<PAGE>
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Farm Bureau Mutual Funds
[LOGO]
FARM BUREAU MUTUAL FUNDS
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
737-127(96)
FBL Money
Market Fund, Inc.
[LOGO]
SEMI-ANNUAL REPORT
JANUARY 31, 1996
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.
<PAGE>
PRESIDENT'S LETTER
Dear Shareholder,
The year began with more than the usual degree of uncertainty in the
fixed-income markets, largely due to government shutdowns which have starved us
of any economic release since October last year. Assessing the true strength of
the economy has become complicated by the impact of these shutdowns and the
blizzards in the Midwest and Northeast. In addition, we are faced with the
uncertainty of a balanced budget, and whether Clinton and the GOP will put the
issue to the nation in the November elections.
Looking at the flat yield curve for U.S. Treasury securities, it is apparent
the bond market is predicting even lower returns. Typically, there is a 100
basis-point spread between the Fed funds rate and the two-year Treasury note.
With the two-year Treasury note currently yielding 5.00%, the market is
expecting a Fed funds rate near 4.00%, which is a long way from today's rate of
5.25%. Since the overnight rate is higher than the two-year Treasury, any
Treasury purchases we make will yield less than investing funds overnight. It is
very difficult to extend maturities in a flat or inverted yield curve, but if
the Fed does ease, we will have locked in attractive rates for a short time.
Whatever 1996 presents, investors of FBL Money Market Fund, Inc. can be
assured that their investments are liquid and present minimal credit risk.
Whether you use the fund as an interest-bearing checking account, as an
emergency savings vehicle or as a haven from volatile capital markets, we will
attempt to provide an attractive investment vehicle for your cash management
needs.
(INSERT SPECIMAN SIGNATURE)
EDWARD M. WIEDERSTEIN
PRESIDENT
March 12, 1996
2
<PAGE>
FBL MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (equivalent to amortized cost)........ $20,917,046
Cash...................................................................... 933,372
Receivables:
Due from FBL Investment Advisory Services, Inc.......................... 44,585
Accrued interest........................................................ 26,462
Prepaid expense........................................................... 1,520
-----------
Total Assets.............................................................. $21,922,985
-----------
-----------
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable to FBL Investment Advisory Services, Inc............... $ 25,818
Accrued expenses........................................................ 37,616
-----------
Total Liabilities......................................................... 63,434
Net assets applicable to 21,859,551 shares of capital stock outstanding
(NOTE 4)................................................................ 21,859,551
-----------
Total Liabilities and Net Assets.......................................... $21,922,985
-----------
-----------
NET ASSET VALUE PER SHARE................................................. $ 1.00
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
FBL MONEY MARKET FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest......................................................................... $ 666,663
EXPENSES
Paid to FBL Investment Advisory Services, Inc. (NOTE 3):
Investment advisory and management fees........................................ 59,060
Shareholder service, transfer and dividend disbursing agent fees............... 71,226
Accounting fees................................................................ 5,906
Custodian fees................................................................... 19,027
Legal fees....................................................................... 4,908
Directors' fees and expenses..................................................... 2,731
Reports to shareholders.......................................................... 18,937
Registration fees................................................................ 4,972
Miscellaneous.................................................................... 34,997
---------
Total Expenses................................................................... 221,764
Expense reimbursement (NOTE 3)................................................... (44,585)
---------
Net Expenses..................................................................... 177,179
---------
Net Increase in Net Assets Resulting from Operations............................. $ 489,484
---------
---------
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
FBL MONEY MARKET FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31,
1996 YEAR ENDED JULY
(UNAUDITED) 31, 1995
-------------- ---------------
<S> <C> <C>
OPERATIONS
Net investment income........................................................... $ 489,484 $ 778,149
DIVIDENDS TO SHAREHOLDERS FROM (NOTE 5)
Net investment income........................................................... (489,484) (778,149)
-------------- ---------------
-0- -0-
CAPITAL SHARE TRANSACTIONS (NOTE 4)............................................. 1,882,747 1,050,045
Total Increase in Net Assets.................................................... 1,882,747 1,050,045
NET ASSETS
Beginning of period............................................................. 19,976,804 18,926,759
-------------- ---------------
End of period................................................................... $ 21,859,551 $ 19,976,804
-------------- ---------------
-------------- ---------------
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
FBL MONEY MARKET FUND, INC.
SCHEDULE OF INVESTMENTS
JANUARY 31, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON PRINCIPAL
PURCHASE DATE AMOUNT VALUE
------------- ---------- -----------
<S> <C> <C> <C>
COMMERCIAL PAPER (21.50%)
NONDEPOSITORY INSTITUTIONS (19.21%)
American General Finance Corp., 5.45%, due
3/11/96............................................ 5.445% $1,200,000 $ 1,200,000
Deere (John) Capital Corp., 5.51%, due 2/22/96..... 5.506 800,000 800,000
Ford Motor Credit Corp., 5.53%, due 2/12/96........ 5.533 1,200,000 1,200,000
General Electric Capital Corp., 5.45%, due
3/07/96........................................... 5.448 1,000,000 1,000,000
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4,200,000
PETROLEUM & COAL PRODUCTS (2.29%)
Chevron Oil Finance Corp., 5.42%, due 2/16/96...... 5.418 500,000 500,000
-----------
Total Commercial Paper............................... 4,700,000
UNITED STATES GOVERNMENT AGENCIES (74.19%)
Federal Farm Credit Bank, due 2/09/96.............. 5.668 2,700,000 2,696,650
Federal Farm Credit Bank, due 3/05/96.............. 5.479 4,500,000 4,477,819
Federal Home Loan Bank, due 2/16/96................ 5.655 600,000 598,609
Federal Home Loan Bank, due 2/29/96................ 5.673 1,000,000 995,667
Federal Home Loan Mortgage Corp., due 2/05/96...... 5.513 2,575,000 2,573,445
Federal Home Loan Mortgage Corp., due 3/01/96...... 5.483 2,000,000 1,991,325
Federal Home Loan Mortgage Corp., due 3/19/96...... 5.444 1,500,000 1,489,558
Federal National Mortgage Assoc., due 2/20/96...... 5.440 400,000 398,871
Federal National Mortgage Assoc., due 3/05/96...... 5.444 1,000,000 995,102
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Total United States Government Agencies.............. 16,217,046
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Total Investments (95.69%)........................... 20,917,046
OTHER ASSETS LESS LIABILITIES (4.31%)
Cash, receivables and prepaid expense, less
liabilities....................................... 942,505
-----------
Total Net Assets (100.00%)........................... $21,859,551
-----------
-----------
</TABLE>
SEE ACCOMPANYING NOTES.
6
<PAGE>
FBL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1996
(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, 1996) 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, currently at an annual rate of 0.50%
for the first $200,000,000 average daily net assets; (2) shareholder service,
transfer and dividend disbursing agent
7
<PAGE>
FBL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES (CONTINUED)
fees, which are based on direct services provided and expenses incurred by the
investment adviser, plus an annual per account charge of $9.00; 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, 1996, the following affiliated companies
owned shares in the Fund:
<TABLE>
<CAPTION>
AFFILIATE SHARES
- ----------------------------------------------------------------- ---------
<S> <C>
FBL Investment Advisory Services, Inc............................ 511,894
FBL Financial Group, Inc. ....................................... 456,514
FBL Real Estate Ventures, Inc. .................................. 198,054
FBL Insurance Brokerage, Inc. ................................... 119,598
FBL Marketing Services, Inc. .................................... 93,470
FBL Ventures of South Dakota, Inc. .............................. 67,436
FBL Financial Services, Inc. .................................... 54,886
RIK, Inc. ....................................................... 44,229
FBL Partners..................................................... 11,517
Iowa Agency Managers Association................................. 5,875
Iowa Farm Bureau Federation...................................... 5,385
Others........................................................... 1,378
</TABLE>
4. CAPITAL SHARE TRANSACTIONS
Net assets as of January 31, 1996 consisted of:
<TABLE>
<S> <C>
Capital Stock (500,000,000 shares of $.001 par value Capital
Stock authorized)............................................ $ 21,860
Additional paid-in capital.................................... 21,837,691
-----------
Net Assets.................................................... $21,859,551
-----------
-----------
</TABLE>
8
<PAGE>
FBL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
Transactions in Capital Stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1996 JULY 31, 1995
------------------------------- -------------------------------
SHARES AMOUNT SHARES AMOUNT
-------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C>
Shares sold.................................... 39,198,675 $ 39,198,675 60,737,863 $ 60,737,863
Shares issued in reinvestment of dividends and
distributions................................. 487,190 487,190 769,139 769,139
-------------- --------------- -------------- ---------------
39,685,865 39,685,865 61,507,002 61,507,002
Shares redeemed................................ (37,803,118) (37,803,118) (60,456,957) (60,456,957)
-------------- --------------- -------------- ---------------
Net Increase................................... 1,882,747 $ 1,882,747 1,050,045 $ 1,050,045
-------------- --------------- -------------- ---------------
-------------- --------------- -------------- ---------------
</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,
1996 were paid as follows:
<TABLE>
<CAPTION>
PAYABLE DATE
- -------------------------------------------------------------------
<S> <C>
August 31, 1995.................................................... $ .0037
September 29, 1995................................................. .0034
October 31, 1995................................................... .0037
November 30, 1995.................................................. .0035
December 29, 1995.................................................. .0033
January 31, 1996................................................... .0036
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Total Dividends Per Share.......................................... $ .0212
---------
---------
</TABLE>
9
<PAGE>
FBL MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1996 --------------------------------------------------------
(UNAUDITED) 1995 1994 1993 1992 1991
----------- -------- -------- -------- -------- --------
<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......................... 0.021 0.041 0.020 0.019 0.036 0.064
----------- -------- -------- -------- -------- --------
Total from investment operations................ 0.021 0.041 0.020 0.019 0.036 0.064
----------- -------- -------- -------- -------- --------
Less Distributions
Dividends (from net investment income)........ (0.021) (0.041) (0.020) (0.019) (0.036) (0.064)
----------- -------- -------- -------- -------- --------
Total distributions............................. (0.021) (0.041) (0.020) (0.019) (0.036) (0.064)
----------- -------- -------- -------- -------- --------
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)............................................ 4.31%(2) 4.17% 1.95% 1.91% 3.69% 6.59%
Ratios/Supplemental Data:
Net assets, end of period (000's omitted)....... $21,860 $ 19,977 $ 18,927 $ 22,072 $ 33,511 $ 61,876
Ratio of net expenses to average net assets..... 1.50%(2) 1.51% 1.50% 1.50% 1.25% 0.93%
Ratio of net income to average net assets....... 4.14%(2) 4.06% 1.92% 1.89% 3.75% 6.40%
Information assuming no voluntary reimbursement
by FBL Investment of excess operating expenses
(see NOTE 3):
Per share net investment income................. $ 0.020 $ 0.036 $ 0.019 $ 0.019
Ratio of expenses to average net assets......... 1.88%(2) 2.01% 1.57% 1.54%
Amount reimbursed............................... $44,585 $ 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.
10
