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[LOGO]
EquiTrust Money
Market Fund, Inc.
SEMI-ANNUAL REPORT
JANUARY 31, 1999
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)
This report is not to be
distributed unless preceded or
accompanied by a prospectus.
737-127(99)
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PRESIDENT'S LETTER
Dear Shareholder:
In our last annual report, we discussed possible effects of the troubled
Asian economy on U.S. capital markets. International trade was lagging and
threatened to pull the United States into a recession. Furthermore, the global
equity markets had begun to erode, causing a "flight to quality" to the U.S.
Treasury markets, while Russia's default on its obligations brought additional
capital to the more stable U.S. markets.
The following sequence of events is difficult for even the most savvy
investor to understand. A complete meltdown of capital markets occurred due to
the liquidation of a large hedge fund comprised of many money center bank
investors. In response, Federal Reserve Chairman Alan Greenspan and the Federal
Open Market Committee (FOMC) stepped in and dropped the Fed funds rate .25% in
order to calm markets and restore liquidity. As more bad news continued to
surface, whether it was a company announcing bankruptcy or the U.S. stock market
plunging, the FOMC quickly moved again to restore calm. The Fed funds rate was
dropped an additional .50% to the current level of 4.75%.
With increasing volatility in the capital markets, a money market fund
offers liquidity and stability, allowing your investment to earn a yield while
you evaluate other investment options.
[EDWARD M. WIEDERSTEIN SIGNATURE]
EDWARD M. WIEDERSTEIN
PRESIDENT
March 10, 1999
2
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EQUITRUST MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 1999
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (equivalent to
amortized cost).................................. $30,758,730
Cash.............................................. 22,912
Accrued interest receivable....................... 11,166
Prepaid expenses.................................. 8,937
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Total Assets...................................... $30,801,745
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-----------
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable to EquiTrust Investment
Management Services, Inc....................... $ 18,038
Fund shares purchased........................... 975,749
Dividends payable............................... 95,170
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Total Liabilities................................. 1,088,957
Net assets applicable to 29,712,788 shares of
capital stock outstanding........................ 29,712,788
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Total Liabilities and Net Assets.................. $30,801,745
-----------
-----------
NET ASSET VALUE PER SHARE......................... $ 1.00
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-----------
</TABLE>
SEE ACCOMPANYING NOTES.
3
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EQUITRUST MONEY MARKET FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 1999
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest.......................................... $754,024
EXPENSES
Paid to EquiTrust Investment Management Services,
Inc.:
Investment advisory and management fees.......... 35,603
Shareholder service, transfer and dividend
disbursing agent fees........................... 53,795
Accounting fees.................................. 7,121
Custodian fees.................................... 22,385
Legal fees........................................ 4,223
Directors' fees and expenses...................... 2,333
Reports to shareholders........................... 26,789
Registration fees................................. 6,360
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Total Expenses.................................... 158,609
Fees paid indirectly.............................. (17,741)
--------
Net Expenses...................................... 140,868
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Net Increase in Net Assets Resulting from
Operations....................................... $613,156
--------
--------
</TABLE>
SEE ACCOMPANYING NOTES.
4
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EQUITRUST MONEY MARKET FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31,
1999 YEAR ENDED
(UNAUDITED) JULY 31, 1998
----------- -----------------
<S> <C> <C>
OPERATIONS
Net investment income................... $ 613,156 $ 1,101,256
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income................... 613,156 (1,101,256)
----------- -----------------
-0- -0-
CAPITAL SHARE TRANSACTIONS.............. 3,349,203 3,309,857
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Total Increase in Net Assets............ 3,349,203 3,309,857
NET ASSETS
Beginning of period..................... 26,363,585 23,053,728
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End of period........................... $29,712,788 $ 26,363,585
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</TABLE>
SEE ACCOMPANYING NOTES.
5
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EQUITRUST MONEY MARKET FUND, INC.
SCHEDULE OF INVESTMENTS
JANUARY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
PURCHASE PRINCIPAL
DATE AMOUNT VALUE
---------- ------------ -------------
<S> <C> <C> <C>
COMMERCIAL PAPER (8.50%)
- -----------------------------
NONDEPOSITORY INSTITUTIONS
American General Finance Co.,
4.77%, due 2/17/99.............. 4.766% $ 825,000 $ 825,000
Ford Motor Credit Corp., 4.80%,
due 2/01/99..................... 4.804 625,000 625,000
Ford Motor Credit Corp., 4.76%,
due 2/1/99...................... 4.763 190,000 190,000
General Electric Capital Corp.,
4.87%, due 2/04/99.............. 4.866 345,000 345,000
Texaco, Inc., 4.81%, due
2/19/99......................... 4.814 540,000 540,000
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Total Commercial Paper............. 2,525,000
UNITED STATES GOVERNMENT AGENCIES (95.02%)
- -----------------------------------------------
Federal Home Loan Bank, due
2/09/99......................... 5.117 435,000 434,391
Federal Home Loan Bank, due
2/12/99......................... 4.690 495,000 494,174
Federal Home Loan Bank, due
3/03/99......................... 4.813 3,305,000 3,291,114
Federal Home Loan Mortgage Corp.,
due 2/03/99..................... 4.833 3,040,000 3,038,391
Federal Home Loan Mortgage Corp.,
due 2/02/99..................... 4.781 3,035,000 3,033,808
Federal Home Loan Mortgage Corp.,
due 2/05/99..................... 4.830 2,970,000 2,967,644
Federal Home Loan Mortgage Corp.,
due 2/08/99..................... 4.836 1,870,000 1,867,773
Federal Home Loan Mortgage Corp.,
due 2/09/99..................... 4.870 1,475,000 1,473,035
Federal Home Loan Mortgage Corp.,
due 2/10/99..................... 5.150 1,059,000 1,057,359
Federal Home Loan Mortgage Corp.,
due 2/11/99..................... 4.849 2,491,000 2,487,035
Federal Home Loan Mortgage Corp.,
due 2/16/99..................... 4.802 715,000 713,404
Federal Home Loan Mortgage Corp.,
due 2/25/99..................... 4.772 3,285,000 3,273,871
Federal Home Loan Mortgage Corp.,
due 3/04/99..................... 4.798 1,600,000 1,593,090
Federal National Mortgage Assoc.,
due 2/18/99..................... 4.870 2,515,000 2,508,641
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Total United States Government
Agencies.......................... 28,233,730
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Total Investments (103.52%)........ 30,758,730
OTHER ASSETS LESS LIABILITIES (-3.52%)
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Cash, receivables and prepaid
expenses, less liabilities...... (1,045,942)
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Total Net Assets (100.00%)......... $ 29,712,788
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</TABLE>
SEE ACCOMPANYING NOTES.
6
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EQUITRUST MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
January 31, 1999
(Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
EquiTrust Money Market Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as an open-end, diversified
management investment company and operates in the mutual fund industry. Prior to
May 1, 1998, the Fund was named FBL Money Market Fund, Inc.
The Fund values investments at amortized cost, which approximates market.
Under the amortized cost method, a security is valued at its cost on the date of
purchase and thereafter is adjusted to reflect a constant amortization to
maturity of the difference between the principal amount due at maturity and the
cost of the investment to the Fund.
The value of the underlying securities serving to collateralize repurchase
agreements is marked to market daily. Should the value of the underlying
securities decline, the seller would be required to provide the Fund with
additional securities so that the aggregate value of the underlying securities
was at least equal to the repurchase price. If a seller of a repurchase
agreement were to default, the Fund might experience losses in enforcing its
rights. To minimize this risk, the investment adviser (under the supervision of
the Board of Directors) will monitor the creditworthiness of the seller of the
repurchase agreement and must find such creditworthiness satisfactory before the
Fund may enter into the repurchase agreement.
The Fund records investment transactions generally on the trade date. Net
realized gains and losses on sales of investments, if any, are determined on the
basis of identified cost. Interest income on interest bearing investments is
recognized on an accrual basis.
All of the Fund's net investment income and any realized gains and losses on
portfolio investments are declared as dividends daily to shareholders of record
as of the preceding business day.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
2. FEDERAL INCOME TAXES
No provision for federal income taxes is considered necessary because the
Fund is qualified as a "regulated investment company" under the Internal Revenue
Code and intends to distribute each year substantially all of its net investment
income and realized capital gains to shareholders. The cost of investments is
the same for both federal income tax and financial reporting purposes.
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into agreements with EquiTrust Investment Management
Services, Inc. ("EquiTrust Investment"), formerly known as FBL Investment
Advisory Services, Inc., relating to the
7
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EQUITRUST MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES (CONTINUED)
management of the Fund and the investment of its assets. Pursuant to these
agreements, fees paid to EquiTrust Investment are as follows: (1) investment
advisory and management fees, which are based on the Fund's daily net assets,
currently at an annual rate of 0.25%; (2) shareholder service, transfer and
dividend disbursing agent fees, which are based on direct services provided and
expenses incurred by the investment adviser, plus an annual per account charge
of $9.00; and (3) accounting fees, which are based on the Fund's daily net
assets at an annual rate of 0.05%, with a maximum annual expense of $30,000.
EquiTrust Investment has agreed to reimburse the Fund annually for its total
expenses, excluding brokerage, interest, taxes and extraordinary expenses in
excess of 1.50% of the Fund's average daily net assets. The amount reimbursed,
however, shall not exceed the amount of the investment advisory and management
fees paid by the Fund for such period. For the period ended January 31, 1999,
the Fund's expenses were below the reimbursement threshold, and accordingly, no
amounts were reimbursed by EquiTrust Investment.
Certain officers and directors of the Fund are also officers of FBL
Financial Group, Inc., the indirect parent of EquiTrust Investment, and other
affiliated entities. At January 31, 1999, FBL Financial Group, Inc. and its
affiliated companies owned 3,276,954 shares in the Fund.
4. CAPITAL SHARE TRANSACTIONS
Net assets as of January 31, 1999 consisted of:
<TABLE>
<S> <C>
Capital Stock (500,000,000 shares of $.001 par
value
Capital Stock authorized)....................... $ 29,713
Additional paid-in capital........................ 29,683,075
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Net Assets........................................ $29,712,788
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</TABLE>
Transactions in Capital Stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 1999 JULY 31, 1998
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold................... 43,403,180 $ 43,403,180 83,625,990 $ 83,625,990
Shares issued in reinvestment
of dividends and
distributions................ 511,299 511,299 994,794 994,794
Shares redeemed............... (40,565,275) (40,565,275) (81,310,927) (81,310,927)
----------- ------------ ----------- ------------
Net Increase.................. 3,349,204 $ 3,349,204 3,309,857 $ 3,309,857
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
</TABLE>
8
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EQUITRUST MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income are declared daily and are payable on
the last business day of the month. Dividends for the period ended January 31,
1999 were paid as follows:
<TABLE>
<CAPTION>
PAYABLE DATE
- --------------------------------------------------
<S> <C>
August 31, 1998................................... $.0040
September 30, 1998................................ .0037
October 30, 1998.................................. .0036
November 30, 1998................................. .0035
December 31, 1998................................. .0035
January 29, 1999.................................. .0032
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Total Dividends Per Share......................... $.0215
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</TABLE>
6. EXPENSE OFFSET ARRANGEMENTS
The Fund and other Funds managed by EquiTrust Investment have an agreement
with the custodian bank to indirectly pay a portion of the custodian's fees
through credits earned by the Funds' cash on deposit with the bank. Such deposit
agreement is an alternative to overnight investments.
9
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EQUITRUST MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
1999 ---------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
------------ --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income From Investment
Operations
Net investment
income.............. 0.022 0.043 0.040 0.040 0.041 0.020
------------ --------- --------- --------- --------- ---------
Total from investment
operations............ 0.022 0.043 0.040 0.040 0.041 0.020
------------ --------- --------- --------- --------- ---------
Less Distributions
Dividends (from net
investment
income)............. (0.022) (0.043) (0.040) (0.040) (0.041) (0.020)
------------ --------- --------- --------- --------- ---------
Total distributions.... (0.022) (0.043) (0.040) (0.040) (0.041) (0.020)
------------ --------- --------- --------- --------- ---------
Net asset value, end of
period.................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------------ --------- --------- --------- --------- ---------
------------ --------- --------- --------- --------- ---------
Total Return:
Total investment return
based on net asset
value (1)............. 4.38%(2) 4.44% 3.99% 4.05% 4.17% 1.95%
Ratios/Supplemental Data:
Net assets, end of
period ($000's
omitted).............. $29,713 $ 26,364 $ 23,054 $ 24,574 $ 19,977 $ 18,927
Ratio of total expenses
to average net
assets................ 1.14%(2) 1.27% 1.51% 1.50% 1.51% 1.50%
Ratio of net expenses
to average net
assets................ 1.01%(2)
Ratio of net income to
average net assets.... 4.40%(2) 4.40% 3.90% 3.92% 4.06% 1.92%
Information assuming no
voluntary reimbursement
by EquiTrust Investment
of excess operating
expenses (see NOTE 3):
Per share net
investment income..... $ 0.022 $ 0.043 $ 0.040 $ 0.038 $ 0.036 $ 0.019
Ratio of expenses to
average net assets.... 1.14%(2) 1.27% 1.55% 1.72% 2.01% 1.57%
Amount reimbursed...... $ 0 $ 0 $ 10,590 $ 51,886 $ 96,398 $ 6,978
</TABLE>
- --------------------------
Note: Per share amounts have been calculated on the basis of monthly per share
amounts (using average monthly outstanding shares) accumulated for the
period.
(1) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period.
(2) Computed on an annualized basis.
SEE ACCOMPANYING NOTES.
10
