13.11

   

Income From Investment Operations:

 

   

   

 

   

   

 

   

   

 

   

   

 

   

   

Net investment income

 

0.10

1

 

0.15

2

 

0.23

 

 

0.30

1

 

0.26

 

Net realized and unrealized gain (loss)
on investments, foreign currency transactions and futures contracts

 

1.19

 

 


(0.94

)2

 

(0.91

)

 

(0.64

)

 

1.00

 

TOTAL FROM
INVESTMENT OPERATIONS

 

1.29

 

 

(0.79

)

 

(0.68

)

 

(0.34

)

 

1.26

 

Less Distributions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions from net investment income

 

(0.10

)

 

(0.12

)

 

(0.22

)

 

(0.27

)

 

(0.26

)

Distributions from net realized gain on investments, foreign currency transactions and futures contracts

 

--

 

 

--

 

 

(0.52

)

 

(0.61

)

 

(0.60

)

TOTAL DISTRIBUTIONS

 

(0.10

)

 

(0.12

)

 

(0.74

)

 

(0.88

)

 

(0.86

)

Net Asset Value, End of Period

 

$11.15

   

 

$ 9.96

   

 

$10.87

   

 

$12.29

   

 

$13.51

   

Total Return3

 

13.03

%

 

(7.36

)%

 

(5.89

)%

 

(2.87

)%

 

10.26

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ratios to Average Net Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

1.90

%

 

1.79

%

 

1.79

%

 

1.77

%

 

1.76

%

Net investment income

 

0.99

%

 

1.46

%2

 

2.00

%

 

2.19

%

 

1.99

%

Expense waiver/reimbursement4

 

0.25

%

 

0.25

%

 

0.25

%

 

0.25

%

 

0.25

%

Supplemental Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000 omitted)

 

$56,747

 

 

$58,706

 

 

$76,065

 

 

$89,725

 

 

$95,824

 

Portfolio turnover

 

121

%

 

23

%

 

36

%

 

72

%

 

113

%
                               

1 Based on average shares outstanding.

2 Effective December 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting discount/amortizing premium on long-term debt securities. The effect of this change for the fiscal year ended November 30, 2002 was to decrease net investment income per share by $0.01, increase net realized gain/loss per share by $0.01, and decrease the ratio of net investment income to average net assets from 1.55% to 1.46%. Per share, ratios and supplemental data for periods prior to November 30, 2002 have not been restated to reflect this change in presentation.

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

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

See Notes which are an integral part of the Financial Statements

Management's Discussion of Fund Performance

For the twelve month reporting period ended November 30, 2003, a shareholder in the Federated Moderate Allocation Fund's Institutional Shares had a total return of 13.68%1 while a shareholder in the fund's Select Shares had a total return of 13.03%.1

The primary influences on the returns of the fund were the diversified nature of the portfolio and the disciplined design of the fund. The fund has, by design, the next to highest allocation to stocks (after the Federated Growth Allocation Fund) of the funds in the Federated Managed Allocation Portfolio series. The higher relative returns for stocks versus bonds during the 12-month reporting period resulted in this fund having the next to highest returns of the other funds in the series. Returns were further enhanced by a higher than normal allocation to stocks that was maintained during the entire reporting period.

The stock portion of the fund is invested in a diversified portfolio of domestic and foreign stocks. Early in the 12-month reporting period, stock prices were depressed by concerns about a war in Iraq and weaker economic data. A successful end to the Iraq conflict combined with indications of faster growth of the U.S. economy and faster growth of corporate earnings resulted in a strong rally in stock prices. The continuation of the rally was supported by unusually strong economic growth during the third quarter of 2003. Small-cap stocks benefited the most from this recovery as indicated by a 36.28% return for the Russell 2000 Index.2 Returns of the fund were enhanced by investing a portion of the stock allocation in small-cap stocks.3

The bond portion of the fund is invested in a diversified portfolio of domestic and foreign bonds. Returns within the bond categories were highly varied. Riskier bonds such as high yield, non-investment grade bonds had exceptionally high returns while less risky bonds like U.S. Treasury bonds had much lower returns. High yield bonds often have high returns during periods of economic recovery because the improving economic environment reduces the risk of default. High quality bonds often perform poorly during these periods because of concerns that stronger economic growth will bring higher inflation rates and less accommodation by the Federal Reserve Board. Fund returns were enhanced by allocations to high yield bonds and investment-grade corporate bonds. Although the gains were not as large as for high yield bonds, investment grade corporate bonds also benefited from the economic recovery.4

The fund benefited from investments in both foreign stocks and bonds.5 Investor concerns about the high U.S. current account deficit helped fuel a decline in the value of the dollar and corresponding rise in the value of foreign currencies. This resulted in most types of foreign securities outperforming their U.S. counterparts.

1 Performance quoted is based on net asset value, reflects past performance and is no guarantee of future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance information is available at our website www.federatedinvestors.com or by calling 1-800-341-7400.

2 The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which represents approximately 10% of the total market capitalization of the Russell 3000 Index. Investments cannot be made in an index.

3 Small company stocks may be less liquid and subject to greater price volatility than large capitalization stocks.

4 Lower rated bonds involve a higher degree of risk than investment grade bonds in return for higher yield potential.

5 International investing involves special risks including currency risk, increased volatility of foreign securities, and diferences in auditing and other financial standards.

GROWTH OF A $25,000 INVESTMENT -- INSTITUTIONAL SHARES

The graph below illustrates the hypothetical investment of $25,0001 in the Federated Moderate Allocation Fund (Institutional Shares) (the "Fund") from May 25, 1994 (start of performance) to November 30, 2003, compared to the Standard and Poor's 500 Index (S&P 500)2 and the 60% Standard & Poor's 500 Index/40% Lehman Brothers Aggregate Bond Index (60% S&P500/40% LBAB).2

Average Annual Total Return for the Period Ended 11/30/2003

 

   

   

1 Year

 

13.68

%

5 Years

 

1.76

%

Start of Performance (5/25/1994)

 

6.76

%

GROWTH OF $25,000 AS OF NOVEMBER 30, 2003

Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. For after-tax returns, visit www.federatedinvestors.com. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1 The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the 60% S&P 500/40% LBAB have been adjusted to reflect reinvestment of dividends on securities in the indexes.

2 The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.The S&P 500 and the 60% S&P500/40% LBAB are not adjusted to reflect sales charges, expenses, or other fees that the Securities and Exchange Commission (SEC) requires to be reflected in the Fund's performance. The indexes are unmanaged and investments cannot be made in indexes.

GROWTH OF A $10,000 INVESTMENT -- SELECT SHARES

The graph below illustrates the hypothetical investment of $10,0001 in the Federated Moderate Allocation Fund (Select Shares) (the "Fund") from May 25, 1994 (start of performance) to November 30, 2003, compared to the Standard and Poor's 500 Index (S&P 500)2 and the 60% Standard & Poor's 500 Index/40% Lehman Brothers Aggregate Bond Index (60% S&P500/40% LBAB).2

Average Annual Total Return for the Period Ended 11/30/2003

 

   

   

1 Year

 

13.03

%

5 Years

 

1.08

%

Start of Performance (5/25/1994)

 

6.04

%

GROWTH OF $10,000 AS OF NOVEMBER 30, 2003

Past performance is no guarantee of future results. The line graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. For after-tax returns, visit www.federatedinvestors.com. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than original cost. Mutual funds are not obligations of or guaranteed by any bank and are not federally insured.

1 The Fund's performance assumes the reinvestment of all dividends and distributions. The S&P 500 and the 60% S&P500/40% LBAB have been adjusted to reflect reinvestment of dividends on securities in the indexes.

2 The S&P 500 is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The S&P 500 and the 60% S&P500/40% LBAB are not adjusted to reflect sales charges, expenses, or other fees that the SEC requires to be reflected in the Fund's performance. The indexes are unmanaged and investments cannot be made in indexes.

Portfolio of Investments

November 30, 2003

Shares or
Principal
Amount

   

   

   

Value in
U.S. Dollars

 

 

 

Mutual Funds--89.4%1

 

 

 

 

8,148,202

 

Capital Appreciation Core Fund

 

$

82,592,542

 

65,432

 

Emerging Markets Fixed Income Core Fund

 

 

941,632

 

1,214,236

 

Federated Intermediate Income Fund, Class IS

 

 

12,433,768

 

1,121,085

 

Federated International Capital Appreciation Fund, Class A

 

 

8,946,255

 

1,463,961

 

Federated Mortgage Core Portfolio

 

 

14,844,561

 

347,299

 

Federated U.S. Government Securities Fund: 2-5 Years, Class IS

 

 

3,983,518

 

570,031

 

High Yield Bond Portfolio

 

 

3,893,314

 

5,116,878

 

Prime Value Obligations Fund, IS Shares

 

 

5,116,878

 

 

 

TOTAL MUTUAL FUNDS (IDENTIFIED COST $131,212,017)

 

 

132,752,468

 

 

 

Treasury Securities--10.5%

 

 

 

$

7,300,000

2

United States Treasury Bill, 2/12/2004 (security held as
collateral for futures contracts)

 

 

7,286,933

 

933,000

 

United States Treasury Bond, 6.125%, 11/15/2027

 

 

1,043,355

 

5,180,000

 

United States Treasury Bond, 8.875%, 8/15/2017

 

 

7,288,415

 

 

 

TOTAL TREASURY SECURITIES (IDENTIFIED COST $15,013,739)

 

 

15,618,703

 

 

 

TOTAL INVESTMENTS--99.9%
(IDENTIFIED COST $146,225,756)3

 

 

148,371,171

 

 

 

OTHER ASSETS AND LIABILITIES--NET--0.1%

 

 

165,440

 

 

 

TOTAL NET ASSETS--100%

 

$

148,536,611
             

1 Affiliated companies.

2 The Fund purchases index futures contracts to efficiently manage cash flows resulting from shareholder purchases and redemptions, dividend and capital gain payments to shareholders and corporate actions while maintaining exposure to the index and minimizing trade costs. The underlying face amount, at value, of open index futures was $7,404,600 at November 30, 2003.

3 The cost of investments for federal tax purposes amounts to $146,545,212.

Note: The categories of investments are shown as a percentage of total net assets at November 30, 2003.

See Notes which are an integral part of the Financial Statements

Statement of Assets and Liabilities

November 30, 2003

Assets:

 

 

 

 

 

 

 

Total investments in securities, at value including $132,752,468 of investments in affiliated issuers (Note 6) (identified cost $146,225,756)

 

 

 

 

$

148,371,171

 

Cash

 

 

 

 

 

77

 

Cash denominated in foreign currency (identified cost $67,169)

 

 

 

 

 

67,879

 

Income receivable

 

 

 

 

 

199,790

 

Receivable for daily variation margin

 

 

 

 

 

7,700

 

Receivable for shares sold

 

 

 

 

 

39,132

 
 

TOTAL ASSETS

 

 

 

 

 

148,685,749

 
 

Liabilities:

 

 

 

 

 

 

 

Payable for shares redeemed

 

$

58,394

 

 

 

 

Payable for custodian fees

 

 

15,981

 

 

 

 

Payable for transfer and dividend disbursing agent fees and expenses (Note 6)

 

 

24,519

 

 

 

 

Payable for Directors'/Trustees' fees

 

 

163

 

 

 

 

Payable for portfolio accounting fees (Note 6)

 

 

5,823

 

 

 

 

Payable for distribution services fees (Note 6)

 

 

23,232

 

 

 

 

Payable for shareholder services fees (Note 6)

 

 

15,385

 

 

 

 

Accrued expenses

 

 

5,641

 

 

 

 
 

TOTAL LIABILITIES

 

 

 

 

 

149,138

 
 

Net assets for 13,310,091 shares outstanding

 

 

 

 

$

148,536,611

 
 

Net Assets Consist of:

 

 

 

 

 

 

 

Paid in capital

 

 

 

 

$

156,241,278

 

Net unrealized appreciation of investments, translation of assets and liabilities
in foreign currency and futures contracts

 


 

 

 

 

2,169,157

 

Accumulated net realized loss on investments, foreign currency
transactions and futures contracts

 

 

 

 

 

(11,179,752

)

Undistributed net investment income

 

 

 

 

 

1,305,928

 
 

TOTAL NET ASSETS

 

 

 

 

$

148,536,611

 
 

Net Asset Value, Offering Price and Redemption Proceeds Per Share

 

 

 

 

 

 

 

Institutional Shares:

 

 

 

 

 

 

 

$91,789,197 ÷ 8,219,030 shares outstanding

 

 

 

 

 

$11.17

 
 

Select Shares:

 

 

 

 

 

 

 

$56,747,414 ÷ 5,091,061 shares outstanding

 

 

 

 

 

$11.15

 
 
               

See Notes which are an integral part of the Financial Statements

Statement of Operations

Year Ended November 30, 2003

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

Dividends (including $1,037,185 received from affiliated issuers (Note 6) and net of foreign taxes withheld of $42,461)

 

 

 

 

 

 

 

 

 

$

2,444,444

 

Interest

 

 

 

 

 

 

 

 

 

 

1,622,676

 

Income allocated from partnership (Note 6)

 

 

 

 

 

 

 

 

 

 

104,148

 

TOTAL INCOME

 

 

 

 

 

 

 

 

 

 

4,171,268

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Investment adviser fee (Note 6)

 

 

 

 

 

$

1,083,437

 

 

 

 

 

Administrative personnel and services fee (Note 6)

 

 

 

 

 

 

157,877

 

 

 

 

 

Custodian fees

 

 

 

 

 

 

50,667

 

 

 

 

 

Transfer and dividend disbursing agent fees and expenses (Note 6)

 

 

 

 

 

 

196,996

 

 

 

 

 

Directors'/Trustees' fees

 

 

 

 

 

 

3,770

 

 

 

 

 

Auditing fees

 

 

 

 

 

 

12,754

 

 

 

 

 

Legal fees

 

 

 

 

 

 

6,183

 

 

 

 

 

Portfolio accounting fees (Note 6)

 

 

 

 

 

 

73,532

 

 

 

 

 

Distribution services fee--Select Shares (Note 6)

 

 

 

 

 

 

405,829

 

 

 

 

 

Shareholder services fee--Institutional Shares (Note 6)

 

 

 

 

 

 

225,869

 

 

 

 

 

Shareholder services fee--Select Shares (Note 6)

 

 

 

 

 

 

135,276

 

 

 

 

 

Share registration costs

 

 

 

 

 

 

35,057

 

 

 

 

 

Printing and postage

 

 

 

 

 

 

35,646

 

 

 

 

 

Insurance premiums

 

 

 

 

 

 

362

 

 

 

 

 

Miscellaneous

 

 

 

 

 

 

5,371

 

 

 

 

 

EXPENSES BEFORE ALLOCATION

 

 

 

 

 

 

2,428,626

 

 

 

 

 

Expense allocated from partnership

 

 

 

 

 

 

2,467

 

 

 

 

 

TOTAL EXPENSES

 

 

 

 

 

 

2,431,093

 

 

 

 

 

Waivers and Reimbursements (Note 6):

 

 

 

 

 

 

 

 

 

 

 

 

Reimbursement of investment adviser fee

 

$

(2,867

)

 

 

 

 

 

 

 

 

Waiver of administrative personnel and services fee

 

 

(2,755

)

 

 

 

 

 

 

 

 

Waiver of distribution services fee--Select Shares

 

 

(135,276

)

 

 

 

 

 

 

 

 

Waiver/reimbursement of shareholder services fee--Institutional Shares

 

 

(181,356

)

 

 

 

 

 

 

 

 

Reimbursement of shareholder services fee--Select Shares

 

 

(407

)

 

 

 

 

 

 

 

 

TOTAL WAIVERS AND REIMBURSEMENTS

 

 

 

 

 

 

(322,661

)

 

 

 

 

Net expenses

 

 

 

 

 

 

 

 

 

 

2,108,432

 

Net investment income

 

 

 

 

 

 

 

 

 

 

2,062,836

 

Realized and Unrealized Gain (Loss) on Investments,
Foreign Currency Transactions and Futures Contracts:

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain on investments and foreign currency transactions (including realized loss of $156,667 on sales of investments in affiliated issuers) (Note 6)

 

 

 

 

 

 

 

 

 

 

7,697,836

 

Net realized gain on futures contracts

 

 

 

 

 

 

 

 

 

 

1,385,003

 

Net realized loss allocated from partnership

 

 

 

 

 

 

 

 

 

 

(77,024

)

Net change in unrealized depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts

 


 


 

 

 


 


 

 

 

 

6,670,467

 

Net realized and unrealized gain on investments, foreign currency transactions and futures contracts

 

 

 

 

 

 

 

 

 

 

15,676,282

 

Change in net assets resulting from operations

 

 

 

 

 

 

 

 

 

$

17,739,118

 
                         

See Notes which are an integral part of the Financial Statements

Statement of Changes in Net Assets

 

Year Ended November 30

 

   

2003

   

 

   

2002

   

Increase (Decrease) in Net Assets

 

 

 

 

 

 

 

 

Operations:

 

 

 

 

 

 

 

 

Net investment income

 

$

2,062,836

 

 

$

3,403,910

 

Net realized gain (loss) on investments, foreign currency
transactions and futures contracts

 

 

9,005,815

 

 

 

(7,675,745

)

Net realized gain on capital gain distributions from other
investment companies

 

 

--

 

 

 

289

 

Net change in unrealized appreciation/depreciation of investments, translation of assets and liabilities in foreign currency and futures contracts

 

 

6,670,467

 

 

 

(9,678,590

)

CHANGE IN NET ASSETS RESULTING FROM OPERATIONS

 

 

17,739,118

 

 

 

(13,950,136

)

Distributions to Shareholders:

 

 

 

 

 

 

 

 

Distributions from net investment income

 

 

 

 

 

 

 

 

Institutional Shares

 

 

(1,519,492

)

 

 

(2,128,609

)

Select Shares

 

 

(529,828

)

 

 

(753,967

)

CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS
TO SHAREHOLDERS

 

 

(2,049,320

)

 

 

(2,882,576

)

Share Transactions:

 

 

 

 

 

 

 

 

Proceeds from sale of shares

 

 

19,862,598

 

 

 

38,391,922

 

Net asset value of shares issued to shareholders in payment
of distributions declared

 

 

1,727,524

 

 

 

2,330,837

 

Cost of shares redeemed

 

 

(42,737,074

)

 

 

(71,701,917

)

CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS

 

 

(21,146,952

)

 

 

(30,979,158

)

Change in net assets

 

 

(5,457,154

)

 

 

(47,811,870

)

Net Assets:

 

 

 

 

 

 

 

 

Beginning of period

 

 

153,993,765

 

 

 

201,805,635

 

End of period (including undistributed net investment income of $1,305,928 and $221,028, respectively)

 

$

148,536,611

 

 

$

153,993,765

 
                 

See Notes which are an integral part of the Financial Statements

Notes to Financial Statements

November 30, 2003

1. ORGANIZATION

Federated Managed Allocation Portfolios (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of four diversified portfolios. The financial statements included herein are only those of Federated Moderate Allocation Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to seek capital appreciation with income as a secondary objective. Effective October 6, 2003, the Fund changed its name from Federated Managed Moderate Growth Portfolio to Federated Moderate Allocation Fund. The Fund offers two classes of shares: Institutional Shares and Select Shares.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles ("GAAP") in the United States of America.

Investment Valuation

Listed equity securities are valued at the last sale price reported on a national securities exchange. U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities, and unlisted securities and private placement securities are generally valued at the mean of the latest bid and asked price as furnished by an independent pricing service. Short-term securities are valued at the prices provided by an independent pricing service. However, short-term securities with remaining maturities of 60 days or less at the time of purchase may be valued at amortized cost, which approximates fair market value. Investments in other open-end regulated investment companies are valued at net asset value. Securities for which no quotations are readily available are valued at fair value as determined in good faith using methods approved by the Board of Trustees (the "Trustees").

With respect to valuation of foreign securities, trading in foreign cities may be completed at times which vary from the closing of the New York Stock Exchange. Therefore, foreign securities are valued at the latest closing price on the exchange on which they are traded prior to the closing of the New York Stock Exchange. Foreign securities quoted in foreign currencies are translated into U.S. dollars at the foreign exchange rate in effect at noon, Eastern Time, on the day the value of the foreign security is determined.

Pursuant to an Exemptive Order issued by the SEC, the Fund may invest in Federated Core Trust II (the "Core Trust II") which is independently managed by Federated Global Investment Management Corp. Core Trust II is a limited partnership established under the laws of the State of Delaware, on November 13, 2000, registered under the Act, and offered only to registered investment companies and other accredited investors. The Fund may invest in common stock (including American Depositary Receipts) of companies with large- and medium-market capitalizations that offer superior growth prospects or of companies whose stock is undervalued primarily by investing in Capital Appreciation Core Fund ("CACORE"), a portfolio of Core Trust II. The investment objective of CACORE is to provide capital appreciation. The Fund records daily its proportionate share of income, expenses, unrealized gains and losses and realized gains and losses from CACORE. Additional information regarding CACORE is available upon request.

Repurchase Agreements

It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement.

The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Trustees. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. The Fund, along with other affiliated investment companies, may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Investment Income, Expenses and Distributions

Interest income and expenses are accrued daily. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at fair market value. The Fund offers multiple classes of shares, which differ in their respective distribution and service fees. All shareholders bear the common expenses of the Fund based on average daily net assets of each class, without distinction between share classes. Dividends are declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.

Premium and Discount Amortization/Paydown Gains and Losses

All premiums and discounts on fixed income securities are amortized/accreted for financial statement purposes.

Federal Taxes

It is the Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the "Code") and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal tax is necessary.

Withholding taxes on foreign interest and dividends have been provided for in accordance with the applicable country's tax rules and rates.

When-Issued and Delayed Delivery Transactions

The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.

Futures Contracts

The Fund purchases stock index futures contracts to manage cashflows, enhance yield and to potentially reduce transaction costs. Upon entering into a stock index futures contract with a broker, the Fund is required to deposit in a segregated account a specified amount of cash or U.S. government securities. Futures contracts are valued daily and unrealized gains or losses are recorded in a "variation margin" account. Daily, the Fund receives from or pays to the broker a specified amount of cash based upon changes in the variation margin account. When a contract is closed, the Fund recognizes a realized gain or loss. For the year ended November 30, 2003, the Fund had net realized gains of $1,385,003 on futures contracts.

Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities.

At November 30, 2003, the Fund had outstanding futures contracts as set forth below:

Expiration Date

 

Contracts to Receive

 

Position

 

Unrealized
Appreciation

December 2003

 

28 S & P 500 Index Futures

 

Long

 

$21,934

Foreign Exchange Contracts

The Fund may enter into foreign currency commitments for the delayed delivery of securities or foreign currency exchange transactions. The Fund may enter into foreign currency contract transactions to protect assets against adverse changes in foreign currency exchange rates or exchange control regulations. Purchased contracts are used to acquire exposure to foreign currencies; whereas, contracts to sell are used to hedge the Fund's securities against currency fluctuations. Risks may arise upon entering into these transactions from the potential inability of counterparties to meet the terms of their commitments and from unanticipated movements in security prices or foreign exchange rates. The foreign currency transactions are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized until the settlement date. At November 30, 2003, the Fund had no outstanding foreign currency commitments.

Foreign Currency Translation

The accounting records of the Fund are maintained in U.S. dollars. All assets and liabilities denominated in foreign currencies ("FC") are translated into U.S. dollars based on the rates of exchange of such currencies against U.S. dollars on the date of valuation. Purchases and sales of securities, income and expenses are translated at the rate of exchange quoted on the respective date that such transactions are recorded. Differences between income and expense amounts recorded and collected or paid are adjusted when reported by the custodian bank. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Reported net realized foreign exchange gains or losses arise from sales of portfolio securities, sales and maturities of short-term securities, sales of FCs, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.

Other

Investment transactions are accounted for on a trade date basis.

3. CHANGE IN ACCOUNTING POLICY

Effective December 1, 2001, the Fund adopted the provisions of the revised AICPA Audit and Accounting Guide for Investment Companies (the "Guide"). For financial statement purposes, the revised Guide requires the Fund to amortize premium and discount on all fixed income securities and to classify gains and losses realized on principal payments received on mortgage-backed securities (paydown gains and losses) as part of investment income.

Upon initial adoption, the Fund adjusted its cost of fixed income securities by the cumulative amount of amortization that would have been recognized had amortization been in effect from the purchase date of each holding with a corresponding reclassification between unrealized appreciation/ depreciation on investments and undistributed net investment income. Adoption of these accounting principles does not affect the Fund's net asset value or distributions, but changes the classification of certain amounts between interest income and realized and unrealized gain/loss on the Statement of Operations. The cumulative effect to the Fund resulting from the adoption of premium and discount amortization and recognition of paydown gains and losses as part of interest income on the financial statements is as follows:

   

 

As of 12/1/ 2001

 

For the Year Ended
11/30/2002

   

 

Cost of Investments

 

Undistributed
Net Investment
Income

 

Net
Investment
Income

 

Net
Unrealized
Appreciation
(Depreciation)

 

Net
Realized
Gain (Loss)

Increase
(Decrease)

 

$(213,700)

 

$(213,700)

 

$(159,793)

 

$(138,673)

 

$298,466

The Statement of Changes in Net Assets and Financial Highlights for prior periods have not been restated to reflect this change in presentation.

4. SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares.

Transactions in shares were as follows:

Year Ended November 30

 

2003

 

2002

Institutional Shares:

 

Shares

 

 

 

Amount

 

 

Shares

   

 

 

Amount

   

Shares sold

 

1,364,181

 

 

$

13,752,240

 

 

2,810,732

 

 

$

29,742,487

 

Shares issued to shareholders in payment
of distributions declared

 


120,801

 

 

 


1,235,050

 

 

156,935

 

 

 

1,644,763

 

Shares redeemed

 

(2,803,892

)

 

 

(28,320,189

)

 

(4,959,332

)

 

 

(51,125,280

)

NET CHANGE RESULTING FROM
INSTITUTIONAL SHARE TRANSACTIONS

 


(1,318,910

)

 

$


(13,332,899

)

 

(1,991,665

)

 

$

(19,738,030

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended November 30

 

2003

 

2002

Select Shares:

 

Shares

   

 

   

Amount

   

 

Shares

   

 

   

Amount

   

Shares sold

 

602,008

 

 

$

6,110,358

 

 

845,425

 

 

$

8,649,435

 

Shares issued to shareholders in payment
of distributions declared

 

48,227

 

 

 

492,474

 

 

65,429

 

 

 

686,074

 

Shares redeemed

 

(1,453,082

)

 

 

(14,416,885

)

 

(2,013,602

)

 

 

(20,576,637

)

NET CHANGE RESULTING FROM SELECT
SHARE TRANSACTIONS

 

(802,847

)

 

$

(7,814,053

)

 

(1,102,748

)

 

$

(11,241,128

)

NET CHANGE RESULTING FROM
SHARE TRANSACTIONS

 

(2,121,757

)

 

$

(21,146,952

)

 

(3,094,413

)

 

$

(30,979,158

)
                             

5. FEDERAL TAX INFORMATION

The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due in part to differing treatments for foreign currency transactions, defaulted interest, discount accretion/premium amortization on debt securities and tax allocated income from partnership.

For the year ended November 30, 2003, permanent differences identified and reclassified among the components of net assets were as follows:

Increase (Decrease)

Paid In Capital

 

Undistributed
Net Investment
Income

 

Accumulated Net
Realized Loss

$(46,820)

 

$1,071,384

 

$(1,024,564)

Net investment income, net realized gains (losses) as disclosed in the Statement of Operations, and net assets were not affected by this reclassification.

The tax character of distributions as reported on the Statement of Changes in Net Assets for the years ended November 30, 2003 and 2002 was as follows:

   

 

2003

 

2002

Ordinary income1

 

$2,049,320

 

$2,882,576

1 For tax purposes short-term capital gain distributions are considered ordinary income distributions.

As of November 30, 2003, the components of distributable earnings on a tax basis were as follows:

Undistributed ordinary income

 

$ 1,346,903

Net unrealized appreciation

 

$ 1,849,701

Capital loss carryforward

 

$10,879,337

The difference between book-basis and tax basis unrealized appreciation/depreciation is attributable in part to differing treatments for the deferral of losses from wash sales and discount accretion/premium amortization on debt securities.

At November 30, 2003, the cost of investments for federal tax purposes was $146,545,212. The net unrealized appreciation of investments for federal tax purposes excluding any unrealized appreciation resulting from changes in foreign currency exchange rates was $1,825,959. This consists of net unrealized appreciation from investment for those securities having an excess of value over cost of $2,467,395 and net unrealized depreciation from investments for those securities having an excess of cost over value of $641,436.

At November 30, 2003, the Fund had a capital loss carryforward of $10,879,337 which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows:

Expiration Year

 

Expiration Amount

2009

 

$4,101,638

2010

 

$6,777,699

6. INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES

Investment Adviser Fee

Federated Investment Management Company, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment adviser fee equal to 0.75% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion.

Certain of the Fund's assets are managed by Federated Global Investment Management Corp. (the "Sub-Adviser"). Under the terms of a sub-adviser agreement between the Adviser and the Sub-Adviser, the Sub-Adviser receives an allocable portion of the Fund's adviser fee. This fee is paid by the Adviser out of its resources and is not an incremental Fund expense.

Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the Fund may invest in other funds, which are managed by the Adviser or an affiliate of the Adviser. The Adviser has agreed to reimburse certain investment adviser fees as a result of these transactions. Income distributions earned from investments in these funds are recorded as income in the accompanying financial statements and are listed below.

Capital Appreciation Core Fund

 

$

101,534

Emerging Markets Fixed Income Core Fund

 

$

2,614

Federated Intermediate Income Fund

 

$

10,441

Federated Mortgage Core Portfolio

 

$

652,398

Federated U.S. Government Securities Fund: 2-5 years

 

$

4,337

High Yield Bond Portfolio

 

$

364,471

Prime Value Obligations Fund

 

$

5,538

Administrative Fee

Federated Administrative Services ("FAS"), under the Administrative Services Agreement ("Agreement"), provides the Fund with administrative personnel and services. The fee paid to FAS is based on the aggregate daily net assets of all Federated funds as specified below:

Maximum Administrative Fee

 

Average Aggregate Daily Net
Assets of the Federated Funds

0.150%

 

on the first $5 billion

0.125%

 

on the next $5 billion

0.100%

 

on the next $10 billion

0.075%

 

on assets in excess of $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 choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion.

Prior to November 1, 2003, Federated Services Company ("FServ") provided the Fund with administrative personnel and services. The fee paid to FServ was based on the average aggregate daily net assets of all Federated funds as specified below.

Maximum Administrative Fee

 

Average Aggregate Daily Net
Assets of the Federated Funds

0.150%

 

on the first $250 million

0.125%

 

on the next $250 million

0.100%

 

on the next $250 million

0.075%

 

on assets in excess of $750 million

The administrative fee received during any fiscal year was at least $125,000 per portfolio and $30,000 per each additional class of Shares.

For the year ended November 30, 2003 the fees paid to FAS and FServ were $142,260 and $12,862, respectively, after voluntary waiver, if applicable.

Distribution Services Fee

The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Select Shares. The Plan provides that the Fund may incur distribution expenses of up to 0.75% of average net assets, annually, to compensate FSC. The distributor may voluntarily choose to waive any portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion.

Shareholder Services Fee

Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund shares for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive and/or reimburse any portion of its fee. FSSC can modify or terminate this voluntary waiver and/or reimbursement at any time at its sole discretion.

Transfer and Dividend Disbursing Agent Fees and Expenses

FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type and number of accounts and transactions made by shareholders. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion.

Portfolio Accounting Fees

FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. FServ may voluntarily choose to waive any portion of its fee. FServ can modify or terminate this voluntary waiver at any time at its sole discretion.

General

Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies.

7. INVESTMENT TRANSACTIONS

Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations (and in-kind contributions), for the year ended November 30, 2003, were as follows:

Purchases

 

$

155,721,905

Sales

 

$

167,892,545

8. CONCENTRATION OF CREDIT RISK

The Fund invests in securities of non-U.S. issuers. Although the Fund maintains a diversified investment portfolio, the political or economic developments within a particular country or region may have an adverse effect on the stability of domiciled issuers to meet their obligations. Additionally, political or economic developments may have an effect on the liquidity and volatility of portfolio securities and currency holdings.

9. LEGAL PROCEEDINGS

In October, 2003, Federated Investors, Inc. and various subsidiaries thereof (collectively, "Federated"), along with various investment companies sponsored by Federated ("Funds") were named as defendants in several class action lawsuits filed in the United States District Court for the Western District of Pennsylvania seeking damages of unspecified amounts. The lawsuits were purportedly filed on behalf of people who purchased, owned and/or redeemed shares of Federated-sponsored mutual funds during specified periods beginning November 1, 1998. The suits are generally similar in alleging that Federated engaged in illegal and improper trading practices including market timing and late trading in concert with certain institutional traders, which allegedly caused financial injury to the mutual fund shareholders. The Board of the Funds has retained the law firm of Dickstein Shapiro Morin & Oshinsky LLP to represent the Funds in these lawsuits. Federated and the Funds, and their respectiv e counsel, are reviewing the allegations and will respond appropriately. Additional lawsuits based upon similar allegations may be filed in the future. Although Federated does not believe that these lawsuits will have a material adverse effect on the Funds, there can be no assurance that these suits, the ongoing adverse publicity and/or other developments resulting from related regulatory investigations will not result in increased Fund redemptions, reduced sales of Fund shares, or other adverse consequences for the Funds.

10. FEDERAL TAX INFORMATION (UNAUDITED)

For the year ended November 30, 2003, the Fund did not designate any long-term capital gain dividends.

For the fiscal year ended November 30, 2003, 46.23% of the distributions from net investment income paid by the Fund are qualifying dividends which may be subject to a maximum tax rate of 15% as provided for by the Jobs and Growth Tax Relief Act of 2003. Complete information will be reported in conjunction with your 2003 Form 1099-DIV.

Independent Auditors' Report

TO THE BOARD OF TRUSTEES OF FEDERATED MANAGED ALLOCATION PORTFOLIOS
AND SHAREHOLDERS OF FEDERATED MODERATE ALLOCATION FUND:

We have audited the accompanying statement of assets and liabilities, including the portfolio of investments, of Federated Moderate Allocation Fund (the "Fund") as of November 30, 2003, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to provide reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of the securities owned at November 30, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of the Federated Moderate Allocation Fund as of November 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with accounting principles generally accepted in the United States of America.

Deloitte & Touche LLP

Boston, Massachusetts
Janruary 23, 2004

Board of Trustees and Trust Officers

The Board is responsible for managing the Trust's business affairs and for exercising all the Trust's powers except those reserved for the shareholders. The following tables give information about each Board member and the senior officers of the Funds. 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. The Trust comprises three portfolios and the Federated Fund Complex consists of 44 investment companies (comprising 138 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Board member oversees all portfolios in the Federated Fund Complex; serves for an indefinite term; and also serves as a Board member of the following investment company complexes: Banknorth Funds--fou r portfolios; Golden Oak® Family of Funds--seven portfolios and WesMark Funds--five portfolios. The Fund's Statement of Additional Information includes additional information about Trust Trustees and is available, without charge and upon request, by calling 1-800-341-7400.

INTERESTED TRUSTEES BACKGROUND

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began





 




Principal Occupation(s), Previous Position(s)
and Other Directorships Held

John F. Donahue*
 Birth Date: July 28, 1924
CHAIRMAN AND TRUSTEE
Began serving: November 1993

 

Principal Occupations: Chairman and Director or Trustee of the
Federated Fund Complex; Chairman and Director, Federated Investors, Inc.

Previous Positions: Trustee, Federated Investment Management Company and Chairman and Director, Federated Investment Counseling.

 

 

 

J. Christopher Donahue*
 Birth Date: April 11, 1949
PRESIDENT AND TRUSTEE
Began serving: January 2000

 

Principal Occupations: Principal Executive Officer and President of the Federated Fund Complex; Director or Trustee of some of the Funds in the Federated Fund Complex; President, Chief Executive Officer and Director, Federated Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Passport Research, Ltd.; Trustee, Federated Shareholder Services Company; Director, Federated Services Company.

Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport
Research. Ltd.

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began





 




Principal Occupation(s), Previous Position(s)
and Other Directorships Held

Lawrence D. Ellis, M.D.*
 Birth Date: October 11, 1932
3471 Fifth Avenue
Suite 1111
Pittsburgh, PA
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Professor of Medicine, University of Pittsburgh; Medical Director, University of Pittsburgh Medical Center Downtown; Hematologist, Oncologist and Internist, University of Pittsburgh Medical Center.

Other Directorships Held: Member, National Board of Trustees,
Leukemia Society of America.

Previous Positions: Trustee, University of Pittsburgh; Director,
University of Pittsburgh Medical Center.

 

 

 

* Family relationships and reasons for "interested" status: John F. Donahue is the father of J. Christopher Donahue; both are "interested" due to the positions they hold with Federated Investors, Inc. and its subsidiaries. Lawrence D. Ellis, M.D. is "interested" because his son-in-law is employed by the Fund's principal underwriter, Federated Securities Corp.

INDEPENDENT TRUSTEES BACKGROUND

 

 

 

Name
Birth Date
Address
Positions Held with Trust
Date Service Began





 




Principal Occupation(s), Previous Position(s)
and Other Directorships Held

Thomas G. Bigley
 Birth Date: February 3, 1934
15 Old Timber Trail
Pittsburgh, PA
TRUSTEE
Began serving: November 1994

 

Principal Occupation: Director or Trustee of the Federated Fund Complex.

Other Directorships Held: Director, Member of Executive Committee, Children's Hospital of Pittsburgh; Director, University of Pittsburgh.

Previous Position: Senior Partner, Ernst & Young LLP.

 

 

 

John T. Conroy, Jr.
 Birth Date: June 23, 1937
Grubb & Ellis/Investment
Properties Corporation
3838 North Tamiami Trail
Suite 402
Naples, FL
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Chairman of the Board, Investment Properties Corporation; Partner or Trustee in private real estate ventures in Southwest Florida.

Previous Positions: President, Investment Properties Corporation; Senior Vice President, John R. Wood and Associates, Inc., Realtors; President, Naples Property Management, Inc. and Northgate Village Development Corporation.

 

 

 

Nicholas P. Constantakis
 Birth Date: September 3, 1939
175 Woodshire Drive
Pittsburgh, PA
TRUSTEE
Began serving: January 2000

 

Principal Occupations: Director or Trustee of the Federated Fund Complex.

Other Directorships Held: Director and Member of the Audit Committee, Michael Baker Corporation (engineering and energy services worldwide).

Previous Position: Partner, Andersen Worldwide SC.

 

 

 

John F. Cunningham
 Birth Date: March 5, 1943
353 El Brillo Way
Palm Beach, FL
TRUSTEE
Began serving: January 1999

 

Principal Occupation: Director or Trustee of the Federated Fund Complex.

Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting);
Trustee Associate, Boston College.

Previous Positions: Director, Redgate Communications and EMC Corporation (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. Madden
 Birth Date: March 16, 1942
One Royal Palm Way
100 Royal Palm Way
Palm Beach, FL
TRUSTEE
Began serving: November 1993

 

Principal Occupation: Director or Trustee of the Federated Fund Complex; Management Consultant.

Other Directorships Held: Board of Overseers, Babson College.

Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange.

 

 

 

Charles F. Mansfield, Jr.
 Birth Date: April 10, 1945
80 South Road
Westhampton Beach, NY
TRUSTEE
Began serving: January 1999

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Management Consultant; Executive Vice President, DVC Group, Inc. (marketing communications and technology) (prior to 9/1/00).

Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP);
Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly, Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University.

 

 

 

John E. Murray, Jr., J.D., S.J.D.
 Birth Date: December 20, 1932
Chancellor, Duquesne University
Pittsburgh, PA
TRUSTEE
Began serving: February 1995

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Chancellor and Law Professor, Duquesne University;
Partner, Murray, Hogue and Lannis.

Other Directorships Held: Director, Michael Baker Corp.
(engineering, construction, operations and technical services).

Previous Positions: President, Duquesne University;
Dean and Professor of Law, University of Pittsburgh School of Law;
Dean and Professor of Law, Villanova University School of Law.

 

 

 

Marjorie P. Smuts
 Birth Date: June 21, 1935
4905 Bayard Street
Pittsburgh, PA
TRUSTEE
Began serving: November 1993

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; Public Relations/Marketing Consultant/Conference Coordinator.

Previous Positions: National Spokesperson, Aluminum Company of America; television producer; President, Marj Palmer Assoc.;
Owner, Scandia Bord.

 

 

 

John S. Walsh
 Birth Date: November 28, 1957
2604 William Drive
Valparaiso, IN
TRUSTEE
Began serving: January 1999

 

Principal Occupations: Director or Trustee of the Federated Fund Complex; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director, Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc.

Previous Position: Vice President, Walsh & Kelly, Inc.

 

 

 

OFFICERS

 

 

 

Name
Birth Date
Positions Held with Trust
Date Service Began




 




Principal Occupation(s) and Previous Position(s)

John W. McGonigle
 Birth Date: October 26, 1938
EXECUTIVE VICE PRESIDENT
AND SECRETARY
Began serving: November 1993

 

Principal Occupations: Executive Vice President and Secretary of the Federated Fund Complex; Executive Vice President, Secretary and Director, Federated Investors, Inc.

 

 

 

Richard J. Thomas
 Birth Date: June 17, 1954
TREASURER
Began serving: November 1998

 

Principal Occupations: Principal Financial Officer and
Treasurer of the Federated Fund Complex; Senior Vice President,
Federated Administrative Services.

 

 

 

Richard B. Fisher
 Birth Date: May 17, 1923
VICE PRESIDENT
Began serving: November 1993

 

Principal Occupations: Vice Chairman or President of some of the Funds in the Federated Fund Complex; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp.

Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Complex; Executive Vice President, Federated Investors, Inc. and Director and Chief Executive Officer, Federated Securities Corp.

 

 

 

John W. Harris
 Birth Date: June 6, 1954
VICE PRESIDENT
Began serving: November 1999

 

John W. Harris is Vice President of the Trust. Mr. Harris initially joined Federated in 1987 as an Investment Analyst. He served as an Investment Analyst and an Assistant Vice President from 1990 through 1992 and as a Senior Investment Analyst and Vice President through May 1993. After leaving the money management field to travel extensively, he rejoined Federated in 1997 as a Senior Investment Analyst and became a Portfolio Manager and an Assistant Vice President of the Fund's Adviser in December 1998. In January 2000, Mr. Harris became a Vice President of the Fund's Adviser. Mr. Harris is a Chartered Financial Analyst. He received his M.B.A. from the University of Pittsburgh.

 

 

 

Mutual funds are not bank deposits or obligations, are not 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. Investment in mutual funds involves investment risk, including the possible loss of principal.

This report is authorized for distribution to prospective investors only when preceded or accompanied by the Fund's prospectus, which contains facts concerning its objective and policies, management fees, expenses, and other information.

VOTING PROXIES ON FUND PORTFOLIO SECURITIES

A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. This information is also available from the EDGAR database on the SEC's Internet site at http://www.sec.gov.

 

[Logo of Federated Investors]

Federated Moderate Allocation Fund
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
www.federatedinvestors.com

Contact us at 1-800-341-7400 or
www.federatedinvestors.com/contact

Federated Securities Corp., Distributor

Cusip 314212606
Cusip 314212507

G00871-01 (1/04)

Federated is a registered mark of Federated Investors, Inc.
2004 © Federated Investors, Inc.



Item 2.     Code of Ethics

As of the end of the period covered by this report, the registrant has
adopted a code of ethics (the "Section 406 Standards for Investment Companies
- Ethical Standards for Principal Executive and Financial Officers") that
applies to the registrant's Principal Executive Officer and Principal
Financial Officer; the registrant's Principal Financial Officer also serves
as the Principal Accounting Officer.

The registrant hereby undertakes to provide any person, without charge, upon
request, a copy of the code of ethics.  To request a copy of the code of
ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the
Section 406 Standards for Investment Companies - Ethical Standards for
Principal Executive and Financial Officers.


Item 3.     Audit Committee Financial Expert

The registrant's Board has determined that each member of the Board's Audit
Committee is an "audit committee financial expert," and that each such member
is "independent," for purposes of this Item.  The Audit Committee consists of
the following Board members:  Thomas G. Bigley, John T. Conroy, Jr., Nicholas
P. Constantakis and Charles F. Mansfield, Jr.


Item 4.     Principal Accountant Fees and Services

            Not Applicable

Item 5      Audit Committee of Listed Registrants

            Not Applicable

Item 6      [Reserved]

Item 7.     Disclosure of Proxy Voting Policies and Procedures for Closed-End
            Management Investment Companies

            Not Applicable

Item 8.     Purchases of Equity Securities by Closed-End Management
            Investment Company and Affiliated Purchasers

            Not Applicable

Item 9.     Submission of Matters to a Vote of Security Holders

            Not Applicable

Item 10.    Controls and Procedures

(a) The registrant's President and Treasurer have concluded that the
registrant's disclosure controls and procedures (as defined in rule 30a-3(c)
under the Act) are effective in design and operation and are sufficient to
form the basis of the certifications required by Rule 30a-(2) under the Act,
based on their evaluation of these disclosure controls and procedures within
90 days of the filing date of this report on Form N-CSR.

(b) There were no changes in the registrant's internal control over financial
reporting (as defined in rule 30a-3(d) under the Act), or the internal
control over financial reporting of its service providers during the last
fiscal half year (the registrant's second half year in the case of an annual
report) that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.

Item 11.    Exhibits













SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant  Federated Managed Allocation Portfolios

By          /S/Richard J. Thomas, Principal Financial Officer
                            (insert name and title)

Date          January 27, 2004


Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.


By          /S/J. Christopher Donahue, Principal Executive Officer


Date        January 27, 2004


By          /S/ Richard J. Thomas, Principal Financial Officer


Date        January 27, 2004