1. Space City Cash Conference Houston Treasury Management Association
Mark F. Weiss, CFA Vice President Senior Investment Analyst Portfolio Manager Federated Investment Management Company September 20, 2017
Federated Securities Corp. Distributor (9/17)

2. Overview of Money Market Reform
Fund Type
Net Asset Value
Liquidity Fee/Redemption Gate Eligible
U.S. Treasury
Stable No
Government
Retail prime
Yes
Retail municipal
Institutional prime
Floating
Institutional municipal
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3. MMF Industry Assets by Category: 9/30/15 – 6/5/17
Money Market Reform
October 14, 2016
Source: iMoneyNet
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4. Federated MMF Assets By Category: 9/30/15 – 6/5/17
Money Market Reform
October 14, 2016
Source: Federated
INSTITUTIONAL Sales Material. Not for distribution to the public.

5. Total Money Market Assets ($ in Millions)
9/30/15
12/30/16
8/8/17
$ Change
12/30/16 – 8/8/17
Prime
$1,435,138
$ 374,384
$ 424,722
+50,338
Government
970,713
2,181,078
2,102,970
(78,108)
Tax-Free
242,806
130,272
130,726
+454
Total
$2,648,658
$2,685,734
$2,658,418
(27,316)
Source: iMoneyNet
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6. Prime Institutional Money Market Funds
There are currently 47 Prime Institutional money market funds with total assets of $173B
Only 4 funds have total assets over $10B, one of these funds is not available publicly
5 funds have total assets between $5B and $10B
38 funds have total assets of less than $5B
Source: iMoneyNet, August 18, 2017
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7. Managed According to Rule 2a-7
Credit Quality
Liquidity
Maturity
Diversification
Periodic Stress Tests
Rule 2a-7 is a rule under the Investment Company Act of 1940 regulating money market funds. Rule 2a-7 imposes various requirements on the money market fund’s portfolio, including regulation related to maturity, credit qualification and diversification.
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8. Federated’s Risk Mitigation
Interest Rate Risk
Security maturity restriction < 397 days
Weighted Average Maturity (WAM) restriction < 60 days
Weighted Average Life (WAL) restriction < 120 days
Liquidity Risk
Daily liquid assets > 10%
Weekly liquid assets > 30%
Investment Concentration Risk^
< 5% for individual issuers
< 10% for individual guarantors
Credit Risk Mitigation
Bank Municipal and corporate credit committees
Review issuers and assign internal Federated credit rating
Develop approved issuer database; ongoing monitoring
Portfolio management strategy and construction
Traders select securities from approved issuer database
Periodic Stress Tests
Interest rate stress
Credit stress
Redemption stress
Combined stresses
Spread widening stress
Client Concentration Risk
Know Your Clients Rule (KYC)
Regular monitoring/periodic reporting
^Except for repurchase agreements with Treasury or Agency collateral, subject to limitations.
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9. Only Slight Movements in Floating NAV Institutional MMFs
Fed rate hikes on:
Dec. 14, 2016
Mar. 15, 2017
Largest Prime Institutional Fund NAV Ranges, October 2016-April 2017
October 2016
November 2016
December 2016
January 2017
February 2017
March 2017
April 2017
MIN
MAX
BlackRock Cash Funds: Instit/SL
47,745.4
1.0000
1.0002
1.0003
1.0004
1.0005
JPMorgan Prime MMF/Capital
18,712.1
BlackRock Liquidity:TempFund Inst
12,304.2
1.0006
Fidelity Inv Prime MMkt/Instit
9,884.7
State Street Inst Liq Resvs/Prem
8,060.2
1.0001
JPMorgan Prime MMF/Instit
6,242.5
Federated Instit Prime Val Oblg/Svc
4,005.1
Morgan Stanley ILF/Prime/Inst
3,684.1
Wells Fargo Heritage MMF/Select
3,259.2
Dreyfus Inst Preferred MMF/Instit
3,123.6
UBS Select Prime Institutional Fund
2,307.2
Dreyfus Cash Mgmt/Instit
2,224.5
JPMorgan Prime MMF/IM
1,935.6
Goldman Sachs FS MMF/Inst
1,919.4
Northern Inst Prime Obligs/Shares
1,868.9
Western Asset Inst Cash Res/Inst
1,683.6
JPMorgan Prime MMF/Agency
1,355.7
State Street Inst Liq Resvs/Trust
1,333.3
Goldman Sachs FS Prime Oblig/Inst
1,051.1
Fidelity Inv Prime Reserves/Instit
1,014.8
Source: iMoneyNet (Money Fund Report), 5/26/17
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10. FNAV Money Market Funds – How Much Spread is Enough?
The Answer Depends on the Investor.
A month or less
Between 1 and 2 months
Between 2 and 3 months
Between 3 and 6 months
Key Decision Factors:
Type of Cash: Liquidity vs. Investment
Time Horizon
Market Environment
Flexibility
Initial Investment
$ 10,000,000
If the NAV dropped from $ to:
Then the principal loss that would need to be made up would be:
And the number of days needed to recoup the loss at various incremental yield spreads to stable NAV alternatives would be:
20 bps spread
35 bps spread
50 bps spread
$0.9999
($1,000) 19 11 8
$0.9998
($2,000) 37 21 15
$0.9997
($3,000) 55 32 22
$0.9996
($4,000) 73 42 30
$0.9995
($5,000) 92 53
$0.9994
($6,000)
110 63 44
$0.9993
($7,000)
128 52
$0.9992
($8,000)
146 84 59
$0.9991
($9,000)
165 94 66
$0.9990
($10,000)
183
105
Other Points to Consider:
Shadow NAV disclosure
Information is not representative of any actual, implied or expected results. The results described are hypothetical only and they do not represent any actual investment. Information should not be taken as any indication that any strategy employed by any fund will achieve similar results.
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11. Current Yield Potential%
Past performance is no guarantee of future results. This chart is for illustrative purposes only.
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12. 7-Day Net Yields as of June 30, 2017 Spread vs. Treasury Fund
Yield Spreads
7-Day Net Yields as of June 30, 2017
Fund Type
7-Day Net Yield
Spread vs. Treasury Fund
Treasury Money Market Fund
0.83% --
Government Agency Money Market Fund
0.85%
+2 bp
Prime Institutional Money Market Fund
1.12%
+29 bp
Performance data quoted represents past performance which is no guarantee of future results. Investment return will vary. An investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, contact us or visit FederatedInvestors.com.
Source: Federated Investors Treasury Money market Fund is based on 7-Day Net Yield of Federated’s Treasury Obligations Fund (IS Shares), Government Agency Money Market Fund is based on 7 -Day Net Yield of Federated’s Government Obligations Fund (IS Shares), Prime Institutional Money Market Fund is based on 7-Day Net Yield of Federated’s Institutional Prime Obligations Fund (IS Shares). 7-day Unsubsidized Net Yield are as follows: Federated’s Treasury Obligation's Fund (IS Shares) is 0.75, Federated’s Government Obligation's Fund (IS Shares) is 0.67, and Federated’s Institutional Prime Obligation's Fund (IS Shares) is See Slide 13 for additional information on Treasury Obligations, Government Obligations Fund, Institutional Prime Obligations Fund.
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13. Incremental additional accrued income: $118,030
Hypothetical of a $100,000,000 Allocation (Time period 10/1/16 to 6/30/17)
Option 1 –
Invest 100% Govt. Money Market Fund
Annualized Total Return: 0.52%
Option 2 –
Invest 50% Govt./ 50% Institutional Prime
Prime Annualized Total Return: 0.83%
Accrued Income: $601,720
Government
100%
Accrued Income: 385,661
Incremental additional accrued income: $118,030
Performance data quoted represents past performance which is no guarantee of future results. Investment return will vary. An investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than what is stated. To view performance current to the most recent month-end, contact us or visit FederatedInvestors.com.
Assumes monthly interest compounding for both investments.
Source: Federated Investors: Option 1 is based on monthly interest compounding of Federated’s Government Obligations Fund (IS Shares), Option 2 is based on monthly interest compounding of Federated’s Government Obligations Fund (IS Shares) and monthly interest compounding of Federated’s Institutional Prime Obligations Fund (IS Shares).
For illustrative purposes only.
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14. Disclosure
These materials are intended for use by sophisticated parties as described in Section (c)(1) of the Department of Labor’s Fiduciary Rule, 81 Fed. Reg. 68, at (April 8, ).  Federated is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity for purposes of the Employee Retirement Income Security Act of 1974, as amended or section 4975 of the Internal Revenue Code of 1986, as amended or otherwise in connection with the sale or distribution of our products and services to in-scope clients such as ERISA plans and IRAs (“Transaction”).  While Federated has a financial interest in a Transaction because Federated earns revenue from the sale of our products and services, Federated does not receive a fee or other compensation directly from you or your in-scope clients for the provision of investment advice (as opposed to other services) in connection with any Transaction.
Investors should carefully consider the fund’s investment objectives, risks, charges and expenses before investing. To obtain a summary prospectus or prospectus containing this and other information, contact us or visit FederatedInvestors.com. Please carefully read the summary prospectus or the prospectus before investing.
Money Market Fund Disclosures:
Institutional: You could lose money by investing in the fund. Because the share price of the fund will fluctuate, when you sell your shares, they may be worth more or less than what you originally paid for them. The fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the fund's liquidity falls below required minimums because of market conditions or other factors. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund's sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
Government/Treasury: You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s sponsor has no legal obligation to provide financial support to the fund, and you should not expect that the sponsor will provide financial support to the fund at any time.
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