THE FLEX-FUNDS
THE MONEY MARKET FUND
1999 SEMI-ANNUAL REPORT June 30, 1999
THE FLEX-FUNDS
P.O. Box 7177, Dublin OH 43017
(800)325-FLEX www.flexfunds.com
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The Flex-funds 1999 Semi-Annual Report
THE MONEY MARKET FUND
The Money Market Fund continues to rank #1 out of 85 general purpose money
market funds for cumulative total return since inception (March 1985) according
to Lipper. The Fund also ranked among the top 7% of all general purpose money
markets funds for average annual total return over the 1-year, 5-year, and
10-year periods.
As of June 30, 1999, the Fund's 7-day simple yield was 4.64%, and the 7-day
compound yield was 4.74%.
Interest rates were on the rise throughout the first half of 1999, without
any action by the Federal Reserve until June 30th. On that day, the Fed raised
the Fed funds target rate for overnight interbank loans from 4.75% to 5.00%. It
was the Fed's first action since last autumn's triple-play 0.25% rate reduction.
The fact that interest rates across the board increased steadily over the
last six months without any intervention by the Federal Reserve demonstrates two
points: first, that the Federal Reserve has consistently "hinted" at possible
action in order to affect the interest rate market; and second, that the markets
have become quite adept at forecasting the need for interest rate adjustments.
Both factors make today's economic and interest rate environment less volatile
and less subject to surprise. They have also contributed to the continued steady
growth of the U.S. economy.
[PHOTO] Philip A. Voelker, Portfolio Manager
Because of this changing interest rate environment, we had decreased the
Fund's average maturity by almost half - from 70 days at the start of the year
to 39 days on June 30. This decision to shorten the average maturity of the Fund
should help us weather any changes in interest rates that may arise in the
latter half of 1999, and seek to provide investors with competitive rates of
return relative to other money market funds.
1999 SEMI-ANNUAL HIGHLIGHTS
---------------------------
FUND RANKINGS among general purpose money market funds for average annual
total returns as of 6/30/99 per Lipper:
One Year: #21 OUT OF 317
Five Years: #12 OUT OF 213
Ten Years: #5 OUT OF 130
PERIOD & AVERAGE ANNUAL TOTAL RETURNS
as of 6/30/99
Year to Date........................2.33%
One Year............................4.99%
Five Years..........................5.31%
Ten Years...........................5.37%
Life of Fund1.......................6.01%
1 Inception Date 3/27/85
CURRENT & EFFECTIVE YIELDS as of 6/30/99
7-day Simple Yield..................4.64%
7-day Compound Yield................4.74%
PORTFOLIO HOLDINGS as of 6/30/99:
[GRAPH] The following information was presented as a pie chart:
1) Commercial Paper 60.51%
2) Variable Rate Notes 16.02%
3) Repurchase Agreements 12.14%
4) Corporate Notes 11.33%
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 3
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<TABLE>
<CAPTION>
Money Market Portfolio
Portfolio of Investments as of June 30, 1999 (Unaudited)
COUPON/YIELD MATURITY FACE AMOUNT AMORTIZED COST
<S> <C> <C> <C> <C>
COMMERCIAL PAPER - 60.5%
American Honda Finance Corp. 4.83% 07/07/99 10,000,000 $ 9,991,951
American Honda Finance Corp. 5.05% 07/30/99 24,353,000 24,253,931
Bankers Trust Corp. 4.97% 11/09/99 25,000,000 24,547,868
Bell Atlantic Financial Services, Inc. 4.98% 07/01/99 4,800,000 4,800,000
Bell Atlantic Financial Services, Inc. 4.98% 07/06/99 10,700,000 10,692,599
Cargill Global Funding plc 4.96% 07/06/99 25,000,000 24,982,778
Credit Suisse First Boston 4.94% 09/14/99 25,000,000 24,742,708
Credit Suisse First Boston 4.83% 10/13/99 40,000,000 39,441,867
Catholic Health Partners 4.93% 07/07/99 37,228,000 37,197,411
Carolina Power & Light Co. 4.82% 08/20/99 20,000,000 19,866,111
Duff & Phelps Utility & Corp. 4.82% 08/02/99 12,500,000 12,446,444
Duff & Phelps Utility & Corp. 4.85% 08/25/99 10,000,000 9,925,903
E.I. DuPont De Nemours & Co. 4.85% 07/21/99 50,000,000 49,865,278
Eaton Corp.*** 4.87% 07/19/99 7,475,000 7,456,798
Eaton Corp.*** 4.73% 10/08/99 10,000,000 9,869,925
FPL Group Capital, Inc.*** 4.83% 08/10/99 27,400,000 27,252,954
FPL Group Capital, Inc.*** 4.94% 09/15/99 25,000,000 24,739,278
Ford Motor Credit Co. 5.02% 07/28/99 50,000,000 49,811,750
General Electric Capital Corp. 4.85% 07/02/99 3,658,000 3,657,507
General Electric Capital Corp. 4.84% 09/02/99 32,350,000 32,075,996
General Electric Capital Corp. 4.73% 10/06/99 20,000,000 19,745,106
Ipalco Enterprises 4.90% 07/12/99 20,000,000 19,970,056
LG&E Capital Corp. 4.97% 07/06/99 17,958,000 17,945,604
LG&E Capital Corp. 4.83% 07/22/99 17,173,000 17,124,615
MidAmerican Energy Co. 4.93% 07/16/99 16,300,000 16,266,517
Motorola Credit Corp. 4.82% 07/02/99 4,000,000 3,999,465
Monsanto Co. 4.74% 08/12/99 9,400,000 9,348,018
Monsanto Co. 4.82% 08/18/99 11,000,000 10,929,307
Monsanto Co. 4.82% 09/08/99 14,000,000 13,870,663
National Rural Utilities 4.84% 07/06/99 10,000,000 9,993,277
National Rural Utilities 4.85% 09/17/99 25,000,000 24,737,292
Toronto Dominion Holdings USA, Inc. 4.68% 07/19/99 40,000,000 39,906,400
Toyota Motor Corp. 4.85% 07/07/99 18,400,000 18,385,127
UBS AG 4.74% 07/22/99 25,000,000 24,930,875
Xerox Credit Corp. 4.82% 09/03/99 50,000,000 49,571,555
TOTAL COMMERCIAL PAPER
(Cost$744,342,934 ) 744,342,934
CORPORATE OBLIGATIONS - 25.0%
Aquarium Holdings KY*** 5.13%* 07/01/99 14,000,000 14,000,000
Associates Corp. N.A. 6.37% 08/15/99 2,000,000 2,003,007
Associates Corp. N.A. 6.75% 10/15/99 300,000 301,316
Baltimore Gas & Electric Co. 8.40% 10/05/99 2,000,000 2,018,597
Bath Technologies, Inc. 5.14% 07/01/99 4,500,000 4,500,000
Bear Stearns Co., Inc. 6.22% 07/19/99 5,000,000 5,002,438
Bear Stearns Co., Inc. 7.62% 09/15/99 4,000,000 4,020,408
Bear Stearns Co., Inc. 7.63% 09/15/99 1,765,000 1,774,067
Care Life Project*** 5.14% 07/01/99 3,700,000 3,700,000
Caterpillar Finance 6.84% 09/15/99 1,000,000 1,003,508
Caterpillar Finance 6.42% 07/15/99 3,000,000 3,001,642
Caterpillar, Inc. 6.80% 08/24/99 500,000 500,804
Chase Manhattan Bank 5.88% 08/04/99 3,700,000 3,702,655
Chrysler Financial 12.75% 11/01/99 1,000,000 1,024,342
Citigroup 9.75% 08/01/99 500,000 501,938
Citigroup 6.25% 10/25/99 2,000,000 2,007,555
Clark Grave Vault Co.*** 5.30%* 07/01/99 2,550,000 2,550,000
Consolidated Edison*** 5.19%* 07/01/99 8,250,000 8,250,000
Coughlin Family Properties, Inc.*** 5.13%* 07/01/99 3,970,000 3,970,000
D.E.D.E. Realty*** 5.13%* 07/01/99 3,760,000 3,760,000
Damascus-Bishop Tire 5.14%* 07/01/99 3,000,000 3,000,000
Danis Construction Co.*** 5.13% 07/01/99 6,000,000 6,000,000
Doren, Inc.*** 5.14%* 07/01/99 400,000 400,000
Espanola/Nambe*** 5.14%* 07/01/99 2,115,000 2,115,000
Fleet Mortgage Group, Inc. 6.50% 09/15/99 4,000,000 4,011,427
Ford Motor Credit Co. 6.38% 09/15/99 500,000 501,298
Flordia Power & Light Co. 5.50% 07/01/99 1,000,000 1,000,000
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 4
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COUPON/YIELD MATURITY FACE AMOUNT AMORTIZED COST
GTE Southwest Inc. 5.82%* 12/01/99 1,000,000 1,003,041
General American Life Insurance**** 5.28%* 09/21/99 20,000,000 20,000,000
Georgia Power Co. 6.12% 09/01/99 1,500,000 1,502,545
General Motors Acceptance Corp. 8.00% 10/01/99 3,000,000 3,021,232
General Motors Acceptance Corp. 8.40% 10/15/99 1,255,000 1,267,051
Goldman Sachs Group LP 6.88% 09/15/99 1,000,000 1,003,365
Hancor, Inc.*** 5.14%* 07/01/99 600,000 600,000
International Lease Finance Corp. 7.41% 09/01/99 1,300,000 1,305,206
Isaac Tire, Inc.*** 5.13%* 07/01/99 980,000 980,000
J.W. Harris Co., Inc. 5.13%* 07/01/99 2,100,000 2,100,000
Jackson Tube Service, Inc. 5.13% 07/01/99 4,500,000 4,500,000
John Deere 6.43% 08/09/99 10,000,000 10,007,972
Luken-Woodlawn LLC 5.13% 07/01/99 3,740,000 3,740,000
Melvin Stone Co. 5.13% 07/01/99 7,600,000 7,600,000
Miami Valley Steel 5.14% 07/01/99 2,050,000 2,050,000
Morgan Guaranty Trust Co. 5.75% 10/08/99 500,000 500,754
Mubea Inc.*** 5.14% 07/01/99 3,750,000 3,750,000
Mubea Inc.*** 5.14%* 07/01/99 5,400,000 5,400,000
Norwest Financial, Inc. 7.20% 08/25/99 1,100,000 1,103,420
Norwest Financial, Inc. 6.38%* 10/01/99 500,000 501,541
Norwest Financial, Inc. 6.05% 11/19/99 2,000,000 2,006,156
O.K.I. Supply Co.*** 5.13%* 07/01/99 2,090,000 2,090,000
Osco Industries, Inc.*** 5.14%* 07/01/99 2,700,000 2,700,000
Pepsico, Inc. 6.25% 09/01/99 5,000,000 5,009,300
Presrite Corp.*** 5.14% 07/01/99 1,700,000 1,700,000
Pro Tire, Inc.*** 5.13% 07/01/99 1,175,000 1,175,000
R.I. Lampus Co.*** 5.14% 07/01/99 2,110,000 2,110,000
RSD Technology*** 5.14% 07/01/99 5,770,000 5,770,000
SBC Communication Capital Corp. 6.40% 08/18/99 1,000,000 1,001,910
Salomon, Inc. 7.13%* 08/01/99 225,000 225,343
Seariver Maritime, Inc. 4.92%* 08/01/99 6,400,000 6,400,000
SunAmerica, Inc. 6.20% 10/31/99 45,700,000 45,882,425
Signature Brands 13.00%* 08/15/99 18,500,000 20,139,518
Surgery Financing Co.*** 5.14% 07/01/99 3,475,000 3,475,000
Surgery Financing Co.*** 5.14% 07/01/99 3,000,000 3,000,000
Transamerica Finance 8.75% 10/01/99 2,000,000 2,018,168
Transamerica Finance 8.08% 11/04/99 1,390,000 1,404,176
Triangle Funding 5.35% 10/15/99 7,500,000 7,500,000
Virginia Electric Power Co. 6.35% 07/02/99 7,070,000 7,070,264
Wisconsin Electric Power Co. 6.20% 08/01/99 1,000,000 1,001,392
White Castle Project*** 5.14% 07/01/99 8,750,000 8,750,000
World Trade Finance 5.07% 09/01/99 20,000,000 20,000,000
TOTAL CORPORATE OBLIGATIONS
(Cost$306,984,781 ) 306,984,781
U.S. GOVERNMENT AGENCY OBLIGATIONS - 2.4%
Federal Home Loan Bank 5.14% 07/07/99 25,000,000 25,000,000
Student Loan Marketing Assoc. 5.30% 07/07/99 4,350,000 4,350,130
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $29,350,130 ) 29,350,130
U.S. TREASURY OBLIGATIONS - 0.0%
** U.S. Treasury Bill 4.30% 01/06/00 63,100 61,676
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $61,676 ) 61,676
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 5
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COUPON/YIELD MATURITY FACE AMOUNT AMORTIZED COST
REPURCHASE AGREEMENTS - 12.1%
Banc of America Securities LLC (Collateralized by 5.60% 07/01/99 50,000,000 50,000,000
$51,379,000 various commercial papers,
5.50% - 5.54%, 07/19/99 - 09/20/99,
market value - $51,000,007)
Prudential Securities (Collateralized by $53,556,000 5.10% 07/01/99 48,000,000 48,000,000
various U.S. Government securities,
6.00% - 6.50%, 02/25/14 - 04/15/14,
market value - $50,383,685)
State Street Bank & Trust Co. (Collateralized by 4.90% 07/01/99 31,569,000 31,569,000
$32,201,291 FFCB, 5.13%, 04/02/01,
market value - $32,201,291)
State Street Bank & Trust Co. (Collateralized by 4.70% 07/01/99 19,721,000 19,721,000
$31,662,245 SLMA, 5.20%, 01/25/07,
market value - $20,117,704)
TOTAL REPURCHASE AGREEMENTS
(Cost $149,290,000 ) 149,290,000
TOTAL INVESTMENTS - 100.0%
(Cost$1,230,029,521)(a) $1,230,029,521
</TABLE>
<TABLE>
<CAPTION>
TRUSTEE DEFERRED COMPENSATION***** SHARES VALUE
<S> <C> <C>
Flex-funds Highlands Growth Fund 356 7,470
Flex-funds Muirfield Fund 541 3,465
Flex-funds Total Return Utilities Fund 156 3,015
Flex Partners International Equity Fund 278 3,757
TOTAL TRUSTEE DEFERRED COMPENSATION
(Cost $14,513 ) $17,707
<FN>
(a) Cost for federal income tax and financial reporting purposes are the same.
FHLMC: Federal Home Loan Mortgage Corporation
Remic: Real Estate Mortgage Investment Conduit
FFCB: Federal Farm Credit Bureau
SLMA: Student Loan Marketing Association
* Variable rate security. Interest rate is as of June 30, 1999. Maturity date
reflects the next rate change date.
** Pledged as collateral on Letter of Credit.
*** Security is restricted as to resale to institutional investors, but has
been deemed liquid in accordance with guidelines approved by the Board of
Trustees.
**** Illiquid security. The sale or disposition of such security may not be
possible in the ordinary course of business within seven days at
approximately the value at which the Fund has valued the security.
***** Assets of affiliates to the Money Market Portfolio held for the benefit of
the Portfolio's Trustees in connection with the Trustee Deferred
Compensation Plan.
</FN>
</TABLE>
See accompanying notes to financial statements.
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 6
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STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1999 (Unaudited)
MONEY MARKET FUND
Assets:
Investment in corresponding portfolio
at value $183,305,649
Receivable for capital stock issued ---
Unamortized organization costs ---
Other assets 84,454
Total Assets 183,390,103
Liabilities:
Payable for capital stock redeemed ---
Dividends payable 681,039
Accrued 12b-1 distribution fees 33,994
Accrued transfer agent and
administrative fees 17,414
Other accrued liabilities 2,245
Total Liabilities 734,692
Net Assets 182,655,411
Net Assets:
Capital 182,655,411
Accumulated undistributed (distributions
in excess of) net investment income ---
Accumulated undistributed net realized
gain (loss) from investments ---
Net unrealized appreciation (depreciation) ---
of investments
Net Assets $182,655,411
Capital Stock Outstanding 182,655,411
(indefinite number of shares authorized,
$0.10 par value)
Net Asset Value, Offering and
Redemption Price Per Share $1.00
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
MONEY MARKET FUND
Net Investment Income from Corresponding
Portfolio:
Interest $4,987,874
Dividends ---
Expenses net of waivers and/or
reimbursement (177,240)
Total Net Investment Income from
Corresponding Portfolio 4,810,634
Fund Expenses:
Administrative fee 49,299
Transfer agent fees 63,712
Audit fees 1,892
Legal fees 686
Printing 19,862
Amortization of organizational costs ---
Distribution plan 78,879
Postage 9,785
Registration and filing fees 10,899
Insurance 579
Other expenses 1,957
Total Expenses 237,550
Expenses reimbursed by investment advisor (17,311)
Net Expenses 220,239
NET INVESTMENT INCOME (LOSS) 4,590,395
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,590,395
See accompanying notes to financial statements
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 7
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STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
Six Months
Ended 6/30/99 Year ended
(Unaudited) 12/31/98
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $4,590,395 $8,867,836
Net increase (decrease) in net assets
resulting from operations 4,590,395 8,867,836
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income (4,590,395) (8,867,836)
In excess of net investment income --- ---
Net decrease in net assets resulting
from dividends and distributions (4,590,395) (8,867,836)
CAPITAL TRANSACTIONS:
Issued 331,806,373 478,112,579
Reinvested 3,849,142 8,641,621
Redeemed (307,255,401) (501,833,777)
Net increase (decrease) in net assets
resulting from capital share
transactions 28,400,114 (15,079,577)
TOTAL INCREASE IN NET ASSETS 28,400,114 (15,079,577)
NET ASSETS - Beginning of period 154,255,297 169,334,874
NET ASSETS - End of period $182,655,411 $154,255,297
SHARE TRANSACTIONS:
Issued 331,806,373 478,112,579
Reinvested 3,849,142 8,641,621
Redeemed (307,255,401) (501,833,777)
Change in shares 28,400,114 (15,079,577)
See accompanying notes to financial statements
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 8
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<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
MONEY MARKET FUND
Six Months Years Ended December 31,
Ended 6/30/99 ------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Income from Investment Operations
Net Investment Income 0.023 0.052 0.053 0.05 0.06 0.04
Total From Investment Operations 0.023 0.052 0.053 0.05 0.06 0.04
Less Distributions
Dividends (from net investment income) (0.023) (0.052) (0.053) (0.05) (0.06) (0.04)
Total Distributions (0.023) (0.052) (0.053) (0.05) (0.06) (0.04)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return 2.33%(1) 5.31% 5.38% 5.27% 5.85% 4.10%
Ratios/Supplemental Data
Net Assets, End of Period ($000) $182,655 $154,255 $169,335 $119,947 $141,087 $164,838
Ratio of Expenses to Average Net Assets 0.40%(2) 0.40% 0.40% 0.40% 0.40% 0.37%
Ratio of Net Investment Income to
Average Net Assets 4.66%(2) 5.19% 5.26% 5.15% 5.70% 4.02%
Ratio of Expenses to Average Net Assets,
before waiver of fees(3) 0.53%(2) 0.59% 0.59% 0.58% 0.64% 0.57%
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees(3) 4.53%(2) 5.00% 5.07% 4.97% 5.46% 3.82%
<FN>
(1) Not Annualized
(2) Annualized
(3) Ratio includes fees waived in corresponding portfolio
</FN>
</TABLE>
See accompanying notes to financial statements
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 9
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NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (UNAUDITED)
1. ORGANIZATION
The Flex-funds Trust (the "Trust") was organized in 1982 and is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified,
open-end management investment company. The Trust offers five separate series,
and it is presently comprised of five separate funds including The Money Market
Fund (the "Fund"). The Fund invests all of its investable assets in a
corresponding open-end management investment company (the "Portfolio") having
the same investment objective as the Fund. The Fund, the Portfolio into which
the Fund invests and the percentage of each Portfolio owned by the Fund is as
follows:
PERCENTAGE OF PORTFOLIO
OWNED BY FUND AS OF
FUND PORTFOLIO JUNE 30, 1999
- ---- --------- -------------
The Money Market Fund Money Market Portfolio 15%
The financial statements of the Portfolio, including the Portfolio of
Investments, are included elsewhere in this report and should be read in
conjunction with the financial statements of the Fund.
2. SIGNIFICANT ACCOUNTING POLICES
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.
VALUATION OF INVESTMENTS
The Fund values its investment in the corresponding Portfolio at fair value.
Valuation of securities held by the Portfolio is further described at Note 2 of
the Portfolios' Notes to Financial Statements which are included elsewhere in
this report.
INCOME TAXES
It is Fund's policy to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially all
of its investment company taxable income and net capital gains to its
shareholders. Therefore, no Federal income tax provision is required.
DISTRIBUTIONS TO SHAREHOLDERS
The Fund declares dividends from net investment income on a daily basis and pays
such dividends on a monthly basis. The Fund distributes net capital gains, if
any, on an annual basis.
Distributions from net investment income and from net capital gains are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. Permanent book and tax basis
differences have been reclassified among the components of net assets.
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 10
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INVESTMENT INCOME & EXPENSES
The Fund records daily its proportionate share of the Portfolio's income,
expenses, and realized and unrealized gains and losses. In addition, the Fund
accrues its own expenses. Expenses incurred by the Trust that do not
specifically relate to an individual Fund of the Trust are allocated to the
Funds based on each Fund's relative net assets or other appropriate basis.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides the Portfolio with investment management, research,
statistical and advisory services.
Mutual Funds Service Co. ("MFSCo"), a wholly-owned subsidiary of MII, serves as
stock transfer, dividend disbursing and shareholder services agent for the Fund.
In compensation for such services, the Fund pays MFSCo an annual fee equal to
the greater of $20 per active shareholder account or 0.06% of the Fund's average
daily net assets. MFSCo is entitled to receive an annual minimum fee of $4,000
from the Fund.
MFSCo provides the Trust with certain administrative services. In compensation
for such services, the Fund pays MFSCo an annual fee equal to 0.05% of the
Fund's average daily net assets.
RMA has voluntarily agreed to reimburse the Fund for the amount by which annual
expenses of the Fund including expenses allocated from its respective Portfolio
(excluding interest, taxes, brokerage fees, and extraordinary expenses) exceed
0.40% of average daily net assets of the Fund on an annual basis. Such
reimbursement is limited to the total of fees charged the Fund by RMA and MFSCo.
Pursuant to Rule 12b-1 of the Act, the Fund has adopted a Distribution Plan (the
"Plan"). Under the provisions of the Plan, the Fund may incur certain expenses
associated with the distribution of fund shares in amounts not to exceed 0.20%
of the average daily net assets of the Fund on an annual basis.
Certain officers of the Funds and trustees of the Trust and the Portfolios are
also officers or directors of MII, RMA and MFSCo.
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 11
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STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 1999 (Unaudited)
MONEY MARKET PORTFOLIO
Assets:
Investments, at market value* $1,080,739,521
Repurchase agreements, at cost* 149,290,000
Trustee deferred compensation investments, at 20,901
market value
Cash 559
Receivable for securities sold ---
Receivable for net variation margin on futures ---
Receivable from corresponding Fund 1,853,723
Interest receivable 5,019,977
Dividends receivable ---
Prepaid/Other assets 116,098
Total Assets $1,237,040,779
Liabilities:
Payable for securities purchased 1,600,000
Payable for Trustee Deferred Compensation Plan 20,901
Payable to investment adviser 169,391
Accrued audit fees 6,264
Accrued legal fees 214
Accrued custodian fees 11,246
Accrued trustee fees ---
Accrued fund accounting fees 13,922
Other accrued liabilities 7,551
Total Liabilities 1,829,489
Net Assets $1,235,211,290
Net Assets:
Capital 1,235,211,290
Net unrealized appreciation (depreciation) of ---
investments
Net Assets $1,235,211,290
*Securities at cost $1,230,029,521
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
MONEY MARKET PORTFOLIO
NET INVESTMENT INCOME
Interest $29,626,485
Dividends ---
Total Investment Income 29,626,485
Expenses:
Investment advisory fees 1,540,234
Audit fees 6,286
Custodian fees 41,994
Trustees fees and expenses 14,620
Legal fees 222
Accounting fees 76,982
Insurance 34,197
Other expenses 2,690
Total Expenses 1,717,225
Investment advisory fees waived (660,724)
Directed brokerage payments received ---
Total Net Expenses 1,056,501
NET INVESTMENT INCOME 28,569,984
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $28,569,984
See accompanying notes to financial statements
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
Six Months
Ended 6/30/99 Year ended
(Unaudited) 12/31/98
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $28,569,984 $40,566,858
Net realized gain (loss) from investments
and futures contracts --- ---
Net change in unrealized appreciation
(depreciation) of investments --- ---
Net increase (decrease) in net assets
resulting from operations 28,569,984 40,566,858
TRANSACTIONS OF INVESTORS' BENEFICIAL INTERESTS:
Contributions 3,932,769,311 3,894,846,315
Withdrawals (3,524,397,328) (3,742,162,497)
Net increase (decrease) in net assets resulting
from transactions of investors' beneficial
interests 408,371,983 170,683,818
TOTAL INCREASE IN NET ASSETS 436,941,967 211,250,676
NET ASSETS - Beginning of period 798,269,323 587,018,647
NET ASSETS - End of period $1,235,211,290 $798,269,323
See accompanying notes to financial statements
<TABLE>
MONEY MARKET PORTFOLIO
<CAPTION>
Six Months Year Ended December 31,
Ended 6/30/99 -----------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net Assets, End of Period ($000) $1,233,358 $798,269 $587,019 $352,930 $256,126 $224,523
Ratio of Expenses to Average Net Assets 0.18%(1) 0.18% 0.18% 0.19% 0.21% 0.19%
Ratio of Net Investment Income to
Average Net Assets 4.87%(1) 5.39% 5.47% 5.34% 5.87% 4.28%
Ratio of Expenses to Average Net Assets,
before waiver of fees 0.29%(1) 0.30% 0.31% 0.33% 0.37% 0.39%
Ratio of Net Investment Income to Average
Net Assets, before waiver of fees 4.76%(1) 5.27% 5.34% 5.20% 5.70% 4.08%
</TABLE>
(1) Annualized
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1999 (UNAUDITED)
1. ORGANIZATION
The Money Market Fund (the "Fund") invests all of its investable assets in a
corresponding open-end management investment company (a "Portfolio") having the
same investment objective as the Fund. The Portfolio is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a no-load, open-end
management investment company which was organized as a trust under the laws of
the State of New York. The Declaration of Trust permits the Trustees to issue
beneficial interests in the Portfolio.
The investment objective of the Money Market Portfolio is to seek current income
and stable net asset values through investment in a portfolio of money market
instruments. The financial statements of the Fund are included elsewhere in this
report.
2. SIGNIFICANT ACCOUNTING POLICES
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.
INVESTMENTS
Money market securities held in the Money Market Portfolio are valued at
amortized cost, which approximates market value.
REPURCHASE AGREEMENTS
The Portfolio may engage in repurchase agreement transactions whereby the
Portfolio takes possession of an underlying debt instrument subject to an
obligation of the seller to repurchase the instrument from the Portfolio and an
obligation of the Portfolio to resell the instrument at an agreed upon price and
term. At all times, the Portfolio maintains the value of collateral, including
accrued interest, at least 100% of the amount of the repurchase agreement, plus
accrued interest. If the seller defaults or the fair value of the collateral
declines, realization of the collateral by the Portfolios may be delayed or
limited.
DEFERRED TRUSTEE COMPENSATION
Under a Deferred Compensation Plan (the "Plan") non-interested Trustees may
elect to defer receipt of a portion of their annual compensation. Under the
Plan, deferred amounts are invested in the shares of the Flex-funds and
Flex-Partners Funds. Deferred amounts remain in the Portfolios until distributed
in accordance with the Plan.
LETTER OF CREDIT
The Portfolio has pledged as collateral a U.S. Government Security, cash or
other high-grade debt security solely for the benefit of ICI Mutual Insurance
Co. for the Portfolio's fidelity bond coverage.
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 14
<PAGE>
INCOME TAXES
The Portfolio will be treated as a partnership for Federal income tax purposes.
As such, each investor in the Portfolio will be subject to taxation on its share
of the Portfolio's ordinary income and capital gains. It is the Portfolio's
policy to comply with the requirements of the Internal Revenue Code applicable
to it. Therefore, no Federal income tax provision is required.
SECURITIES TRANSACTIONs
The Portfolio records security transactions on the trade date. Interest income
(including amortization of premium and accretion of discount) is recognized as
earned.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides the Portfolio with investment management, research,
statistical and advisory services. For such services the Portfolio pays monthly
a fee at the following annual rates: 0.40% of average daily net assets up to
$100 million and 0.25% of average daily net assets exceeding $100 million.
During the six months ended June 30, 1999, RMA voluntarily waived a portion of
its investment advisory fees in the Portfolio.
Mutual Funds Service Co. ("MFSCo"), a wholly-owned subsidiary of MII, serves as
accounting services agent for the Portfolio. In compensation for such services,
each Portfolio pays MFSCo an annual fee equal to the greater of:
a. 0.15% of the first $10 million of average daily net assets,
0.10% of the next $20 million of average daily net assets,
0.02% of the next $50 million of average daily net assets, and
0.01% in excess of $80 million of average daily net assets, or
b. $30,000.
Certain officers and trustees of the Portfolios are also officers or directors
of MII, RMA and MFSCo.
4. SECURITIES TRANSACTIONS
As of June 30, 1999, the aggregate cost basis of investments for Federal income
tax was $1,230,029,521.
The Flex-funds Money Market Fund 1999 Semi-Annual Report Page 15
<PAGE>
THE FLEX-FUNDS
R. Meeder & Associates, P.O. Box 7177, Dublin OH 43017
