FBL Money
Market Fund, Inc.
SEMI-ANNUAL REPORT
JANUARY 31, 1997
INVESTMENT MANAGER AND
PRINCIPAL UNDERWRITER
FBL INVESTMENT ADVISORY
SERVICES, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IA 50266
1-800-247-4170 (OUTSIDE IOWA)
1-800-422-3175 (IN IOWA)
225-5586 (DES MOINES)
This report is not to be distributed
unless preceded or accompanied by
a prospectus.
FARM BUREAU MUTUAL FUNDS
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
[LOGO]
FARM BUREAU
FINANCIAL SERVICES
LIVING BESIDE YOU. WORKING FOR YOU. (R)
737-127 (97)
PRESIDENT'S LETTER
Dear Shareholder,
Although short-term interest rates did not change much during 1996,
expectations about such changes gyrated wildly. The year began with a 25
basis-point drop in the Federal funds rate to 5.25% with the feeling there
would be another rate drop during the spring. Yet, on Good Friday, a
surprisingly low unemployment figure was released providing incentive for the
Federal Reserve to hold interest rates steady. In July, another surprise
unemployment release, this time a strong one, ratcheted interest rates higher
in anticipation of a rate increase.
However, as the year progressed, the temperature cooled and so did the
expectations for a rate increase. Economic figures showed that this was a
"Goldilocks economy", that is, everything was just right. The United States
economy appeared to be fine in this long running expansion, and the voters
returned President Clinton to office to continue the moderate growth pattern
of the country. There were some concerns that the stock market was displaying
"irrational exuberance", as Chairman Greenspan called it, with regard to the
dizzying heights that stock valuations were reaching throughout the year.
Looking ahead, the spread between the 90-day Treasury bill and the 2-year
Treasury note is almost 1%, which is wider than normal, indicating the
markets anticipate a rate increase by the Federal Reserve sometime this
spring. Whether markets gyrate due to interest rate movements or stock market
activity, the FBL Money Market Fund strives to maintain liquidity, safety of
principal and diversification for its shareholders.
/s/ EDWARD M. WIEDERSTEIN
EDWARD M. WIEDERSTEIN
PRESIDENT
March 17, 1997
<TABLE>
<CAPTION>
FBL MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1997
(UNAUDITED)
<S> <C>
ASSETS
Investments in securities, at value
(equivalent to amortized cost) ........................... $23,927,479
Cash .......................................................... 63,998
Receivables:
Due from FBL Investment Advisory Services, Inc. .............. 9,793
Accrued interest ............................................. 16,149
-----------
Total Assets .................................................. $24,017,419
===========
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable to FBL Investment Advisory Services, Inc. ... $ 12,796
Accrued expenses ............................................. 5,479
-----------
Total Liabilities ............................................. 18,275
Net assets applicable to 23,999,144 shares
of capital stock outstanding ................................. 23,999,144
-----------
Total Liabilities and Net Assets .............................. $24,017,419
===========
NET ASSET VALUE PER SHARE ..................................... $ 1.00
===========
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
FBL MONEY MARKET FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1997
(UNAUDITED)
<S> <C>
INVESTMENT INCOME
Interest ........................................................ $ 658,863
EXPENSES
Paid to FBL Investment Advisory Services, Inc.:
Investment advisory and management fees ........................ 51,006
Shareholder service, transfer and dividend disbursing agent fees 65,689
Accounting fees ................................................ 6,176
Custodian fees .................................................. 24,382
Legal fees ...................................................... 8,797
Directors' fees and expenses .................................... 4,457
Reports to shareholders ......................................... 22,047
Registration fees ............................................... 14,395
Miscellaneous ................................................... (1,887)
---------
Total Expenses .................................................. 195,062
Expense reimbursement ........................................... (9,793)
---------
Net Expenses .................................................... 185,269
---------
Net Increase in Net Assets Resulting from Operations ............ $ 473,594
=========
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
FBL MONEY MARKET FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JANUARY 31, 1997 YEAR ENDED
(UNAUDITED) JULY 31, 1996
----------- -------------
<S> <C> <C>
OPERATIONS
Net investment income .............................. $ 473,594 $ 926,317
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income .............................. (473,594) (926,317)
------------ ------------
-0- -0-
CAPITAL SHARE TRANSACTIONS ......................... (574,802) 4,597,142
------------ ------------
Total Increase (Decrease) in Net Assets ............ (574,802) 4,597,142
NET ASSETS
Beginning of period ................................ 24,573,946 19,976,804
------------ ------------
End of period ...................................... $ 23,999,144 $ 24,573,946
============ ============
</TABLE>
See accompanying notes.
<TABLE>
<CAPTION>
FBL MONEY MARKET FUND, INC.
SCHEDULE OF INVESTMENTS
JANUARY 31, 1997
(UNAUDITED)
ANNUALIZED
YIELD ON
PURCHASE PRINCIPAL
DATE AMOUNT VALUE
---- ------ -----
<S> <C> <C> <C>
COMMERCIAL PAPER (17.40%)
- -------------------------
NONDEPOSITORY INSTITUTIONS
American General Finance Corp., 5.37%, due 2/27/97 5.371% $ 900,000 $ 900,000
Ford Motor Credit Corp., 5.34%, due 3/13/97 5.341 700,000 700,000
General Electric Capital Corp., 5.37%, due 3/03/97 5.375 875,000 875,000
IBM Credit Corp., 5.33%, due 3/18/97 5.334 700,000 700,000
Norwest Financial, Inc., 5.37%, due 4/09/97 5.371 1,000,000 1,000,000
---------
Total Commercial Paper 4,175,000
UNITED STATES GOVERNMENT AGENCIES (82.30%)
- ------------------------------------------
Federal Home Loan Bank, due 3/20/97 5.341 1,250,000 1,241,461
Federal Home Loan Mortgage Corp., due 2/07/97 5.425 600,000 599,465
Federal Home Loan Mortgage Corp., due 2/20/97 5.435 950,000 947,320
Federal Home Loan Mortgage Corp., due 2/24/97 5.468 1,400,000 1,395,193
Federal Home Loan Mortgage Corp., due 3/25/97 5.358 1,450,000 1,439,016
Federal Home Loan Mortgage Corp., due 4/04/97 5.352 1,200,000 1,189,189
Federal National Mortgage Assoc., due 2/03/97 5.412 1,800,000 1,799,466
Federal National Mortgage Assoc., due 2/13/97 5.420 1,800,000 1,796,798
Federal National Mortgage Assoc., due 2/18/97 5.424 2,000,000 1,994,960
Federal National Mortgage Assoc., due 2/21/97 5.436 2,300,000 2,293,170
Federal National Mortgage Assoc., due 3/04/97 5.451 1,450,000 1,443,318
Federal National Mortgage Assoc., due 3/10/97 5.481 700,000 696,132
Federal National Mortgage Assoc., due 4/07/97 5.364 1,850,000 1,832,494
Federal National Mortgage Assoc., due 5/09/97 5.379 1,100,000 1,084,497
---------
Total United States Government Agencies 19,752,479
---------
Total Investments (99.70%) 23,927,479
OTHER ASSETS LESS LIABILITIES (0.30%)
- -------------------------------------
Cash and receivables, less liabilities 71,665
---------
Total Net Assets (100.00%) $23,999,144
===========
</TABLE>
See accompanying notes.
FBL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1997
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
FBL Money Market Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end, diversified management
investment company and operates in the mutual fund industry.
The Fund values investments at amortized cost, which approximates market.
Under the amortized cost method, a security is valued at its cost on the date
of purchase and thereafter is adjusted to reflect a constant amortization to
maturity of the difference between the principal amount due at maturity and
the cost of the investment to the Fund.
The value of the underlying securities serving to collateralize repurchase
agreements is marked to market daily. Should the value of the underlying
securities decline, the seller would be required to provide the Fund with
additional securities so that the aggregate value of the underlying
securities was at least equal to the repurchase price. If a seller of a
repurchase agreement were to default, the Fund might experience losses in
enforcing its rights. To minimize this risk, the investment adviser (under
the supervision of the Board of Directors) will monitor the creditworthiness
of the seller of the repurchase agreement and must find such creditworthiness
satisfactory before the Fund may enter into the repurchase agreement.
The Fund records investment transactions generally on the trade date. Net
realized gains and losses on sales of investments, if any, are determined on
the basis of identified cost. Interest income on interest bearing investments
is recognized on an accrual basis.
All of the Fund's net investment income and any realized gains and losses
(none through January 31, 1997) on portfolio investments are declared as
dividends daily to shareholders of record as of the preceding business day.
2. FEDERAL INCOME TAXES
No provision for federal income taxes is considered necessary because the
Fund is qualified as a "regulated investment company" under the Internal
Revenue Code and intends to distribute each year substantially all of its net
investment income and realized capital gains to shareholders. The cost of
investments is the same for both federal income tax and financial reporting
purposes.
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into agreements with FBL Investment Advisory Services,
Inc. ("FBL Investment") relating to the management of the Fund and the
investment of its assets. Pursuant to these agreements, fees paid to FBL
Investment are as follows: (1) investment advisory and management fees, which
are based on the Fund's daily net assets, at an annual rate of 0.25%; (2)
shareholder service, transfer and dividend disbursing agent fees, which are
based on direct services provided and expenses incurred by the investment
adviser, plus an annual per account charge of $12.00; and (3) accounting
fees, which are based on the Fund's daily net assets at an annual rate of
0.05%, with a maximum annual expense of $30,000.
FBL Investment has agreed to reimburse the Fund annually for its total
expenses, excluding brokerage, interest, taxes and extraordinary expenses in
excess of 1.50% of the Fund's average daily net assets. The amount
reimbursed, however, shall not exceed the amount of the investment advisory
and management fees paid by the Fund for such period.
Certain officers and directors of the Fund are also officers of Farm Bureau
Life Insurance Company, the indirect parent of FBL Investment, and other
affiliated entities. At January 31, 1997, the following affiliated companies
owned shares in the Fund:
AFFILIATE SHARES
--------- ------
FBL Investment Advisory Services, Inc. .. 790,814
FBL Financial Group, Inc ................ 474,248
FBL Real Estate Ventures, Inc ........... 362,709
Western Farm Bureau Loan Company ........ 200,949
Western Farm Insurance Agency ........... 194,920
Others 290,353
4. CAPITAL SHARE TRANSACTIONS
Net assets as of January 31, 1997 consisted of:
Capital Stock (500,000,000 shares of $.001 par value
Capital Stock authorized) ........................... $ 23,999
Additional paid-in capital ............................... 23,975,145
-----------
Net Assets ............................................... $23,999,144
===========
Transactions in Capital Stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1997 JULY 31, 1996
------------------------------ ------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold .................... 40,421,378 $ 40,421,378 77,494,901 $ 77,494,901
Shares issued in reinvestment of
dividends and distributions .... 470,121 470,121 916,068 916,068
------------ ------------ ------------ ------------
40,891,499 40,891,499 78,410,969 78,410,969
Shares redeemed ................ (41,466,301) (41,466,301) (73,813,827) (73,813,827)
------------ ------------ ------------ ------------
Net Increase (Decrease) ........ (574,802) $ (574,802) 4,597,142 $ 4,597,142
============ ============ ============ ============
</TABLE>
5. DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income are declared daily and are payable on
the last business day of the month. Dividends for the period ended January
31, 1997 were paid as follows:
PAYABLE DATE
------------
August 30, 1996 ...................... $.0032
September 30, 1996 ................... .0033
October 31, 1996 ..................... .0033
November 27, 1996 .................... .0028
December 31, 1996 .................... .0036
January 31, 1997 ..................... .0033
------
Total Dividends Per Share ............ $.0195
======
FBL MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1997 -------------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income From Investment Operations
Net investment income ............... 0.020 0.040 0.041 0.020 0.019 0.036
----------- ----------- ----------- ----------- ----------- -----------
Total from investment operations ..... 0.020 0.040 0.041 0.020 0.019 0.036
----------- ----------- ----------- ----------- ----------- -----------
Less Distributions
Dividends (from net investment
income) ............................. (0.020) (0.040) (0.041) (0.020) (0.019) (0.036)
----------- ----------- ----------- ----------- ----------- -----------
Total distributions .................. (0.020) (0.040) (0.041) (0.020) (0.019) (0.036)
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of period ....... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
=========== =========== =========== =========== =========== ===========
Total Return:
Total investment return based on net
asset value (1) .................. 3.98%(2) 4.05% 4.17% 1.95% 1.91% 3.69%
Ratios/Supplemental Data:
Net assets, end of period ($000's
omitted) ......................... 23,999 24,574 19,977 18,927 22,072 33,511
Ratio of net expenses to average
net assets ....................... 1.50%(2) 1.50% 1.51% 1.50% 1.50% 1.25%
Ratio of net income to average
net assets ....................... 3.85%(2) 3.92% 4.06% 1.92% 1.89% 3.75%
Information assuming no voluntary
reimbursement by FBL Investment of
excess operating expenses
(see Note 3):
Per share net investment income .... $ 0.019 $ 0.038 $ 0.036 $ 0.019 $ 0.019
Ratio of expenses to average
net assets ....................... 1.59%(2) 1.72% 2.01% 1.57% 1.54%
Amount reimbursed .................. $ 9,793 $ 51,886 $ 96,398 $ 6,978 $ 5,116
</TABLE>
Note: Per share amounts have been calculated on the basis of monthly per
share amounts (using average monthly outstanding shares) accumulated
for the period.
(1) Total investment return is calculated assuming an initial investment
made at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions at net asset value
during the period, and redemption on the last day of the period.
(2) Computed on an annualized basis.
See accompanying notes.
