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[LOGO]
EquiTrust Money
Market Fund, Inc.
SEMI-ANNUAL REPORT
JANUARY 31, 2000
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(00)
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PRESIDENT'S LETTER
Dear Shareholder:
Higher oil prices, a recovering global economy, a weaker U.S. dollar, a
robust U.S. economy and a surging stock market combined to create an environment
of steadily rising interest rates during 1999. In response to continued economic
strength and declining unemployment, the Fed chose to reverse the three rate
cuts that took place during the 1998 Asian financial crisis.
Even though rates have been rising rapidly, other obvious signs of inflation
remain absent. During 1999, the consumer price index (CPI) rose 2.7%, an
acceleration from 1998 mainly due to rising energy prices. The producer price
index (PPI) rose a comparable 3.0% during the year. Commodity prices as measured
by the Commodities Research Bureau (CRB) Bridge Index are up only slightly for
the year and gold prices are also virtually unchanged on a year-over-year basis.
As mentioned previously, the Federal Open Market Committee (FOMC) raised the
Fed Funds rate three times during the fall of 1999 to preempt any inflation
pressures from a strong labor market and consumer confidence. Currently, the
Federal Funds rate is 5.5% and additional increases are expected to occur in the
spring of 2000 due to the remaining tightening bias. We are happy to report that
Y2K came and went with barely a hiccup in the money markets, which is comforting
for the mutual fund industry. Portfolio maturities were shorter than usual in
order to remain liquid, which proved beneficial in a rising interest rate
environment. Going forward, we look for spreads to remain stable, but yields to
rise in relation to movements by the Fed.
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. As interest rates are rising, a money
market fund is an excellent place to capture increasing yields with minimal
risks.
/s/ Edward M. Wiederstein
EDWARD M. WIEDERSTEIN
PRESIDENT
February 24, 2000
2
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EQUITRUST MONEY MARKET FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
JANUARY 31, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (equivalent to
amortized cost).................................. $29,751,341
Cash.............................................. 88,366
Accrued interest receivable....................... 16,700
Prepaid expenses.................................. 376
----------
Total Assets...................................... $29,856,783
==========
LIABILITIES AND NET ASSETS
Liabilities:
Accounts payable to EquiTrust Investment
Management Services, Inc....................... $ 16,938
Fund shares purchased........................... 468,182
Dividends payable............................... 113,620
Accrued Expenses................................ 2,087
----------
Total Liabilities................................. 600,827
Net assets applicable to 29,255,956 shares of
capital stock outstanding........................ 29,255,956
----------
Total Liabilities and Net Assets.................. $29,856,783
==========
NET ASSET VALUE PER SHARE......................... $ 1.00
==========
</TABLE>
SEE ACCOMPANYING NOTES.
3
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EQUITRUST MONEY MARKET FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JANUARY 31, 2000
(UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest.......................................... $857,704
EXPENSES
Paid to EquiTrust Investment Management
Services, Inc.:
Investment advisory and management fees.......... 39,499
Shareholder service, transfer and dividend
disbursing agent fees........................... 58,030
Accounting fees.................................. 7,900
Custodian fees.................................... 49,119
Legal fees........................................ 25,126
Directors' fees and expenses...................... 2,804
Registration fees................................. 5,962
Miscellaneous..................................... 6,708
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Total Expenses.................................... 195,148
Fees paid indirectly.............................. (2,021)
-------
Net Expenses...................................... 193,127
-------
Net Increase in Net Assets Resulting from
Operations....................................... $664,577
=======
</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,
2000 YEAR ENDED
(UNAUDITED) JULY 31, 1999
------------ ----------------
<S> <C> <C>
OPERATIONS
Net investment income................... $ 664,577 $ 1,143,628
DIVIDENDS TO SHAREHOLDERS FROM
Net investment income................... 664,577 (1,143,628)
----------- -----------
-0- -0-
CAPITAL SHARE TRANSACTIONS.............. (2,118,370) 5,010,741
----------- -----------
Total Increase (Decrease) in Net
Assets................................. (2,118,370) 5,010,741
NET ASSETS
Beginning of period..................... 31,374,326 26,363,585
----------- -----------
End of period........................... $29,255,956 $31,374,326
=========== ===========
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
EQUITRUST MONEY MARKET FUND, INC.
SCHEDULE OF INVESTMENTS
JANUARY 31, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
PURCHASE PRINCIPAL
DATE AMOUNT VALUE
---------- ----------- ------------
<S> <C> <C> <C>
COMMERCIAL PAPER (19.02%)
- ------------------------------
NONDEPOSITORY INSTITUTIONS
American General Finance Co.,
5.57%, due 2/10/00.............. 5.573% $ 750,000 $ 750,000
Ford Motor Credit Corp., 5.45%,
due 2/02/00..................... 5.451 725,000 725,000
General Electric Capital Corp.,
5.29%, due 2/14/00.............. 5.285 695,000 695,000
IBM Credit Corp., 6.03%, due
2/01/00......................... 6.029 1,055,000 1,055,000
Norwest Financial Corp., 5.54%,
due 2/04/00..................... 5.544 1,000,000 1,000,000
Texaco, Inc., 5.67%, due
2/07/00......................... 5.666 1,340,000 1,340,000
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Total Commercial Paper............. 5,565,000
UNITED STATES GOVERNMENT AGENCIES (82.67%)
- -----------------------------------------------
Federal Home Loan Bank, due
2/18/00......................... 5.526 1,100,000 1,097,176
Federal Home Loan Bank, due
3/08/00......................... 5.683 1,250,000 1,243,032
Federal Home Loan Bank, due
3/22/00......................... 5.757 2,300,000 2,282,004
Federal Home Loan Mortgage Corp.,
due 2/08/00..................... 5.824 1,515,000 1,513,310
Federal Home Loan Mortgage Corp.,
due 2/15/00..................... 5.512 1,930,000 1,925,928
Federal Home Loan Mortgage Corp.,
due 2/22/00..................... 5.642 1,310,000 1,305,761
Federal Home Loan Mortgage Corp.,
due 2/23/00..................... 5.586 865,000 862,097
Federal Home Loan Mortgage Corp.,
due 2/25/00..................... 5.602 1,180,000 1,175,669
Federal Home Loan Mortgage Corp.,
due 2/29/00..................... 5.649 1,520,000 1,513,441
Federal Home Loan Mortgage Corp.,
due 3/02/00..................... 5.727 1,365,000 1,358,605
Federal Home Loan Mortgage Corp.,
due 3/14/00..................... 5.667 2,320,000 2,304,968
Federal National Mortgage Assoc.,
due 2/09/00..................... 5.867 1,515,000 1,513,055
Federal National Mortgage Assoc.,
due 2/11/00..................... 5.617 1,605,000 1,602,534
Federal National Mortgage Assoc.,
due 2/24/00..................... 5.636 1,500,000 1,494,692
Federal National Mortgage Assoc.,
due 3/03/00..................... 5.691 1,510,000 1,502,737
Federal National Mortgage Assoc.,
due 3/09/00..................... 5.733 1,500,000 1,491,332
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Total United States Government
Agencies.......................... 24,186,341
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Total Investments (101.69%)........ 29,751,341
OTHER ASSETS LESS LIABILITIES (-1.69%)
- ------------------------------------------
Cash, receivables and prepaid
expenses, less liabilities...... (495,385)
-----------
Total Net Assets (100.00%)......... $29,255,956
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</TABLE>
SEE ACCOMPANYING NOTES.
6
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EQUITRUST MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JANUARY 31, 2000
(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.
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 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 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") relating to the 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
7
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EQUITRUST MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES (CONTINUED)
assets. The amount reimbursed, however, shall not exceed the amount of the
investment advisory and management fees paid by the Fund for such period.
Certain officers and directors of the Fund are also officers of FBL
Financial Group, Inc., the indirect parent of EquiTrust Investment, and other
affiliated entities. At January 31, 2000, FBL Financial Group, Inc. and its
affiliated companies owned 3,114,102 shares in the Fund.
4. EXPENSE OFFSET ARRANGEMENTS
The Fund and other mutual 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. This
deposit agreement is an alternative to overnight investments.
5. CAPITAL SHARE TRANSACTIONS
Net assets as of January 31, 2000 consisted of:
<TABLE>
<S> <C>
Capital Stock (500,000,000 shares of $.001 par
value Capital Stock authorized)................. $ 29,256
Additional paid-in capital........................ 29,226,700
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Net Assets........................................ $29,255,956
==========
</TABLE>
Transactions in Capital Stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 2000 JULY 31, 1999
------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold................... 42,365,581 $ 42,365,581 87,713,062 $ 87,713,062
Shares issued in reinvestment
of dividends and
distributions................ 546,784 546,784 1,041,980 1,041,980
Shares redeemed............... (45,030,735) (45,030,735) (83,744,301) (83,744,301)
----------- ------------ ----------- ------------
Net Increase (Decrease)....... (2,118,370) $ (2,118,370) 5,010,741 $ 5,010,741
=========== ============ =========== ============
</TABLE>
8
<PAGE>
EQUITRUST MONEY MARKET FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. 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,
2000 were paid as follows:
<TABLE>
<CAPTION>
PAYABLE DATE
- ------------
<S> <C>
August 31, 1999................................... $.0035
September 30, 1999................................ .0034
October 29, 1999.................................. .0033
November 30, 1999................................. .0036
December 30, 1999................................. .0037
January 31, 2000.................................. .0038
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Total Dividends Per Share......................... $.0213
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</TABLE>
9
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EQUITRUST MONEY MARKET FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JANUARY 31, YEAR ENDED JULY 31,
2000 ------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period..... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
Income From Investment
Operations
Net investment
income.............. 0.021 0.039 0.043 0.040 0.040 0.041
------- ------- ------- ------- ------- -------
Total from investment
operations............ 0.021 0.039 0.043 0.040 0.040 0.041
------- ------- ------- ------- ------- -------
Less Distributions
Dividends (from net
investment
income)............. (0.021) (0.039) (0.043) (0.040) (0.040) (0.041)
------- ------- ------- ------- ------- -------
Total distributions.... (0.021) (0.039) (0.043) (0.040) (0.040) (0.041)
------- ------- ------- ------- ------- -------
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)............. 2.14% 3.91% 4.44% 3.99% 4.05% 4.17%
Ratios/Supplemental Data:
Net assets, end of
period ($000's
omitted).............. $29,256 $31,374 $26,364 $23,054 $24,574 $19,977
Ratio of total expenses
to average net
assets................ 1.24%(2) 1.30% 1.27% 1.55% 1.72% 2.01%
Ratio of net expenses
to average net
assets................ 1.22%(2) 1.23% 1.27% 1.51% 1.50% 1.51%
Ratio of net income to
average net assets.... 4.21%(2) 3.83% 4.40% 3.90% 3.92% 4.06%
Information assuming no
voluntary reimbursement
by EquiTrust Investment
of excess operating
expenses (see NOTE 3):
Per share net
investment income..... $ 0.040 $ 0.038 $ 0.036
Ratio of expenses to
average net assets.... 1.55% 1.72% 2.01%
Amount reimbursed...... $10,590 $51,886 $96,398
</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 and is not annualized for periods
less than one year.
(2) Computed on an annualized basis.
SEE ACCOMPANYING NOTES.
10
