UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-21927
American Money Management Funds
(Exact Name of Registrant as Specified in Charter)
PO Box 675203
14249 Rancho Santa Fe Farms Road
Rancho Santa Fe, CA 92067
(Address of Principal Executive Offices) (Zip Code)
Gabriel B. Wisdom
PO Box 675203
14249 Rancho Santa Fe Farms Road
Rancho Santa Fe, CA 92067
(Name and Address of Agent for Service)
With copy to:
JoAnn M. Strasser, Thompson Hine LLP
312 Walnut Street, 14th Floor, Cincinnati, Ohio 45202
Registrant’s Telephone Number, including Area Code: 858-755-0909
Date of fiscal year end: July 31
Date of reporting period: January 31, 2007
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Reports to Stockholders.
SEMI-ANNUAL REPORT
AMERICAN MONEY MANAGEMENT FUNDS
THE FALLEN ANGELS VALUE FUND
THE FALLEN ANGELS INCOME FUND
January 31, 2007
FALLEN ANGELS VALUE FUND
PORTFOLIO ANALYSIS
DECEMBER 31, 2006 (UNAUDITED)
The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.
FALLEN ANGELS INCOME FUND
PORTFOLIO ANALYSIS
DECEMBER 31, 2006 (UNAUDITED)
The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.
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AMERICAN MONEY MANAGEMENT FUNDS | ||
THE FALLEN ANGELS VALUE FUND | ||
Schedule of Investments | ||
January 31, 2007 (Unaudited) | ||
Shares | Value | |
COMMON STOCKS - 75.08% | ||
Cement, Hydraulic - 0.79% | ||
4,000 | Cemex SA DE CV | $ 141,520 |
Computer Communications Equipment - 1.49% | ||
10,000 | Cisco Systems, Inc. * | 266,200 |
Computer & Office Equipment - 1.11% | ||
2,000 | International Business Machines Corp. | 198,300 |
Concrete, Gypsum & Plaster Products - 2.90% | ||
4,000 | Florida Rock Industries, Inc. | 197,800 |
6,000 | USG Corp. * | 321,600 |
519,400 | ||
Construction Machinery & Equipment - 2.15% | ||
6,000 | Caterpillar, Inc. | 384,420 |
Crude Petroleum & Natural Gas - 4.81% | ||
4,000 | Anadarko Petroleum Corp. | 175,000 |
5,000 | Canetic Resources Trust | 63,100 |
8,500 | Chesapeake Energy Corp. | 251,685 |
3,000 | Newfield Exploration Co. * | 128,430 |
8,000 | Penn West Energy Trust | 242,560 |
860,775 | ||
Drawing & Insulating of Nonferrous Wire - 1.75% | ||
15,000 | Corning, Inc. * | 312,600 |
Drilling Oil & Gas Wells - 0.96% | ||
4,000 | Nabors Industries, Ltd. * | 121,120 |
4,000 | Pioneer Drilling Co. * | 50,680 |
171,800 | ||
Electronic Computers - 1.08% | ||
8,000 | Dell, Inc. * | 193,760 |
Electronic & Other Electrical Equipment - 1.41% | ||
7,000 | General Electric Co. | 252,350 |
Engines & Turbines - 0.99% | ||
6,000 | Briggs & Stratton Corp. | 177,840 |
Fire, Marine & Casualty Insurance - 1.91% | ||
5,000 | American International Group, Inc. | 342,250 |
Food and Kindred Products - 0.77% | ||
8,000 | Sara Lee Corp. | 137,200 |
Hospital & Medical Service Plans - 3.36% | ||
5,500 | UnitedHealth Group, Inc. | $ 287,430 |
4,000 | Wellpoint, Inc. * | 313,520 |
600,950 | ||
Insurance Agents, Broker & Service - 1.59% | ||
3,000 | Hartford Financial Services Group, Inc. | 284,730 |
Life Insurance - 1.51% | ||
8,000 | Manulife Financial Corp. | 269,680 |
Men's & Boy's Furnishings, Work Clothing & Allied Garmets - 0.71% | ||
9,000 | Quicksilver, Inc. * | 127,890 |
Metal Mining - 2.25% | ||
7,000 | BHP Billiton, Ltd. | 286,930 |
2,000 | Freeport McMoran Copper, Inc. | 115,020 |
401,950 | ||
Metal Working Machinery & Equipment - 1.95% | ||
4,000 | Black & Decker Corp. | 349,120 |
Motor Homes - 0.51% | ||
10,000 | Fleetwood Enterprises, Inc. * | 92,100 |
Motor Vehicles & Passenger Car Bodies - 3.31% | ||
5,000 | Honda Motor Co, Ltd. | 196,650 |
3,000 | Toyota Motor Corp. | 395,340 |
591,990 | ||
National Commercial Banks - 3.14% | ||
6,500 | Citigroup, Inc. | 358,345 |
4,000 | JP Morgan Chase & Co. | 203,720 |
562,065 | ||
Insurance Agents, Brokers & Service - 1.12% | ||
10,000 | Allianz SE | 201,300 |
Oil & Gas Field Services - 0.82% | ||
5,000 | Halliburton Co. | 147,700 |
Operative Builders - 0.61% | ||
2,000 | KB Home | 108,440 |
Orthopedic, Prosthetic & Surgical Appliances & Supplies - 2.03% | ||
6,000 | Armor Holdings, Inc. * | 363,000 |
Petroleum Refining - 1.85% | ||
5,000 | Conocophillips | 332,050 |
Pharmaceutical Preparations - 5.13% | ||
2,000 | Bristol Myers Squibb Co. | $ 57,580 |
3,000 | Johnson & Johnson | 200,400 |
3,000 | Merck & Co, Inc. | 134,250 |
10,000 | Pfizer, Inc. | 262,400 |
6,000 | Sanofi-Aventis | 264,480 |
919,110 | ||
Plastic Mail, Synth Resin/Rubber, Cellulos - 0.64% | ||
10,000 | Chemtura Corp. | 115,200 |
Plastic Materials, Synth Resins & Nonvulcan Elastomers - 0.65% | ||
2,000 | Eastman Chemical Co. | 117,120 |
Retail-Apparel & Accessory Stores - 0.89% | ||
2,000 | Abercrombie & Fitch Co. | 159,080 |
Retail-Drug Stores and Proprietary Stores - 2.14% | ||
6,000 | CVS Corp. | 201,900 |
4,000 | Walgreen Co. | 181,200 |
383,100 | ||
Retail-Lumber & Other Building Materials Dealers - 1.66% | ||
4,000 | Home Depot, Inc. | 162,960 |
4,000 | Lowe's Companies, Inc. | 134,840 |
297,800 | ||
Retail-Variety Stores - 3.16% | ||
3,000 | Target Corp. | 184,080 |
8,000 | Wal-mart Stores, Inc. | 381,520 |
565,600 | ||
Security & Commodity Brokers, Dealers, Exchanges & Services - 0.56% | ||
1,000 | NYSE Group, Inc. * | 99,980 |
Security Brokers, Dealers & Flotation Companies - 1.38% | ||
3,000 | Lehman Brothers Holdings, Inc. | 246,720 |
Semiconductors & Related Devices - 1.40% | ||
12,000 | Intel Corp. | 251,520 |
Services-General Medical & Surgical Hospitals - 1.41% | ||
13,000 | Health Management Associates, Inc. * | 252,850 |
Services-Mailing, Reproduction, Commercial Art & Photography - 0.83% | ||
3,000 | Getty Images, Inc. * | 147,720 |
Services-Prepackaged Software - 1.44% | ||
15,000 | Oracle Systems * | $ 257,400 |
Surgical & Medical Instruments & Apparatus - 3.20% | ||
4,000 | 3M Co. | 297,200 |
15,000 | Boston Scientific Corp. * | 276,750 |
573,950 | ||
State Commercial Banks - 0.82% | ||
8,000 | Popular, Inc. | 146,080 |
Telephone Communications - 1.26% | ||
6,000 | AT&T Corp. | 225,780 |
Trucking & Courier Services - 0.61% | ||
1,500 | United Parcel Service, Inc. | 108,420 |
Wholesale-Electrical Apparatus & Equipment, Wiring Supplies - 1.02% | ||
3,000 | Wesco International, Inc. * | 182,160 |
TOTAL FOR COMMON STOCKS (Cost $13,217,577) - 75.08% | 13,440,970 | |
SHORT TERM INVESTMENTS - 23.70% | ||
1,554,108 | Fidelity Money Market Portfolio Class Select 5.17%** (Cost $1,554,108) | 1,554,108 |
697,866 | Fidelity Governmental Fund 57 5.14%** (Cost $697,866) | 697,866 |
1,739,057 | First Amer Prime Obligation Fund Class Y 4.91%** (Cost $1,739,057) | 1,739,057 |
214,199 | First American Government Obligation Fund Class Y 4.87% ** (Cost $214,199) | 214,199 |
38,160 | First American Treasury Obligation Fund Class Y 4.84% ** (Cost $38,160) | 38,160 |
TOTAL FOR SHORT TERM INVESTMENTS (Cost $4,243,390) | 4,243,390 | |
TOTAL INVESTMENTS (Cost $17,460,967) - 98.78% | 17,684,360 | |
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OTHER ASSETS LESS LIABILITIES - 1.22% | 218,876 | |
NET ASSETS - 100.00% | $ 17,903,236 | |
* Non-income producing during the period. | ||
** Variable rate security; the coupon rate shown represents the yield at January 31, 2007. | ||
The accompanying notes are an integral part of these financial statements. |
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AMERICAN MONEY MANAGEMENT FUNDS | |||
THE FALLEN ANGELS INCOME FUND | |||
Schedule of Investments | |||
January 31, 2007 (Unaudited) | |||
Shares | Value | ||
CLOSED END MUTUAL FUNDS - 13.21% | |||
10,000 | Advent Claymore Convertible Securities & Income Fund | $ 282,200 | |
1,000 | Advent Claymore Enhanced Growth & Income Fund | 19,820 | |
7,500 | BlackRock Corporate High Yield Fund III, Inc. | 63,675 | |
7,000 | Flaherty & Crumrine/Claymore Preferred Securities Income Fund Inc. | 152,250 | |
5,000 | India Fund, Inc. | 222,300 | |
4,000 | Neuberger Berman Income Opportunity Fund Inc. | 72,880 | |
15,000 | Nicholas-Applegate Convertible & Income Fund II | 234,750 | |
35,000 | Nuveen Preferred Convertible Income Fund 2 | 493,500 | |
5,000 | Western Asset High Income Fund II Inc. | 56,350 | |
20,000 | Zweig Fund Inc. | 118,400 | |
1,716,125 | |||
PREFERRED SECURITIES - 64.20% | |||
10,000 | Arch Cap Group, Ltd. Preferred Series A 8.00% | $ 264,000 | |
8,000 | ASBC Cap Trust I Preferred Plus Trust 7.625% | 203,120 | |
20,000 | BAC Capital Trust III 7.00% | 500,200 | |
10,000 | Banknorth Capital Trust II Preferred Plus Trust 8.00% | 252,600 | |
8,000 | Bell South Trust Certificates 2001-4 7.00% | 202,720 | |
6,000 | Bell South Corporate Backed Trust Certificates 7.00% | 151,980 | |
8,000 | Converium Fin S A. Senior Notes 8.25% | 203,760 | |
2,000 | Ford Debentures Trust Corporate Backed Trust Certificates 7.40% | 36,320 | |
10,000 | Bristol Myers Squibb Trust Corporate Backed Trust Certificates 6.80% | 251,000 | |
14,000 | Developers Diversifed Realty Corporation 8.60% | 356,020 | |
12,000 | DTE Energy Co. Trust I 7.80% | 301,440 | |
16,000 | Fleet Capital Trust VIII 7.2% | 404,320 | |
7,000 | Ford Motor Credit Co. 7.375% | 155,820 | |
9,000 | Ford Motor Co. Capital Trust 6.50% | 331,830 | |
12,000 | General Electric Capital Corp. 6.625% | 302,520 | |
3,000 | General Electric Corporate Backed Trust Certificates 6.80% | 77,220 | |
5,000 | General Motors Corp. Senior Notes 7.375% | 101,700 | |
5,000 | General Motors Corp. Senior Notes 7.375% | 100,400 | |
15,000 | General Motors Corp. Senior Notes 7.50% | 308,850 | |
10,000 | JP Morgan Chase & Co. 7.00% | 253,700 | |
10,000 | SunAmerica Trust Debentures Corporate Backed Trust Certificates 6.70% | 250,200 | |
3,000 | Lehman Brothers Holdings, Inc. 7.65% | 29,970 | |
3,300 | Lehman Brothers Holdings, Inc. 7.75% | 33,561 | |
1,800 | Lehman Brothers Holdings, Inc. 6.25% | 43,470 | |
1,000 | ML Capital Trust II 8.00% | 25,340 | |
4,000 | Citizens Communications Preferred Plus Trust 8.375% | 102,880 | |
6,000 | Liberty Media Preferred Plus Trust 8.75% | $ 151,800 | |
9,000 | Saturns DPL, Inc. 2002-03 Trust 7.875% | 229,500 | |
2,000 | Saturns Dow Chemical Co. 2003-4 Trust 6.375% | 50,620 | |
8,000 | Saturns DPL Capital Trust II Series 20 8.00% | 203,920 | |
12,000 | ONB Capital Trust II 8.00% | 301,560 | |
1,200 | Verizon Wireless Preferred Plus Trust 7.625% | 30,552 | |
5,000 | Morgan Stanley Preferred Plust Trust 7.05% | 127,800 | |
5,000 | Ford Motor Preferred Plus Trust 7.40% | 91,000 | |
9,000 | Unumprovident Preferred Plus Trust 7.40% | 226,620 | |
14,000 | Public Storage Preferred Plus Trust 7.625% | 25,180 | |
14,000 | Stilwell Financial, Inc. 7.875% | 351,680 | |
2,500 | Walt Disney Trust Corporate Backed Trust Certificates 6.875% | 64,350 | |
7,000 | Sherwin Williams Corporate Backed Trust Certificates 7.25% | 175,000 | |
4,000 | AON Cap Trust A Corporate Backed Trust Certificates 7.75% | 101,120 | |
4,800 | Safeco Corporate Backed Trust Certificates 8.072% | 120,816 | |
5,000 | United Dominion Realty Trust, Inc. 8.60% | 128,250 | |
19,000 | Verizon New England, Inc. 7.00% | 475,000 | |
5,000 | Wells Fargo Capital Trust VI 6.95% | 125,600 | |
4,400 | XL Capital, Ltd. 7.625% | 112,816 | |
8,338,125 | |||
EQUITY SECURITIES - 15.65% | |||
32,500 | Canetic Resources Trust | $ 410,150 | |
10,000 | Enerplus Resources Fund | 438,700 | |
24,000 | Pengrowth Energy Trust | 406,560 | |
12,000 | Penn West Energy Trust | 363,840 | |
38,000 | Provident Energy Trust | 395,960 | |
15,000 | SEA Container, Ltd. | 15,900 | |
2,031,110 | |||
SHORT TERM INVESTMENTS - 6.00% | |||
258,526 | Fidelity Money Market Portfolio Class Select 5.17%** (Cost $258,526) | $ 258,526 | |
305,210 | Fidelity Governmental Fund 57 5.14%** (Cost $305,210) | 305,210 | |
215,741 | First Amer Prime Obligation Fund Class Y 4.91%** (Cost $215,741) | 215,741 | |
TOTAL FOR SHORT TERM INVESTMENTS (Cost $779,477) | 779,477 | ||
TOTAL INVESTMENTS (Cost $12,966,980) - 99.06% | 12,864,837 | ||
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OTHER ASSETS LESS LIABILITIES - 0.94% | 122,497 | ||
NET ASSETS - 100.00% | $ 12,987,334 | ||
** Variable rate security; the coupon rate shown represents the yield at January 31, 2007. | |||
The accompanying notes are an integral part of these financial statements. |
The accompanying notes are an integral part of these financial statements.
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AMERICAN MONEY MANAGEMENT FUNDS | ||
Statements of Operations | ||
For the period September 12, 2006 (commencement of investment | ||
operations) through January 31, 2007 (Unaudited) | ||
Value Fund | Income Fund | |
Investment Income: | ||
Dividends | $ 19,205 | $ 88,404 |
Interest | 111,493 | 115,151 |
Total Investment Income | 130,698 | 203,555 |
Expenses: | ||
Advisory fees (Note 3) | 37,961 | 25,643 |
Administration | 9,490 | 6,411 |
Distribution (12b-1) fees | 9,490 | 6,411 |
Custodian | 2,274 | 2,165 |
Transfer Agent | 6,891 | 6,558 |
Audit | 2,092 | 1,992 |
Legal | 2,047 | 1,948 |
Registration | 1,623 | 1,546 |
Trustee | 910 | 866 |
Printing and Mailing | 455 | 433 |
Miscellaneous | 342 | 324 |
Insurance | 243 | 231 |
Total Expenses | 73,818 | 54,528 |
Fees Waived (Note 3) | (23,039) | (14,887) |
Net Expenses | 50,779 | 39,641 |
Net Investment Income | 79,919 | 163,914 |
Realized and Unrealized Gain (Loss) from Investments: | ||
Realized Gain on Investments | 9,296 | 10,101 |
Net Increase (Decrease) in Unrealized Appreciation (Depreciation) on Investments | 223,393 | (102,143) |
Net Realized and Unrealized Gain (Loss) from Investments | 232,689 | (92,042) |
Net Increase in Net Assets Resulting from Operations | $ 312,608 | $ 71,872 |
The accompanying notes are an integral part of these financial statements.
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AMERICAN MONEY MANAGEMENT FUNDS | |
THE FALLEN ANGELS VALUE FUND | |
Statement of Changes in Net Assets | |
For the period September 12, 2006 (commencement of investment | |
operations) through January 31, 2007 (Unaudited) | |
Increase in net assets from operations: | |
Net investment income | $ 79,919 |
Net realized gain from investments | 9,296 |
Unrealized appreciation on investments | 223,393 |
Net increase in net assets resulting from operations | 312,608 |
Distributions to Shareholders | (70,755) |
Capital Share Transactions (Note 5) | 17,611,383 |
Total increase | 17,853,236 |
Net Assets: | |
Beginning of period | 50,000 |
End of period | $ 17,903,236 |
The accompanying notes are an integral part of these financial statements.
AMERICAN MONEY MANAGEMENT FUNDS | |
THE FALLEN ANGELS INCOME FUND | |
Statement of Changes in Net Assets | |
For the period September 12, 2006 (commencement of investment | |
operations) through January 31, 2007 (Unaudited) | |
Increase in net assets from operations: | |
Net investment income | $ 163,914 |
Net realized gain from investments | 10,101 |
Unrealized depreciation on investments | (102,143) |
Net increase in net assets resulting from operations | 71,872 |
Distributions to Shareholders | (67,335) |
Capital Share Transactions (Note 5) | 12,932,797 |
Total increase | 12,937,334 |
Net Assets: | |
Beginning of period | 50,000 |
End of period | $ 12,987,334 |
The accompanying notes are an integral part of these financial statements.
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AMERICAN MONEY MANAGEMENT FUNDS | |
THE FALLEN ANGELS VALUE FUND | |
Financial Highlights | |
For a share of capital stock outstanding throughout each period | |
Period * | |
Ended | |
1/31/2007 | |
Net Asset Value, at Beginning of Period | $ 10.00 |
Income From Investment Operations: | |
Net Investment Income ** | 0.06 |
Net Gains on Securities (Realized and Unrealized) | 0.12 |
Total from Investment Operations | 0.18 |
Distributions | (0.04) |
Net Asset Value, at End of Period | $ 10.14 |
Total Return *** | 1.81 % |
Ratios/Supplemental Data: | |
Net Assets at End of Period (Thousands) | $ 17,903 |
Before Waiver | |
Ratio of Expenses to Average Net Assets **** | 1.92 % |
Ratio of Net Investment Income to Average Net Assets **** | 1.48 % |
After Wavier | |
Ratio of Expenses to Average Net Assets **** | 1.32 % |
Ratio of Net Investment Income to Average Net Assets **** | 2.07 % |
Portfolio Turnover Rate | 1.26 % |
* For the period September 12, 2006 (commencement of investment operations) through January 31, 2007 | |
** Per share net investment income has been determined on the basis of average number of shares outstanding during the period. | |
*** Total return in the above table represent the return that the investor would have earned or lost over the period indicated | |
on an investment assuming reinvestment of dividends, and is not annualized for periods of less than one year. | |
**** Annualized |
The accompanying notes are an integral part of these financial statements.
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AMERICAN MONEY MANAGEMENT FUNDS | |
THE FALLEN ANGELS INCOME FUND | |
Financial Highlights | |
For a share of capital stock outstanding throughout each period | |
Period * | |
Ended | |
1/31/2007 | |
Net Asset Value, at Beginning of Period | $ 10.00 |
Income From Investment Operations: | |
Net Investment Income ** | 0.22 |
Net Losses on Securities (Realized and Unrealized) | (0.17) |
Total from Investment Operations | 0.05 |
Distributions | (0.05) |
Net Asset Value, at End of Period | $ 10.00 |
Total Return *** | 0.55 % |
Ratios/Supplemental Data: | |
Net Assets at End of Period (Thousands) | $ 12,987 |
Before Waiver | |
Ratio of Expenses to Average Net Assets **** | 2.09 % |
Ratio of Net Investment Income to Average Net Assets **** | 5.71 % |
After Wavier | |
Ratio of Expenses to Average Net Assets **** | 1.52 % |
Ratio of Net Investment Income to Average Net Assets **** | 6.28 % |
Portfolio Turnover Rate | 4.78 % |
* For the period September 12, 2006 (commencement of investment operations) through January 31, 2007 | |
** Per share net investment income has been determined on the basis of average number of shares outstanding during the period. | |
*** Total return in the above table represent the return that the investor would have earned or lost over the period indicated | |
on an investment assuming reinvestment of dividends, and is not annualized for periods of less than one year. | |
**** Annualized |
The accompanying notes are an integral part of these financial statements.
American money management Funds
THE FALLEN ANGELS VALUE FUND
THE FALLEN ANGELS INCOME FUND
Notes to Financial Statements
January 31, 2007 (Unaudited)
Note 1. Organization
The Fallen Angels Value Fund and the Fallen Angels Income Fund (each a “Fund” and collectively, the “Funds”) are diversified series of American Money Management Funds (the “Trust”), an open-end investment company that was organized as an Ohio business trust on June 20, 2006. The Trust is permitted to issue an unlimited number of shares of beneficial interest of separate series. The Funds are the only series currently authorized by the Board of Trustees (“the Board”).
The Fallen Angels Value Fund’s investment objective is to seek long-term capital appreciation. The Fund’s principal investment strategy is under normal circumstances to invest in a portfolio of equity securities that includes common stocks, preferred stocks, convertible securities, and warrants to buy common stocks. The Fund may also invest in shares of closed-end investment companies, as well as exchange traded funds (ETFs). In addition, the Fund may invest indirectly in foreign securities by either purchasing American Depositary Receipts (“ADRs”) or by investing in investment companies and ETFs that hold foreign securities or ADRs.
The Fallen Angels Income Fund’s investment objective is to seek high current income with the potential for capital appreciation. The Fund’s principal investment strategy is to invest in a portfolio of debt and equity securities that includes dividend paying common stocks, preferred stocks, closed-end income funds, royalty trusts, convertible securities, warrants to buy common stocks and U.S. government securities. The Fund may also invest in shares of closed-end investment companies, as well as exchange traded funds (ETFs). In addition, the Fund may invest indirectly in foreign securities by either purchasing American Depositary Receipts (“ADRs”) or by investing in investment companies and ETFs that hold foreign securities or ADRs.
Note 2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies employed by the Fund in preparing its financial statements:
Security Valuation- Each Fund’s assets are generally are valued at their market value using market quotations. If market prices are not available or, in the advisor’s opinion, market prices do not reflect fair value, or if an event occurs after the close of trading on the domestic or foreign exchange or market on which the security is principally traded (but prior to the time the NAV is calculated) that materially affects fair value, the adviser will value a Fund’s assets at their fair value in accordance with policies approved by the Funds’ Board of Trustees. The Board has adopted guidelines for good faith pricing, and has delegated to the Adviser the responsibility for determining fair value prices, subject to review by the Board of Trustees.
In accordance with the Trust’s good faith pricing guidelines, the Advisor is required to consider all appropriate factors relevant to the value of securities for which it had determined other pricing sources are not available or reliable as described above. No single standard for determining fair value controls, since fair value depends upon the circumstances of each individual case. As a general principle, the current fair value of an issue of securities being valued by the advisor would appear to be the amount which the owner might reasonably expect to receive for them upon their current sale. Methods which are in accord with this principle may, for example, be based on (i) a multiple of earnings; (ii) a discount from market of a similar freely traded security (included a derivative security or a basket of securities traded on other markets, exchanges or among dealers); or (iii) yield to maturity with respect to debt issues, or a combination of these and other methods.
Option Writing- When either Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security or currency in determining whether the Fund has realized a gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. T he Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option.
Repurchase Agreements- In connection with transactions in repurchase agreements, it is the Funds’ policy that its custodian take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of the repurchase transaction, including accrued interest, at all times. If the seller defaults, and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited.
Financial Futures Contracts- Each Fund invests in financial futures contracts solely for the purpose of hedging its existing portfolio securities, or securities that the Fund intends to purchase, against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash, U.S. government securities, or other assets, equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the fair value of the underlying security. The Fund recognizes a gain or loss equal to the daily variation margin. Should market conditions move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may r ealize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the underlying hedged assets.
Short Sales- The Funds may sell a security that they do not own in anticipation of a decline in the fair value of that security. When the Fund sells a security short, it must borrow the security sold short and deliver it to the broker-dealer through which it made the short sale. A gain, limited to the price at which the Fund sold the security short, or a loss, unlimited in size, will be recognized upon the termination of a short sale.
Federal Income Taxes- The Funds’ policy is to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute all its taxable income to its shareholders. Therefore, no federal income tax provision is required.
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 – Accounting for Uncertainty in Income Taxes, that requires the tax effects of certain tax positions to be recognized. These tax positions must meet a “more likely than not” standard that based on their technical merits, have a more than 50 percent likelihood of being sustained upon examination. FASB Interpretation No. 48 is effective for fiscal periods beginning after December 15, 2006. At adoption, the financial statements must be adjusted to reflect only those tax positions that are more likely than not of being sustained. Management of the Fund is currently evaluating the impact that FASB Interpretation No. 48 will have on the Funds’ financial statements.
Distributions to Shareholders- Each Fund typically will distribute substantially all of its net investment income in the form of dividends and capital gains to its shareholders. The Fallen Angels Value Fund will distribute dividends and capital gains annually, and expects that distributions will consist primarily of capital gains. The Fallen Angels Income Fund will distribute dividends quarterly and capital gains annually, and expects that distributions will consist primarily of ordinary income. Distributions will be recorded on ex-dividend date.
Other- The Funds follow industry practice and record security transactions on the trade date. The specific identification method is used for determining gains or losses for financial statements and income tax purposes. Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Discounts and premiums are amortized over the useful lives of the respective securities. Withholding taxes on foreign dividends will be provided for in accordance with the Funds’ understanding of the applicable country’s tax rules and rates.
Use of Estimates- 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 increase and decreases in net assets from operations during the reporting period. Actual results could differ from these estimates.
Note 3. Investment Management Agreement
The Trust has a management agreement (the “Management Agreement”) with American Money Management Funds, LLC (the “Advisor”) to furnish investment advisory and management services to the Funds. Under the management agreement, each Fund will pay the Advisor a monthly fee based on the Fund’s average daily net assets at the annual rate of 1.00% per Fund. For the period September 12, 2006 (commencement of investment operations) through January 31, 2007 (“the period”), the Adviser earned a fee of $37,961 and $25,643 for the Value Fund and Income Fund, respectively. The Advisor voluntarily waived Advisory fees in the amount of $23,039 and $14,887 for the Value Fund and Income Fund, respectively. This voluntary waiver was in effect until December 31, 2006. The Funds owed the Adviser $14,922 and $10,756 for the Value Fund and Income Fund, respectively as of January 31, 2007.
The Trust also has an administration agreement with the Advisor to furnish sponsorship, administrative and supervisory services as may from time to time be reasonably requested by the Trust and in general to provide supervision of the overall operations of the Trust. Under this agreement, each Fund pays the Advisor a monthly fee based on the Funds’ average daily net assets at the annual rate of 0.25%. For the period, the Advisor earned a fee of $9,490 and $6,411 from the Value Fund and Income Fund, respectively. The Funds owed the Advisor $3,731 and $2,689 for the Value Fund and Income Fund, respectively, as of January 31, 2007.
The Funds’ have adopted a Plan pursuant to Rule 12b-1 under the 1940 Act whereby the Funds’ may pay the Advisor for certain distribution and promotion expenses activities which are primarily intended to result in the sale of the Funds’ shares, including, but not limited to: advertising, printing of prospectuses and reports for prospective shareholders, preparation and distribution of advertising materials and sales literature, and payments to dealers and shareholder servicing agents who enter into agreements with the Funds. The Funds’ may incur such distribution expenses at the rate of 0.25% per annum of the Funds’ average net assets. For the period ended December 31, 2006, the Plan accrued fees of $9,490 and $6,411 under the plan from the Value Fund and Income Fund, respectively. The Funds owed the Advisor $3,731 and $2,689 for the Value Fund and Income Fund, respectively as of January 31, 2007.
Note 4. Related Party Transactions
Gabriel B. Wisdom is the control person of the Advisor and also serves as a trustee and officer of the Trust. Mr. Wisdom receives benefits from the Advisor resulting from management fees paid to the Advisor by the Fund.
Note 5. Capital Stock
The Funds are authorized to issue an unlimited number of shares with no par value of separate series. Paid in capital at January 31, 2007 was $17,661,383 and $12,982,796 representing 1,756,698 and 1,298,262 shares outstanding for the Value Fund and Income Fund.
Transactions in capital stock for the period ended January 31, 2007 were as follows:
Value Fund | Income Fund | |||
Shares | Amount | Shares | Amount | |
Shares Sold | 1,821,297 | $18,218,700 | 1,353,361 | $13,533,250 |
Shares issued in reinvestment of distributions | 7,047 | 70,755 | 6,740 | 67,335 |
Shares redeemed | (67,646) | (678,072) | (66,839) | (667,788) |
Net Increase | 1,760,698 | $17,611,383 | 1,293,262 | $12,932,797 |
Note 6. Investment Transactions
For the period ended January 31, 2007, purchases and sales of investment securities other than U.S. Government obligations aggregated $13,319,777 and $111,577 for the Value Fund and $12,452,459 and $275,057 for the Income Fund, respectively.Purchases and sales of U.S. Government obligations aggregated $0 and $0, respectively.
Note 7. Tax Matters
For Federal income tax purposes, the cost of investments owned at January 31, 2007 was $17,460,967 for the Value Fund and $12,966,980 for the Income Fund.
At January 31, 2007, the composition of unrealized appreciation (the excess of value over tax cost) and depreciation (the excess of tax cost over value) was as follows:
Value Fund | ||
Appreciation | Depreciation | Net Appreciation(Depreciation) |
$459,547 | ($236,154) | $223,393 |
Income Fund | ||
Appreciation | Depreciation | Net Appreciation(Depreciation) |
$83,955 | ($186,098) | ($102,143) |
As of January 31, 2007, the components of distributable earnings on a tax basis were as follows:
Value Fund | |
Undistributed ordinary income | $9,164 |
Undistributed capital gain | 9,296 |
Unrealized appreciation on investments | 223,393 |
$ 241,853 |
Income Fund | |
Undistributed ordinary income | $96,580 |
Undistributed capital gain | 10,101 |
Unrealized depreciation on investments | (102,143) |
$ 4,538 |
The Funds paid income distributions of $0.0407 and $0.0547 per share for total distributions of $70,755 and $67,335 for the Value Fund and Income Fund for the period ended January 31, 2007.
Dividends and Distributions to Shareholders- The Funds record all dividends and distributions payable to shareholders on the ex-dividend date.
Permanent book and tax differences relating to shareholder distributions may result in reclassifications to paid in capital and may affect the per-share allocation between net investment income and realized and unrealized gain/loss. Undistributed net investment income and accumulated undistributed net realized gain/loss on investment transactions may include temporary book and tax differences which reverse in subsequent periods. Any taxable income or gain remaining at fiscal year end is distributed in the following year.
Note 9. Control and Ownership
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the fund, under Section 2(a)(9) of the Investment Company Act of 1940. As of January 31, 2007, Charles Schwab for the benefit of its customers owned, in aggregate, approximately 99.66% and 99.61% of the Value Fund and Income Fund, respectively.
AMERICAN MONEY MANAGEMENT FUNDS
EXPENSE ILLUSTRATION
JANUARY 31, 2007 (UNAUDITED)
Expense Example
As a shareholder of the Fallen Angels Value Fund and Fallen Angels Income Fund, you incur ongoing costs which consist of management fees; distribution (12b-1) fees; and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period, September 12, 2006 through January 31, 2007.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratios and an assumed rate of return of 5% per year before expenses, which is not the Funds’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in these Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
The Fallen Angels Value Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
September 12, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Actual | $1,000.00 | $1,018.11 | $5.18 |
* Expenses are equal to the Fund's annualized expense ratio of 1.32%, multiplied by the average account value over the period, multiplied by 142/365 (to reflect the partial year period). |
The Fallen Angels Value Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
August 1, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Hypothetical (5% Annual Return before expenses) | $1,000.00 | $1,018.55 | $6.72 |
* Expenses are equal to the Fund's annualized expense ratio of 1.32%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the partial year period). |
The Fallen Angels Income Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
September 12, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Actual | $1,000.00 | $1,005.48 | $5.93 |
* Expenses are equal to the Fund's annualized expense ratio of 1.52%, multiplied by the average account value over the period, multiplied by 142/365 (to reflect the partial year period). |
The Fallen Angels Income Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
August 1, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Hypothetical (5% Annual Return before expenses) | $1,000.00 | $1,017.54 | $7.73 |
* Expenses are equal to the Fund's annualized expense ratio of 1.52%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
The expense ratios for the Funds used to calculate the actual and hypothetical fund expenses in the examples above reflect a voluntary waiver by the Advisor of its management fee. The Advisor ceased its voluntary waiver of the management fees as of December 31, 2006. Had the Advisor not voluntarily waived its management fee during this period, the actual and hypothetical expense examples would have appeared as follows:
The Fallen Angels Value Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
September 12, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Actual | $1,000.00 | $1,017.11 | $7.53 |
* Expenses are equal to the Fund's annualized expense ratio of 1.92%, multiplied by the average account value over the period, multiplied by 142/365 (to reflect the partial year period). |
The Fallen Angels Value Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
August 1, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Hypothetical (5% Annual Return before expenses) | $1,000.00 | $1,015.53 | $9.75 |
* Expenses are equal to the Fund's annualized expense ratio of 1.92%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the partial year period). |
The Fallen Angels Income Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
September 12, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Actual | $1,000.00 | $1,004.47 | $8.15 |
* Expenses are equal to the Fund's annualized expense ratio of 2.09%, multiplied by the average account value over the period, multiplied by 142/365 (to reflect the partial year period). |
The Fallen Angels Income Fund | |||
Beginning Account Value | Ending Account Value | Expenses Paid During the Period* | |
August 1, 2006 | January 31, 2007 | September 12, 2006 to January 31, 2007 | |
Hypothetical (5% Annual Return before expenses) | $1,000.00 | $1,014.67 | $10.61 |
* Expenses are equal to the Fund's annualized expense ratio of 2.09%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
AMERICAN MONEY MANAGEMENT FUNDS
THE FALLEN ANGELS VALUE FUND
THE FALLEN ANGELS INCOME FUND
TRUSTEES AND OFFICERS
JANUARY 31, 2007 (UNAUDITED)
TRUSTEES AND OFFICERS
The following table provides information regarding each Trustee who is not an “interested person” of the Trust, as defined in the Investment Company Act of 1940. Each Trustee serves as a Trustee until the termination of the Trust unless the Trustee dies, resigns, retires or is removed.
Name, Address and Year of Birth | Position & Length of Time Served with the Trust | Number of Portfolios Overseen | Principal Occupations During Past 5 Years and Current Directorships |
Kelly C. Huang c/o American Money Management P.O. Box 675203 Rancho Santa Fe, CA 92067 1966 | Trustee since August 2006. | 2 | Management Consultant, self-employed (2002-present); Consultant, East Bay Small Business Development Center (2007-present); Consultant, Pyxis (2/2002-4/2002) (medical equipment); Product Manager, Supplypro (2000-2001) (industrial supply) |
Ingram S. Chodorow Placontrol, Inc. 12760 High Bluff Drive Suite 210 San Diego, CA 92130 1939 | Trustee since August 2006. | 2 | President/CEO, Placontrol, Inc. (1973-present) (manufacturing and marketing dental flossers); CEO, Redfield Corp. (1987-2002) (manufacturing and marketing medical devices); CEO/President, Technalytics, Inc. (1969-present) (medical patents licensing) |
Linda J. Rock 1946 Zapo St. Del Mar, CA 92014 1957 | Trustee since August 2006. | 2 | Marketing Consultant, self-employed (1990-present); Director/Vice President, Del Mar Village Association (2002-present; President 2005-2006) (non-profit) |
Miro Copic c/o American Money Management P.O. Box 675203 Rancho Santa Fe, CA 92067 1961 | Trustee since August 2006. | 2 | President/CEO, BottomLine Marketing (2003-present) (marketing); Senior Vice President, Marketing and Product Management, Hasbro, Inc. (Wizards of the Coast), (media/entertainment); (2002-2003); CEO, iGrapevine, ideaEdge Ventures (2001-2002); NewsCorp (1997-2000); Savoy Brands (1994-1997); PepsiCo (1987-1994) |
The following table provides information regarding each Trustee who is an “interested person” of the Trust, as defined in the Investment Company Act of 1940, and each officer of the Trust.
Name, Address, and Year of Birth | Position and Length of Time Served with the Trust | Number of Portfolios Overseen | Principal Occupations During Past 5 Years and Current Directorships |
Gabriel B. Wisdom1 P.O. Box 675203 Rancho Santa Fe, CA 92067 1950 | Trustee since June 2006; President since August 2006. | 2 | Chief Executive Officer and Managing Director, American Money Management, LLC (1999 to present); Director, Monterey Financial (1994-present) (Finance Company); General Partner, SWM LLP (2005-present) (Hedge Fund) |
Michael J. Moore P.O. Box 675203 Rancho Santa Fe, CA 92067 1976 | Treasurer since August 2006. | N/A | Chief Investment Officer, American Money Management (2001 to present); Chief Executive Officer, Ad-Pad, Inc. (marketing and promotional products firm) (1999 to 2001); General Partner, SWM LLC (6/2005-present) |
Joseph D. Dang P.O. Box 675203 Rancho Santa Fe, CA 92067 1977 | Secretary since June 2006; CCO since August 2006. | N/A | Counsel and Chief Compliance Officer, American Money Management, LLC (2005 to present); Financial Analyst/Financial Planner, Ayco (financial planning subsidiary of Goldman Sachs) (2004 to 2005); Contract Attorney (2003; 4/2005-7/2005); University of San Diego School of Law (1999 to 2002) |
1 Gabriel B. Wisdom is considered an "Interested” Trustee as defined in the Investment Company Act of 1940, as amended, because he is an officer of the Trust and President of the Funds' investment adviser.
AMERICAN MONEY MANAGEMENT FUNDS
THE FALLEN ANGELS VALUE FUND
THE FALLEN ANGELS INCOME FUND
ADDITIONAL INFORMATION
JANUARY 31, 2007 (UNAUDITED)
Additional Information
The Funds’ Statement of Additional Information ("SAI") includes additional information about the trustees and is available, without charge, upon request. You may call toll-free (866) 663-8023 to request a copy of the SAI or to make shareholder inquiries.
Proxy Voting
The Funds’ Advisor is responsible for exercising the voting rights associated with the securities held by the Fund. A description of the policies and procedures used by the Advisor in fulfilling this responsibility is available without charge by calling (866) 663-8023. It is also included in the Funds’ State of Additional Information, which is available on the Securities and Exchange Commission’s website at http://www.sec.gov.
Information regarding how the Fund voted proxies, Form N-PX, relating to portfolio securities during the most recent 12-month period ended June 30th will be available after August 29, 2007 without charge, upon request, by calling our toll free number (866) 663-8023.
Portfolio Holdings
The Funds file a complete schedule of investments with the SEC for the first and third quarter of each fiscal year on Form N-Q. The Funds’ first and third fiscal quarters end on April 30 and October 31. The Fund’s Forms N-Q are available on the SEC’s website at http://sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room). You may also obtain copies by calling the Fund at (866) 663-8023.
Board Approval of Management Agreement
The Board approved the Management Agreement on August 25, 2006. They discussed the specific factors Trustees should consider in evaluating an investment advisory contract which include, but are not limited to, the following: the investment performance of the investment adviser; the nature, extent and quality of the services provided by the investment adviser to the fund; the costs of the services to be provided and the profits to be realized by the adviser and its affiliates from the relationship with the Funds; the extent to which economies of scale will be realized as the Funds grow; and whether the fee levels reflect these economies of scale to the benefit of shareholders.
As to the nature, extent and quality of the services provided by the Advisor to the Funds, the Trustees examined a copy of the Advisor’s registration statement on Form ADV and reviewed the experiences of the Advisor’s portfolio managers that would be responsible for investment decisions regarding the Funds. The Board discussed with the portfolio managers the research tools used by the Advisor and the investment philosophy of the Advisor. The Trustees considered that, under the terms of the Management Agreement, the Advisor would, subject to the supervision of the Board, provide or arrange to be provided to the Funds such investment advice as the Advisor in its discretion deems advisable and will furnish or arrange to be furnished a continuous investment program for the Funds consistent with the Funds’ investment objectives and policies. The Trustees noted that the Advisor will monitor and review investment decisions and adopt procedures to prevent and detect violations of the Funds’ investment policies and limitations, as well as the federal securities laws. Based on the information presented at the meeting, the Trustees concluded that they were satisfied with the investment experience of the Advisor. The Trustees concluded that, overall, they were satisfied with the nature, extent and quality of the services to be provided to the Funds under the Management Agreement.
Because the Funds had not yet commenced operations, the Trustees could not consider the investment performance of the Funds. However, as to the investment performance of the Advisor, the Trustees did consider the investment performance of several separate accounts managed by the Advisor since 2003 that the Advisor believes are representative of the Advisor's overall investment performance for discretionary accounts. Based upon their review, the Trustees concluded that the Advisor’s performance was satisfactory.
As to the costs of the services to be provided and the profits to be realized by the Advisor, the Trustees reviewed information provided by the Advisor regarding its expected profitability from the Funds and its financial condition. The Board also considered other fees paid to the Advisor (the administration fee of 0.25% and 12b-1 fee of 0.25%) in evaluating the profitability of the Advisor. The Board noted that most, if not all, of the 12b-1 revenue will be used by the Advisor to pay third party intermediaries. Based on their review, the Trustees concluded that they were satisfied that the Advisor’s level of profitability from its relationship with each Fund was not excessive. As to comparative fees and expenses, the Trustees considered the management fees and total expenses to be paid by the Funds compared to a peer group for each Fund. The Boar d also discussed the fees charged by the Advisor for separately managed accounts. The Board also discussed industry averages and it was the consensus of the Board that the proposed management fee and expense ratio were acceptable in light of the quality of services the Funds expected to receive from the Advisor and the level of fees paid by funds in the peer group.
As to economies of scale, the Trustees noted that the Management Agreement does not contain breakpoints that reduce the fee rate on assets above specified levels. The Trustees recognized that breakpoints may be an appropriate way for the Advisor to share its economies of scale with a Fund and its shareholders if it experiences a substantial growth in assets. However, the Trustees recognized that that Funds had not yet commenced operations and that management agreements with competitor funds do not always contain breakpoints. Consequently, the Trustees concluded that the absence of breakpoints was acceptable under the circumstances.
Board of Trustees
Ingram S. Chodorow
Miro Copic
Kelly C. Huang
Linda J. Rock
Gabriel B. Wisdom
Investment Adviser
American Money Management, LLC
P.O. Box 675203
Rancho Santa Fe, CA 92067
Dividend Paying Agent,
Shareholders’ Servicing Agent,
Transfer Agent
Mutual Shareholder Services, LLC
Custodian
U.S. Bank, NA
Independent Registered Public Accounting Firm
Sanville & Company
Legal Counsel
Thompson Hine LLP
This report is provided for the general information of the shareholders of the American Money Management Funds. This report is not intended for distribution to prospective investors in the fund, unless preceded or accompanied by an effective prospectus.
Item 2. Code of Ethics. Not applicable.
Item 3. Audit Committee Financial Expert. Not applicable.
Item 4. Principal Accountant Fees and Services. Not applicable.
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments. Not applicable – schedule filed with Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds. Not applicable.
Item 8. Portfolio Managers of Closed-End Funds. Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Funds. Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
The registrant has not adopted procedures by which shareholders may recommend nominees to the registrant's board of trustees.
Item 11. Controls and Procedures.
(a)
Based on an evaluation of the registrant’s disclosure controls and procedures as of December 29, 2006, the disclosure controls and procedures are reasonably designed to ensure that the information required in filings on Forms N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b)
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s first fiscal half-year that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a)(1)
EX-99.CODE ETH. Not applicable.
(a)(2)
EX-99.CERT. Filed herewith.
(a)(3)
Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b)
EX-99.906CERT. Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
American Money Management Funds
By /s/Gabriel B. Wisdom, President
Gabriel B. Wisdom
President
Date: March 29, 2007
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /s/Gabriel B. Wisdom, President
Gabriel B. Wisdom
President
Date March 29, 2007
By /s/Michael Moore
Michael Moore
Treasurer
Date March 29, 2007