Top 5 Federated Mutual Funds (May 2011)

Founded in 1955, Federated Investors is one of the largest investment managers in the U.S. With more than $358 billion worth of assets under management, the company has used a disciplined approach to deliver superior value to investors. Federated offers a wide range of products, including domestic and international equity, fixed-income and money market funds. These products are distributed through more than 5,200 financial intermediaries and institutions.

Below we will share with you 5 top rated Federated mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future.

Federated Capital Income A (CAPAX) seeks long-term income growth with capital growth as a secondary objective. The fund invests in debt and equity securities with the potential to deliver high levels of income. It focuses on purchasing stocks of large and mid-cap firms which consistently offer high dividends. The fund has a ten year annualized return of 3.68%.

John Nichol is the fund manager and has managed this Federated mutual fund since 2000.

Federated Kaufmann A (KAUAX) focuses on investing in small and mid-cap companies. The fund primarily purchases common stocks of companies after evaluating growth, the economic outlook for its particular industry and financial characteristics. Not more than 305 of its assets are invested in foreign securities. The fund has a ten year annualized return of 4.83%.

As of March 2011, this Federated mutual fund held 175 issues, with 4.77% of its total assets invested in CETIP SA Balcao Organizado de Ativos e Derivativos.

Federated Bond A (FDBAX) invests the majority of its assets in fixed income investment grade securities including corporate debt and U.S. government securities. Up to 35% of the securities purchased may be rated below investment grade. The fund has a three year annualized return of 7.85%.

The Federated mutual fund has a minimum initial investment of $1,500 and an expense ratio of 0.99% compared to a category average of 0.94%.

Federated Strategic Income A (STIAX) seeks high current income. The fund invests in three major categories of fixed-income securities. These include domestic securities rated below investment grade as well as those rated higher and foreign securities. Not more than 50% of its assets may be invested in any single category. The fund has a three year annualized return of 8.91%.

Joseph M. Balestrino is the fund manager and has managed this Federated mutual fund since 1996.

Federated Asset Allocation A (FSTBX) invests 20% to 80% of its assets in equity securities and 20% to 80% of its assets in fixed-income securities. The fund may also invest in exchange traded funds, derivative contracts and other synthetic instruments. The fund returned 18.28% over the last one year period.

The Federated mutual fund has a minimum initial investment of $1,500 and an expense ratio of 1.25% compared to a category average of 1.01%.

To view the Zacks Rank and past performance of all Federated mutual funds, then click here.

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