SEMIANNUAL REPORT
NICHOLAS
MONEY MARKET FUND,
INC.
700 North
Water Street
Milwaukee
Wisconsin 53202
June 30, 1996
August 30, 1996
Report to Shareholders:
Short-term interest rates remained relatively stable in the first half
of 1996. The Federal Reserve Board (Fed) has left its target short-term
rate (Fed Funds) unchanged since late January 1996. At which time they
decreased the Fed Funds target by .25% to 5.25% to counter an apparent
economic slowdown which never materialized to any extent. Accordingly
the 7-day effective yield on the Fund declined from 5.53% at December 31,
1995 to 5.16 at June 30, 1996.
Our investment philosophy is to purchase high quality short-term
corporate obligations, mainly commercial paper, and maintain a relatively
short average maturity of 30 to 45 days. At June 30, 1996 88% of the
Funds assets were invested in commercial paper and the Funds weighted
average maturity was 41 days. This practice will allow the Fund to
maintain a stable net asset value and a highly rated liquid portfolio.
Yields As Of Yields As Of
06/30/96 07/30/96
------------ ------------
Current 7-Day* 5.03% 5.05%
Effective 7-Day* 5.16% 5.18%
Current 6 months 5.03% 5.00%
Effective 6 month 5.15% 5.11%
*The current yield represents the annualized net investment
income per share for the stated time periods. The effective
yield assumes compounding. All performance data is
historical and does not represent future results.
Subsequent to June 30, 1996 the Fed has continued to leave short term
rates unchanged anticipating that the economy will slow down in the
remainder of the year keeping inflation low. However, the Fed is concerned
that wages will begin to rise given the low unemployment rate. In our view
the Fed will remain tough on inflation and increase rates if the economy
starts to heat up or there are other indications of upward pressure on
prices of goods and services.
Thank you for your continued support.
Sincerely,
/s/ Albert O. Nicholas
----------------------
Albert O. Nicholas
President
Statement of Net Assets
June 30, 1996 (unaudited)
<TABLE>
YIELD TO AMORTIZED
PRINCIPAL MATURITY MATURITY COST
AMOUNT DATE (NOTE 1(b)) (NOTE 1(a))
- --------- -------- ---------- ---------
<S> <C> <C> <C>
COMMERCIAL PAPER - 91.2%
$ 575,000 Fiserv, Inc. 07/01/96 5.65% 575,000
1,000,000 AMCORE Financial, Inc. 07/02/96 5.61% 999,847
3,250,000 Coca-Cola Enterprises Inc. 07/03/96 5.43% 3,249,041
2,750,000 American Honda Finance Corporation 07/08/96 5.47% 2,747,139
2,447,000 Sandoz Corporation 07/08/96 5.43% 2,444,464
1,450,000 B.A.T Capital Corporation 07/09/96 5.45% 1,448,276
2,400,000 Marshall & Ilsley Corporation 07/09/96 5.39% 2,397,184
2,425,000 American Honda Finance Corporation 07/10/96 5.43% 2,421,775
2,300,000 General Signal Corporation 07/11/96 5.46% 2,296,582
3,600,000 Heller Financial, Inc. 07/11/96 5.48% 3,594,630
3,300,000 Firstar Corporation 07/12/96 5.68% 3,294,404
2,750,000 Frontier Corporation 07/12/96 5.50% 2,745,463
1,000,000 Dover Corp. 07/15/96 5.45% 997,919
1,900,000 Heller Financial, Inc. 07/15/96 5.49% 1,896,025
4,150,000 Electronic Data Systems Corporation 07/16/96 5.41% 4,140,835
3,325,000 CS First Boston Inc. 07/17/96 5.43% 3,317,138
1,000,000 Bear Stearns Companies Inc. (The) 07/18/96 5.44% 997,492
1,450,000 Hanson Finance (U.K.) plc 07/18/96 5.46% 1,446,337
2,160,000 Hitachi Credit America Corp. 07/18/96 5.44% 2,154,594
2,427,000 Frontier Corporation 07/19/96 5.50% 2,420,447
1,600,000 Mosinee Paper Corporation 07/19/96 5.67% 1,595,560
1,325,000 Cortez Capital Corporation 07/22/96 5.42% 1,320,904
1,050,000 LOCAP, Inc. 07/22/96 5.50% 1,046,705
1,200,000 Bear Stearns Companies Inc. (The) 07/23/96 5.44% 1,196,091
4,075,000 Sears Roebuck Acceptance Corporation 07/24/96 5.46% 4,061,071
3,500,000 Dover Corp. 07/25/96 5.47% 3,487,470
1,550,000 Sears Roebuck Acceptance Corporation 07/25/96 5.48% 1,544,451
1,125,000 AMCORE Financial, Inc. 07/26/96 5.72% 1,120,625
2,300,000 AMCORE Financial, Inc. 07/26/96 5.71% 2,291,056
2,250,000 Coca-Cola Enterprises Inc. 07/29/96 5.43% 2,240,725
550,000 McCormick & Company Inc. 07/29/96 5.55% 547,669
750,000 Rexam plc 07/29/96 5.50% 746,850
3,050,000 Fiserv, Inc. 07/30/96 5.69% 3,036,364
500,000 Stanley Works, (The) 07/30/96 5.46% 497,845
1,525,000 Mosinee Paper Corporation 07/31/96 5.70% 1,517,947
1,230,000 Ford Motor Credit Company 08/01/96 5.48% 1,224,323
1,600,000 General Motors Acceptance Corporation 08/02/96 5.52% 1,592,320
1,820,000 American General Finance Corporation 08/05/96 5.47% 1,810,516
3,825,000 General Motors Acceptance Corporation 08/06/96 5.51% 3,804,345
1,175,000 Whirlpool Corporation 08/07/96 5.50% 1,168,491
3,150,000 B.A.T Capital Corporation 08/09/96 5.49% 3,131,675
2,100,000 CS First Boston Inc. 08/12/96 5.52 2,086,770
3,650,000 Brown-Forman Corporation 08/13/96 5.49% 3,626,588
500,000 Hitachi America, Ltd. 08/15/96 5.52% 496,625
1,825,000 Fiserv, Inc. 08/16/96 5.73% 1,811,941
3,500,000 LOCAP, Inc. 08/22/96 5.53% 3,472,801
700,000 Rexam plc 08/23/96 5.51% 694,456
2,275,000 Mosinee Paper Corporation 08/26/96 5.73% 2,255,182
------------
TOTAL COMMERCIAL PAPER 99,011,958
------------
VARIABLE RATE SECURITIES - 9.2%
5,000,000 Anchor National Life Funding Agreement** 07/01/96 5.63% 5,000,000
4,647 Pitney Bowes Credit Corporation* 07/01/96 5.14% 4,647
5,000,000 Morgan Stanley Group 07/15/97 5.71% 5,000,000
------------
TOTAL VARIABLE RATE SECURITIES 10,004,647
------------
TOTAL INVESTMENTS 109,016,605
------------
LIABILITIES, NET OF CASH AND RECEIVABLES (0.4%) (425,243)
------------
TOTAL NET ASSETS (Basis of percentages disclosed above) $108,591,362
============
NET ASSET VALUE PER SHARE ($.0001 par value, 3,000,000,000
shares authorized), offering price and redemption price
($108,591,362 divided by 108,591,362 shares outstanding) $1.00
=====
</TABLE>
* These securities are subject to a demand feature as defined
by the Securities and Exchange Commission.
** Not readily marketable for a 90 day period.
The accompanying notes to financial statements are
an integral part of this statement.
STATEMENT OF OPERATIONS
For the six months ended June 30, 1996 (unaudited)
INCOME:
Interest $3,017,519
EXPENSES:
Management fee (Note 2) 163,182
Transfer agent fees 41,847
Registration fees 31,574
Legal fees 15,008
Postage 8,531
Custodian fees 6,834
Printing 4,500
Directors' fees 2,944
Audit and tax consulting fees 2,700
Telephone 1,403
Other operating expenses 1,652
----------
280,175
----------
Net investment income $2,737,344
==========
The accompanying notes to financial statements are
an integral part of this statement.
STATEMENTS OF CHANGE IN NET ASSETS
For the six months ended June 30, 1996 (unaudited)
and the year ended December 31, 1995
<TABLE>
1996 1995
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 2,737,344 $ 6,083,716
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.025 and $0.055 per share, respectively) (2,737,344) (6,083,716)
------------ ------------
Increase in net assets
from investment activities -- --
------------ ------------
CAPITAL SHARE TRANSACTIONS (all at $1.00 per share):
Proceeds from shares issued 47,731,558 125,452,082
Net asset value of shares issued in distributions from net
investment income 2,744,548 5,909,339
Cost of shares redeemed (53,722,955) (137,608,434)
Decrease in net assets derived from ------------ ------------
capital share transactions (3,246,849) (6,247,013)
------------ ------------
Total decrease in net assets (3,246,849) (6,247,013)
------------ ------------
NET ASSETS, at the beginning of the period 111,838,211 118,085,224
------------ ------------
NET ASSETS, at the end of the period $ 108,591,362 $ 111,838,211
============ ============
</TABLE>
The accompanying notes to financial statements are
an integral part of these statements.
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
<TABLE>
Six Months YEAR ENDED DECEMBER 31,
Ended 6/30/96 -------------------------------------------------
(unaudited) 1995 1994 1993 1992 1991
----------- ---- ---- ---- ---- ----
<S> <C> <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 0.025 0.055 .038 .027 .033 .056
----- ----- ---- ---- ---- ----
LESS DISTRIBUTIONS
Dividends (from net investment income) (0.025) (0.055) (.038) (.027) (.033) (.056)
----- ----- ---- ---- ---- ----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions) $108.6 $111.8 $118.1 $122.5 $138.7 $147.0
Ratio of expenses to average net assets .52%* .51% .53% .54% .54% .52%
Ratio of net investment income
to average net assets 5.03%* 5.50% 3.83% 2.67% 3.30% 5.61%
*Annualized
</TABLE>
The accompanying notes to financial statements are
an integral part of these statements.
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
The Nicholas Money Market Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as an
open-end diversified investment company. The primary objective
of the Fund is to achieve as high a level of current income as
is consistent with preserving capital and providing liquidity.
The following is a summary of significant accounting policies
followed by the Fund.
(a) Securities held by the Fund, which are purchased at a
discount or premium, are valued on the basis of amortized
cost, done on a straight line method which is not
materially different than the level yield method. Amortized
cost approximates market value and does not take into
account unrealized gains or losses or the impact of
fluctuating interest rates. Variable rate instruments
purchased at par are valued at cost. Investment transactions
are accounted for on the trade date.
(b) Yield to maturity is calculated at date of purchase for
commercial paper. For variable rate securities, the yield
to maturity is calculated based on the next interest reset
date.
(c) The Fund maintains a dollar-weighted average portfolio
maturity of 90 days or less and purchases investments which
have maturities of 397 days or less. As of June 30, 1996,
the Fund's dollar-weighted average portfolio maturity was 41
days. Days to maturity on variable rate securities are based
on the number of days until the interest reset date or
demand feature, whichever is longer.
(d) 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 or excise
tax provision is required.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT -
The Fund has an agreement with Nicholas Company, Inc. (with whom
certain officers and directors of the Fund are affiliated) to
serve as investment adviser and manager. Under the terms of the
agreement, a monthly fee is paid to the investment adviser at an
annual rate of .30 of 1% of the daily average net asset value of
the Fund. The adviser will reimburse the Fund if total operating
expenses (other than the management fee) incurred by the Fund
exceed .50 of 1% of the average net assets for the year. At June
30, 1996, the Fund owed Nicholas Company, Inc. $25,262 for
advisory services.
OFFICERS AND DIRECTORS
ALBERT O. NICHOLAS
President, Treasurer and Director
FREDERICK F. HANSEN
Director
JAY H. ROBERTSON
Director
MELVIN L. SCHULTZ
Director
DAVID L. JOHNSON
Executive Vice President
THOMAS J. SAEGER
Executive Vice President and Secretary
JEFFREY T. MAY
Senior Vice President
DAVID O. NICHOLAS
Vice President
LYNN S. NICHOLAS
Vice President
KATHLEEN A. EVANS
Vice President
CANDACE L. LESAK
Vice President
Custodian and Transfer Agent
FIRSTAR TRUST COMPANY
Milwaukee
(414) 276-0535
COUNSEL
MICHAEL, BEST & FRIEDRICH
Milwaukee
AUDITORS
ARTHUR ANDERSEN LLP
Milwaukee
Member of
100% No-Load (TM)
Mutual Fund Council
This report is submitted for the information of shareholders of
the Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective
prospectus.
