<PAGE> 1
------------------------
FARM BUREAU MUTUAL FUNDS
- -------------------------------------------------------------------------------
FBL MONEY
MARKET FUND, INC.
SEMI-ANNUAL REPORT
JANUARY 31, 1998
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 FINANCIAL SERVICES LOGO]
FARM BUREAU MUTUAL FUND
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
737-127(98)
<PAGE> 2
PRESIDENT'S LETTER
Dear Shareholder:
Currently, the Federal Funds Rate is 5.50%, which is the level the Federal
Open Market Committee (FOMC) raised it to in March, 1997, in order to adhere to
their goal of containing inflation. The FOMC saw a very strong labor market and
high capacity utilization, which they feared would develop into 'cost push'
inflation. However, as the year progressed it appeared productivity was a key
factor in keeping costs and price increases down. In fact, for the period ended
January, 1998, the Consumer Price Index measured inflation of 1.60%. The Federal
Reserve (Fed) policy of "wait and see" appeared to be the right course of
action.
In October, the Asian crisis developed and carried over into the U.S.
markets. With major problems overseas the U.S. markets were a "flight to
quality" play and Treasury yields dropped as foreigners bought Treasuries.
Should the Fed lower the Federal Funds Rate because of the lack of inflation, or
should they remain "as is" in order to stabilize all markets? There was an
incredible amount of deflation of assets as a result of the Asian crisis, and
current interest rates may only serve to accelerate the situation. What will the
effect be from the Asian economy being in dire straits? Because the United
States participates in global markets will it affect the U.S. economy and throw
us into an economic slowdown?
Some investors are able to withstand choppy seas and high turbulence in
their portfolio holdings. Others find it easier to sell and wait for trouble to
pass. Whatever your risk tolerance, a money market fund can provide stability
and liquidity to any investment portfolio.
Edward M. Wiederstein
EDWARD M. WIEDERSTEIN
PRESIDENT
March 13, 1998
2
<PAGE> 3
FBL MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1998
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (equivalent to amortized
cost)..................................................... $23,330,773
Cash........................................................ 517,014
Accrued interest receivable................................. 38,062
Other receivables........................................... 69
-----------
Total Assets................................................ $23,885,918
===========
LIABILITIES AND NET ASSETS
Liabilities:
Accrued expenses.......................................... $ 647,335
-----------
Total Liabilities........................................... 647,335
Net assets applicable to 23,238,583 shares of capital stock
outstanding............................................... 23,238,583
-----------
Total Liabilities and Net Assets............................ $23,885,918
===========
NET ASSET VALUE PER SHARE................................... $ 1.00
===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
FBL MONEY MARKET FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1998
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest.................................................... $706,285
EXPENSES
Paid to FBL Investment Advisory Services, Inc.:
Investment advisory and management fees................... 31,768
Shareholder service, transfer and dividend disbursing
agent fees............................................. 56,675
Accounting fees........................................... 6,354
Custodian fees.............................................. 32,779
Legal fees.................................................. 7,366
Directors' fees and expenses................................ 2,106
Reports to shareholders..................................... 3,715
Registration fees........................................... 5,045
Miscellaneous............................................... 23,660
--------
Total Expenses.............................................. 169,468
--------
Net Increase in Net Assets Resulting from Operations........ $536,817
========
</TABLE>
See accompanying notes.
4
<PAGE> 5
FBL MONEY MARKET FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31,
1998 YEAR ENDED
(UNAUDITED) JULY 31, 1997
----------- -------------
<S> <C> <C>
OPERATIONS
Net investment income....................................... $ 536,817 $ 945,941
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income....................................... (536,817) (945,941)
----------- -----------
-0- -0-
CAPITAL SHARE TRANSACTIONS.................................. 184,855 (1,520,218)
----------- -----------
Total Increase (Decrease) in Net Assets..................... 184,855 (1,520,218)
NET ASSETS
Beginning of period......................................... 23,053,728 24,573,946
----------- -----------
End of period............................................... $23,238,583 $23,053,728
=========== ===========
</TABLE>
See accompanying notes.
5
<PAGE> 6
FBL MONEY MARKET FUND, INC.
SCHEDULE OF INVESTMENTS
JANUARY 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
PURCHASE PRINCIPAL
DATE AMOUNT VALUE
---------- ---------- -----------
<S> <C> <C> <C>
COMMERCIAL PAPER (26.14%)
NONDEPOSITORY INSTITUTIONS
Ford Motor Credit Corp., 5.47%, due 2/13/98....... 5.446% $1,250,000 $ 1,250,000
General Electric Capital Corp., 5.59%, due
2/25/98........................................ 5.594 1,000,000 1,000,000
IBM Credit Corp., 5.46%, due 3/10/98.............. 5.464 1,225,000 1,225,000
John Deere Capital Corp., 5.44%, due 3/03/98...... 5.441 1,250,000 1,250,000
Norwest Financial, Inc., 5.74%, due 2/02/98....... 5.784 1,350,000 1,350,000
-----------
Total Commercial Paper.............................. 6,075,000
UNITED STATES GOVERNMENT AGENCIES (74.26%)
Federal Home Loan Bank, due 2/11/98............... 5.768 1,400,000 1,397,571
Federal Home Loan Bank, due 3/18/98............... 5.434 1,300,000 1,291,157
Federal Home Loan Mortgage Corp., due 2/04/98..... 5.440 1,200,000 1,199,285
Federal Home Loan Mortgage Corp., due 2/20/98..... 5.752 700,000 697,801
Federal Home Loan Mortgage Corp., due 2/27/98..... 5.498 1,325,000 1,319,634
Federal Home Loan Mortgage Corp., due 3/09/98..... 5.463 2,075,000 2,063,572
Federal Home Loan Mortgage Corp., due 3/16/98..... 5.472 350,000 347,706
Federal Home Loan Mortgage Corp., due 3/20/98..... 5.471 675,000 670,178
Federal National Mortgage Assoc., due 2/10/98..... 5.461 1,550,000 1,547,684
Federal National Mortgage Assoc., due 2/18/98..... 5.753 1,675,000 1,670,261
Federal National Mortgage Assoc., due 3/05/98..... 5.464 1,300,000 1,293,656
Federal National Mortgage Assoc., due 4/08/98..... 5.465 1,500,000 1,485,103
Federal National Mortgage Assoc., due 4/17/98..... 5.469 500,000 494,371
Federal National Mortgage Assoc., due 4/24/98..... 5.493 1,800,000 1,777,794
-----------
Total United States Government Agencies............. 17,255,773
-----------
Total Investments (100.40%)......................... 23,330,773
OTHER ASSETS LESS LIABILITIES (-0.40%)
Cash and receivables, less liabilities............ (92,190)
-----------
Total Net Assets (100.00%).......................... $23,238,583
===========
</TABLE>
See accompanying notes.
6
<PAGE> 7
FBL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 1998
(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, 1998) on portfolio investments are declared as
dividends daily to shareholders of record as of the preceding business day.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
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
7
<PAGE> 8
FBL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES (CONTINUED)
these agreements, fees paid to FBL Investment are determined as follows: (1)
investment advisory and management fees, which are based on the Fund's average
daily net assets, currently at an annual rate of 0.25% (0.50% prior to December
1,1996); (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 $9.00 and miscellaneous
activity fees; and (3) accounting fees, which are based on the Fund's average
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 FBL
Financial Group, Inc., the indirect parent of FBL Investment, and other
affiliated entities. At January 31, 1998, FBL Financial Group, Inc. and its
affiliated companies owned 2,570,504 shares in the Fund.
4. CAPITAL SHARE TRANSACTIONS
Net assets as of January 31, 1998, consisted of:
<TABLE>
<S> <C>
Capital Stock (500,000,000 shares of $.001 par value
Capital Stock authorized)........................... $ 23,239
Additional paid-in capital............................ 23,215,344
-----------
Net Assets............................................ $23,238,583
===========
</TABLE>
Transactions in Capital Stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1998 JULY 31, 1997
-------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Shares sold......................... 40,689,678 $ 40,689,678 80,558,632 $80,558,632
Shares issued in reinvestment of
dividends and distributions....... 445,002 445,002 939,265 939,265
----------- ------------ ----------- -----------
41,134,680 41,134,680 81,497,897 81,497,897
Shares redeemed..................... (40,949,825) (40,949,825) (83,018,115) (83,018,115)
----------- ------------ ----------- -----------
Net Increase (Decrease)............. 184,855 $ 184,855 (1,520,218) $(1,520,218)
=========== ============ =========== ===========
</TABLE>
8
<PAGE> 9
FBL MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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,
1998, were paid as follows:
<TABLE>
<CAPTION>
PAYABLE DATE
------------
<S> <C>
August 30, 1997............................................ $.0033
September 30, 1997......................................... .0034
October 31, 1997........................................... .0036
November 26, 1997.......................................... .0030
December 31, 1997.......................................... .0038
January 31, 1998........................................... .0043
------
Total Dividends Per Share.................................. $.0214
======
</TABLE>
9
<PAGE> 10
FBL MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1998 ---------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ------- ------- ------- ------- -------
<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 0.040 0.040 0.041 0.020 0.019
------- ------- ------- ------- ------- -------
Total from investment operations.... 0.021 0.040 0.040 0.041 0.020 0.019
Less Distributions
Dividends (from net investment
income)......................... (0.021) (0.040) (0.040) (0.041) (0.020) (0.019)
------- ------- ------- ------- ------- -------
Total distributions................. (0.021) (0.040) (0.040) (0.041) (0.020) (0.019)
------- ------- ------- ------- ------- -------
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).................... 4.35%(2) 3.99% 4.05% 4.17% 1.95% 1.91%
Ratios/Supplemental Data:
Net assets, end of period (000's
omitted).......................... $23,239 $23,054 $24,574 $19,977 $18,927 $22,072
Ratio of net expenses to average net
assets............................ 1.37%(2) 1.51% 1.50% 1.51% 1.50% 1.50%
Ratio of net income to average net
assets............................ 4.35%(2) 3.90% 3.92% 4.06% 1.92% 1.89%
Information assuming no voluntary
reimbursement by FBL Investment of
excess operating expenses (see Note
3)
Per share net investment income..... $ 0.021 $ 0.040 $ 0.038 $ 0.036 $ 0.019 $ 0.019
Ratio of expenses to average net
assets............................ 1.37%(2) 1.55% 1.72% 2.01% 1.57% 1.54%
Amount reimbursed................... $ 0 $10,590 $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.
10
