Attribution Report Returns by Industry, Sector and Asset Classes 4/21/2017 12:52 AM Attribution Report Returns by Industry, Sector and Asset Classes Prabhu Ramamoorthy Feb 21, 2010 © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Federated Total Return Bond Series 4/21/2017 12:52 AM Federated Total Return Bond Series Benchmark – Barclays Capital US Aggregate Weighted Average Effective Maturity 6.1 Yrs Weighted Average Effective Duration 4.3 Yrs. Weighted Average Coupon 5.32% Weighted Average YTM 4 .31% Weighted Average Quality AA-, A2 Source:  http://www.nesteggu.com/common/FundSheets/FTRBX.pdf Source: http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser Can also be calculated from historical prices http://www.andreassteiner.net/performanceanalysis/?download=SingleIndexModelCalcs.xls Beta 9.7 R Square 0.77 Alpha 0.05 © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Bond Market Review Bond Index Returns 4Q09 vs. 1 Year 09 4/21/2017 12:52 AM Bond Market Review Bond Index Returns 4Q09 vs. 1 Year 09 Source: https://www2.blackrock.com/webcore/litService/search/getDocument.seam?venue=PUB_INS&source=CONTENT&ServiceName=PublicServiceView&ContentID=44788 Source: http://feg-research.com/pdfs/December%20Research%20Review.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Bond Market Review Sector Returns 4Q09 vs. 1 Year 09 4/21/2017 12:52 AM Bond Market Review Sector Returns 4Q09 vs. 1 Year 09 High Yield> CMBS>Corporate IG >ABS>MBS>Agencies>Treasuries in 4Q 2009 High Yield> CMBS>ABS>Corporate IG> Municipals>MBS>Agencies>Treasuries in 1 year Source: http://www.loomissayles.com/internet/internet.nsf/($DocumentID)/E03D1D1D94B95D1B8525753600784A12/$FILE/BondMarketReview.pdf Source: https://www.deferralselect.com/System/exb/exb_includes/Q4'09%20Market%20Update.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Bond Market Review Credit Returns 4Q09 vs. 1 Year 09 4/21/2017 12:52 AM Bond Market Review Credit Returns 4Q09 vs. 1 Year 09 Lower the Credit Rating, Higher the Returns. Increasing Risk appetite and stabilization High Yields most attractive, Less Default and tightening credit spreads Source: http://www.loomissayles.com/internet/internet.nsf/($DocumentID)/E03D1D1D94B95D1B8525753600784A12/$FILE/BondMarketReview.pdf Source: https://www.deferralselect.com/System/exb/exb_includes/Q4'09%20Market%20Update.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Bond Market Review Industry – Investment Grade Option adjusted spreads 4/21/2017 12:52 AM Bond Market Review Industry – Investment Grade Option adjusted spreads As on Nov 9, 2009 2006 2007 2008Q4 2009Q2 9-Nov Aerospace and Defense 93 153 375 237 181 Bank 79 208 524 387 257 Brokerage 74 213 539 404 274 Capital Goods 112 168 397 231 175 Consumer Products 177 534 381 194 CPEG 138 201 463 270 263 Forest Products & Building Materials 174 261 834 543 378 Healthcare 104 160 351 191 146 High Technology 118 558 273 193 Spreads started to tighten due to stabilization and economic recovery Note: Spreads highest during 2008Q4 during financial crisis Source: http://www.scribd.com/doc/24163763/S-P-Capital-IQ-s-Monthly-Market-Observations-December-2009 Source: http://feg-research.com/pdfs/December%20Research%20Review.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Bond Market Review Industry – Investment Grade Option adjusted spreads 4/21/2017 12:52 AM Bond Market Review Industry – Investment Grade Option adjusted spreads As on Nov 9, 2009 2006 2007 2008Q4 2009Q2 9-Nov Home Builders and Real Estate 112 245 663 595 399 Insurance 118 240 706 486 327 Integrated Oil and Gas 109 155 479 266 206 Media and Entertainment 181 255 675 448 294 Metals Mining and Steel 152 201 753 484 315 Oil Gas Exploration and Production 133 537 299 223 Retail and Restaurants 124 229 597 234 176 Telecommunication 187 243 555 Transportation 114 214 544 316 Utility 117 207 272 196 Source: http://www.scribd.com/doc/24163763/S-P-Capital-IQ-s-Monthly-Market-Observations-December-2009 © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Bond Market Review Industry – Investment Grade Option adjusted spreads 4/21/2017 12:52 AM Bond Market Review Industry – Investment Grade Option adjusted spreads Sample Spread Time Plot for Select Industries Even though Spreads have started to tighten, Spreads as on Nov 9,2009 are still not at 2006 levels Source: http://www.scribd.com/doc/24163763/S-P-Capital-IQ-s-Monthly-Market-Observations-December-2009 © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Yield Curve Steepening over 09 4/21/2017 12:52 AM Yield Curve Steepening over 09 Yield Curve became steep due to Fed support. Fed discount and reserve rate kept low Once Fed pulls back and stops monetary easing, interest rates expected to rise Source: http://www.ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_2009.shtml © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Composition Sector 4/21/2017 12:52 AM FTRB Composition Sector Core Plus Strategy – In addition to Benchmark, FTRB has High Yield Securities in portfolio holdings Source:  http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Barclays Aggregate Sector Composition 4/21/2017 12:52 AM FTRB Barclays Aggregate Sector Composition No Municipal Bonds. BBB and lower - zero Source:  http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser Source:  http://www.lordabbett.com/institutional/resources/pdfs/productpdfs/LA_PdtProfile_CoreFixedInc.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Allocation Sector FTBR vs. BCAB 4/21/2017 12:52 AM FTRB Allocation Sector FTBR vs. BCAB Treasuries, Agencies – Underweight, Corporate, High Yield - Overweight Source:  http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser Source:  http://www.lordabbett.com/institutional/resources/pdfs/productpdfs/LA_PdtProfile_CoreFixedInc.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Allocation Credit FTBR vs. BCAB 4/21/2017 12:52 AM FTRB Allocation Credit FTBR vs. BCAB Treasuries, Agencies – Underweight, AA and Below - Overweight Source:  http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser Source:  http://www.lordabbett.com/institutional/resources/pdfs/productpdfs/LA_PdtProfile_CoreFixedInc.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Performance Attribution Factors 4/21/2017 12:52 AM FTRB Performance Attribution Factors FTRB Return attribution white paper strategy at http://www.thefirma.org/2008_conference/aboutfederated/White%20Paper-%20Alpha%20Strategies.pdf Return is attributed and split into Sector Allocation –Treasuries, MBS, CMBS, ABS, Corporate High Yield Security Selection – Bottom up analysis considering sector also Duration – Interest Rate Risk Yield Curve – Maturity, Barbell, Ladder, Bullet Currency – Currency risk, Investing in dollar denominated foreign instruments Source:  http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Allocation Impact on Returns 4/21/2017 12:52 AM FTRB Allocation Impact on Returns Active Returns due to Sector Allocation is significant Asset Allocation (a(i)p – a(i)b) Multiplied By Benchmark Sector Return r(i)b =Active Asset Allocation Return for Sector(i) Total Asset Allocation Return ∑iєS(a(i)-a(i)b)*r(i)b Explains most of the excess returns over benchmark Source:  http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Split up by Attribution Factors 4Q09 4/21/2017 12:52 AM FTRB Split up by Attribution Factors 4Q09 Asset Allocation by sector – Summation of ∑iєS(a(i)-a(i)b)*r(i)b almost explains 97 bp return Source:  http://www.federatedinvestors.com/daf/pdf/portfolio_attribution/41115.pdf Source:  Annual Report http://www.federatedinvestors.com/daf/pdf/sai/G01722-02.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Attribution Report Comment 4/21/2017 12:52 AM FTRB Attribution Report Comment Return vs. Benchmark Comments Duration Positive in 4Q 2009 and provided 22 bp of return vs. benchmark . Fund Set to lower duration than that of Benchmark in expectation of Rising Interest Rate. But early on in year, duration effect was detracting with respect to BCAB as interest rates fell during summer with Fed support in market. Sector Allocation Provided 97 bp of return. Significant contribution relative to Benchmark over the year Underweight in Treasuries Overweight in High Yields, Corporate Yield Curve 1 basis point in 4Q 2009. Positive. During Summer 2009, Interest rates declined across all maturities. Fund held lesser long term maturity when compared to Barclays Aggregate Bond Index. Hence impact here was lesser and could have been more. Security Selection Negative for 4th Quarter. Selection was positive over a longer year horizon. Holdings in High Quality MBS. Over the year ,Core Mortgage Holdings Outperformed Barclays MBS and led to positive returns. Other security selection in other sectors contributed relatively little to total performance. Source:  http://www.federatedinvestors.com/daf/pdf/portfolio_attribution/41115.pdf Source:  http://www.federatedinvestors.com/daf/pdf/sai/G01722-02.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

FTRB Attribution Strategy and active bets in future 4/21/2017 12:52 AM FTRB Attribution Strategy and active bets in future Treasury Underweight Rising Interest Rate and sensitivity. Short term rates expected to rise once Fed takes action and pulls out MBS Rising Rates and End of Fed MBS Purchase program. Higher Interest rates may bring extension risk and higher duration with slower prepayment, variability and default risk High Yield, Corporate Overweight Tightening Credit Spread, Lower Defaults Emerging Market Debt Emerging countries have better economic fundamentals, Lower Debt as percent of GDP Duration 85% of Benchmark Duration Management with respect to Benchmark expecting rising rates Source:  http://www.federatedinvestors.com/sc?cid=54385&link=commentary&templ=commentaryLeaf&ut=unregistered_webuser Source:  http://www.federatedinvestors.com/daf/pdf/sai/G01722-02.pdf © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

Important Links, References 4/21/2017 12:52 AM Important Links, References For all fixed income research material and outlook used for the analysis, go to http://www.raghavendraprabhu.com/node/73. The page has compiled the link to all materials and is very helpful for market outlook and review of past returns For Attribution Strategy of FTBR go to http://www.thefirma.org/2008_conference/aboutfederated/White%20Paper-%20Alpha%20Strategies.pdf For FTBR, go to http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser. The data from Annual reports and other public available information has been used. Approximate Portfolio holdings in Excel sheet Other Web Sites -Yahoo finance, Treasury yield curve, References to data and reports from publicly available sources have been used Benchmark data was collected from different sources including other prospectuses, fund reports. Detailed Benchmark data not available for extensive sector and security analysis Source:  http://www.federatedinvestors.com/ffw/funds/fundoverview.do?basketid=1022&fundshareid=1347&link=products&ut=unregistered_webuser © 2007 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.