CBA MONEY FUND
Annual Report
February 28, 1998
This report is not authorized for use as an offer of sale or a
solicitation of an offer to buy shares of the Fund unless
accompanied or preceded by the Fund's current prospectus. Past
performance results shown in this report should not be considered a
representation of future performance, which will fluctuate. The Fund
seeks to maintain a consistent $1.00 net asset value per share,
although this cannot be assured. An investment in the Fund is
neither insured nor guaranteed by the US Government. Statements and
other information herein are as dated and are subject to change.
CBA Money Fund
Box 9011
Princeton, NJ 08543-9011 #11676 -- 2/98
[RECYCLE LOGO]
Printed on post-consumer recycled paper
CBA Money Fund
Dear Shareholder:
For the year ended February 28, 1998, CBA Money Fund paid
shareholders a net annualized dividend of 5.12%.* For the six-month
period ended February 28, 1998, the Fund's net annualized dividend
was 5.04%.* The Fund's 7-day yield as of February 28, 1998 was 4.99%.
The average portfolio maturity for CBA Money Fund at February 28, 1998
was 78 days compared to 83 days at August 31, 1997.
The Environment
During the six months ended February 28, 1998, investors focused on
the implications that the financial crisis in Asia would have on
economic growth worldwide. In the United States, sentiment
fluctuated between a variety of outlooks. At times, US stock and
bond prices reflected expectations that the slowdown in Asian
economic growth would lead to a sharp decline in US business
activity and, ultimately, a deflationary environment. During other
periods, US investors appeared to expect that the positive trends of
a moderately expanding economy, declining unemployment, enhanced
productivity and corporate profits growth would continue, unimpeded
by the developments in Asia. To date, there have been only a few
signs that Asia's troubles are influencing US economic activity.
Industrial activity is beginning to slow, but the slowdown has not
spread to other sectors of the economy. We continue to have a
constructive view on the market, expecting growth to moderate and
inflation to remain under control.
The Federal Open Market Committee did not ease monetary policy at
its meeting in early February. Subsequently, in his Humphrey-Hawkins
testimony before Congress, Federal Reserve Board Chairman Alan
Greenspan indicated that monetary policy might remain steady for
some time. This raised concerns among US bond investors who had
expected imminent monetary policy easing. As 1998 progresses, it is
likely that investor focus will remain on developments in Asia,
their potential impact on the US economy and the Federal Reserve
Board's response to any changes in the US economy.
The portfolio's composition at the end of the February period and as
of our last report is detailed below:
2/28/98 8/31/97
Bank Notes 15.6% 6.9%
Certificates of Deposit 2.8 3.1
Certificates of Deposit --
European 1.3 1.3
Certificates of Deposit --
Yankee+ 11.8 8.6
Commercial Paper 39.4 44.2
Corporate Notes 11.4 12.8
Master Notes &
Funding Agreements 2.7 2.9
US Government &
Agency Obligations 15.3 16.8
Repurchase Agreements 2.1 2.9
Other Assets Less
Liabilities -- 0.5
Liabilities in Excess of
Other Assets (2.4) --
------------ ------------
100.0% 100.0%
============ ============
+US branches of foreign banks.
* Based on a constant investment throughout the period,
with dividends compounded daily, and reflecting a net
return to the investor after all expenses.
In Conclusion
We appreciate your continued support of CBA Money Fund, and we look
forward to assisting you with your financial needs in the months and
years ahead.
Sincerely,
/S/ARTHUR ZEIKEL
Arthur Zeikel
President
/S/MARIE HEUMILLER
Marie Heumiller
Vice President and Portfolio Manager
April 1, 1998
We are pleased to announce that Marie Heumiller is responsible for
the day-to-day management of CBA Money Fund. Ms. Heumiller has been
employed by Merrill Lynch Asset Management, L.P. (an affiliate of
the Fund's investment adviser) since 1992 as Vice President and
Portfolio Manager.
Officers and Trustees
Arthur Zeikel -- President and Trustee
Ronald W. Forbes -- Trustee
Cynthia A. Montgomery -- Trustee
Charles C. Reilly -- Trustee
Kevin A. Ryan -- Trustee
Richard R. West -- Trustee
Terry K. Glenn -- Executive Vice President
Kevin J. McKenna -- Senior Vice President
Joseph T. Monagle, Jr. -- Senior Vice President
Donald C. Burke -- Vice President
Marie Heumiller -- Vice President
Gerald M. Richard -- Treasurer
Robert Harris -- Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 1713
Boston, MA 02101
Transfer Agent
Merrill Lynch Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
(800) 221-7210*
* For inquiries regarding your CBA account, call (800) 247-6400.
<TABLE>
<CAPTION>
CBA Money Fund
Schedule of Investments as of February 28, 1998 (in Thousands)
Face Interest Maturity Value
Issue Amount Rate* Date (Note 1a)
<S> <C> <C> <C> <C>
Bank Notes -- 15.6%
American Express $19,000 5.585%+ 2/12/99 $19,000
Centurion Bank 7,300 5.575+ 3/19/99 7,300
Bank of America N.T. 10,000 5.93 6/24/98 10,004
& S.A. 13,000 5.64+ 6/30/98 12,996
The Bank of New York 14,000 5.94 6/30/98 14,006
Comerica Bank, 13,000 5.535+ 2/02/99 12,995
Detroit 8,500 5.525+ 2/09/99 8,496
FCC National Bank 18,000 5.55+ 2/23/99 17,988
First National Bank 10,000 5.80 7/30/98 10,000
of Chicago 10,000 5.88 8/26/98 10,005
7,000 5.55+ 2/23/99 6,995
First Tennessee 7,000 5.75 1/22/99 7,000
Bank N.A., Memphis 10,000 5.505+ 2/08/99 9,993
Huntington National 5,000 5.515+ 1/20/99 4,998
Bank 25,000 5.515+ 1/22/99 24,989
KeyBank N.A. 25,000 5.588+ 4/03/98 25,002
9,000 5.76+ 5/06/98 8,999
16,000 5.74+ 8/20/98 15,994
15,000 5.74+ 8/28/98 14,995
LaSalle National Bank, 15,000 5.55 2/08/99 14,974
Chicago 7,000 5.55 2/22/99 6,988
Northern Trust Co. 5,000 5.95 6/24/98 5,002
PNC Bank N.A. 41,100 5.60+ 10/01/98 41,084
45,000 5.57+ 1/29/99 44,971
SunTrust Bank, 10,000 5.80 7/24/98 10,000
Atlanta
U.S. National Bank 3,000 5.665+ 4/14/98 3,000
of Oregon ------------
Total Bank Notes (Cost -- $367,774) 367,774
============
Certificates of Deposit -- 2.8%
Chase Manhattan 25,000 6.00 6/16/98 25,014
Bank 10,000 5.87 7/21/98 10,003
Morgan Guaranty 10,000 5.87 8/06/98 10,004
Trust Company of NY
Nationsbank N.A. 8,000 5.55 2/09/99 7,986
14,000 5.55 2/10/99 13,976
------------
Total Certificates of Deposit (Cost -- $66,989) 66,983
============
Certificates of Deposit -- European -- 1.3%
Barclays Bank PLC, 20,000 6.08 6/15/98 20,015
London
Westdeutsche 10,000 5.83 8/03/98 10,002
Landesbank
Girozentrale, London ------------
Total Certificates of Deposit -- European
(Cost -- $30,001) 30,017
============
Certificates of Deposit -- Yankee -- 11.8%
ABN-AMRO Bank 10,000 5.93 6/19/98 10,004
N.V., Chicago 10,000 5.77 7/28/98 10,000
10,000 5.85 8/07/98 10,003
Barclays Bank PLC, 10,000 5.94 6/25/98 10,004
NY 10,000 5.86 8/18/98 10,004
10,000 5.715 10/09/98 9,998
10,000 5.56 2/25/99 9,985
7,000 5.645 3/02/99 6,995
Bayerische 10,000 5.835 9/29/98 10,006
Hypotheken-und 24,000 5.65 2/26/99 23,984
Wechsel-Bank, NY
Bayerische Landesbank 10,000 5.85 7/10/98 10,002
Girozentrale, NY
Bayerische 10,000 5.70 10/06/98 9,997
Vereinsbank AG, NY 16,000 5.60 2/02/99 15,980
Canadian Imperial Bank 15,000 5.55 2/10/99 14,975
of Commerce, NY
Deutsche Bank AG, NY 10,000 5.62 2/26/99 9,990
Landesbank 15,000 5.94 6/19/98 15,006
Hessen Thuringen
Girozentrale, NY
Norddeutsche 10,000 5.525+ 2/02/99 9,996
Landesbank
Girozentrale AG, NY
Royal Bank of 10,000 6.05 6/10/98 10,006
Canada, NY 10,000 5.79 8/20/98 10,001
Swiss Bank Corp., NY 25,000 5.95 7/02/98 25,012
10,000 5.90 8/28/98 10,006
Westdeutsche 10,000 5.60+ 3/06/98 10,000
Landesbank 17,000 5.94 6/29/98 17,008
Girozentrale, NY ------------
Total Certificates of Deposit -- Yankee
(Cost -- $278,922) 278,962
============
Commercial Paper -- 39.4%
Aesop Funding Corp. 10,000 5.49 4/07/98 9,941
Allomon Funding Corp. 10,095 5.53 3/06/98 10,084
10,147 5.75 3/17/98 10,119
15,217 5.77 3/20/98 15,168
5,070 5.48 5/18/98 5,008
American Honda 30,000 5.45 4/16/98 29,779
Finance Corp. 5,000 5.47 4/16/98 4,963
15,000 5.56 5/28/98 14,799
Apreco, Inc. 15,000 5.50 3/05/98 14,986
25,000 5.48 5/12/98 24,715
BTR Dunlop 50,000 5.56 4/09/98 49,685
Finance, Inc.
CIT Group Holdings, 15,000 5.55 4/24/98 14,871
Inc. (The)
Chrysler Financial 15,000 5.49 3/03/98 14,991
Corporation
Countrywide Home 25,000 5.73 3/06/98 24,973
Loans, Inc. 20,000 5.54 5/27/98 19,726
Diageo PLC 20,000 5.48 3/27/98 19,915
Finova Capital Corp. 4,000 5.55 3/24/98 3,985
15,000 5.49 4/08/98 14,908
25,000 5.49 4/09/98 24,843
10,000 5.61 4/29/98 9,906
10,000 5.61 4/30/98 9,904
Ford Credit 25,000 5.53 4/07/98 24,850
Europe PLC
Ford Motor Credit 10,000 5.52 4/07/98 9,940
Company
France Telecom 15,000 5.74 3/26/98 14,938
General Electric 25,000 5.50 3/04/98 24,980
Capital Corp.
General Motors 35,000 5.49 3/19/98 34,893
Acceptance Corp. 35,000 5.57 3/20/98 34,888
20,000 5.51 4/03/98 19,892
Generale Bank, Inc. 20,000 5.55 4/06/98 19,883
Goldman Sachs 25,000 5.53 5/05/98 24,742
Group, L.P. 10,000 5.62 6/30/98 9,811
Lehman Brothers 20,000 5.80 3/27/98 19,914
Holdings, Inc. 23,500 5.47 5/06/98 23,254
25,000 5.50 5/08/98 24,731
20,000 5.50 5/12/98 19,772
15,000 5.50 5/19/98 14,813
Lexington Parker 15,000 5.73 3/05/98 14,986
Capital Company, LLC 20,000 5.73 3/06/98 19,978
20,000 5.74 3/06/98 19,978
10,000 5.48 5/20/98 9,874
9,000 5.49 5/26/98 8,878
10,000 5.49 5/27/98 9,863
Mont Blanc 15,000 5.49 4/24/98 14,871
Capital Corp.
Morgan Stanley, Dean 25,000 5.73 3/13/98 24,946
Witter, Discover & Co. 15,000 5.75 3/17/98 14,959
Old Line Funding Corp. 10,000 5.51 4/02/98 9,948
Preferred Receivables 18,000 5.48 3/11/98 17,967
Funding Corp.
RTZ America, Inc. 13,000 5.55 3/25/98 12,948
Republic Industries 17,000 5.51 4/13/98 16,883
Funding Corp.
Rio Tinto Finance PLC 5,000 5.75 3/03/98 4,997
Salomon, Smith 25,000 5.47 5/07/98 24,735
Barney Holdings, Inc.
Scripps (E.W.) 25,000 5.73 3/10/98 24,958
Company (The)
Twin Towers Inc. 3,752 5.75 3/02/98 3,750
Windmill 6,481 5.48 5/22/98 6,397
Funding Corp. ------------
Total Commercial Paper (Cost -- $929,487) 929,486
============
Corporate Notes -- 11.4%
Abbey National 10,000 5.93 3/25/98 10,003
Treasury Services PLC 25,000 5.65+ 4/15/98 24,998
15,000 5.74+ 6/09/98 14,997
Associates Corp. of 5,700 6.25 3/15/99 5,730
North America
Bank of Scotland 4,000 5.95 6/18/98 4,001
Treasury Services PLC
CIT Group Holdings, 4,500 5.58+ 8/17/98 4,498
Inc. (The) 11,000 5.59+ 9/30/98 10,994
10,000 5.64+ 1/12/99 9,996
Chase Manhattan Auto 4,000 5.549 3/12/99 3,999
Owner Trust 1998-A
Credit Suisse First 8,000 5.75+ 4/14/98 8,000
Boston Inc.
First Bank System Inc. 14,000 5.757+ 10/21/98 14,016
Ford Credit Auto 10,000 5.545 2/16/99 9,997
Owner Trust 1998-A
General Motors 7,000 5.702+ 2/27/01 6,986
Acceptance Corp.
Goldman Sachs 20,000 5.625+ 3/26/99 19,998
Group, L.P.
IBM Credit Corp. 10,000 5.93 3/18/98 10,002
10,000 5.868 8/13/98 10,005
LABS Trust (Series 16,935 5.625+ 12/28/98 16,935
1996-4), Senior Notes
LABS Trust (Series 11,047 5.625+ 10/21/98 11,047
1997-6), Senior Notes
LINCS (Series 1997-4) 15,000 5.615+ 9/18/98 15,000
LINCS (Series 1997-5) 14,500 5.615+ 11/18/98 14,500
LINCS (Series 1998-2) 10,000 5.615+ 2/12/99 10,000
Morgan (J.P.) & 20,000 5.58+ 2/24/99 19,992
Company, Inc.
Morgan Stanley, Dean 4,300 5.544+ 1/15/99 4,297
Witter, Discover & Co.
Premier Auto Trust 2,189 5.649 6/08/98 2,189
1997-3, Class A-1
Premier Auto Trust 6,900 5.545 11/06/98 6,900
1998-1, Class A-1 ------------
Total Corporate Notes (Cost -- $269,095) 269,080
============
Master Notes & Funding Agreements -- 2.7%
Goldman Sachs 40,000 5.625+ 4/28/98 40,000
Group, L.P.
Jackson National Life 25,000 5.655+ 5/01/98 25,000
Insurance Co. ------------
Total Master Notes & Funding Agreements
(Cost -- $65,000) 65,000
============
US Government & Agency Obligations --
Non-Discount Notes -- 15.3%
Federal Home Loan 21,000 5.749+ 10/20/98 20,996
Banks 3,900 6.355 6/11/99 3,907
5,000 5.99 8/11/99 5,004
5,000 5.67 1/20/00 4,981
7,000 5.855 1/20/00 6,988
5,000 5.77 1/27/00 4,986
5,000 5.75 3/16/00 4,984
5,000 5.865 3/17/00 4,991
Federal Home Loan 20,000 5.57+ 4/20/98 19,998
Mortgage Corp. 4,000 6.36 5/20/99 4,006
Federal National 16,000 5.57+ 3/26/98 15,999
Mortgage Association 21,000 5.479+ 3/27/98 20,999
25,000 5.519+ 4/24/98 24,999
10,000 5.68 7/31/98 10,001
20,000 5.744+ 10/20/98 19,994
25,000 5.669+ 1/21/99 24,989
5,000 5.40 2/02/99 4,990
10,000 5.38 2/12/99 9,977
25,000 5.603+ 3/03/99 24,989
Federal National 17,000 5.67+ 3/03/99 16,994
Mortgage Association 4,000 6.375 5/21/99 4,006
2,800 5.88 8/10/99 2,800
Student Loan 13,000 5.714+ 10/06/98 12,995
Marketing Association 10,000 5.714+ 11/25/98 9,998
20,000 5.679+ 1/12/00 19,993
3,000 5.81 1/27/00 2,992
15,000 5.704+ 2/02/00 14,993
13,600 5.724+ 2/04/00 13,593
US Treasury Notes 10,000 5.25 7/31/98 9,994
15,000 6.375 1/15/99 15,102
------------
Total US Government & Agency Obligations --
Non-Discount Notes (Cost -- $361,269) 361,238
============
<CAPTION>
Repurchase Agreements** -- 2.1%
Face Amount Issue
<S> <C> <C>
$49,777 Fuji Securities, Inc., purchased on
2/27/1998 to yield 5.68% to 3/02/1998 49,777
------------
Total Repurchase Agreements
(Cost -- $49,777) 49,777
============
Total Investments (Cost -- $2,418,314) -- 102.4% 2,418,317
Liabilities in Excess of Other Assets -- (2.4%) (57,635)
------------
Net Assets -- 100.0% $2,360,682
============
* Commercial Paper and certain US Government & Agency Obligations are traded on a
discount basis; the interest rates shown are the discount rates paid at the time
of purchase by the Fund. Other securities bear interest at the rates shown,
payable at fixed dates or upon maturity. Interest rates on variable rate
securities are adjusted periodically based upon appropriate indexes; the interest
rates shown are those in effect at February 28, 1998.
** Repurchase Agreements are fully collateralized by US Government Obligations.
+ Variable Rate Notes.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CBA Money Fund
Statement of Assets and Liabilites as of February 28, 1998
<S> <C> <C>
Assets:
Investments, at value (identified cost -- $2,418,313,756*) (Note 1a) $2,418,317,259
Cash 25,808
Interest receivable 17,047,439
Prepaid registration fees and other assets (Note 1e) 1,153,288
---------------
Total assets 2,436,543,794
---------------
Liabilities:
Payables:
Securities purchased $73,767,372
Investment adviser (Note 2) 675,740
Distributor (Note 2) 649,177 75,092,289
---------------
Accrued expenses and other liabilities 769,413
---------------
Total liabilities 75,861,702
---------------
Net Assets $2,360,682,092
===============
Net Assets Consist of:
Shares of beneficial interest, $.10 par value, unlimited number of shares authorized $236,067,859
Paid-in capital in excess of par 2,124,610,730
Unrealized appreciation on investments -- net 3,503
---------------
Net Assets -- Equivalent to $1.00 per share based on 2,360,678,589 shares of beneficial
interest outstanding $2,360,682,092
===============
* The aggregate cost of investments at February 28, 1998 for Federal income tax purposes was
$2,418,313,756. As of February 28, 1998, net unrealized appreciation for Federal income tax
purposes amounted to $3,503, of which $263,092 related to appreciated securities and $259,589
related to depreciated securities.
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CBA Money Fund
Statement of Operations for the Year Ended February 28, 1998
<S> <C> <C>
Investment Income (Note 1d):
Interest and amortization of premium and discount earned $127,482,737
Expenses:
Investment advisory fees (Note 2) $9,293,428
Transfer agent fees (Note 2) 3,805,534
Distribution fees (Note 2) 2,744,110
Registration fees (Note 1e) 389,490
Accounting services (Note 2) 158,610
Custodian fees 115,122
Printing and shareholder reports 89,587
Professional fees 63,258
Trustees' fees and expenses 36,134
Other 26,698
------------
Total expenses before reimbursement 16,721,971
Reimbursement of expenses (Note 2) (898,221)
------------
Total expenses after reimbursement 15,823,750
------------
Investment Income -- Net 111,658,987
Realized Gain on Investments -- Net (Note 1d) 227,994
Change in Unrealized Appreciation/Depreciation on Investments -- Net 37,859
------------
Net Increase in Net Assets Resulting from Operations $111,924,840
============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CBA Money Fund For the Year Ended
Statements of Changes in Net Assets February 28,
1998 1997
Increase (Decrease) in Net Assets:
<S> <C> <C>
Operations:
Investment income -- net $111,658,987 $98,710,245
Realized gain on investments -- net 227,994 46,265
Change in unrealized appreciation/depreciation on investments -- net 37,859 (81,776)
--------------- ---------------
Net increase in net assets resulting from operations 111,924,840 98,674,734
--------------- ---------------
Dividends & Distributions to Shareholders (Note 1f):
Investment income -- net (111,658,987) (98,710,245)
Realized gain on investments -- net (227,994) (46,265)
--------------- ---------------
Net decrease in net assets resulting from dividends and distributions to
shareholders (111,886,981) (98,756,510)
--------------- ---------------
Beneficial Interest Transactions (Note 3):
Net proceeds from sale of shares 6,033,580,870 5,723,246,368
Net asset value of shares issued to shareholders in reinvestment of dividends and
distributions (Note 1f) 111,675,227 98,549,542
--------------- ---------------
6,145,256,097 5,821,795,910
Cost of shares redeemed (6,021,271,868) (5,573,053,954)
--------------- ---------------
Net increase in net assets derived from beneficial interest transactions 123,984,229 248,741,956
--------------- ---------------
Net Assets:
Total increase in net assets 124,022,088 248,660,180
Beginning of year 2,236,660,004 1,987,999,824
--------------- ---------------
End of year $2,360,682,092 $2,236,660,004
=============== ===============
See Notes to Financial Statements.
</TABLE>
<TABLE>
<CAPTION>
CBA Money Fund
Financial Highlights
The following per share data and ratios have been derived For the For the For the
from information provided in the financial statements. Year Ended Year Ended Year Ended
February 28, February 29, February 28,
1998 1997 1996 1995 1994
Increase (Decrease) in Net Asset Value:
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
Net asset value, beginning of year $1.00 $1.00 $1.00 $1.00 $1.00
---------- ---------- ---------- ---------- ----------
Investment income -- net .0497 .0475 .0524 .0396 .0260
Realized and unrealized gain (loss) on investments
- -- net .0001 --* .0001 .0005 (.0004)
---------- ---------- ---------- ---------- ----------
Total from investment operations .0498 .0475 .0525 .0401 .0256
---------- ---------- ---------- ---------- ----------
Less dividends and distributions:
Investment income -- net (.0497) (.0475) (.0524) (.0396) (.0260)
Realized gain on investments -- net (.0001) --* (.0001) --* (.0004)
---------- ---------- ---------- ---------- ----------
Total dividends and distributions (.0498) (.0475) (.0525) (.0396) (.0264)
---------- ---------- ---------- ---------- ----------
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00
========== ========== ========== ========== ==========
Total Investment Return 5.10% 4.87% 5.39% 4.04% 2.67%
========== ========== ========== ========== ==========
Ratios to Average Net Assets:
Expenses, net of reimbursement .70% .69% .75% .77% .71%
========== ========== ========== ========== ==========
Expenses .74% .73% .79% .81% .75%
========== ========== ========== ========== ==========
Investment income and realized gain on
investments -- net 4.98% 4.71% 5.22% 3.98% 2.62%
========== ========== ========== ========== ==========
Supplemental Data:
Net assets, end of year (in thousands) $2,360,682 $2,236,660 $1,988,000 $1,406,315 $1,287,456
========== ========== ========== ========== ==========
* Amount is less than $.0001 per share.
See Notes to Financial Statements.
</TABLE>
CBA Money Fund
Notes to Financial Statements
1. Significant Accounting Policies:
CBA Money Fund (the "Fund") is a money fund whose shares are offered
to subscribers to the Capital Builder Account service of Merrill
Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S") and to subscribers to
the Broadcort Capital Account service of Broadcort Capital Corp.
("Broadcort"). Shares may also be purchased by individual investors
not subscribing to these services, but such investors will not
receive any of the special features offered as a part of such
services. The Fund is registered under the Investment Company Act of
1940 as a diversified, open-end management investment company. The
following is a summary of significant accounting policies followed
by the Fund.
(a) Valuation of investments -- Portfolio securities with remaining
maturities of sixty days or less are valued at amortized cost, which
approximates market value. Securities with remaining maturities of
greater than sixty days, for which market quotations are readily
available, will be valued at market value. When securities are
valued with sixty days or less to maturity, the difference between
the valuation existing on the sixty-first day before maturity and
maturity value is amortized on a straight-line basis to maturity.
Other securities held by the Fund will be valued at their fair value
as determined in good faith by or under the direction of the Board
of Trustees.
(b) Repurchase agreements -- The Fund invests in US Government
securities pursuant to repurchase agreements with a member bank of
the Federal Reserve System or a primary dealer in US Government
securities. Under such agreements, the bank or primary dealer agrees
to repurchase the security at a mutually agreed upon time and price.
The Fund takes possession of the underlying securities, marks to
market such securities and, if necessary, receives additional
securities daily to ensure that the contract is fully
collateralized.
(c) Income taxes -- It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to
its shareholders. Therefore, no Federal income tax provision
is required.
(d) Security transactions and investment income -- Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Realized gains and losses on security
transactions are determined on the identified cost basis. Interest
income (including amortization of premium and discount) is
recognized on the accrual basis.
(e) Prepaid registration fees -- Prepaid registration fees are
charged to expense as the related shares are issued.
(f) Dividends and distributions to shareholders -- The Fund declares
dividends daily and reinvests daily such dividends (net of non
resident alien tax and back-up withholding tax withheld) in
additional fund shares at net asset value. Dividends and
distributions are declared from the total of net investment income
and net realized gain or loss on investments.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee based upon the average daily
value of the Fund's net assets at the following annual rates: 0.50%
of the first $500 million of average daily net assets, 0.425% of
average daily net assets in excess of $500 million but not exceeding
$1 billion, and 0.375% of average daily net assets in excess of $1
billion. During the year ended February 28, 1998, FAM earned
$9,293,428, of which $898,221 was voluntarily waived.
The Fund has adopted a Distribution and Shareholder Servicing Plan
in compliance with Rule 12b-1 under the Investment Company Act of
1940, pursuant to which MLPF&S and Broadcort each receive a
distribution fee under the Distribution Agreement from the Fund at
the end of each month at the annual rate of 0.125% of average daily
net assets of the Fund attributable to subscribers to the respective
Capital Builder Account and Broadcort Capital Account programs. The
MLPF&S distribution fee is to compensate MLPF&S financial
consultants and other directly involved branch office personnel for
selling shares of the Fund and for providing direct personal
services to shareholders. The Broadcort distribution fee is to
compensate selected dealers for activities and services related to
the sale, promotion and marketing of shares of the Fund. The
distribution fee is not compensation for the administrative and
operational services rendered to the Fund by MLPF&S or Broadcort in
processing share orders and administering shareholder accounts.
Merrill Lynch Financial Data Services, Inc. ("MLFDS"), a wholly-
owned subsidiary of ML & Co., is the Fund's transfer agent.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or trustees of the Fund are officers and/or
directors of FAM, PSI, MLFDS, and/or ML & Co.
3. Beneficial Interest Transactions:
The number of shares purchased and redeemed during the year
corresponds to the amounts included in the Statements of Changes in
Net Assets with respect to net proceeds from sale of shares and cost
of shares redeemed, respectively, since shares are recorded at $1.00
per share.
CBA Money Fund
Independent Auditors' Report
The Board of Trustees and Shareholders, CBA Money Fund:
We have audited the accompanying statement of assets and
liabilities, including the schedule of investments, of CBA Money
Fund as of February 28, 1998, the related statements of operations
for the year then ended and changes in net assets for each of the
years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended.
These financial statements and the financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and the financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements and the financial highlights are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned
at February 28, 1998 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights
present fairly, in all material respects, the financial position of
CBA Money Fund as of February 28, 1998, the results of its
operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
April 2, 1998
CBA Money Fund
Important Tax Information (unaudited)
None of the ordinary income distributions paid daily by CBA Money
Fund during the year ended February 28, 1998 qualify for the
dividends received deduction for corporations. Additionally, the
Fund paid a long-term capital gain distribution of $.0000362 per
share to shareholders of record on April 18, 1997. All of this long-
term capital gain distribution is subject to the 28% tax rate.
The law varies in each state as to whether and what percentage of
dividend income attributable to Federal obligations is exempt from
state income tax. We recommend that you consult your tax adviser to
determine if any portion of the dividends you received is exempt
from state income tax.
Listed below are the percentages of total assets of the Fund
invested in Federal obligations as of the end of each quarter of the
fiscal year:
For the Percentage of
Quarter Ended Federal Obligations+
May 31, 1997 2.14%
August 31, 1997 10.05
November 30, 1997 7.26
February 28, 1998 6.42
Of the Fund's ordinary income dividends paid during the year ended
February 28, 1998, 10.86% was attributable to Federal obligations.
In calculating the foregoing percentage, expenses of the Fund have
been allocated on a pro-rata basis.
Please retain this information for your records.
+ For purposes of this calculation, Federal obligations include US
Treasury Notes, US Treasury Bills and US Treasury Bonds. Also
included are obligations issued by the following agencies: Banks
for Cooperatives, Federal Intermediate Credit Banks, Federal Land
Banks, Federal Home Loan Banks, and the Student Loan Marketing
Association. Repurchase agreements are not included in this
calculation.
