August 24, 1999
Report to Fellow Shareholders:
Early in 1999, short-term interest rates fell before
leveling off later in the first and second quarters. However, at
the end of the second quarter rates began to rise. The decline
in rates in early 1999 was in response to decreases in the
Federal Funds target rate late in 1998. The Federal Reserve
Board ("Fed") lowered rates late last year largely in an effort
to revive what was at the time slumping U.S. stock and bond
markets. The target rate remained unchanged at 4.75% until the
end of June 1999, when the rate was set at 5.00%. Short-term
interest rates have followed the late second quarter increase,
and have slowly climbed upwards by the end of the six month
reporting period of June 30.
The seven-day effective yield for Nicholas Money Market Fund
("Fund") declined from 5.04% at December 31, 1998 to 4.64% at
June 30, 1999. Net assets fell from roughly $160 million at
December 31, 1998 to $142 million at June 30, 1999 with weighted
average days to maturity slightly increasing from 37 days to 38
days. Over 93% of the Fund's net assets were invested in various
issuers of commercial paper. Management would once again like
to remind shareholders that its yield and total return ranked
above the average for taxable money market funds as reported by
IBC's Money Market Insight ("IBC") a service of the IBC Financial
Data, Inc. Of the 928 taxable funds reported by IBC on June 30,
1999, the Funds 12-month return of 4.96% outperformed the taxable
fund average 12-month return of 4.69%. Yields for the Fund are
shown in the table below:
Yield Yield
As Of As Of
6/30/99 7/31/99
------- -------
Current 7-day* .......................... 4.54% 4.66%
Effective 7-day* .......................... 4.64% 4.77%
Current 12-month* ......................... 4.85% 4.78%
Effective 12-month* ........................ 4.96% 4.91%
As of August 24, 1999, the Fund's effective seven-day yield
has risen to 4.86%. Also on this date the Fed raised its target
rate by a quarter of a percent to 5.25%. The Fed hikes in June
and August 1999 were largely in response to growth in U.S.
economic activity. The Fed felt such boosts were warranted
because the financial strain from the previous year eased,
foreign economics firmed and the U.S. economy was at a brisk
pace. Expect the Fed to keep an eye on such key variables as
unemployment rates which are historically low, and the ability of
productivity gains to keep inflation (which has risen as measured
by the consumer price index just 1.40% through July 31, 1999)
manageable. Also the public's response to potential Y2K problems
and how that would effect financial markets may influence the Fed
as to whether or not to change rates in the future. Currently
the Fed's neutral stance on future rate changes has caused many
economists to believe that if there are any additional rate
increases for the remainder of this year, they should be small.
Thank you for your continued support.
Sincerely,
/s/ Albert O. Nicholas
----------------------
Albert O. Nicholas
President
*The current yield represents the annualized net investment
income per share for the stated time periods. The effective
yield assumes compounding. All performance and ranking data is
historical and does not represent future results. An investment
in the Fund is neither insured nor guaranteed by the United
States Government and there can be no assurance that the Fund
will be able to maintain a stable net asset value of $1.00 per
share.
Statement of Net Assets
June 30, 1999 (unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Yield to Amortized
Principal Maturity Maturity Cost
Amount Date (Note 1 (b)) (Note 1 (a))
--------- -------- ---------- ------------
<S> <C> <C> <C>
COMMERCIAL PAPER - 93.37%
$ 665,000 Newell Co. 07/01/99 5.78% $ 665,000
2,500,000 Fiserv, Inc. 07/02/99 5.10% 2,499,653
700,000 Wausau-Mosinee Paper Corporation 07/02/99 5.10% 699,903
4,275,000 John Deere Capital Corporation 07/06/99 4.89% 4,272,162
1,750,000 Torchmark Corporation 07/06/99 5.01% 1,748,804
2,000,000 Torchmark Corporation 07/06/99 5.01% 1,998,633
5,000,000 American Honda Finance Corporation 07/07/99 4.91% 4,996,000
878,000 American Honda Finance Corporation 07/07/99 4.99% 877,283
2,450,000 Ford Motor Credit Co. 07/08/99 4.91% 2,447,718
710,000 Torchmark Corporation 07/08/99 5.14% 709,303
885,000 Vulcan Materials Co. 07/08/99 4.91% 884,174
2,160,000 Ford Motor Credit Co. 07/09/99 4.90% 2,157,706
730,000 American General Finance Corporation 07/12/99 4.94% 728,927
2,200,000 General Electric Capital Corporation 07/12/99 4.94% 2,196,753
600,000 Torchmark Corporation 07/12/99 5.10% 599,083
1,885,000 Bear Stearns Companies, Inc. (The) 07/13/99 4.97% 1,881,959
6,000,000 Vulcan Materials Co. 07/13/99 4.92% 5,990,400
1,550,000 DaimlerChrysler N.A. Holding Corp. 07/14/99 4.94% 1,547,308
1,300,000 Newell Co. 07/14/99 4.94% 1,297,723
1,575,000 DaimlerChrysler N.A. Holding Corp. 07/15/99 4.94% 1,572,054
320,000 Fiserv, Inc. 07/15/99 5.20% 319,365
2,000,000 Wausau-Mosinee Paper Corporation 07/15/99 5.20% 1,996,033
1,500,000 Credit Suisse First Boston, Inc. 07/16/99 4.93% 1,496,994
2,050,000 Weyerhaeuser Real Estate Company 07/16/99 5.07% 2,045,746
2,950,000 General Motors Acceptance Corporation 07/19/99 4.93% 2,942,920
1,125,000 Electronic Data Systems Corp. 07/20/99 4.91% 1,122,156
2,275,000 Ford Motor Credit Co. 07/20/99 4.99% 2,269,129
1,125,000 Associates First Capital Corp. 07/21/99 4.90% 1,122,013
2,000,000 Fiserv, Inc. 07/21/99 5.20% 1,994,333
3,150,000 Weyerhaeuser Real Estate Company 07/21/99 5.07% 3,141,285
3,100,000 Coca-Cola Enterprises, Inc. 07/22/99 4.99% 3,091,175
225,000 Fiserv, Inc. 07/22/99 5.20% 224,331
4,000,000 DaimlerChrysler N.A. Holding Corp. 07/23/99 4.92% 3,988,242
900,000 Associates First Capital Corp. 07/26/99 4.97% 896,963
2,475,000 Sears Roebuck Acceptance Corporation 07/26/99 5.13% 2,466,355
3,225,000 Bayer Corporation 07/27/99 4.92% 3,213,820
2,025,000 Bear Stearns Companies, Inc. (The) 07/28/99 4.96% 2,017,634
150,000 American Honda Finance Corporation 07/29/99 5.18% 149,407
3,775,000 Firstar Corp. 07/29/99 4.98% 3,760,701
400,000 Fiserv, Inc. 07/30/99 5.26% 398,341
1,100,000 LOCAP, Inc. 07/30/99 5.20% 1,095,481
3,300,000 LOCAP, Inc. 07/30/99 5.03% 3,286,974
475,000 Fiserv, Inc. 08/02/99 5.31% 472,804
550,000 Marshall & Ilsley Corp. 08/02/99 4.98% 547,619
970,000 Associates First Capital Corp. 08/03/99 4.99% 965,661
975,000 Stanley Works (The) 08/04/99 5.01% 970,488
2,525,000 Stanley Works (The) 08/04/99 5.01% 2,513,315
1,780,000 Credit Suisse First Boston, Inc. 08/05/99 4.95% 1,771,659
3,900,000 American General Finance Corporation 08/06/99 5.01% 3,880,890
572,000 Stanley Works (The) 08/09/99 5.16% 568,864
1,200,000 Stanley Works (The) 08/09/99 5.01% 1,193,630
1,500,000 Wausau-Mosinee Paper Corporation 08/09/99 5.22% 1,491,713
600,000 Wausau-Mosinee Paper Corporation 08/09/99 5.26% 596,652
3,250,000 Brown-Forman Corporation 08/10/99 5.11% 3,231,944
2,385,000 Morgan Stanley Dean Witter & Co. 08/10/99 4.93% 2,372,280
3,225,000 Coca-Cola Enterprises, Inc. 08/11/99 4.96% 3,207,260
1,150,000 Coca-Cola Enterprises, Inc. 08/11/99 4.96% 1,143,674
4,025,000 Marshall & Ilsley Corp. 08/12/99 5.04% 4,001,850
2,500,000 Marshall & Ilsley Corp. 08/13/99 5.08% 2,485,159
1,850,000 Sears Roebuck Acceptance Corporation 08/16/99 5.14% 1,838,110
890,000 Credit Suisse First Boston, Inc. 08/17/99 5.01% 884,330
775,000 General Electric Capital Corporation 08/18/99 5.14% 769,802
2,100,000 Wausau-Mosinee Paper Corporation 08/18/99 5.47% 2,085,020
3,230,000 General Motors Acceptance Corporation 08/19/99 5.17% 3,207,754
1,375,000 American General Finance Corporation 08/20/99 5.21% 1,365,260
3,300,000 Firstar Corp. 08/24/99 5.27% 3,274,508
725,000 McGraw-Hill Companies 08/25/99 5.32% 719,240
4,125,000 McGraw-Hill Companies 08/31/99 5.01% 4,090,891
------------
TOTAL COMMERCIAL PAPER 132,460,321
------------
VARIABLE RATE SECURITIES - 7.05%
5,000,000 Anchor National Life Funding Agreement (1)(2) 07/01/99 5.13% 5,000,000
415 Firstar Bank U.S.A., N.A. (1) 07/01/99 5.00% 415
5,000,000 Morgan Stanley Group, Inc. (1) 07/14/00 5.35% 5,000,000
------------
TOTAL VARIABLE RATE SECURITIES 10,000,415
------------
TOTAL INVESTMENTS 142,460,736
------------
LIABILITIES, NET OF CASH AND RECEIVABLES (0.42)% (593,843)
------------
TOTAL NET ASSETS (Basis of percentages disclosed above) $141,866,893
------------
------------
NET ASSET VALUE PER SHARE ($.0001 par value, 3,000,000,000
shares authorized), offering price and redemption price
($141,866,893 / 141,866,893 shares outstanding) $1.00
=====
</TABLE>
(1) These securities are subject to a demand feature
as defined by the Securities and Exchange Commission.
(2) 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, 1999 (unaudited)
- -------------------------------------------------------------------------------
INCOME:
Interest............................ $3,824,588
----------
EXPENSES:
Management fee (Note 2)............. 228,176
Transfer agent fees................. 56,111
Registration fees................... 23,361
Legal fees.......................... 18,626
Postage and mailing fees............ 9,723
Printing fees....................... 7,040
Custodian fees...................... 3,275
Directors' fees..................... 3,000
Telephone fees...................... 517
Other operating expenses............ 3,127
----------
352,956
----------
Net investment income........... $3,471,632
----------
----------
The accompanying notes to financial statements
are an integral part of this statement.
Statements of Changes in Net Assets
For the six months ended June 30, 1999 (unaudited)
and the year ended December 31, 1998
- -------------------------------------------------------------------------------
<TABLE>
1999 1998
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income.................................. $ 3,471,632 $ 7,494,990
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.022 and $0.052 per share, respectively).......... (3,471,632) (7,494,990)
------------ -------------
Increase in net assets
from investment activities.................. -- --
------------ ------------
CAPITAL SHARE TRANSACTIONS (all at $1.00 per share):
Proceeds from shares issued............................ 86,463,368 178,021,968
Net asset value of shares issued in distributions 3,605,848 7,046,022
Cost of shares redeemed................................ (108,389,620) (142,679,502)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions.................. (18,320,404) 42,388,488
------------ ------------
Total increase (decrease) in net assets....... (18,320,404) 42,388,488
------------ ------------
NET ASSETS, at the beginning of the period................. 160,187,297 117,798,809
------------ ------------
NET ASSETS, at the end of the period....................... $141,866,893 $160,187,297
------------ ------------
------------ ------------
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
Financial Highlights
(For a share outstanding throughout each period)
- -------------------------------------------------------------------------------
<TABLE>
<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 ASSET VALUE, BEGINNING OF PERIOD..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income.................. .022 .052 .052 .050 .055 .038
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
From net investment income............. (.022) (.052) (.052) (.050) (.055) (.038)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL RETURN............................. 2.31%** 5.26% 5.26% 5.14% 5.64% 3.90%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions)..... $141.9 $160.2 $117.8 $119.1 $111.8 $118.1
Ratio of expenses to average net assets.. .45%* .48% .51% .52% .51% .53%
Ratio of net investment income
to average net assets.................. 4.45%* 5.18% 5.15% 5.02% 5.50% 3.83%
</TABLE>
* Annualized.
** Not annualized.
The accompanying notes to financial statements are an
integral part of these statements.
Notes to Financial Statements
June 30, 1999 (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 which approximates market
value. Investment transactions are generally 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 current interest rate and payment frequency.
(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, 1999, the Fund's dollar-weighted
average portfolio maturity was 38 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.
(e) 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 estimates.
(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, 1999, the Fund owed Nicholas
Company, Inc. $35,443 for advisory services.
NICHOLAS FAMILY OF FUNDS
Services Offered
- ---------------------------------------------------------------------
* IRAs
*Traditional *Simple *Educational
*Roth *SEP
*Self-employed Master Retirement Plan
*Money Purchase *Profit Sharing
*Automatic Investment Plan
*Direct Deposit of Distributions
*Systematic Withdrawl Plan
*Monthly Automatic Exchange between Funds
*Telephone Redemption
*Telephone Exchange
*24-hour Automated Account Information (800-544-6547)
Please call a shareholder representative for further information on
the above services or with any other questions you may have regarding
the Nicholas Family of Funds.
Officers and Directors
ALBERT O. NICHOLAS, President 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 and Treasurer
DAVID O. NICHOLAS, Senior Vice President
LYNN S. NICHOLAS, Vice President
KATHLEEN A. EVANS, Vice President
CANDACE L. LESAK, Vice President
Investment Adviser
NICHOLAS COMPANY, INC.
Milwaukee, Wisconsin
414-272-6133 or 800-227-5987
Transfer Agent
FIRSTAR MUTUAL FUND SERVICES, LLC
Milwaukee, Wisconsin
414-276-0535 or 800-544-6547
Custodian
FIRSTAR BANK MILWAUKEE, N.A.
Milwaukee, Wisconsin
Auditors
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin
Counsel
MICHAEL, BEST & FRIEDRICH LLP
Milwaukee, Wisconsin
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.
NICHOLAS MONEY MARKET FUND, INC.
700 North Water Street
Milwaukee, Wisconsin 53202
www.nicholasfunds.com
JUNE 30, 1999
