NICHOLAS MONEY MARKET FUND, INC.
August 16, 2000
Report to Fellow Shareholders:
Money market rates, for the first half of the year 2000,
rose in response to the one-percent increase in the Federal Funds
target rate. The Federal Reserve Board ("the Fed") pushed the
target rate from 5.50% at the beginning of the year to 6.50% by
the end of June. Similarly, Nicholas Money Market Fund's ("the
Fund") seven-day current and effective yields increased from
5.62% and 5.78%, respectively at the beginning of the year to
6.28% and 6.48%, respectively at June 30, 2000. Selected yields
for the Fund are shown in the table below for the periods ended
June 30 and July 31, 2000:
Yield As Yield As
Of Of
06/30/00 07/31/00
Current 7-day* ................... 6.28% 6.30%
Effective 7-day* ................ 6.48% 6.51%
Current 12-month* ............... 5.37% 5.51%
Effective 12-month* ................ 5.50% 5.65%
As of June 30, 2000 the Fund held nearly 95% of its assets
in high-quality corporate commercial paper with the rest in top-
rated variable rate securities. Weighted average days-to-
maturity was 36 days and the Fund's net assets increased by
approximately $29 million during the six months ended June 30,
2000. In terms of 12-month returns and yields at June 30, 2000
only 34 of 308 funds tracked by Money Market Insight, a service
of iMoneyNet, Inc., had percentages equal to or greater than
Nicholas Money Market Fund within the taxable first tier money
fund group. This places the Fund in the top 12% of the above
peer group in terms of 12-month yield (average effective 12-month
yield for the taxable first tier money fund group was 5.17% at
June 30, 2000).
The consensus among economists and Fed watchers currently
favors either no increases in Fed rates or only modest ones for
the remainder of this year.
Thank you for your continued support.
Sincerely,
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, 2000 (unaudited)
------------------------------------------------------------------------------
[CAPTION]
<TABLE>
Yield to Amortized
Principal Maturity Maturity Cost
Amount Date (Note 1 (b)) (Note 1 (a))
--------- ---------- ---------- ------------
<C> <C> <C> <C>
COMMERCIAL PAPER - 94.66%
$3,000,000 Fiserv, Inc. ................................. 07/03/2000 6.56% $3,000,000
1,750,000 Coca-Cola Enterprises, Inc. .................. 07/05/2000 6.71% 1,749,370
745,000 General Electric Capital Corporation ......... 07/05/2000 6.56% 744,735
550,000 General Motors Acceptance Corporation ........ 07/06/2000 6.59% 549,705
975,000 Fiserv, Inc. ................................. 07/07/2000 6.87% 974,274
4,475,000 Newell Rubbermaid Inc. ....................... 07/07/2000 6.62% 4,471,783
1,500,000 Brown-Forman Corp. ........................... 07/10/2000 6.32% 1,498,206
2,656,000 Panasonic Finance Europe plc.................. 07/10/2000 6.67% 2,652,617
4,000,000 John Deere Capital Corp. ..................... 07/11/2000 6.62% 3,994,258
2,750,000 American General Finance Corporation ......... 07/12/2000 6.62% 2,745,559
2,450,000 Fiserv, Inc. ................................. 07/13/2000 6.97% 2,445,372
4,500,000 Ford Motor Credit Co. ........................ 07/14/2000 6.65% 4,491,021
1,425,000 General Electric Capital Corporation ......... 07/14/2000 6.72% 1,422,144
3,350,000 Bear Stearns Companies, Inc. (The) ........... 07/17/2000 6.70% 3,341,493
5,000,000 Salomon Smith Barney Holdings, Inc. .......... 07/17/2000 6.66% 4,987,303
4,075,000 Bear Stearns Companies, Inc. (The) ........... 07/18/2000 6.69% 4,063,930
2,235,000 Ford Motor Credit Co. ........................ 07/19/2000 6.69% 2,228,523
3,150,000 Banta Corporation ............................ 07/20/2000 7.03% 3,139,811
8,000,000 GTE Corporation .............................. 07/21/2000 6.72% 7,973,680
2,450,000 Morgan Stanley Dean Witter & Co. ............. 07/21/2000 6.72% 2,441,976
2,500,000 Stanley Works (The) .......................... 07/21/2000 6.75% 2,491,750
6,650,000 Merrill Lynch & Co., Inc. .................... 07/24/2000 6.75% 6,624,475
900,000 American Honda Finance Corporation ........... 07/25/2000 6.73% 896,387
975,000 General Motors Acceptance Corporation ........ 07/25/2000 6.76% 971,074
1,425,000 Stanley Works (The) .......................... 07/25/2000 6.78% 1,419,235
825,000 General Motors Acceptance Corporation ........ 07/26/2000 6.76% 821,527
2,450,000 Salomon Smith Barney Holdings, Inc. .......... 07/26/2000 6.69% 2,439,747
2,260,000 Firstar Corporation .......................... 07/27/2000 6.75% 2,250,086
2,635,000 General Electric Capital Corporation ......... 07/28/2000 6.75% 2,622,960
3,350,000 Associates First Capital B.V.................. 07/31/2000 6.69% 3,332,960
4,425,000 Firstar Corporation .......................... 07/31/2000 6.77% 4,402,285
1,640,000 LOCAP, Inc. .................................. 07/31/2000 6.99% 1,631,262
5,625,000 LOCAP, Inc. .................................. 07/31/2000 6.99% 5,595,031
5,000,000 Coca-Cola Enterprises, Inc. .................. 08/01/2000 6.67% 4,973,739
1,575,000 General Electric Capital Corporation ......... 08/01/2000 6.77% 1,566,626
2,300,000 Marshall & Ilsley Corp. ...................... 08/02/2000 6.79% 2,287,312
2,350,000 Banta Corporation ............................ 08/03/2000 7.03% 2,336,138
2,050,000 Banta Corporation ............................ 08/04/2000 6.97% 2,037,609
545,000 DaimlerChrysler N.A. Holding Corp. ........... 08/07/2000 6.70% 541,540
1,050,000 Fiserv, Inc. ................................. 08/07/2000 7.10% 1,042,905
2,000,000 Wausau-Mosinee Paper Corporation ............. 08/07/2000 6.96% 1,986,778
2,175,000 DaimlerChrysler N.A. Holding Corp. ........... 08/08/2000 6.72% 2,160,754
8,000,000 Tribune Company .............................. 08/08/2000 6.69% 7,947,760
1,035,000 Vulcan Materials Co. ......................... 08/08/2000 6.73% 1,028,200
4,500,000 CIT Group, Inc. (The) ........................ 08/09/2000 6.71% 4,469,753
4,100,000 Wausau-Mosinee Paper Corporation ............. 08/10/2000 6.97% 4,070,571
3,400,000 CIT Group, Inc. (The) ........................ 08/11/2000 6.72% 3,375,837
1,275,000 Associates First Capital B.V. ................ 08/14/2000 6.71% 1,265,257
4,050,000 Marshall & Ilsley Corp. ...................... 08/15/2000 6.71% 4,018,314
2,200,000 Marshall & Ilsley Corp. ...................... 08/18/2000 6.72% 2,181,559
1,925,000 Newell Rubbermaid Inc. ....................... 08/21/2000 6.74% 1,907,812
2,800,000 Torchmark Corp. .............................. 08/21/2000 6.80% 2,774,732
1,000,000 Fiserv, Inc. ................................. 08/22/2000 7.07% 990,417
5,025,000 American Honda Finance Corporation ........... 08/23/2000 6.74% 4,978,372
2,300,000 Associates First Capital B.V. ................ 08/24/2000 6.74% 2,278,140
5,225,000 Vulcan Materials Co. ......................... 08/28/2000 6.75% 5,171,519
697,000 Vulcan Materials Co. ......................... 08/28/2000 6.75% 689,855
450,000 American Honda Finance Corporation ........... 09/13/2000 6.84% 444,015
------------
TOTAL COMMERCIAL PAPER ................. 160,940,053
------------
VARIABLE RATE SECURITIES - 5.89%
5,000,000 Anchor National Life Funding Agreement (1)(2) 07/03/2000 6.90% 5,000,000
11,531 Firstar Bank U.S.A., N.A. (1) ................ 07/03/2000 6.53% 11,531
5,000,000 Morgan Stanley Group, Inc. (1) ............... 03/15/2001 7.09% 5,000,000
------------
TOTAL VARIABLE RATE SECURITIES ......... 10,011,531
------------
TOTAL INVESTMENTS ...................... 170,951,584
------------
LIABILITIES, NET OF OTHER ASSETS, - (0.55)% (932,436)
------------
TOTAL NET ASSETS (Basis of percentages disclosed above), - 100% $170,019,148
------------
------------
NET ASSET VALUE PER SHARE ($.0001 par value, 3,000,000,000
shares authorized), offering price and redemption price
($170,019,148 / 170,019,148 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.
<PAGE>
Statement of Operations
For the six months ended June 30, 2000 (unaudited)
-------------------------------------------------------------------------------
INCOME:
Interest $4,789,742
----------
EXPENSES:
Management fee (Note 2) 230,059
Transfer agent fees 56,198
Legal fees 25,154
Registration fees 20,579
Postage and mailing 11,696
Printing 7,163
Custodian fees 3,795
Directors' fees 3,000
Other operating expenses 2,718
----------
360,362
----------
Net investment income $4,429,380
----------
----------
The accompanying notes to financial statements
are an integral part of this statement.
<PAGE>
Statements of Changes in Net Assets
For the six months ended June 30, 2000 (unaudited) and the year
ended December 31, 1999
--------------------------------------------------------------------------
[CAPTION]
<TABLE>
2000 1999
------------ ------------
<C> <C> <C>
OPERATIONS:
Net investment income $ 4,429,380 $ 7,161,357
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income
($0.029 and $0.048 per share, respectively) (4,429,380) (7,161,357)
------------ -------------
Increase in net assets
from investment activities -- --
------------ ------------
CAPITAL SHARE TRANSACTIONS (all at $1.00 per share):
Proceeds from shares issued 102,442,806 156,003,266
Reinvestment of distributions 4,074,523 7,009,099
Cost of shares redeemed (77,447,599) (182,250,244)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions 29,069,730 (19,237,879)
------------ ------------
Total increase (decrease) in net assets 29,069,730 (19,237,879)
------------ ------------
NET ASSETS:
Beginning of the period 140,949,418 160,187,297
------------ ------------
NET ASSETS:
End of the period $170,019,148 $140,949,418
------------ ------------
------------ ------------
</TABLE>
The accompanying notes to financial statements
are an integral part of these statements.
<PAGE>
Financial Highlights
(For a share outstanding throughout each period)
[CAPTION]
<TABLE>
Six Months Year ended December 31,
Ended 06/30/2000 ------------------------------------------------
(unaudited) 1999 1998 1997 1996 1995
------------- ---- ---- ---- ---- ----
<C> <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 .029 .048 .052 .052 .050 .055
----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS:
From net investment income (.029) (.048) (.052) (.052) (.050) (.055)
----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL RETURN 2.89% 4.91% 5.26% 5.26% 5.14% 5.64%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions) $170.0 $140.9 $160.2 $117.8 $119.1 $111.8
Ratio of expenses to average net assets .47%* .49% .48% .51% .52% .51%
Ratio of net investment income
to average net assets 5.75%* 4.76% 5.18% 5.15% 5.02% 5.50%
* Annualized </TABLE>
The accompanying notes to financial statements are an
integral part of these statements.
Notes to Financial Statements
June 30, 2000 (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, 2000, the Fund's dollar-weighted
average portfolio maturity was 35 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, 2000, the Fund owed Nicholas
Company, Inc. $42,859 for advisory services.
Officers and Directors
ALBERT O. NICHOLAS, President and 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 INSTITUTIONAL CUSTODY SERVICES
Cincinnati, Ohio
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, 2000
