<PAGE>
[LOGO]
FARM BUREAU MUTUAL FUNDS
5400 University Avenue, West Des Moines, Iowa 50266
Yield and Purchase Information --
Call Toll Free (800) 247-4170 or in Iowa call Toll Free (800) 422-3175; in the
Des Moines metropolitan area call 225-5586.
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TABLE OF CONTENTS Page No.
Summary of Expenses............................................................2
Financial Highlights...........................................................3
Yield Information..............................................................4
Investment Objective and Policies..............................................4
How to Buy Shares..............................................................8
How to Redeem Shares...........................................................9
Other Shareholder Services....................................................10
Net Asset Value...............................................................12
Management of the Fund........................................................12
Portfolio Transactions........................................................13
Dividends.....................................................................13
Taxes.........................................................................14
General Information...........................................................15
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NO DEALER, SALESMAN, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS, AND, IF
GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE FUND, THE ADVISER, OR THE UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE SECURITIES OF THE FUND IN ANY JURISDICTION IN WHICH SUCH SALE, OFFER
TO SELL, OR SOLICITATION MAY NOT BE LAWFULLY MADE.
- ------------------------------------------------
PLEASE READ THIS PROSPECTUS CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
EQUITRUST
MONEY MARKET
FUND, INC.
Prospectus dated December 1, 1997
(as amended May 1, 1998)
EquiTrust Money Market Fund, Inc. (formerly known as FBL Money Market Fund,
Inc.) (the "Fund") is a no-load, open-end, diversified management investment
company with an investment objective of maximum current income consistent with
liquidity and stability of principal. The Fund pursues its objective by
investing in money market instruments maturing in thirteen months or less,
including securities issued or guaranteed by the United States Government, its
agencies or instrumentalities, certificates of deposit, bankers' acceptances,
high grade commercial paper and other corporate debt and repurchase agreements.
There can be no assurance that the objective of the Fund will be realized.
Shares of the Fund may be purchased at their net asset value without any sales
charge. The minimum initial investment is $500 and subsequent investments may be
made in any amount. Shares may be redeemed at any time at net asset value as
described herein.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.
This Prospectus contains information about the Fund that a prospective
investor should know before investing. Please read it carefully and retain it
for future reference. A Statement of Additional Information for the Fund, dated
December 1, 1997, (as amended May 1, 1998), has been filed with the Securities
and Exchange Commission and is incorporated herein by reference. The Statement
of Additional Information is available upon request and without charge from the
Fund by writing or calling the Fund at the address or telephone numbers set
forth above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
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SUMMARY OF
EXPENSES
- ---------------
<TABLE>
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases...................................... None
Maximum Sales Load Imposed on Reinvested Dividends........................... None
Deferred Sales Load.......................................................... None
Redemption Fee............................................................... None
Exchange Fee................................................................. None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of net assets)
Management Fees.............................................................. 0.25%
12b-1 Fees................................................................... None
Other Expenses............................................................... 1.26%
----------
Total Fund Operating Expenses........................................ 1.51%
----------
----------
</TABLE>
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each time period...... $ 15 $ 47 $ 82 $ 179
</TABLE>
The purpose of the preceding table is to assist investors in understanding
the various costs and expenses that an investor in the Fund will bear directly
or indirectly. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. The
example assumes a 5% annual rate of return pursuant to the requirements of the
Securities and Exchange Commission and is not intended to be representative of
past or future performance of the Fund.
2
<PAGE>
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FINANCIAL
HIGHLIGHTS
---------------
The condensed financial information set forth below has been derived from
the financial statements and financial highlights of the Fund, of which the last
five years have been audited by independent auditors as set forth in their
report dated August 29, 1997. This table should be read in conjunction with the
financial statements and notes thereto of the Fund included in the Annual Report
to Shareholders, which financial statements and notes are incorporated herein by
reference.
Selected data for a share of capital stock outstanding throughout each year:
<TABLE>
<CAPTION>
YEAR ENDED JULY 31,
----------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
year........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income from Investment
Operations
Net investment income..... 0.40 0.040 0.041 0.020 0.019 0.036 0.064 0.077 0.083 0.061
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations................ 0.40 0.040 0.041 0.020 0.019 0.036 0.064 0.077 0.083 0.061
Less Distributions
Dividends (from net
investment income)...... (0.40) (0.040) (0.041) (0.020) (0.019) (0.036) (0.064) (0.077) (0.083) (0.061)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions......... (0.40) (0.040) (0.041) (0.020) (0.019) (0.036) (0.064) (0.077) (0.083) (0.061)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
year........................ $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total Return:
Total investment return
based on net asset value
(1)....................... 3.99% 4.05% 4.17% 1.95% 1.91% 3.69% 6.59% 7.92% 8.57% 6.23%
Ratios/Supplemental Data:
Net assets, end of year
(000's omitted)........... $23,054 $24,574 $19,977 $18,927 $22,072 $33,511 $61,876 $67,784 $54,116 $23,868
Ratio of net expenses to
average net assets........ 1.51% 1.50% 1.51% 1.50% 1.50% 1.25% 0.93% 0.93% 1.09% 1.15%
Ratio of net income to
average net assets........ 3.90% 3.92% 4.06% 1.92% 1.89% 3.75% 6.40% 7.52% 8.58% 6.10%
Information assuming no
voluntary reimbursement by
EquiTrust Investment
Management Services, Inc. of
excess operating expenses:
Per share net investment
income.................. $ 0.040 $ 0.038 $ 0.036 $ 0.019 $ 0.019
Ratio of expenses to
average net assets...... 1.55% 1.72% 2.01% 1.57% 1.54%
Amount reimbursed......... $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 year, reinvestment of all
dividends and distributions at net asset value during the year, and
redemption on the last day of the year.
3
<PAGE>
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YIELD
INFORMATION
- ---------------
From time to time, the Fund may advertise its yield and effective yield.
Each figure is based upon historical earnings and is not necessarily
representative of the future performance of the Fund. The yield of the Fund
refers to the net investment income generated by a hypothetical investment in
the Fund over a specific seven-day period. This net investment income is then
annualized, which means that the net investment income generated during the
seven-day period is assumed to be generated each week over an annual period and
is shown as a percentage of the investment. The effective yield is calculated
similarly, but the net investment income earned by the investment is assumed to
be compounded weekly when annualized. The effective yield will be slightly
higher than the yield due to this compounding effect.
The performance of the Fund may be compared to that of other money market
mutual funds tracked by Lipper Analytical Services, Inc., an independent
research firm which ranks mutual funds by overall performance, investment
objectives and assets, or by IBC/Donoghue's Money Fund Directory, a service
which reports on money market funds.
The Fund's yield and effective yield will fluctuate. Additional information
concerning the Fund's performance is described in the Statement of Additional
Information.
If you would like the yield or effective yield for the Fund, call toll free
1-800-247-4170 (in Iowa 1-800-422-3175, or in the Des Moines metropolitan area
call 225-5586), 24 hours a day, 7 days a week. The recorded message is updated
each weekday.
- --------------------------------------------------------------------------------
INVESTMENT
OBJECTIVE
AND POLICIES
- ---------------
The investment objective of the Fund is maximum current income consistent
with liquidity and stability of principal and may not be changed without
shareholder approval.
The Fund limits its investments to securities that meet the quality and
diversification requirements of Rule 2a-7 under the Investment Company Act of
1940 (the "Investment Company Act"). Under Rule 2a-7, the Fund may only purchase
United States denominated instruments that are determined to present minimal
credit risks and at the time of acquisition are rated in the top two rating
categories by the required number of nationally recognized statistical rating
organizations (at least two or, if only one such organization has rated the
security, that one organization) or, if unrated, are deemed comparable in
quality. The diversification requirements of Rule 2a-7 provide generally that
the Fund may not at the time of acquisition invest more than 5% of its assets in
securities of any one issuer or invest more than 5% of its assets in securities
that have not been rated in the highest category by the required number of
rating organizations or, if unrated, have not been deemed comparable, except
U.S. Government securities and repurchase agreements of such securities.
4
<PAGE>
The Fund seeks to achieve its objective by investing in the following money
market instruments maturing in thirteen months or less from the time of
investment, thereby allowing the Fund to maintain a dollar-weighted average
portfolio maturity of 90 days or less:
U.S. GOVERNMENT SECURITIES: Bills, notes, bonds and other debt
securities issued by the U.S. Treasury. These are direct obligations of the
U.S. Government and differ mainly in the length of their maturities.
U.S. GOVERNMENT AGENCY OR INSTRUMENTALITY SECURITIES: Debt securities
issued or guaranteed by agencies or instrumentalities of the U.S.
Government. Although these securities are not direct obligations of the U.S.
Government, some are supported by the full faith and credit of the U.S.
Treasury; others are supported only by the limited right of the issuer to
borrow from the U.S. Treasury; and others depend solely upon the credit of
the agency or instrumentality and not the U.S. Treasury.
OBLIGATIONS OF BANKS OR SAVINGS INSTITUTIONS: Certificates of deposit,
bankers' acceptances and other short-term debt obligations of commercial
banks or savings and loan associations. The Fund will not invest in any
instruments issued by a commercial bank unless it has total assets of at
least $100 million and has its deposits insured by the Federal Deposit
Insurance Corporation ("FDIC"). Similarly, the Fund will not invest in any
instrument issued by a savings and loan association unless it has total
assets of at least $100 million, has been issued a charter by the Office of
Thrift Supervision ("OTS") or was formerly a member of the Federal Home Loan
Bank System and is now subject to regulation by the OTS, and is insured by
the FDIC. However, the Fund may invest in an obligation of a bank or savings
and loan association with assets of less than $100 million if the principal
amount of such obligation is fully covered by FDIC insurance. The limit of
such coverage is currently $100,000.
COMMERCIAL PAPER: Short-term unsecured promissory notes issued by
corporations, primarily to finance short-term credit needs. The Fund will
only invest in commercial paper that is rated A-1 or A-2 by Standard &
Poor's Corporation ("S&P") or Prime-1 or Prime-2 by Moody's Investors
Service, Inc. ("Moody's") or, if unrated, issued by a corporation having an
outstanding debt issue rated at least AA/Aa by S&P or Moody's.
In addition, the Fund will invest in commercial paper issued by major
corporations in reliance on the so-called "private placement" exemption from
registration by Section 4(2) of the Securities Act of 1933 ("Section 4(2)
paper") subject to the above noted requirements with respect to ratings.
Section 4(2) paper is restricted as to disposition under the federal
securities laws, and generally is sold to institutional investors such as
the Fund, who agree that it is purchasing the paper for investment and not
with a view to public distribution. Any resale by the purchaser must be in
an exempt transaction. Section 4(2) paper normally is resold to other
institutional investors through or with the assistance of the issuer or
investment dealers who make a market in the Section 4(2) paper, thus
providing liquidity. The Fund's investment adviser considers the legally
restricted but readily saleable Section 4(2) paper to be liquid; however,
the paper will be treated as illiquid unless, pursuant to procedures
approved by the Board of Directors, a particular investment in Section 4(2)
paper is determined to be liquid. The investment adviser monitors the
liquidity of the Fund's investments in Section 4(2) paper on a continuing
basis.
OTHER CORPORATE DEBT SECURITIES: Outstanding nonconvertible corporate
debt securities (e.g., bonds and debentures) which were not issued as
short-term obligations but which have thirteen
5
<PAGE>
months or less remaining to maturity. The Fund will only invest in such
obligations that at the time of purchase are rated AA/Aa or better by S&P or
Moody's.
REPURCHASE AGREEMENTS: A repurchase agreement is an instrument under
which the Fund acquires a security from the seller who agrees, at the time
of the sale, to repurchase the security at a predetermined time and price,
thereby determining the yield during the Fund's holding period. That yield
is established by reference to current short-term rates and may be more or
less than the interest rate on the underlying security. The value of the
underlying security is marked-to-market daily. If the value of the
underlying security declines, 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.
The Fund may also enter into a special type of repurchase agreement
known as an "open repurchase agreement." An open repurchase agreement varies
from the typical agreement in the following respects: (1) the agreement has
no set maturity, but instead matures upon 24 hours' notice to the seller;
and (2) the repurchase price is not determined at the time the agreement is
entered into, but instead is based on a variable interest rate and the
duration of the agreement.
Repurchase agreements maturing in more than seven days will not exceed
10% of the net assets of the Fund, and no more than 25% of the net assets of
the Fund may be invested in repurchase agreements in which the underlying
securities have maturities in excess of one year, although there is no limit
to the percentage of the Fund's assets which may be invested in repurchase
agreements that mature in seven days or less and have underlying securities
with maturities of one year or less. Net assets are taken at market value at
the time of purchase for purposes of the foregoing limitations. Open
repurchase agreements are considered to mature in one day.
If a seller of a repurchase agreement were to default, the Fund might
experience losses, including delays and expenses in enforcing its rights. To
minimize this risk, the investment adviser (under the review of the Board of
Directors) will review the creditworthiness of the seller, and must find
such creditworthiness satisfactory before the Fund may enter into the
repurchase agreement. Repurchase agreements may be entered into with banks
or securities dealers and the underlying securities will consist only of
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
FLOATING AND VARIABLE RATE SECURITIES: The Fund may invest in
instruments having rates of interest that are adjusted periodically or that
float continuously or periodically according to formulas intended to
minimize fluctuation in the value of the instruments ("Variable Rate
Securities"). The interest rate on a Variable Rate Security is ordinarily
determined by reference to, or is a percentage of, a specified market rate
such as a bank's prime rate, the 90-day U.S. Treasury Bill rate, or the rate
of return on commercial paper or bank certificates of deposit. Generally,
the changes in the interest rate on Variable Rate Securities reduce the
fluctuation in the market value of such securities. Accordingly, as interest
rates decrease or increase, the potential for capital appreciation or
depreciation is less than for fixed rate obligations. Some Variable Rate
Securities have a demand feature ("Variable Rate Demand Securities")
entitling the purchaser to resell the securities at an amount approximately
equal to the principal amount thereof plus accrued interest. As in the case
for other Variable Rate Securities, the interest rate on Variable Rate
Demand Securities varies according to some specified market rate intended to
minimize fluctuation in the value of the instruments. Some of these Variable
Rate Demand Securities are unrated, their transfer is restricted by the
issuer and there is little, if any, secondary market for the securities.
Thus, any inability of the issuers of such securities to pay on demand could
adversely affect the liquidity of these securities. The Fund
6
<PAGE>
determines the maturity of Variable Rate Securities in accordance with
Securities and Exchange Commission rules which allow the Fund to consider
certain of such instruments as having maturities shorter than the maturity
date on the face of the instrument.
WHEN-ISSUED OR DELAYED DELIVERY TRANSACTIONS: From time to time, in the
ordinary course of business, the Fund may purchase newly-issued securities
on a "when-issued" basis and may purchase or sell securities on a "delayed
delivery" basis. When-issued or delayed delivery transactions involve a
commitment by the Fund to purchase or sell particular securities with
payment and delivery to take place at a future date. These transactions
allow the Fund to lock in an attractive purchase price or yield on a
security it intends to purchase or an attractive sale price on a security it
intends to sell. Normally, settlement occurs within one month of the
purchase or sale. During the period between purchase or sale and settlement,
no payment is made or received by the Fund and, for delayed delivery
purchases, no interest accrues to the Fund. The Fund will only make
commitments to purchase securities on a when-issued or delayed delivery
basis with the intention of actually acquiring the securities, but it
reserves the right to sell such securities before the settlement date if
deemed advisable.
At the time the Fund makes the commitment to purchase a security on a
when-issued or delayed delivery basis, it will segregate the security on the
Fund's accounting records, record the transaction and reflect the amount due
and the value of the security in determining its net asset value. Likewise,
at the time the Fund makes the commitment to sell a security on a delayed
delivery basis, it will segregate the security on the Fund's accounting
records, record the transaction and include the proceeds to be received in
determining its net asset value; accordingly, any fluctuations in the value
of the security sold pursuant to a delayed delivery commitment are ignored
in calculating net asset value so long as the commitment remains in effect.
The market value of the when-issued or delayed delivery securities at any
time may be more or less than the purchase price to be paid or the sale
price to be received at the settlement date. To the extent that the Fund
engages in when-issued or delayed delivery transactions, it will do so for
the purpose of acquiring or selling securities consistent with its
investment objectives and policies and not for the purpose of investment
leverage or to speculate on interest rate changes.
The investment adviser does not believe that the Fund's net asset value
or income will be adversely affected overall by the purchase of securities
on a when-issued or delayed delivery basis. The Fund will establish a
segregated account with its custodian bank in which it will maintain cash or
U.S. Government securities or other high-grade debt obligations at least
equal in value to commitments to purchase securities on a when-issued or
delayed delivery basis; subject to this requirement, the Fund may purchase
securities on a when-issued or delayed delivery basis without limit. To the
extent that assets of the Fund are held in cash pending the settlement of a
purchase of securities, the Fund would earn no income. In the case of a
commitment to sell securities on a delayed delivery basis, the Fund will
instruct the custodian to hold the Fund securities themselves in a
segregated account while the commitment is outstanding.
Stability of principal is a primary investment objective of the Fund and,
while the types of money market securities in which the Fund invests generally
are considered to have low principal risk, such securities are not completely
risk free. There is some risk that issuers will fail to meet their principal and
interest obligations on a timely basis; therefore there can be no guarantee that
the Fund will achieve its objective or that it will maintain a net asset value
of $1.00 per share. The net asset value of $1.00 per share has, however, been
maintained by the Fund since its inception. Thus, no shareholder has ever lost
any principal from an investment in the Fund.
The Fund has adopted a number of restrictions and policies relating to the
investment of its assets and its activities that are fundamental and may not be
changed without the approval of the holders of a
7
<PAGE>
"majority of the Fund's outstanding voting securities" as such term is defined
in the Investment Company Act of 1940. A complete list of these investment
restrictions and policies is contained in the Fund's Statement of Additional
Information.
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HOW TO
BUY
SHARES
- ---------
The Fund's shares are sold at their net asset value next determined after an
order and payment are received in the form described below. Purchase orders in
proper form received by wire transfer will be effected at the next determined
net asset value. If you invest by mail, purchase orders in proper form will be
effected at the net asset value next determined after the funds have been
converted into Federal Funds, normally one full business day after receipt. The
Fund is generally open for business, and its net asset value is computed, on
each day the New York Stock Exchange is open for trading (except the Fridays
after Christmas Day and Thanksgiving Day). The Fund reserves the right to reject
any purchase order and to change the minimum purchase requirements at any time.
INITIAL PURCHASE
The minimum initial purchase is $500, except there is no minimum initial
investment for retirement accounts and accounts opened under bona fide payroll
deduction plans. There is no sales charge. An Application may be obtained from
the Fund or from a registered representative of EquiTrust Marketing Services,
Inc. The proper form for initial purchase orders is as follows:
By Mail:
Complete the Application and mail it with your check payable to "EquiTrust
Money Market Fund, Inc." to: EquiTrust Money Market Fund, Inc., 5400 University
Avenue, West Des Moines, Iowa 50266-5997.
By Wire:
Call our toll free number (800) 247-4170 (in Iowa call toll free (800)
422-3175, or in the Des Moines metropolitan area call 225-5586) to obtain an
Account Number and to provide the Fund with your name, address and social
security or tax identification number. Then, simply instruct your bank to "wire
transfer" funds to: BANKERS TRUST COMPANY, ABA #021001033, DDA ACCOUNT #00220644
EQUITRUST MONEY MARKET FUND, INC., FOR FURTHER CREDIT TO YOUR ACCOUNT
REGISTRATION AND ACCOUNT NUMBER. Finally, complete the Application and mail it
to the Fund at the address listed above under "Initial Purchase--By Mail."
SUBSEQUENT PURCHASES
The proper form for subsequent purchase orders is as follows:
By Mail (no minimum):
Send the Fund a check payable to the Fund accompanied by a letter indicating
the dollar value of the shares to be purchased, the account number and the
registered owner(s).
By Wire (no minimum):
Instruct your bank to "wire transfer" funds as outlined above under "Initial
Purchase--By Wire."
8
<PAGE>
- --------------------------------------------------------------------------------
HOW TO
REDEEM
SHARES
---------
Upon receipt of an executed redemption request in proper form as described
below, the Fund will redeem shares at their next determined net asset value. The
Fund intends to pay redemption proceeds within one business day after receipt of
an executed redemption request in proper form. If shares to be redeemed were
purchased by check, the Fund may delay transmittal of redemption proceeds until
it has determined that the check has cleared, which may take up to 15 days from
the purchase date. SHAREHOLDERS MAY NOT USE EXPEDITED REDEMPTION PROCEDURES
(DRAFT OR TELEPHONE REDEMPTION) IF SHARES WERE PURCHASED BY CHECK UNTIL THE
SHARES BEING REDEEMED HAVE BEEN ON THE FUND'S BOOKS FOR AT LEAST 4 BUSINESS
DAYS. There is no such delay when redeeming shares that were purchased by wire.
Due to the high cost of maintaining small accounts, the Fund reserves the
right to redeem an account which an investor has reduced to a value of less than
$500. A shareholder will be notified accordingly and permitted 60 days to make
additional share purchases before the liquidating redemption is processed.
By Mail (no minimum):
Send a letter to the Fund, 5400 University Avenue, West Des Moines, Iowa
50266-5997, requesting redemption of either the number or dollar value of shares
to be redeemed. The letter must be signed exactly as the account is registered.
On a jointly owned account, all owners must sign. SIGNATURES OF ACCOUNT OWNERS
MUST BE GUARANTEED BY A COMMERCIAL BANK, TRUST COMPANY, MEMBER OF A STOCK
EXCHANGE, SAVINGS AND LOAN ASSOCIATION OR SAVINGS BANK, OTHER ELIGIBLE FINANCIAL
INSTITUTION, OR A REGISTERED REPRESENTATIVE OF EQUITRUST MARKETING SERVICES,
INC. OR EQUITRUST INVESTMENT MANAGEMENT SERVICES, INC., and shall include such
other documentation of authority as the Fund deems necessary in the case of
estates, trusts, guardianships, corporations, unincorporated associations and
pension and profit sharing plans. THE FUND CANNOT ACCEPT GUARANTEES FROM
NOTARIES PUBLIC.
By Draft (no minimum):
A shareholder may redeem shares by writing drafts drawn on Norwest Bank
Iowa, N.A., payable to the order of any person in any amount. A shareholder
wishing to use this method of redemption must complete the appropriate portion
of the Application including a signature card. Drafts can be ordered by the
shareholder, for a charge of $12.00 per 175 drafts ordered, after all necessary
application forms have been received in proper form. The cost of the drafts
ordered by the shareholder will be collected by redemption of shares, or
fractions thereof, from the shareholder's account. If the entire account is
redeemed by draft, dividends credited to that account from the beginning of the
month through the day of redemption will be paid by a separate check mailed to
the address of record. Payment of drafts is subject to acceptance by the Fund,
and the Fund may refuse to honor drafts whenever the right of redemption has
been suspended or postponed, or whenever the shareholder's account is otherwise
impaired. When the draft is presented for payment and accepted, a sufficient
number of shares in the account will be redeemed to pay the amount of the draft.
When a draft is presented to redeem Fund shares in excess of the value of the
account OR TO REDEEM SHARES PURCHASED BY CHECK WITHIN 4 BUSINESS DAYS, the draft
will be returned marked "insufficient funds" and a service charge of $10.00 will
be levied on all drafts so marked. Redemption by draft is not available for
Retirement Accounts.
9
<PAGE>
Copies of cleared drafts may be obtained by calling the Fund at our
toll-free number (800) 247-4170 (in Iowa call toll-free (800) 422-3175, or in
the Des Moines metropolitan area call 225-5586), or by writing a letter to the
Fund. The first five copies of drafts per year will be provided at no charge to
the shareholder; thereafter, there will be a charge of $3 per copy. The costs of
the copies will be collected by redemption of shares, or fractions thereof, from
the shareholder's account.
By Telephone ($1,000 minimum):
Shareholders may redeem shares by telephone. The proceeds of shares so
redeemed will be sent by check to the shareholder of record at the address of
record. A shareholder wishing to use this method of redemption must complete the
appropriate portions of the Application and it must be on file with the Fund.
All applications for telephone redemption must have signatures guaranteed by a
commercial bank, trust company, member of a stock exchange, savings and loan
association or savings bank, other eligible financial institution, or a
registered representative of EquiTrust Marketing Services, Inc. (formerly known
as FBL Marketing Services, Inc.) or EquiTrust Investment Management Services,
Inc. (formerly known as FBL Investment Advisory Services, Inc.), and shall
include such other documentation of authority as the Fund deems necessary in the
case of estates, trusts, guardianships, corporations, unincorporated
associations and pension and profit sharing plans. THE FUND CANNOT ACCEPT
GUARANTEES FROM NOTARIES PUBLIC. Once the completed form is on file, the Fund
will honor redemption requests by ANY PERSON by telephone, using the toll free
numbers listed on the cover page, telegraph or other methods without a signature
guarantee from the shareholder or any other person. Proceeds may also be paid to
the shareholder by wire transfer, but only to the bank and account on file as
designated by the shareholder, which must be a domestic commercial bank that is
a member of the Federal Reserve System. Although the Fund does not charge for
wiring funds, the shareholder will be responsible for wire fees, if any, charged
by the receiving bank. The Adviser employs procedures designed to confirm that
instructions communicated by telephone are genuine, including requiring certain
identifying information prior to acting upon instructions, recording all
telephone instructions and sending written confirmations of instructions. To the
extent such procedures are reasonably designed to prevent unauthorized or
fraudulent instructions neither the Adviser nor the Fund would be liable for any
losses from unauthorized or fraudulent instructions. The Fund reserves the right
to terminate this telephone redemption privilege at any time. This procedure is
not available for Retirement Accounts.
- --------------------------------------------------------------------------------
OTHER
SHAREHOLDER
SERVICES
- ----------------
The Fund offers a number of shareholder services designed to facilitate
investment in its shares. Full details as to each of such services and copies of
the various plans described below can be obtained from the Fund.
PERIODIC WITHDRAWAL PLAN
A shareholder who owns $5,000 or more of Fund shares in a single account may
establish a Periodic Withdrawal Plan to provide for regular monthly, quarterly
or annual payments of a fixed dollar amount or fixed percent of the account
balance ($100 annual minimum) to be sent to the shareholder or a designated
payee. (Account balance and withdrawal limitations may be waived if the plan is
established using life expectancy factors to calculate a required minimum
distribution.) Fund shares held in the shareholder's account having a net asset
value of the amount of the requested payment will be
10
<PAGE>
redeemed on or around the fifth business day before the end of the applicable
month and a check will be mailed to the investor within seven days thereafter.
AUTOMATIC INVESTMENT PLAN
A shareholder may elect to participate in the Fund's automatic investment
plan. This plan enables a shareholder to automatically purchase shares of the
Fund on a monthly basis. A minimum initial investment of $50 per account is
required to establish an automatic investment plan. Minimum monthly investments
of $25 per account are necessary to maintain the plan. The Fund will debit the
shareholder's financial institution account and subsequently purchase shares of
the Fund having a net asset value of the amount of the requested deposit on or
around the 16th day of the month. Shareholders interested in this plan must
complete an automatic investment form available from the Fund. If a shareholder
has elected to participate in the Automatic Investment Plan, and all shares of
an account with that option are exchanged for shares of any portfolio of
EquiTrust Series Fund, Inc., the Automatic Investment Plan will continue under
the account(s) to which the shares were exchanged, until such time as that fund
is notified in writing to discontinue the Plan.
EXCHANGE PRIVILEGE
A shareholder may exchange all or some Fund shares for shares of any
portfolio of EquiTrust Series Fund, Inc., provided the accounts have like
registrations, if that fund's shares are eligible for sale in the shareholder's
state of residence. EquiTrust Series Fund, Inc. currently offers six portfolios:
Value Growth Portfolio, High Grade Bond Portfolio, High Yield Bond Portfolio,
Managed Portfolio, Money Market Portfolio and Blue Chip Portfolio. A prospectus
for EquiTrust Series Fund, Inc. may be obtained by writing or calling that fund
at the same address or phone numbers as shown on the cover page of this
prospectus. Traditional Shares of that fund are subject to a contingent deferred
sales charge of up to 5%, as described in its prospectus. Exchanges may be for
any amount, except that if a new account is established by the exchange
privilege, an application for that account must be completed and mailed to the
fund, and the minimum initial purchase amount must be met. Exercise of the
exchange privilege is treated as a sale for federal income tax purposes and,
depending on the circumstances, a gain or loss may be realized by the
shareholder. Shareholders of the Fund interested in exercising the exchange
privilege must first obtain a prospectus and an exchange form from the Fund.
Once the completed exchange form is on file with the Fund, exchanges may be
authorized by telephone (by ANY PERSON) or by letter. This privilege may be
modified or terminated by the Fund at any time.
A shareholder may also request exchanges to any portfolio of EquiTrust
Series Fund, Inc. on a monthly or quarterly basis using the automatic exchange
privilege. Automatic exchanges occur on the 20th day of the month of the elected
schedule or the following business day if the 20th is a holiday or weekend day.
Shareholders interested in the automatic exchange privilege must first obtain a
prospectus and an automatic exchange form from that fund. Automatic exchanges
are subject to the considerations listed in the above paragraph.
RETIREMENT PLANS
Eligible shareholders of the Fund may participate in a variety of qualified
retirement plans which are available from EquiTrust Investment Management
Services, Inc. Some of the plans currently offered are: Self-Employed Individual
Retirement Plans (Keogh Plans), Individual Retirement Accounts (IRAs),
Simplified Employee Pension Plans (SEPs), Savings Incentive Match Plans for
Employees (SIMPLEs) retirement plans, Tax Sheltered 403(b) Plans, Corporate
Pension and Profit Sharing Plans, and Public Employer Deferred Compensation
Plans. The initial investment to establish any such plan, and subsequent
investments, may be in any amount (subject to plan limitations). Investors
Fiduciary Trust Company ("IFTC") of Kansas City, Missouri serves as custodian
and provides the required services for Keogh Plans, IRAs, SEPs, SIMPLEs and
Corporate Pension and Profit Sharing Plans. A custodial fee, currently
11
<PAGE>
$10.00, will be collected annually by redemption of shares, or fractions
thereof, from each participant's account(s). EquiTrust Investment Management
Services, Inc. performs plan services for IFTC for a portion of the fee.
Information with respect to these plans is available upon request from the Fund.
Trustees of qualified retirement plans and 403(b)(7) custodial accounts are
required by law to withhold 20% of the taxable portion of any distribution that
is eligible to be "rolled over." The 20% withholding requirement does not apply
to distributions from IRAs or any part of a distribution which is transferred
directly to another qualified retirement plan, 403(b)(7) account or IRA.
Shareholders should consult their tax advisers regarding this 20% withholding
requirement.
- --------------------------------------------------------------------------------
NET
ASSET
VALUE
- -------
The net asset value per share of the Fund is determined as of the earlier of
3:00 p.m. (Central Time) or the close of the New York Stock Exchange on each day
the Exchange is open (except the Fridays after Christmas Day and Thanksgiving
Day) and on each other day on which there is sufficient trading in the Fund's
investments that it might affect the net asset value, except that the net asset
value will not be computed on a day when no orders for purchase or redemption of
shares are received. If the Fund offices should be closed because of a
weather-related or comparable type of emergency, and the Fund is unable to
segregate orders and redemption requests received on the emergency closed day,
then the Fund will price those orders and redemptions at the net asset value
next determined. The net asset value per share is computed by dividing the total
value of the Fund's securities and other assets, less liabilities (including
dividends payable), by the number of Fund shares outstanding. The Fund seeks to
maintain a constant net asset value per share of $1.00. The Fund's total assets
are determined by valuing the portfolio securities at amortized cost pursuant to
Rule 2a-7 under the Investment Company Act.
- --------------------------------------------------------------------------------
MANAGEMENT
OF THE
FUND
- ---------------
BOARD OF DIRECTORS
The Fund has a board of seven directors, four of whom are not "interested
persons" of the Fund as defined in the Investment Company Act. The Board of
Directors is responsible for the overall supervision of the operations of the
Fund and the performance of the various duties imposed on the directors of
investment companies by the Investment Company Act. The Board of Directors
elects officers of the Fund annually.
INVESTMENT ADVISER AND UNDERWRITER
EquiTrust Investment Management Services, Inc. ("EquiTrust" or "Adviser"),
5400 University Avenue, West Des Moines, Iowa 50266, acts as the Fund's
investment adviser, manager and principal underwriter and is sole distributor of
the Fund's shares. EquiTrust has served as the Fund's investment adviser,
manager and underwriter since the Fund commenced operations in 1981. EquiTrust
is an indirect subsidiary of FBL Financial Group, Inc., an Iowa corporation. The
following individuals are
12
<PAGE>
officers and/or directors of both EquiTrust and the Fund: Stephen M. Morain,
Thomas R. Gibson, Timothy J. Hoffman, Dennis M. Marker, James W. Noyce, William
J. Oddy, Lou Ann Sandburg, Sue A. Cornick, Kristi Rojohn and Elaine A.
Followwill. The Adviser also acts as an investment adviser to individuals,
institutions and two other investment companies: EquiTrust Series Fund, Inc. and
EquiTrust Variable Insurance Series Fund. Personnel of the Adviser also manage
investments for the portfolios of insurance companies.
The Adviser handles the investment and reinvestment of the Fund's assets,
and is responsible for the overall management of the Fund's business affairs,
subject to the supervision of the Board of Directors. As compensation for the
advisory and management services provided by the Adviser, the Fund has agreed to
pay the Adviser an annual management fee of .25% of the average daily net assets
accrued daily and payable monthly.
SHAREHOLDER SERVICE, DIVIDEND DISBURSING AND TRANSFER AGENT
EquiTrust serves as the Fund's Shareholder Service, Dividend Disbursing and
Transfer Agent for a separate fee. EquiTrust in turn has contracted with DST
Systems, Inc., an unrelated party, to perform certain services incidental to the
maintenance of shareholder accounts for a portion of the fee.
ACCOUNTING SERVICES
The Fund has entered into an accounting services agreement with EquiTrust
pursuant to which EquiTrust performs accounting services for the Fund. In
addition, the agreement provides that EquiTrust shall calculate the Fund's net
asset value in accordance with the Fund's Prospectus and prepare for Fund
approval and use various tax returns and other reports. For such services the
Fund pays EquiTrust an annual fee, payable monthly, of .05% of the Fund's
average daily net assets, with the annual fee payable by the Fund not to exceed
$30,000.
- --------------------------------------------------------------------------------
PORTFOLIO
TRANSACTIONS
-----------------
Purchases and sales of portfolio securities are normally principal
transactions. Portfolio securities are normally purchased directly from the
issuer or from an underwriter or market maker for the securities. There are
usually no brokerage commissions paid by the Fund for such purchases and none
were paid during the fiscal year ended July 31, 1997. Purchases from
underwriters will include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked price. The primary consideration in the
allocation of transactions is the most favorable price and execution of orders.
- --------------------------------------------------------------------------------
DIVIDENDS
-----------
The Fund declares dividends of all its daily net investment income on each
day the Fund's net asset value per share is determined. Dividends are payable
monthly and are automatically reinvested and distributed on the last business
day of each month in full and fractional shares of the Fund at the then current
net asset value, unless a shareholder requests payment in cash; provided,
however, that no cash payment will be made for dividends in an amount under $10.
Any such dividend amount under $10 will be reinvested in shares of the Fund.
13
<PAGE>
If a shareholder has elected to receive dividends and/or capital gain
distributions in cash, from an account that remains open, and the postal or
other delivery service is unable to deliver those monies to the shareholder's
address of record, such shareholder's distribution option will automatically be
converted to having all dividend and other distributions reinvested in
additional shares, and the outstanding check will be voided and reinvested in
the account. If a shareholder has elected to receive dividends and/or capital
gain distributions in cash, from an account that is subsequently closed, and the
postal or other delivery service is unable to deliver checks to the
shareholder's address of record, such check will remain outstanding until it is
turned over to the appropriate state agency for escheat purposes. No interest
will accrue on amounts represented by uncashed distribution or redemption
checks.
Each non-qualified account shareholder will receive a monthly summary of
account activity, including information on dividends paid or reinvested.
Qualified account shareholders will receive a quarterly statement reflecting
dividend activity. If the entire amount in an account is redeemed at any time
during a month, dividends credited to that account from the beginning of the
month through the day of redemption will be paid in addition to the proceeds of
the redemption.
The Fund's net investment income, for dividend purposes, consists of (1)
accrued interest income, plus or minus amortized purchase discount or premium,
(2) plus or minus all short-term realized gains or losses and unrealized
appreciation or depreciation on portfolio assets, and (3) minus all accrued
expenses of the Fund. Expenses of the Fund are accrued daily. So long as the
Fund's portfolio securities are valued at amortized cost there would be no
unrealized appreciation or depreciation on portfolio securities.
- --------------------------------------------------------------------------------
TAXES
- ------
The Fund intends to continue to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended. If so qualified, the Fund
will not be subject to federal income taxes to the extent that it distributes
its taxable investment income and realized gains. Distributions of net income
including any net short-term capital gains are taxable to shareholders as
ordinary income, whether such distributions are taken in cash or reinvested in
additional shares. Of course, such distributions are not taxable to shareholders
who are not subject to income tax. Distributions from the Fund do not qualify
for the "dividends received deduction" available to corporate shareholders.
Distributions declared in October, November or December to shareholders of
record as of a date in one of those months and paid during the following January
are treated for federal income tax purposes as paid on December 31 of the
calendar year in which declared. Shareholders are advised to consult with their
tax adviser. Statements as to the tax status of distributions to shareholders
will be furnished to shareholders annually.
The Fund is required by law to withhold 31% of taxable distributions to
shareholders who do not furnish their correct social security or taxpayer
identification number and in certain other circumstances.
14
<PAGE>
- --------------------------------------------------------------------------------
GENERAL
INFORMATION
---------------
ORGANIZATION OF THE FUND
The Fund is a no-load, open-end, diversified management investment company
incorporated under Maryland law on November 5, 1980. The Fund has authorized
capital of 500,000,000 shares of capital stock, $0.001 par value per share. All
shares of capital stock have equal voting rights and equal rights with respect
to dividends, assets, liquidation and redemption. They are fully paid and
non-assessable when issued and have no preemptive, conversion or exchange
rights. The shares are transferable without restriction. Full and fractional
shares may be issued and each fractional share has proportionately the same
rights, including voting, as are provided for a full share.
SHAREHOLDER VOTING RIGHTS
Under the Fund's corporate charter and by-laws, the Fund is not required to
hold, and does not anticipate that it will hold, annual shareholders' meetings.
However, it will hold special meetings of shareholders as required or deemed
desirable for such purposes as electing directors, changing fundamental policies
or approving an investment management agreement.
Each member of the Board of Directors serves for a term of unlimited
duration, subject to the right to remove a Director by the Board of Directors or
the shareholders. The Board of Directors has the power to alter the number of
directors and to appoint successor directors, provided that immediately after
the appointment of any successor director, at least two-thirds of the directors
have been elected by the shareholders of the Fund. However, if at any time less
than a majority of the directors holding office has been elected by the
shareholders, the directors are required to call a special meeting of
shareholders for the purpose of electing directors to fill any existing
vacancies on the Board.
As used in this Prospectus and in the Statement of Additional Information,
the phrase "majority of the Fund's outstanding voting securities" means the vote
of the lesser of (i) 67% of the shares of the Fund present at a meeting if the
holders of more than 50% of the outstanding shares are present in person or by
proxy, or (ii) more than 50% of the outstanding shares of the Fund.
REPORTS TO SHAREHOLDERS
Shareholders will receive unaudited semi-annual financial statements and
fiscal year-end financial statements audited by the Fund's independent auditors.
SHAREHOLDER INQUIRIES
Shareholders may make inquiries either by contacting their registered
representative or by writing or calling the Fund at the address or phone numbers
as shown on the front cover. Copies of year-end account statements may be
obtained by calling the Fund at our toll-free number (800) 247-4170 (in Iowa
call toll-free (800) 422-3175, or in the Des Moines metropolitan area call
225-5586), or by writing a letter to the Fund. The prior year statement for
regular accounts, and prior two year statements for fiduciary accounts, will be
provided at no charge to the shareholder; thereafter, there will be a charge of
$3 per copy. The costs of the copies will be collected by redemption of shares,
or fractions thereof, from the shareholder's account. If the shareholder's
account has been closed, the applicable fees must be remitted with the request.
15
<PAGE>
INSTITUTIONAL ACCOUNTS
Please execute the applicable sections below (all blanks should be completed
with the requested information and inappropriate alternatives should be
deleted).
CORPORATION/ASSOCIATION
I, ________________________________________, Secretary of
________________________, a (corporation) (unincorporated association),
organized under the laws of ____________________________________________________
(the "Organization"), certify that the following resolutions have been adopted
by the (board of directors) (trustees) (other managing body) of said
Organization and are now in full force and effect:
"RESOLVED, that the Organization establish an account in EquiTrust Money
Market Fund, Inc. (the "Fund") and purchase shares of the Fund from time to
time, and the officers of this Organization are authorized to execute the
Application for such account presented for approval (being the form on which
this certificate is set forth) and select the draft redemption privilege and
telephone redemption privilege related to such account in accordance with the
terms on such Application;
FURTHER RESOLVED, that any ______________ (insert number of signatures
selected on the signature card) of the following officers of the Organization:
________________________________________________________________________________
_____________________________________________________ (insert titles) (is) (are)
authorized to execute drafts drawn pursuant to the Fund's draft redemption
privilege and the Fund, Norwest Bank Iowa, N.A. (the "Bank"), EquiTrust
Investment Management Services, Inc. ("EquiTrust") and their representatives are
authorized to honor as genuine and authorized all redemption drafts drawn
pursuant to said draft redemption privilege on behalf of the Organization signed
with the actual or facsimile signatures of said officers as certified to the
Fund by the Secretary of this Organization without inquiry as to the
circumstances of their issue or the disposition of any proceeds;
FURTHER RESOLVED, that in the case of facsimile signatures, redemption drafts
bearing the facsimile specimens or signatures resembling the facsimile specimens
may be honored as genuine and authorized regardless of by whom or by what means
the facsimile signatures thereon have been affixed thereto;
FURTHER RESOLVED, that any one of the aforesaid officers is authorized to act
for the Organization in all other cases in connection with the account of the
Organization with the Fund including providing instructions to the Fund, the
Bank, EquiTrust or their representatives;
FURTHER RESOLVED, that these appointments and authorizations shall remain in
effect and the Fund, the Bank, EquiTrust and their representatives may act
thereon until a revocation or modification thereof by this managing body,
certified by the Secretary of this Organization, shall be delivered to
EquiTrust."
The undersigned Secretary further certifies that the officers of this
Organization listed on the signature card as persons authorized to sign drafts
are now acting in the capacity listed and that the signatures of said persons
set forth on the signature card are genuine and authorized.
IN WITNESS WHEREOF, I have set my hand and the seal of this Organization this
____ day of ______________, 19____.
(SEAL) _____________________________
Secretary
- --------------------------------------------------------------------------------
PARTNERSHIP/TRUST/FIDUCIARY
In connection with the establishment of an account with EquiTrust Money Market
Fund, Inc. (the "Fund") under the name _________________________________________
_______________________, the undersigned certify that they are all of the (part-
ners) (trustees) (other fiduciaries) under the (partnership agreement) (trust)
(will) (court order) (other instrument) described as follows ___________________
_________________________________________________________________ (give detailed
description and dates) and certify that they have full power and authority to
establish an account with the Fund (the "Account") and to select the draft
redemption and telephone redemption privileges in accordance with the
Application to which this certification is attached. The undersigned further
certify that the execution of the Application and the selection of the
privileges noted above and the purchase from time to time of shares of the Fund
in connection therewith have been duly authorized. The undersigned agree to be
bound by the terms and conditions contained in the Application, signature card
and the Fund's current prospectus. The undersigned agree that the persons listed
on the signature card acting with the number of signatures indicated on said
signature card are authorized to execute drafts drawn pursuant to the Fund's
draft redemption privilege and the Fund, Norwest Bank Iowa, N.A. (the "Bank"),
EquiTrust Investment Management Services, Inc. ("EquiTrust") and their
representatives are authorized to honor as genuine and authorized all redemption
drafts drawn pursuant to said draft redemption privilege in connection with the
Account signed with the signatures of said persons described above as certified
herein without inquiry as to the circumstances of their issue or the disposition
of any proceeds. The undersigned certify that the signatures set forth on the
front of the Application and signature card are genuine and authorized. The
undersigned agree that any one of the aforesaid persons are authorized to act
for the owner of the Account in all other cases, including providing
instructions to the Fund, the Bank, EquiTrust or their representatives. This
certification shall remain in effect and the Fund, the Bank, EquiTrust and their
representatives may act in reliance thereon until a revocation or modification
thereof certified to by the undersigned or their successors is delivered to
EquiTrust. All certifications and agreements herein are made jointly and
severally.
<TABLE>
<S> <C> <C>
Dated:
---------------------------- ----------------------------
Signature Title or Capacity
----------------------------- -----------------------------
Signature Title or Capacity
----------------------------- -----------------------------
Signature Title or Capacity
</TABLE>
<PAGE>
<TABLE>
<S> <C>
INVESTMENT ADVISER, UNDERWRITER, CUSTODIAN
SHAREHOLDER SERVICE, DIVIDEND DISBURSING Bankers Trust Company
AND TRANSFER AGENT Global Assets -- Insurance Group
EquiTrust Investment Management Services, 16 Wall Street
Inc. New York, New York 10005
5400 University Avenue
West Des Moines, Iowa 50266
LEGAL COUNSEL INDEPENDENT AUDITORS
Vedder, Price, Kaufman & Kammholz Ernst & Young LLP
Suite 2600 Suite 3400
222 North LaSalle Street 801 Grand Avenue
Chicago, Illinois 60601 Des Moines, Iowa 50309
</TABLE>
<PAGE>
APPLICATION FOR SHARES
PLEASE COMPLETE AND MAIL TO:
EQUITRUST MONEY MARKET FUND, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266-5997
If you have any questions, please call toll-free at 1-800-422-3175 (in Iowa) or
1-800-247-4170 (National).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DESIGNATE TYPE OF ACCOUNT & OWNER NAME(S)
/ / INDIVIDUAL OR JOINT ACCOUNT*
- --------------------------------------------------------------
Owner's Name
- -----------------------------------------------------------------------------
Joint Owner's Name
*Joint tenants with Right of Survivorship. The Fund does not accept accounts
registered tenants-in-common.
/ / CUSTODIAL ACCOUNT
Uniform Gift or Transfer to Minors Act
/ / EDUCATION IRA ACCOUNT
- --------------------------------------------------------------
Custodian's or Responsible Individual's Name
- -----------------------------------------------------------------------------
Minor's Name
/ / TRUST, CORPORATION OF OTHER ENTITY ACCOUNT
- -----------------------------------------------------------------------------
Name of Trust, Corporation or Other Entity
- -----------------------------------------------------------------------------
Trustee(s') Name or Type of Entity
- -----------------------------------------------------------------------------
Date of Trust Agreement
PROVIDE YOUR TAX IDENTIFICATION NUMBER
- -----------------------------------------------------------------------------
Social Security or Tax ID Number
(Use minor's Social Security number for gifts/transfers to minors and Education
IRAs)
- -----------------------------------------------------------------------------
Joint Owner's or Custodian's Social Security or Tax ID Number
PROVIDE YOUR ADDRESS
- -----------------------------------------------------------------------------
Street or PO Box
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
City, State, Zip Code
PROVIDE YOUR DATE(S) OF BIRTH PROVIDE YOUR MEMBERSHIP NUMBER
- ---------------------------
- ----------------------------------
- -----------------------------------------------------------------------------
INITIAL INVESTMENT
- -----------------------------------------------------------------------------
Amount ($500 minimum)
- -----------------------------------------------------------------------------
TO REINVEST YOUR DISTRIBUTIONS
Your dividends and capital gains will be reinvested unless you indicate
otherwise. (No cash payments will be made for dividends in an amount less than
$10.)
/ / Cash Dividends / / Cash Capital Gains
SPECIAL SHAREHOLDER PRIVILEGES
Expedited Redemption ($1,000 minimum)
/ / REDEMPTION BY TELEPHONE
I authorize EquiTrust Investment Management Services, Inc. ("EquiTrust") to
honor telephone requests FROM ANY PERSON without signature guarantee for the
redemption of Fund shares from my account. The proceeds shall be wired only to
the account designated below or, if none, mailed to the address of record. This
privilege will be terminated by the Fund without prior notice if EquiTrust
receives written notice from any account owner of revocation of this authority.
SIGNATURE GUARANTEE REQUIRED.
- -----------------------------------------------------------------------------
Name of Bank (not a savings bank, savings & loan or credit union)
- -----------------------------------------------------------------------------
Address of Bank, City, State, Zip Code
- -----------------------------------------------------------------------------
Bank Account Number
- -----------------------------------------------------------------------------
Bank Routing Number
/ / REDEMPTION BY DRAFT (no minimum)
I authorize Norwest Bank Iowa, N.A. (the "Bank") to honor drafts drawn by me on
the Bank and the redemption of a sufficient number of Fund shares to pay such
drafts. This privilege is subject to the additional terms on the signature card.
/ / Enclosed is a completed signature card.
/ / Please send card for completion.
Please send information on the following:
/ / Exchange Between Funds
/ / Automatic Investment Plan
- --------------------------------------------------------------
TAX QUALIFIED PLANS ONLY
A qualified application must be submitted in addition to this form.
/ / SIMPLE / / IRA / / Education IRA
/ / Tax Deferred 403(b) / / SEP / / Roth IRA
/ / Qualified Pension and Profit Sharing
DESIGNATED BENEFICIARY
(for use with tax qualified plans only)
- -----------------------------------------------------------------------------
Primary Beneficiary
- -----------------------------------------------------------------------------
Social Security Number Date of Birth
- -----------------------------------------------------------------------------
Contingent Beneficiary
- -----------------------------------------------------------------------------
Social Security Number Date of Birth
- -----------------------------------------------------------------------------
Contingent Beneficiary
- -----------------------------------------------------------------------------
Social Security Number Date of Birth
- -----------------------------------------------------------------------------
Spousal Consent of Non-Spouse Beneficiary
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURES
By signing this form, I certify that:
I have received, read and agree to the terms of the prospectus for EquiTrust
Money Market Fund, Inc. I have the authority and legal capacity to purchase
mutual fund shares, am of legal age in my state and believe each investment is
suitable for me. Under penalties of perjury, I certify that the number shown on
this form is a true and correct social security or tax identification number
and, to the best of my knowledge, I am not subject to backup withholding.
- -----------------------------------------------------------------------------
Signature of Applicant
- -----------------------------------------------------------------------------
Signature of Joint Applicant
- -----------------------------------------------------------------------------
Rep's Signature Number
- -----------------------------------------------------------------------------
Date
SIGNATURE GUARANTEE*
Complete for Expedited Redemption Privilege
- -----------------------------------------------------------------------------
Signature Guaranteed By
- -----------------------------------------------------------------------------
Authorized Signature
*Signature guarantee must be supplied by a commercial bank, trust company,
member of a securities exchange, savings and loan association or savings bank,
other eligible financial institution, or a registered representative of
EquiTrust Marketing Services, Inc. or EquiTrust Investment Management Services,
Inc.
737-118A (5/98) This application must be accompanied or preceded by a current
prospectus.
<PAGE>
----------------------------
Farm Bureau Mutual Funds
EquiTrust Money
Market Fund, Inc.
[LOGO]
PROSPECTUS
DECEMBER 1, 1997
(AS AMENDED MAY 1, 1998)
INVESTMENT MANAGER AND
PRINCIPAL UNDERWRITER
EQUITRUST INVESTMENT
MANAGEMENT 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)
<TABLE>
<S> <C>
FARM BUREAU MUTUAL FUNDS
5400 UNIVERSITY AVENUE [LOGO]
WEST DES MOINES, IOWA 50266
</TABLE>
737-118(12/97)
<PAGE>
PART B
FARM BUREAU MUTUAL FUNDS
EQUITRUST MONEY MARKET FUND, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IOWA 50266
(515) 225-5586
STATEMENT OF ADDITIONAL INFORMATION
DECEMBER 1, 1997
(AS AMENDED MAY 1, 1998)
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus of EquiTrust Money Market Fund, Inc.
(the "Fund") dated December 1, 1997 (as amended May 1, 1998). A copy of the
Prospectus may be obtained without charge by writing or calling the Fund at the
address and telephone number shown above.
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT RESTRICTIONS...................................................... B-2
OFFICERS AND DIRECTORS....................................................... B-3
INVESTMENT OBJECTIVE AND POLICIES............................................ B-6
NET ASSET VALUE.............................................................. B-7
CALCULATION OF FUND'S YIELD.................................................. B-7
RETIREMENT PLANS............................................................. B-8
REDEMPTIONS.................................................................. B-9
INVESTMENT ADVISER........................................................... B-10
UNDERWRITING AND DISTRIBUTION................................................ B-11
OTHER INFORMATION............................................................ B-12
FINANCIAL STATEMENTS......................................................... B-12
</TABLE>
<PAGE>
INVESTMENT RESTRICTIONS
In seeking to achieve its investment objective as stated in the Prospectus,
the Fund has adopted the following investment restrictions. The Fund will not:
1. Purchase securities of any issuer (other than securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities) if, as
a result, more than 5% of the value of the Fund's assets (taken at current
value at the time of investment) would be invested in securities of that
issuer.
2. Purchase more than 10% of any class of securities of any issuer
other than securities issued or guaranteed by the U.S. Government, its
agencies or instrumentalities. (For this purpose, all outstanding debt
securities of an issuer are considered one class.)
3. Engage in puts, calls, straddles, spreads or any combination
thereof; nor engage in margin purchases, except for use of short-term
credits necessary for clearance of purchases and sales of portfolio
securities.
4. Make short sales of securities or maintain a short position in
securities.
5. Invest in real estate, including interests in real estate investment
trusts (although it may invest in securities secured by real estate or
interests therein or securities issued by companies which invest in real
estate or interests therein) or invest in commodities or commodity
contracts, including futures contracts.
6. Invest more than 5% of the value of the Fund's total assets (taken
at current value at the time of investment) in securities of issuers, other
than securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities, which have a record of less than three years continuous
operations, including predecessors.
7. Purchase or retain the securities of any issuer if any of the
officers or directors of the Fund or its investment adviser own individually
more than 1/2 of 1% of the securities of such issuer and together own more
than 5% of the securities of such issuer.
8. Concentrate its investments in any one industry by investing 25% or
more of the value of the Fund's total assets (taken at current value at the
time of investment) in any one industry, other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
obligations of banks or savings institutions, or instruments secured by
these money market instruments, such as repurchase agreements for U.S.
Government securities.
9. Make loans to others (except through the purchase of debt
obligations or repurchase agreements referred to under "Investment Objective
and Policies" in the Prospectus). In addition, the Fund may not invest more
than 10% of its net assets (taken at current value at the time of
investment) in repurchase agreements maturing in more than seven days.
10. Borrow money, except from banks for temporary or emergency purposes
and in no event in excess of 10% of its gross assets taken at the lesser of
cost or market or other fair value (the Fund will not borrow in order to
increase income (leveraging) but may borrow to facilitate meeting redemption
requests which might otherwise require untimely disposition of portfolio
securities; interest paid on any such borrowings will reduce net investment
income); nor will it pledge or mortgage more than 15% of its gross assets
taken at cost, except in connection with permissible borrowings discussed
immediately above; nor purchase money market instruments while any such
permissible borrowings are outstanding.
11. Act as an underwriter in securities. In this connection, the Fund
will not invest more than 10% of the value of its total assets in securities
(except repurchase agreements) which are subject to legal or contractual
restrictions on resale, or are not readily marketable.
12. Purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or reorganization.
B-2
<PAGE>
13. Invest in companies for the purpose of exercising management or
control.
14. Purchase any common stocks or other equity securities, or securities
convertible into stock.
15. Issue senior securities.
The investment restrictions described above are fundamental and may not be
changed without the approval of the lesser of (i) 67% of the shares represented
at the meeting of the shareholders at which the holders of 50% or more of the
shares are represented in person or by proxy or (ii) more than 50% of the
outstanding voting securities.
In addition, the Fund may not: (a) purchase securities which are subject to
legal or contractual restrictions on resale in excess of 5% of the value of the
Fund's net assets; (b) invest in interests in oil, gas or other mineral
exploration or development programs or invest in oil, gas, or other mineral
leases; (c) pledge, mortgage or hypothecate its portfolio securities to the
extent that at any time the percentage of pledged securities would exceed 10% of
the Fund's total net assets; or (d) invest in real estate limited partnerships.
These restrictions, (a) through (d), may be changed by the Board of Directors
without shareholder approval.
OFFICERS AND DIRECTORS
The officers and directors of the Fund, their age and their principal
occupations for the past five years are set forth below, though corporate
positions may, in some instances, have changed during this period. The address
of the officers of the Fund is 5400 University Avenue, West Des Moines, Iowa
50266. The directors listed with an asterisk are "interested persons" of the
Fund as defined in the Investment Company Act of 1940.
EDWARD M. WIEDERSTEIN*, PRESIDENT AND DIRECTOR (49)
Farmer; Chairman and Director, FBL Financial Group, Inc., President and
Director, Iowa Farm Bureau Federation, Farm Bureau Life Insurance Company,
FBL Insurance Brokerage, Inc., Farm Bureau Mutual Insurance Company and
other affiliates of the foregoing; Director, Western Ag Insurance Agency,
Inc., Western Farm Bureau Life Insurance Company, Western Agricultural
Insurance Company, American Agricultural Insurance Company and Multi-Pig
Corporation.
RICHARD D. HARRIS*, SENIOR VICE PRESIDENT, SECRETARY-TREASURER AND DIRECTOR (53)
Senior Vice President, Secretary-Treasurer and Director, FBL Financial
Group, Inc.; Senior Vice President and Secretary-Treasurer, Farm Bureau Life
Insurance Company and other affiliates of the foregoing; Executive Director
and Secretary-Treasurer, Iowa Farm Bureau Federation; Senior Vice President
and Assistant Secretary-Treasurer, South Dakota Farm Bureau Mutual Insurance
Company; Vice President and Treasurer, Farm Bureau Management Corporation;
former Director, Public Policy Division, Iowa Farm Bureau Federation;
Director, Iowa FFA Foundation and Iowa Make-A-Wish Foundation.
THOMAS R. GIBSON, CHIEF EXECUTIVE OFFICER (53)
Chief Executive Officer and Director, FBL Financial Group, Inc., EquiTrust
Investment Management Services, Inc. and EquiTrust Marketing Services, Inc.;
Chief Executive Officer, Farm Bureau Life Insurance Company, Western Farm
Bureau Life Insurance Company, Farm Bureau Mutual Insurance Company and
other affiliates of the foregoing.
STEPHEN M. MORAIN, SENIOR VICE PRESIDENT, GENERAL COUNSEL AND ASSISTANT
SECRETARY (52)
General Counsel and Assistant Secretary, Iowa Farm Bureau Federation;
General Counsel, Secretary and Director, Farm Bureau Management Corporation;
Senior Vice President, General Counsel
B-3
<PAGE>
and Director, FBL Financial Group, Inc., EquiTrust Investment Management
Services, Inc. and EquiTrust Marketing Services, Inc.; Senior Vice President
and General Counsel, Farm Bureau Life Insurance Company, Western Farm Bureau
Life Insurance Company and other affiliates of the foregoing; Director,
Computer Aided Design Software, Inc. and Iowa Business Development Finance
Corporation; Chairman, Edge Technologies, Inc.
TIMOTHY J. HOFFMAN, VICE PRESIDENT (47)
Chief Property/Casualty Officer, FBL Financial Group, Inc.; Vice President,
Farm Bureau Life Insurance Company, Western Farm Bureau Life Insurance
Company and other affiliates of the foregoing; Executive Vice President and
General Manager, Farm Bureau Mutual Insurance Company and other affiliates
of the foregoing; Vice President and Director, EquiTrust Marketing Services,
Inc. and EquiTrust Investment Management Services, Inc.
WILLIAM J. ODDY, CHIEF OPERATING OFFICER (53)
Chief Operating Officer, FBL Financial Group, Inc.; Executive Vice President
and General Manager, Farm Bureau Life Insurance Company, Western Farm Bureau
Life Insurance Company and other affiliates of the foregoing; Vice
President, Farm Bureau Mutual Insurance Company and other affiliates of the
foregoing. President, Treasurer and Director, Communications Providers,
Inc.; Chief Operating Officer and Director, EquiTrust Marketing Services,
Inc.; President and Director, EquiTrust Investment Management Services,
Inc., FBL Real Estate Ventures, Ltd. and RIK, Inc; Chief Executive Officer,
Western Computer Services, Inc.
JAMES W. NOYCE, VICE PRESIDENT, CHIEF FINANCIAL OFFICER (41)
Chief Financial Officer, FBL Financial Group, Inc., Farm Bureau Life
Insurance Company, Western Farm Bureau Life Insurance Company and other
affiliates of the foregoing; Vice President, Treasurer and Director, FBL
Leasing Services, Inc. and RIK, Inc.; Chief Financial Officer, Treasurer and
Director, EquiTrust Investment Management Services, Inc. and EquiTrust
Marketing Services, Inc.; Treasurer and Director, FBL Real Estate Ventures,
Ltd.
LOU ANN SANDBURG, VICE PRESIDENT - INVESTMENTS AND ASSISTANT TREASURER (50)
Vice President - Investments and Assistant Treasurer, FBL Financial Group,
Inc., Farm Bureau Life Insurance Company, Western Farm Bureau Life Insurance
Company and other affiliates of the foregoing; Vice President, FBL Financial
Services, Inc. and Western Computer Services, Inc.; Vice President -
Investments, EquiTrust Investment Management Services, Inc. and EquiTrust
Marketing Services, Inc.
DENNIS M. MARKER, INVESTMENT VICE PRESIDENT, ADMINISTRATION AND ASSISTANT
SECRETARY (46)
Investment Vice President, Administration, FBL Financial Group, Inc. and
Farm Bureau Life Insurance Company; Vice President and Director, FBL Leasing
Services, Inc; Investment Vice President, Administration, Secretary and
Director, EquiTrust Investment Management Services, Inc. and EquiTrust
Marketing Services, Inc.
SUE A. CORNICK, MARKET CONDUCT AND MUTUAL FUNDS VICE PRESIDENT AND ASSISTANT
SECRETARY (37)
Market Conduct and Mutual Funds Vice President and Assistant Secretary,
EquiTrust Investment Management Services, Inc. and EquiTrust Marketing
Services, Inc.
B-4
<PAGE>
KRISTI ROJOHN, ASSISTANT SECRETARY (34)
Assistant Mutual Funds Manager and Assistant Secretary, EquiTrust Investment
Management Services, Inc. and EquiTrust Marketing Services, Inc.
ELAINE A. FOLLOWWILL, ASSISTANT SECRETARY (27)
Compliance Assistant and Assistant Secretary, EquiTrust Investment
Management Services, Inc. and EquiTrust Marketing Services, Inc.
DONALD G. BARTLING, DIRECTOR (70)
Box 104
Herman, Nebraska 68029
Farmer; Partner, Bartling Brothers Partnership (farming business); Director,
Papio Missouri River Natural Resources District.
JOHN R. GRAHAM*, DIRECTOR (52)
1512 Country Club Place
Manhattan, Kansas 66502
Executive Vice President, Kansas Farm Bureau, Kansas Farm Bureau Services,
Kansas Agricultural Marketing Association, FB Services Insurance Agency,
Kansas Farm Bureau Life Insurance Company, The Farm Bureau Mutual Insurance
Company, Inc., Kansas Farm Bureau Reinsurance Company, Inc. and KFB
Insurance Company, Inc.; Chairman, Chief Executive Officer and Director, FB
Capital Management, Inc. of Kansas; Director, National Association of
Independent Insurers, Didde Corporation and Farm Bureau Mutual Insurance
Agency of Kansas; Partner, Arthur-Graham Rental Properties, CM Brass and G&H
Real Estate Investments; Trustee, Master Teacher Employee Benefit Pension
Trust.
ERWIN H. JOHNSON, DIRECTOR (54)
1841 March Avenue
Charles City, Iowa 50616
Farmer; Owner and Manager, Center View Farms Co.; Director, First Security
Bank and Trust Co., Charles City, Iowa; Farm Associate, Iowa State
University Cooperative Extension Service; Voting Delegate, former President
and Director, Floyd County Farm Bureau, Financial and Farm Management
Consultant; Iowa State University Overseas Projects.
KENNETH KAY, DIRECTOR (54)
R.R. 2; Box 75
Atlantic, IA 50022
Farmer; Salesman, Pioneer Seed Corn; Voting Delegate, Vice President and
former President, Cass County Farm Bureau; Director, First Whitney Bank and
Trust; Board Member, Transportation Committee Chairman, Cass Atlantic
Development Corporation.
CURTIS C. PIETZ, DIRECTOR (66)
R. R. 3, Box 79
Lakefield, Minnesota 65150
Farmer; Director and Part Owner, Storden Seed and Chemical Service, Inc.;
Director, Minnesota Rural Finance Authority; former Program Evaluator,
Minnesota Department of Vocational Education; former President, Jackson
County Farm Bureau; Former Chairman and Director, Southwest Farm Management
Association; Director, F.C.S.
B-5
<PAGE>
The officers and directors of the Fund also serve in similar capacities as
officers and directors of EquiTrust Series Fund, Inc. and as officers and
trustees of EquiTrust Variable Insurance Series Fund. Several of the officers
and directors of the Fund are also officers and directors of the Adviser. The
Fund pays no direct remuneration to any officer of the Fund. Each of the
directors who is not affiliated with the Adviser receives a fee of $115 plus
expenses from the Fund for each directors' meeting attended. For the fiscal year
ended July 31, 1997, directors' fees paid by the Fund totalled $2,185.
The following table sets forth the compensation received by all Directors of
the Fund for the fiscal year ended July 31, 1997. The information in the last
column of the table sets forth the total compensation received by all Directors
for calendar year 1996 for services as a Director of the Fund and other funds in
the EquiTrust Family.
<TABLE>
<CAPTION>
AGGREGATE PENSION AND RETIREMENT TOTAL COMPENSATION
COMPENSATION FROM BENEFITS ACCRUED AS FROM ALL FUNDS IN
NAME OF DIRECTOR THE FUND PART OF FUND EXPENSES THE EQUITRUST FAMILY
- ---------------------------- ----------------- ----------------------- ---------------------
<S> <C> <C> <C>
Donald G. Bartling $ 460 0 $ 1,380
John R. Graham 0 0 690
Richard D. Harris 0 0 0
Erwin H. Johnson 460 0 1,380
Ann Jorgensen (1) 345 0 1,380
Kenneth Kay 345 0 1,035
Eugene R. Maahs (2) 0 0 0
Stephen M. Morain (3) 0 0 0
Dale W. Nelson (4) 115 0 1,035
Curtis C. Pietz 460 0 1,380
Edward M. Wiederstein 0 0 0
</TABLE>
- ------------------------
(1) Resigned as a Director of the Fund effective June 12, 1997.
(2) Resigned as a Director of the Fund effective August 31, 1996.
(3) Resigned as a Director of the Fund effective July 9, 1997.
(4) Resigned as a Director of the Fund effective August 15, 1996.
As of November 10, 1997, the directors and officers as a group owned of
record or beneficially .625% of the then outstanding shares of the Fund, and
EquiTrust Investment Management Services, Inc., 5400 University Avenue, West Des
Moines, Iowa, the Fund's investment adviser, owned of record and beneficially
7.05% of the Fund's outstanding shares.
INVESTMENT OBJECTIVE AND POLICIES
The following information supplements the information set forth in the
Prospectus under the caption "INVESTMENT OBJECTIVE AND POLICIES."
It is the Fund's intention, as a general policy, to hold securities to
maturity. Nevertheless, the Fund may sell portfolio securities prior to maturity
in order to realize gains or losses or to shorten the average maturity and may
reduce or withhold dividends if it deems such actions appropriate to maintain a
stable net asset value. In addition, the Fund may attempt, from time to time, to
increase its yield by trading to take advantage of variations in the markets for
short-term money market instruments. Redemptions of Fund shares could also
necessitate the sale of portfolio securities at times when such sales would not
be otherwise desirable. While the Fund intends to invest in high quality money
market instruments, these investments are not entirely without risk. An increase
in interest rates will generally reduce the market value of the Fund's portfolio
investments and a decline in interest rates will generally increase the value of
the Fund's portfolio investments. Securities which are not issued or guaranteed
by the U.S. Government are subject to the possibility of default by the issuer.
Those obligations having the maximum degree of security tend to have
proportionately lower yields. Since the Fund's assets will be invested in
securities with short maturities and the Fund will manage its portfolio as
described above, the Fund's
B-6
<PAGE>
portfolio of money market instruments may be expected to turn over several times
a year. Since securities with maturities of less than one year are excluded from
required portfolio turnover calculations, the Fund's portfolio turnover rate for
reporting purposes is zero. Of course, there can be no assurance that the Fund
will achieve its objective.
NET ASSET VALUE
The net asset value per share of the Fund is determined as of the earlier of
the close of the New York Stock Exchange or 3:00 p.m. (Central Time), on each
day the Exchange is open for business, except the Fridays after Christmas Day
and Thanksgiving Day, and on each other day on which there is a sufficient
degree of trading in the Fund's investments that it might affect the net asset
value, except that the net asset value will not be computed on a day when no
orders for purchase or redemption of shares are received. If the Fund offices
should be closed because of a weather-related or comparable type of emergency,
and the Fund is unable to segregate orders and redemption requests received on
the emergency closed day, then the Fund will price those orders and redemptions
at the net asset value next determined. The Fund's net asset value is computed
by dividing the total value of the Fund's securities and other assets, less
liabilities (including dividends payable), by the number of Fund shares
outstanding. The net asset value per share is ordinarily $1.00. The Fund's total
assets are determined by valuing the portfolio securities at amortized cost,
pursuant to Rule 2a-7 under the Investment Company Act of 1940. While this
method provides certainty in valuation, it may result in periods during which
the value, as determined by amortized cost, is higher or lower than the price
the Fund would receive if it sold its portfolio securities. Under the direction
of the Board of Directors, certain procedures have been adopted to monitor and
stabilize the price per share. Calculations are made to compare the value of the
Fund's portfolio valued at amortized cost with market values. Market valuations
are obtained by using actual quotations provided by market makers, estimates of
market value, or values obtained from yield data relating to classes of money
market instruments published by reputable sources at the mean between the bid
and asked prices for those instruments. If a deviation of 1/2 of 1% or more were
to occur between the Fund's $1.00 per share net asset value and the net asset
value calculated by reference to market valuations, or if there were any other
deviation which the Board of Directors believed would result in dilution or
other unfair results material to shareholders or purchasers, the Board of
Directors would promptly consider what action, if any, should be initiated. The
Fund reserves the right to calculate or estimate the net asset value more
frequently than once a day if deemed desirable.
The market value of debt securities usually reflects yields generally
available on securities of similar quality. When yields decline, the market
value of a portfolio holding higher yielding securities increases; and when
yields increase, the market value of the portfolio invested at lower yields can
be expected to decline. In addition, if the Fund has net redemptions at a time
when interest rates have increased, the Fund may have to sell portfolio
securities prior to maturity at a price below the Fund's carrying value. Also,
because the portfolio generally will be valued at amortized cost rather than
market, any yield quoted may be different if the entire portfolio were valued at
market since amortized cost does not take market fluctuations into
consideration.
CALCULATION OF FUND'S YIELD
The Fund's yield is computed in accordance with a standard method prescribed
by rules of the Securities and Exchange Commission. Under that method, the yield
quotation is based on a seven-day period and is computed as follows: The Fund's
net investment income per share (accrued interest on portfolio securities, plus
or minus amortized premium or discount, less accrued expenses) is divided by the
price per share (expected to remain constant at $1.00) at the beginning of the
period ("base period return") and the result is divided by seven and multiplied
by 365. The resulting yield figure is carried to the nearest one-hundredth of
one percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation. The Fund's
yield for the seven-day period ended July 31, 1997 was 4.04%.
B-7
<PAGE>
The Fund's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of the assumed
compounding. The formula for the effective yield is (base period return +1) to
the power of (365/7) - 1. The Fund's effective yield for the seven-day period
ended July 31, 1997 was 4.12%.
The Fund's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in the Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in the Fund is held, but also on such matters as any
realized gains and losses, unrealized appreciation and depreciation and changes
in Fund expenses.
RETIREMENT PLANS
The Fund offers a variety of retirement investment programs, available
through EquiTrust Investment Management Services, Inc., whereby contributions
are invested in shares of the Fund, and any dividends (and capital gain
distributions, if any) are reinvested in additional full and fractional shares
of the Fund. The Fund has waived the minimum investment requirement for an
account opened under any of these programs and subsequent investments can be in
any amount (subject to plan limitations).
SELF-EMPLOYED INDIVIDUAL RETIREMENT PLANS
The Fund has available for self-employed individuals a form of Paired
Defined Contribution Plan, Trust Agreement and related Custodial Agreement
(Keogh Plan) under IRS approved prototypes. A self-employed individual has
complete discretion to make his or her own fee arrangements with the custodial
bank of his or her selection, instead of using the custodian named herein on the
terms described under "General" below. The maximum annual amount permitted as
deductible contributions is generally the lesser of 25% of earned income from
self-employment or $30,000. For purposes of the 25% limit of the previous
sentence, currently no more than $160,000 of earned income may be considered.
The $160,000 limit is increased from time to time by the Secretary of the
Treasury to take into account increases in the cost of living. For further
details, including the right of appointing a successor custodian, refer to the
Plan, Trust Agreement and Custodial Agreement available from the Fund.
INDIVIDUAL RETIREMENT ACCOUNTS
The Fund has available Individual Retirement Accounts (IRAs) under IRS
approved prototypes. A full $2,000 deduction for IRA contributions is available
only to (1) taxpayers who are not active participants in an employer-sponsored
retirement plan and (2) taxpayers who are active participants in an employer-
sponsored plan, but have adjusted gross income below a specified level. For
these purposes, a taxpayer will generally be deemed to be an active participant
in an employer-sponsored retirement plan if for any part of the taxable year
either the employee or his or her spouse is an active participant under a
qualified pension plan, a qualified profit sharing or money purchase plan, a
403(b) annuity program, a Simplified Employee Pension plan, or a government plan
(other than a plan maintained for state and local employees under section 457 of
the Internal Revenue Code). Married taxpayers filing a joint return who are
active participants in an employer-sponsored plan may make a tax-deductible IRA
contribution of up to $4,000 ($2,000 for each spouse) if their adjusted gross
income is $40,000 or less. In order to receive the deduction, the combined
compensation of both spouses must be equal to or greater than the combined
amount. Between $40,000 and $50,000 of adjusted gross income, the IRA deduction
is phased out. For single taxpayers who are active participants in an
employer-sponsored plan, the $2,000 deductible IRA contribution is similarly
phased out between $25,000 and $35,000 of adjusted gross income. To the extent
the IRA deduction is reduced or eliminated by the phase-out rule, an individual
may elect to make nondeductible IRA contributions that, when combined with the
deductible contributions, may not exceed $2,000 ($4,000 for a spousal IRA). The
income on the IRA contribution will not be taxed until withdrawn.
B-8
<PAGE>
For a period of seven days after establishment of an IRA Account and receipt
of a disclosure statement, the investor may revoke his or her application and
the full payment made to the Account will be returned. Form 5305-A, available
from the Distributor, EquiTrust Investment Management Services, Inc., 5400
University Avenue, West Des Moines, Iowa 50266, is to be used to establish an
Account. The form should be consulted for detailed information, including
circumstances under which redemption requests must be accompanied by a
declaration of intent as to the disposition of the amount distributed. For
further details, contact the Fund.
SIMPLE RETIREMENT PLANS
A SIMPLE retirement plan may be maintained in any year by an employer who
has 100 or fewer employees who received at least $5,000 of compensation from the
employer for the preceding year, provided that the employer does not maintain
any other employer-sponsored retirement plan. A SIMPLE plan in the form of an
IRA established for each participant is available through the Fund. For further
details, contact the Fund.
TAX-SHELTERED 403(b) PLANS
The Fund has available Tax-Deferred Plans under section 403(b) of the
Internal Revenue Code. Certain tax-exempt organizations and public schools may
establish such plans under which they will be able to make contributions which
are not currently taxable to their employees. For further details, contact the
Fund.
CORPORATE PENSION AND PROFIT SHARING PLANS
Accounts for corporate pension and profit sharing plans (IRS-approved
prototypes as well as other plans) are available. For further details, contact
the Fund.
PUBLIC EMPLOYER DEFERRED COMPENSATION PLANS
Employees of state, county and municipal agencies may make investments with
pre-tax dollars through eligible deferred compensation plans authorized under
section 457 of the Internal Revenue Code. Contributions and earnings are
tax-sheltered until the funds are actually paid to the employee. Plans and
Administrative Services are available to states, counties and municipalities to
provide a tax-sheltered program for employees. For further details, contact the
Fund.
GENERAL
Investors Fiduciary Trust Company of Kansas City, Missouri, serves as
custodian and provides the services required for Keogh Plans, Individual
Retirement Plans, Section 403(b) Plans and corporate pension and profit sharing
plans. An annual maintenance fee, currently $10, will be collected annually by
redemption of shares or fractions thereof from each participant's account(s).
EquiTrust Investment Management Services, Inc. performs plan services for a
portion of the fee and during the fiscal year ended July 31, 1997 received $739
for its services. Unusual administrative responsibilities will be subject to
such additional charges as will reasonably compensate the custodian for the
service involved.
Since a retirement investment program involves a commitment covering future
years, it is important that the investor consider his or her needs and whether
the investment objective of the Fund as described in the Prospectus is likely to
fulfill them. Premature termination or curtailment of the plan may result in
adverse tax consequences. Consultation with an attorney or other tax adviser
regarding these plans is recommended. For further information regarding these
plans, contact the Fund.
REDEMPTIONS
The Fund may suspend the right of redemption or postpone the date of payment
during any period when (a) trading on the New York Stock Exchange is restricted
as determined by the Securities and
B-9
<PAGE>
Exchange Commission or such Exchange is closed for trading (other than customary
weekend and holiday closings); (b) an emergency exists, as determined by the
Securities and Exchange Commission, as a result of which (i) disposal by the
Fund of securities owned by it is not reasonable or practicable, or (ii) it is
not reasonably practicable for the Fund to determine fairly the value of its net
assets; or (c) the Securities and Exchange Commission by order permits such
suspension for the protection of the Fund's investors. In such event, redemption
will be effected at the net asset value next determined after the suspension has
been terminated unless the shareholder has withdrawn the redemption request in
writing and the request has been received by EquiTrust Investment Management
Services, Inc., 5400 University Avenue, West Des Moines, Iowa 50266-5997, prior
to the day of such determination of net asset value.
INVESTMENT ADVISER
The following information supplements the information set forth in the
Prospectus under the caption "MANAGEMENT OF THE FUND." Pursuant to an Investment
Advisory and Management Services Agreement dated February 23, 1981 (the
"Agreement"), EquiTrust Investment Management Services, Inc. ("EquiTrust" or
"Adviser"), acts as the Fund's investment adviser and manager subject to the
supervision of the Fund's Board of Directors. EquiTrust has served as investment
adviser and manager since the Fund commenced operations in March, 1981.
EquiTrust is a wholly-owned subsidiary of FBL Financial Services, Inc., which is
a wholly-owned subsidiary of FBL Financial Group, Inc., an Iowa corporation, 66%
of whose outstanding voting shares are in turn owned by Iowa Farm Bureau
Federation, an Iowa not-for-profit corporation. The Adviser also acts as the
investment adviser to individuals, institutions and two other mutual funds:
EquiTrust Series Fund, Inc. and EquiTrust Variable Insurance Series Fund.
Personnel of the Adviser also manage investments for the portfolios of insurance
companies.
The Adviser subscribes to leading bond information services and receives
published reports and statistical compilations from issuers directly, as well as
analyses from brokers and dealers who may execute portfolio transactions for the
Fund or the Adviser's other clients. The Adviser regards this information and
material, however, as an adjunct to its own research activities.
Under the Agreement, the Adviser handles the investment and reinvestment of
the Fund's assets and provides for the Fund, at the Adviser's expense, office
space and facilities, simple business equipment, advisory, research and
statistical facilities, clerical services and personnel as may be necessary to
administer the business affairs of the Fund. The Adviser also has agreed to
arrange for any of its officers and directors to serve without salary as
directors, officers or agents of the Fund if duly elected to such positions.
As compensation for the investment advisory and management services and the
aforementioned facilities and administrative services to be provided by the
Adviser, the Fund has agreed to pay the Adviser an annual management fee of .25%
of the average daily net assets, accrued daily and payable monthly. For the
fiscal years ended July 31, 1997, 1996 and 1995 the Fund's investment advisory
and management fee expense was $81,111, $118,225 and $96,398, respectively.
The Adviser is not required to pay expenses of the Fund other than as set
forth above. The Fund pays such other expenses, which include net asset value
calculations; portfolio transaction costs; interest on Fund obligations;
miscellaneous reports; membership dues; all expenses of registration of its
shares under federal and state securities laws; all expenses of Shareholders'
and Directors' meetings and of preparing, printing and mailing proxy statements,
reports and notices to shareholders; investor services (including allocable
telephone and personnel expenses incurred by the Adviser); all taxes and fees
payable to federal, state or other governmental authorities; the fees and
expenses of independent auditors, legal counsel, custodian, transfer and
dividend disbursing agent and any fees of Directors who are not affiliated with
the Adviser; insurance premiums for fidelity bond and other coverage of the
Fund's operations.
B-10
<PAGE>
The Agreement continues in effect from year-to-year as long as its
continuation is approved annually by vote of a majority of the Fund's
outstanding shares or by its Board of Directors, including, in either event, a
majority of those directors who are not parties to such agreement or "interested
persons" (as such term is defined in the Investment Company Act of 1940) of any
such party except in their capacity as directors of the Fund. It may be
terminated without penalty at any time upon 60 days' notice by the Adviser, or
by the Fund by vote of the Fund's Board of Directors, or by a majority vote of
the Fund's outstanding shares and would terminate automatically upon assignment.
The Agreement may be amended only with the approval of a majority of the
outstanding voting securities of the Fund.
The Agreement provides that the Adviser shall not be liable for error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with matters to which the Agreement relates, except loss resulting from bad
faith, gross negligence or willful misfeasance of the Adviser.
PORTFOLIO TRANSACTIONS: Purchases and sales of portfolio securities are
normally principal transactions. Portfolio securities are normally purchased
directly from the issuer or from an underwriter or market maker for the
securities. There are usually no brokerage commissions paid by the Fund for such
purchases and none were paid during the last three fiscal years. Purchases from
underwriters will include a commission or concession paid by the issuer to the
underwriter, and purchases from dealers serving as market makers include the
spread between the bid and asked prices. The primary consideration in the
allocation of transactions is the most favorable price and execution of orders.
Subject to this primary consideration, while there is no understanding or
arrangement to do so, EquiTrust may place the Fund's portfolio transactions with
firms that furnish research, statistical and other services. EquiTrust regards
information which is customarily available only in return for brokerage as among
the many elements to be considered in determining placement of securities
transactions. No specific value can be determined for most such information and
services and they are deemed supplemental to EquiTrust's own efforts in the
performance of its duties under the investment advisory agreement. Any research
benefits derived are available for all clients of EquiTrust.
The investment decisions for the Fund are reached independently from those
for the other mutual funds and other clients whose investments are managed by
EquiTrust. Such other clients may also make investments in money market
instruments at the same time as the Fund. When both the Fund and one or more of
such clients have amounts available for investment in money market instruments,
available investments are allocated as to amount in a manner considered
equitable to each. In some cases, this procedure may affect the size or price of
the position obtainable for the Fund. It is the opinion of the Board of
Directors that the benefits available because of EquiTrust's organization
outweigh any disadvantages that may arise from exposure to simultaneous
transactions. Purchase and sale orders for the Fund may be combined with those
of other clients of the Adviser in the interest of the most favorable net
results to the Fund.
Messrs. Morain, Gibson, Hoffman, Marker, Noyce and Oddy and Mses. Sandburg,
Cornick, Rojohn and Followwill, directors and/or officers of the Fund, are also
directors and/or officers of EquiTrust as indicated under "MANAGEMENT OF THE
FUND" in the Prospectus.
UNDERWRITING AND DISTRIBUTION
Pursuant to an underwriting agreement dated December 31, 1983, EquiTrust
Investment Management Services, Inc. (the "Distributor") serves as principal
underwriter and sole distributor of the Fund's shares, acting as the exclusive
agent of the Fund in the sale of its shares to securities dealers who in turn
sell the shares to the public. The Distributor has agreed to use its best
efforts to distribute shares of the Fund. The Distributor pays expenses incident
to the sale and distribution of Fund shares, including preparation and
distribution of literature relating to the Fund and its investment performance,
and circulation of advertising and public relations material.
The terms of termination and assignment under the underwriting agreement are
the same as those under the investment advisory agreement except that
termination for reasons other than assignment of the agreement requires six
months' notice.
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The Fund bears the expenses of registration of its shares with the
Securities and Exchange Commission and the cost of qualifying and maintaining
the qualification of the Fund's shares under securities laws of the various
states. The Fund also pays expenses incident to the issuance of its shares, such
as taxes and transfer and dividend disbursing fees.
OTHER INFORMATION
CUSTODIAN:
Bankers Trust Company, 16 Wall Street, New York, New York 10005 currently
serves as custodian of all cash and securities owned by the Fund. The custodian
performs no managerial or policy-making functions for the Fund.
INDEPENDENT AUDITORS:
The Fund's independent auditors are Ernst & Young LLP, 801 Grand Avenue,
Suite 3400, Des Moines, Iowa 50309. The independent auditors audit and report on
the Fund's annual financial statements, review certain regulatory reports and
perform other professional accounting, auditing, tax and advisory services when
engaged to do so by the Fund.
ACCOUNTING SERVICES:
The Fund has entered into an accounting services agreement with EquiTrust
Investment Management Services, Inc. pursuant to which EquiTrust performs
accounting services for the Fund. In addition, the Agreement provides that
EquiTrust shall calculate the Fund's net asset value in accordance with the
Fund's current Prospectus and to prepare for Fund approval and use various tax
returns and other reports. For such services, the Fund pays EquiTrust an annual
fee, payable monthly, of .05% of the Fund's average daily net assets, with the
annual fee payable by the Fund not to exceed $30,000. During the fiscal year
ended July 31, 1997, the aggregate amount of such fees paid to EquiTrust was
$12,197.
SHAREHOLDER SERVICE, DIVIDEND DISBURSING AND TRANSFER AGENT:
EquiTrust Investment Management Services, Inc. serves as the Fund's
Shareholder Service, Dividend Disbursing and Transfer Agent. EquiTrust in turn
has contracted with DST Systems, Inc. ("DST"), an unrelated party, to perform
certain services incident to the maintenance of shareholder accounts. The Fund
pays EquiTrust an annual fee of $9.00 per account and miscellaneous activity
fees plus out-of-pocket expenses, a portion of which is paid to DST. During the
fiscal year ended July 31, 1997, the aggregate amount of such fees paid to
EquiTrust was $131,149 of which $32,202 was paid to DST.
FINANCIAL STATEMENTS
The audited financial statements of the Fund, including the notes thereto,
contained in the Annual Report to Shareholders of EquiTrust Money Market Fund,
Inc. (formerly known as FBL Money Market Fund, Inc.) for the fiscal year ended
July 31, 1997, were filed with the Securities and Exchange Commission on
September 26, 1997, and are incorporated herein by reference. Additional copies
of such Annual Report to Shareholders may be obtained without charge by
contacting the Fund.
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