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 811-3703
Name of Fund: CBA Money Fund
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Terry K. Glenn, President, CBA Money
Fund, 800 Scudders Mill Road, Plainsboro, NJ 08536. Mailing address:
P.O. Box 9011, Princeton, NJ 08543-9011
Registrant's telephone number, including area code: (609) 282-2800
Date of fiscal year end: 02/29/04
Date of reporting period: 03/01/03 - 08/31/03
Item 1 - Attach shareholder report
[LOGO] Merrill Lynch Investment Managers www.mlim.ml.com
CBA Money Fund
Semi-Annual Report
August 31, 2003
[LOGO] Merrill Lynch Investment Managers
CBA Money Fund
Electronic Delivery
The Fund is now offering electronic delivery of communications to its
shareholders. In order to receive this service, you must register your account
and provide us with e-mail information. To sign up for this service, simply
access this website http://www.icsdelivery.com/live and follow the instructions.
When you visit this site, you will obtain a personal identification number
(PIN). You will need this PIN should you wish to update your e-mail address,
choose to discontinue this service and/or make any other changes to the service.
This service is not available for certain retirement accounts at this time.
2 CBA MONEY FUND AUGUST 31, 2003
A Letter From the President
Dear Shareholder
Now more than half behind us, 2003 has been a meaningful year in many respects.
After one of the most significant equity market downturns in many investors'
memories, this year finally brought hopeful signs for a sustainable economic
recovery. With that bit of good news, fixed income investments, which had become
the asset class of choice during the long equity market decline, were left to
perform on a new playing field.
The Federal Reserve Board continued its accommodative monetary policy into June
2003, when it brought the Federal Funds rate down to 1%, its lowest level since
1958. With this move, long-term interest rates continued to be volatile, as
investors began to anticipate the impact of future Federal Reserve Board moves
and economic revitalization. As of August 31, 2003, the 10-year Treasury bond
was yielding 4.47%. This compared to a yield of 3.69% six months earlier and
4.14% one year ago.
Against this backdrop, our portfolio managers continued to work diligently to
deliver on our commitment to provide superior performance within reasonable
expectations for risk and return. With that said, remember also that the advice
and guidance of a skilled financial advisor often can mean the difference
between fruitful and fruitless investing. A financial professional can help you
choose those investments that will best serve you as you plan for your financial
future.
Finally, I am proud to premiere a new look to our shareholder communications.
Our portfolio manager commentaries have been trimmed and organized in such a way
that you can get the information you need at a glance, in plain language.
Today's markets are confusing enough. We want to help you put it all in
perspective. The report's new size also allows us certain mailing efficiencies.
Any cost savings in production or postage are passed on to the Fund and,
ultimately, to Fund shareholders.
We thank you for trusting Merrill Lynch Investment Managers with your investment
assets, and we look forward to serving you in the months and years ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Trustee
CBA MONEY FUND AUGUST 31, 2003 3
[LOGO] Merrill Lynch Investment Managers
A Discussion With Your Fund's Portfolio Manager
We believe the Federal Reserve Board will maintain lower short-term
interest rates in the near term, and this should present opportunity further out
on the yield curve.
Discuss the economic conditions that existed during the period.
Early in the period, U.S. economic activity remained slow as the conflict in
Iraq brought consumer and business spending to a standstill. Gross domestic
product (GDP) for the first quarter of 2003 grew at only 1.4%, the same rate of
growth as the disappointing fourth quarter of 2002. On the positive side, low
mortgage rates supported the strength in the housing market and mortgage
refinancing provided consumers with some financial flexibility.
As the geopolitical concerns subsided, economic growth began to show
improvement, with 3.3% growth registered in the second quarter of 2003. By the
end of August 2003, it was evident that the U.S. economy was growing still
faster. Even if further increases in defense spending do not meet second-quarter
levels, we believe consumer spending and business investment expenditures should
continue to push the economy to better than 4% growth in the second half of
2003.
Despite the generally favorable growth trend, the labor situation remained weak.
Although companies have generated profits, it has been achieved through
productivity gains. With the consumer accounting for the majority of GDP growth,
we believe an improvement in employment will be essential to sustainable
above-trend economic growth. Other potential negatives for the economy going
forward are an end to the mortgage-refinancing boom and the rapidly
deteriorating fiscal situation at the federal and state level.
Throughout the period, the Federal Reserve Board maintained its accommodative
monetary policy, most recently dropping the Federal Funds rate to 1% at its June
meeting. We expect short-term interest rates to remain at this level for some
time as the Federal Reserve Board maintains its focus on achieving sustainable
economic growth. While we believe short-term interest rates will inch higher as
the potential for monetary tightening nears, we do not anticipate any interest
rate increases until 2004.
How did the Fund perform in light of the existing market conditions?
For the six-month period ended August 31, 2003, CBA Money Fund paid shareholders
a net annualized dividend of 0.50%.* The Fund's seven-day yield as of August 31,
2003 was 0.26%.
The average portfolio maturity for CBA Money Fund at August 31, 2003 was 66
days, compared to 43 days at February 28, 2003. The portfolio's average maturity
ranged from 50 days to 66 days during the period.
We strategically reduced duration late in the second quarter of the year in
anticipation of the June Federal Open Market Committee (FOMC) meeting. At that
time, front-end yields continued to favor the likelihood of a half-point rate
cut. To avoid investing at these levels, we targeted much shorter maturities,
reducing duration until better opportunities arose. The FOMC ultimately cut
interest rates by only .25%, targeting a Federal Funds level of 1%. In response
to this action, bond yields rose sharply. Notably, the yield on the two-year
Treasury climbed more than 90 basis points (0.90%), reaching 2%. The magnitude
of this move presented tremendous value in our estimation, and we then extended
the Fund's duration back into the mid 60-day range.
* Based on a constant investment throughout the period, with dividends
compounded daily, and reflecting a net return to the investor after all
expenses.
4 CBA MONEY FUND AUGUST 31, 2003
How did you manage the Fund during the period?
Given concerns about deflation, the Federal Reserve Board seems willing to
maintain accommodative monetary policy for some time. Accordingly, sectors with
maturities of 12 months or less have held firm, offering yields only slightly
higher than overnight financing levels. Seeing minimal value, we sold these
sectors and favored the 15-month - 18-month area where the curve becomes much
steeper. Due to the tightening of quality spreads, our focus was typically on
government and agency issues. When yield volatility rose, we were able to
capitalize by adding callable notes that provided both higher coupons and
option-adjusted spreads in this environment.
How would you characterize the Fund's position at the close of the period?
We believe the bond market will trade in a relatively narrow range for the next
six months. The difficult employment situation is enough to temper optimism that
a sustainable economic recovery is truly underway. As a result, we maintain our
constructive bias. We prefer variable-rate product when yields approach recent
lows and we look to be aggressive, adding fixed-rate securities, when yields
creep higher. The steepness of the yield curve in the two-year sector is too
compelling to ignore, particularly if the FOMC does maintain its holding
pattern.
The portfolio's composition at the end of the August period and as of our last
report to shareholders is as follows:
- --------------------------------------------------------------------------------
8/31/03 2/28/03
- --------------------------------------------------------------------------------
Bank Notes ........................................ -- 4.6%
Certificates of Deposit--European ................. -- 5.0
Certificates of Deposit--Yankee+ .................. 8.6% 7.3
Commercial Paper .................................. 14.5 12.9
Corporate Notes ................................... 3.7 0.5
Funding Agreements ................................ 8.4 11.6
Medium-Term Notes ................................. 15.6 11.1
Municipal Bonds ................................... -- 1.0
Promissory Notes .................................. 0.4 --
U.S. Government & Agency
Obligations--Discount Notes ..................... 1.8 --
U.S. Government & Agency
Obligations--Non-Discount Notes ................. 47.4 45.9
Other Assets Less Liabilities ..................... -- 0.1
Liabilities in Excess of Other Assets ............. (0.4) --
--------------------
Total ............................................. 100.0% 100.0%
====================
+ U.S. branches of foreign banks.
Richard J. Mejzak
Vice President and Portfolio Manager
September 15, 2003
CBA MONEY FUND AUGUST 31, 2003 5
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments as of August 31, 2003 (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
==========================================================================================
Certificates of Deposit--Yankee--8.6%
==========================================================================================
BNP Paribas, NY $ 6,000 1.04+ % 3/08/2004 $ 6,000
- ------------------------------------------------------------------------------------------
Deutsche Bank
AG, NY 5,000 1.25+ 6/21/2004 5,008
- ------------------------------------------------------------------------------------------
Societe Generale, NY 7,000 1.05+ 2/12/2004 7,000
- ------------------------------------------------------------------------------------------
Toronto-Dominion 2,500 1.05+ 9/26/2003 2,500
Bank, NY
- ------------------------------------------------------------------------------------------
Total Certificates of Deposit -- Yankee
(Cost--$20,500) .............................................................. 20,508
==========================================================================================
Commercial Paper--14.5%
==========================================================================================
Amstel Funding 2,600 1.07 11/13/2003 2,594
Corp.
- ------------------------------------------------------------------------------------------
Clipper Receivables 1,738 1.03 9/10/2003 1,737
Corp.
- ------------------------------------------------------------------------------------------
Goldman Sachs 7,000 1.11+ 10/09/2003 6,991
Group, Inc.
- ------------------------------------------------------------------------------------------
Greyhawk 1,000 1.04 9/19/2003 999
Funding, LLC 2,000 1.07 11/10/2003 1,996
- ------------------------------------------------------------------------------------------
Morgan Stanley 5,000 1.143+ 1/09/2004 5,000
Group, Inc.
- ------------------------------------------------------------------------------------------
Newport Funding 1,488 1.05 9/02/2003 1,488
Corp.
- ------------------------------------------------------------------------------------------
Old Line Funding Corp. 279 1.07 9/23/2003 279
- ------------------------------------------------------------------------------------------
Rio Tinto Limited 350 1.06 9/19/2003 350
- ------------------------------------------------------------------------------------------
San Paolo IMI US 3,000 1.07 9/04/2003 2,999
Financial Company
- ------------------------------------------------------------------------------------------
Sigma Finance 7,000 1.06+ 12/05/2003 7,000
Corporation 3,000 1.07+ 5/17/2004 3,000
- ------------------------------------------------------------------------------------------
Total Commercial Paper (Cost--$34,442) ....................................... 34,433
==========================================================================================
Corporate Notes -- 3.7%
==========================================================================================
Canadian Imperial 8,000 1.127+ 9/15/2004 8,000
Bank of Commerce
- ------------------------------------------------------------------------------------------
Holmes Financing 750 1.11+ 10/15/2003 750
Number 6
- ------------------------------------------------------------------------------------------
Total Corporate Notes (Cost--$8,750) ......................................... 8,750
==========================================================================================
Funding Agreements -- 8.4%
==========================================================================================
Monumental Life $10,000 1.246+% 8/13/2004 $ 10,000
Insurance Company
- ------------------------------------------------------------------------------------------
New York Life 10,000 1.16+ 5/28/2004 10,000
Insurance Company
- ------------------------------------------------------------------------------------------
Total Funding Agreements (Cost--$20,000) ..................................... 20,000
==========================================================================================
Medium-Term Notes -- 15.6%
==========================================================================================
American Honda 3,000 1.08+ 10/06/2003 3,000
Finance Corp. 3,000 1.34+ 11/10/2003 3,002
- ------------------------------------------------------------------------------------------
BMW US Capital 1,000 1.11+ 12/10/2003 1,000
Group
- ------------------------------------------------------------------------------------------
Bank of Scotland 5,000 1.12+ 1/20/2004 5,000
PLC
- ------------------------------------------------------------------------------------------
General Electric 6,000 1.263+ 11/07/2003 6,002
Capital Corp. 4,000 1.131+ 9/17/2004 4,000
- ------------------------------------------------------------------------------------------
Goldman Sachs 5,000 1.356+ 9/13/2004 5,000
Group, Inc.
- ------------------------------------------------------------------------------------------
Household Finance 1,100 1.13+ 8/18/2004 1,100
Corp.
- ------------------------------------------------------------------------------------------
Morgan Stanley 6,000 1.155+ 9/19/2003 6,000
Group, Inc.
- ------------------------------------------------------------------------------------------
Northern Rock
PLC 3,000 1.13+ 11/19/2003 3,000
- ------------------------------------------------------------------------------------------
Total Medium-Term Notes (Cost--$37,103) ...................................... 37,104
==========================================================================================
Promissory Notes -- 0.4%
==========================================================================================
Morgan Stanley 1,000 1.223+ 2/02/2004 1,000
Group, Inc.
- ------------------------------------------------------------------------------------------
Total Promissory Notes (Cost--$1,000) ........................................ 1,000
==========================================================================================
U.S. Government & Agency Obligations --
Discount Notes -- 1.8%
==========================================================================================
Freddie Mac 1,690 1.05 9/30/2003 1,688
2,478 1.07 10/31/2003 2,474
- ------------------------------------------------------------------------------------------
Total U.S. Government & Agency Obligations--
Discount Notes (Cost--$4,162) ................................................ 4,162
- ------------------------------------------------------------------------------------------
6 CBA MONEY FUND AUGUST 31, 2003
Schedule of Investments (concluded) (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
==========================================================================================
U.S. Government & Agency Obligations --
Non-Discount Notes -- 47.4%
==========================================================================================
Fannie Mae $15,000 0.936+% 1/16/2004 $ 15,000
1,250 2.50 10/01/2004 1,251
1,500 2.20 1/14/2005 1,504
340 2.125 8/19/2005 340
1,750 2.11 8/26/2005 1,751
- ------------------------------------------------------------------------------------------
Federal Farm 10,000 0.961+ 10/01/2003 10,000
Credit Bank 2,500 0.97+ 11/14/2003 2,500
3,000 0.97+ 12/24/2003 3,000
2,000 1.00+ 2/23/2004 2,000
1,500 0.981+ 3/01/2004 1,500
8,000 0.985+ 4/07/2004 7,998
7,000 0.878+ 6/21/2004 6,999
14,000 1.00+ 2/07/2005 13,996
5,000 1.02+ 2/24/2005 4,999
1,300 1.03+ 2/21/2006 1,299
750 1.06+ 2/20/2008 750
- ------------------------------------------------------------------------------------------
Federal Home 10,000 0.959+ 9/15/2003 10,000
Loan Bank 2,300 0.935+ 12/29/2003 2,300
2,000 3.75 4/15/2004 2,030
==========================================================================================
U.S. Government & Agency Obligations --
Non-Discount Notes (concluded)
==========================================================================================
Federal Home $ 2,200 0.97+ % 7/06/2004 $ 2,199
Loan Bank 800 3.875 12/15/2004 823
(concluded) 4,200 4.125 1/14/2005 4,339
950 1.50 5/13/2005 943
475 1.774 5/13/2005 471
- ------------------------------------------------------------------------------------------
Freddie Mac 840 2.125 4/28/2005 841
- ------------------------------------------------------------------------------------------
Student Loan 10,000 1.217+ 2/12/2004 9,999
Marketing
Association
- ------------------------------------------------------------------------------------------
U.S. Treasury Notes 1,200 1.25 5/31/2005 1,189
1,200 1.50 7/31/2005 1,191
1,200 2.00 8/31/2005 1,201
- ------------------------------------------------------------------------------------------
Total U.S. Government & Agency Obligations--
Non-Discount Notes (Cost--$112,434) .......................................... 112,413
- ------------------------------------------------------------------------------------------
Total Investments (Cost--$238,391)--100.4% ................................... 238,370
Liabilities in Excess of Other Assets--(0.4%) ................................ (1,158)
--------
Net Assets--100.0% ........................................................... $237,212
========
* Commercial Paper and certain U.S. Government & Agency Obligations are
traded on a discount basis; the interest rates shown reflect the discount
rates paid at the time of purchase by the Fund. Other securities bear
interest at the rates shown, payable at fixed dates or upon maturity.
Interest rates on variable rate securities are adjusted periodically based
upon appropriate indexes; the interest rates shown are those in effect at
August 31, 2003.
+ Variable rate notes.
See Notes to Financial Statements.
CBA MONEY FUND AUGUST 31, 2003 7
[LOGO] Merrill Lynch Investment Managers
Statement of Assets and Liabilities
As of August 31, 2003
=====================================================================================================================
Assets
- ---------------------------------------------------------------------------------------------------------------------
Investments, at value (identified cost--$238,390,913*) ........... $ 238,369,901
Interest receivable .............................................. 283,000
Prepaid registration fees and other assets ....................... 15,641
-------------
Total assets ..................................................... 238,668,542
-------------
=====================================================================================================================
Liabilities
- ---------------------------------------------------------------------------------------------------------------------
Payables:
Securities purchased .......................................... $ 1,201,163
Investment adviser ............................................ 92,975
Distributor ................................................... 76,796
Other affiliates .............................................. 66,022
Beneficial interest redeemed .................................. 12,163
Dividends to shareholders ..................................... 55 1,449,174
-----------
Accrued expenses and other liabilities ........................... 6,914
-------------
Total liabilities ................................................ 1,456,088
-------------
Net Assets ....................................................... $ 237,212,454
=============
=====================================================================================================================
Net Assets Consist of
- ---------------------------------------------------------------------------------------------------------------------
Shares of beneficial interest, $.10 par value, unlimited number of
shares authorized .............................................. $ 23,723,347
Paid-in capital in excess of par ................................. 213,510,119
Unrealized depreciation on investments--net ...................... (21,012)
-------------
Net Assets--Equivalent to $1.00 per share based on 237,233,466
shares of beneficial interest outstanding ...................... $ 237,212,454
=============
* Cost for Federal income tax purposes. As of August 31, 2003, net
unrealized depreciation for Federal income tax purposes amounted to
$21,012, of which $29,335 related to appreciated securities and $50,347
related to depreciated securities.
See Notes to Financial Statements.
8 CBA MONEY FUND AUGUST 31, 2003
Statement of Operations
For the Six Months Ended August 31, 2003
=====================================================================================================================
Investment Income
- ---------------------------------------------------------------------------------------------------------------------
Interest and amortization of premium and discount earned ......... $ 1,806,386
=====================================================================================================================
Expenses
- ---------------------------------------------------------------------------------------------------------------------
Investment advisory fees ......................................... $ 670,844
Transfer agent fees .............................................. 188,469
Distribution fees ................................................ 165,209
Accounting services .............................................. 32,912
Trustees' fees and expenses ...................................... 21,190
Professional fees ................................................ 17,867
Printing and shareholder reports ................................. 15,076
Registration fees ................................................ 9,423
Custodian fees ................................................... 8,239
Pricing expenses ................................................. 548
Other ............................................................ 7,784
-----------
Total expenses ................................................... 1,137,561
-------------
Investment Income--Net ........................................... 668,825
-------------
Realized Gain on Investments--Net ................................ 24,849
Change in Unrealized Appreciation/Depreciation on Investments--Net (76,427)
-------------
Total Realized and Unrealized Loss on Investments--Net ........... (51,578)
-------------
Net Increase in Net Assets Resulting from Operations ............. $ 617,247
=============
See Notes to Financial Statements.
CBA MONEY FUND AUGUST 31, 2003 9
[LOGO] Merrill Lynch Investment Managers
Statements of Changes in Net Assets
For the Six For the
Months Ended Year Ended
August 31, February 28,
Increase (Decrease) in Net Assets: 2003 2003
==============================================================================================================================
Operations
- ------------------------------------------------------------------------------------------------------------------------------
Investment income--net ................................................. $ 668,825 $ 4,510,304
Realized gain on investments--net ...................................... 24,849 129,256
Change in unrealized appreciation/depreciation on investments--net ..... (76,427) (424,398)
-------------------------------
Net increase in net assets resulting from operations ................... 617,247 4,215,162
-------------------------------
==============================================================================================================================
Dividends &Distributions to Shareholders
- ------------------------------------------------------------------------------------------------------------------------------
Investment income--net ................................................. (668,825) (4,510,304)
Realized gain on investments--net ...................................... (24,849) (129,256)
-------------------------------
Net decrease in net assets resulting from dividends and
distributions to shareholders ........................................ (693,674) (4,639,560)
-------------------------------
==============================================================================================================================
Beneficial Interest Transactions
- ------------------------------------------------------------------------------------------------------------------------------
Net proceeds from sale of shares ....................................... 40,699,056 151,189,174
Net asset value of shares issued to shareholders in reinvestment of
dividends and distributions .......................................... 693,504 4,639,560
-------------------------------
41,392,560 155,828,734
Cost of shares redeemed ................................................ (106,474,764) (393,702,095)
-------------------------------
Net decrease in net assets derived from beneficial interest transactions (65,082,204) (237,873,361)
-------------------------------
==============================================================================================================================
Net Assets
- ------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets ........................................... (65,158,631) (238,297,759)
Beginning of period .................................................... 302,371,085 540,668,844
-------------------------------
End of period .......................................................... $ 237,212,454 $ 302,371,085
===============================
See Notes to Financial Statements.
10 CBA MONEY FUND AUGUST 31, 2003
Financial Highlights
The following per share data and ratios have been derived For the Six For the Year Ended For the
from information provided in the financial statements. Months Ended February 28, Year Ended
August 31, ---------------------------------- February 29,
Increase (Decrease) in Net Asset Value: 2003 2003 2002 2001 2000
====================================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------
Investment income--net ................................ .0024 .0110 .0331 .0567 .0473
Realized and unrealized gain (loss) on investments--net (.0002) (.0007) (.0020) .0021 (.0003)
------------------------------------------------------------
Total from investment operations ......................... .0022 .0103 .0311 .0588 .0470
------------------------------------------------------------
Less dividends and distributions:
Investment income--net ................................ (.0024) (.0110) (.0331) (.0567) (.0473)
Realized gain on investments--net ..................... (.0001) (.0003) (.0003) (.0001) --
------------------------------------------------------------
Total dividends and distributions ........................ (.0025) (.0113) (.0334) (.0568) (.0473)
------------------------------------------------------------
Net asset value, end of period ........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
============================================================
Total Investment Return+ ................................. .50%* 1.13% 3.35% 5.83% 5.09%
============================================================
====================================================================================================================================
Ratios to Average Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses, net of reimbursement ........................... .85%* .87% .83% .75% .70%
============================================================
Expenses ................................................. .85%* .87% .83% .75% .70%
============================================================
Investment income and realized gain on investments--net .. .52%* 1.16% 3.53% 5.67% 4.68%
============================================================
====================================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ................. $ 237,212 $ 302,371 $ 540,669 $1,199,550 $2,425,888
============================================================
* Annualized.
+ If applicable, the Fund's Investment Adviser waived a portion of its
management fee. Without such waiver, the Fund's performance would have
been lower.
See Notes to Financial Statements.
CBA MONEY FUND AUGUST 31, 2003 11
[LOGO] Merrill Lynch Investment Managers
Notes to Financial Statements
1. Significant Accounting Policies:
CBA Money Fund (the "Fund") is a money market fund whose shares are offered to
subscribers to the Capital Builder Account service of Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("MLPF&S") and to subscribers to the Broadcort
Capital Account service of Broadcort Capital Corp. ("Broadcort"). Shares may
also be purchased by individual investors not subscribing to these services, but
such investors will not receive any of the special features offered as a part of
such services. The Fund is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company. The Fund's
financial statements are prepared in conformity with accounting principles
generally accepted in the United States of America, which may require the use of
management accruals and estimates. These unaudited financial statements reflect
all adjustments, which are, in the opinion of management, necessary to a fair
statement of the results for the interim period presented. All such adjustments
are of a normal, recurring nature. The following is a summary of significant
accounting policies followed by the Fund.
(a) Valuation of investments -- Portfolio securities with remaining maturities
of greater than sixty days, for which market quotations are readily available,
are valued at market value. As securities transition from sixty-one to sixty
days to maturity, the difference between the valuation existing on the
sixty-first day before maturity and maturity value is amortized on a
straight-line basis to maturity. Securities maturing sixty days or less from
their date of acquisition are valued at amortized cost, which approximates
market value. For purposes of valuation, the maturity of a variable rate
security is deemed to be the next coupon date on which the interest rate is to
be adjusted. Other investments and assets for which market quotations are not
available are valued at their fair value as determined in good faith by or under
the direction of the Fund's Board of Trustees.
(b) Repurchase agreements -- The Fund invests in money market securities
pursuant to repurchase agreements. Under such agreements, the counterparty
agrees to repurchase the security at a mutually agreed upon time and price. The
Fund takes possession of the underlying securities, marks to market such
securities and, if necessary, receives additional securities daily to ensure
that the contract is fully collateralized. If the counterparty defaults and the
fair value of the collateral declines, liquidation of the collateral by the Fund
may be delayed or limited.
(c) Income taxes -- It is the Fund's policy to comply with the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Therefore, no Federal
income tax provision is required.
(d) Security transactions and investment income -- Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Realized gains and losses on security transactions are determined on the
identified cost basis. Interest income (including amortization of premium and
discount) is recognized on the accrual basis.
(e) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(f) Dividends and distributions to shareholders -- The Fund declares dividends
daily and reinvests daily such dividends (net of non-resident alien tax and
backup withholding tax withheld) in additional fund shares at net asset value.
Dividends and distributions are declared from the total of net investment income
and net realized gain or loss on investments.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect, wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML
& Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services, the Fund pays a monthly fee
based upon the average daily value of the Fund's net assets at the following
annual rates: .50% of the first $500 million of average daily net assets, .425%
of average daily net assets in excess of $500 million but not exceeding $1
billion, and .375% of average daily net assets in excess of $1 billion.
The Fund has adopted a Distribution and Shareholder Servicing Plan in compliance
with Rule 12b-1 under the Investment Company Act of 1940, pursuant to which
MLPF&S and Broadcort each receive a distribution fee under the Distribution
Agreement from the Fund at the end of each month at the annual rate of .125% of
average daily net assets of the Fund attributable to subscribers to the
respective Capital
12 CBA MONEY FUND AUGUST 31, 2003
Notes to Financial Statements (concluded)
Builder Account and Broadcort Capital Account programs. The MLPF&S distribution
fee is to compensate MLPF&S financial advisors and other directly involved
branch office personnel for selling shares of the Fund and for providing direct
personal services to shareholders. The Broadcort distribution fee is to
compensate selected dealers for activities and services related to the sale,
promotion and marketing of shares of the Fund. The distribution fee is not
compensation for the administrative and operational services rendered to the
Fund by MLPF&S or Broadcort in processing share orders and administering
shareholder accounts.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
For the six months ended August 31, 2003, the Fund reimbursed FAM $2,852 for
certain accounting services.
Certain officers and/or trustees of the Fund are officers and/or directors of
FAM, PSI, FDS, and/or ML & Co.
3. Beneficial Interest Transactions:
The number of shares sold, reinvested and redeemed during the periods
corresponds to the amounts included in the Statements of Changes in Net Assets
for net proceeds from sale of shares, value of shares reinvested and cost of
shares redeemed, respectively, since shares are recorded at $1.00 per share.
CBA MONEY FUND AUGUST 31, 2003 13
[LOGO] Merrill Lynch Investment Managers
Officers and Trustees
Terry K. Glenn, President and Trustee
Ronald W. Forbes, Trustee
Cynthia A. Montgomery, Trustee
Charles C. Reilly, Trustee
Kevin A. Ryan, Trustee
Roscoe S. Suddarth, Trustee
Richard R. West, Trustee
Edward D. Zinbarg, Trustee
Kevin J. McKenna, Senior Vice President
Richard J. Mejzak, Vice President
Donald C. Burke, Vice President and Treasurer
Phillip S. Gillespie, Secretary
Custodian
State Street Bank and Trust Company
P.O. Box 351
Boston, MA 02101
Transfer Agent
Financial Data Services, Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
800-221-7210*
* For inquiries regarding your CBA account, call 800-247-6400.
14 CBA MONEY FUND AUGUST 31, 2003
[LOGO] Merrill Lynch Investment Managers www.mlim.ml.com
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Fund unless accompanied or preceded by the Fund's
current prospectus. An investment in the Fund is not insured or guaranteed by
the Federal Deposit Insurance Corporation or any other Government agency.
Although the Fund seeks to preserve your investment at $1.00 per share, it is
possible to lose money by investing in the Fund. Past performance results shown
in this report should not be considered a representation of future performance,
which will fluctuate. Statements and other information herein are as dated and
are subject to change.
CBA Money Fund
Box 9011
Princeton, NJ
08543-9011
#11676 -- 8/03
Item 2 - Did registrant adopt a code of ethics, as of the end of the period
covered by this report, that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party? If not, why not? Briefly describe any amendments or
waivers that occurred during the period. State here if code of
ethics/amendments/waivers are on website and give website address-.
State here if fund will send code of ethics to shareholders without
charge upon request-- N/A (annual requirement only)
Item 3 - Did the registrant's board of directors determine that the registrant
either: (i) has at least one audit committee financial expert serving
on its audit committee; or (ii) does not have an audit committee
financial expert serving on its audit committee? If yes, disclose name
of financial expert and whether he/she is "independent," (fund may, but
is not required, to disclose name/independence of more than one
financial expert) If no, explain why not. - N/A (annual requirement
only)
Item 4 - Disclose annually only (not answered until December 15, 2003)
(a) Audit Fees - Disclose aggregate fees billed for each of the last
two fiscal years for professional services rendered by
the principal accountant for the audit of the
registrant's annual financial statements or services
that are normally provided by the accountant in
connection with statutory and regulatory filings or
engagements for those fiscal years. N/A.
(b) Audit-Related Fees - Disclose aggregate fees billed in each of the
last two fiscal years for assurance and
related services by the principal accountant
that are reasonably related to the performance
of the audit of the registrant's financial
statements and are not reported under
paragraph (a) of this Item. Registrants shall
describe the nature of the services comprising
the fees disclosed under this category. N/A.
(c) Tax Fees - Disclose aggregate fees billed in each of the last two
fiscal years for professional services rendered by the
principal accountant for tax compliance, tax advice, and
tax planning. Registrants shall describe the nature of
the services comprising the fees disclosed under this
category. N/A.
(d) All Other Fees - Disclose aggregate fees billed in each of the last
two fiscal years for products and services
provided by the principal accountant, other than
the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the
nature of the services comprising the fees
disclosed under this category. N/A.
(e)(1) Disclose the audit committee's pre-approval policies and
procedures described in paragraph (c)(7) of Rule 2-01 of
Regulation S-X. N/A.
(e)(2) Disclose the percentage of services described in each of
paragraphs (b) through (d) of this Item that were approved by
the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule
2-01 of Regulation S-X. N/A.
(f) If greater than 50%, disclose the percentage of hours expended on
the principal accountant's engagement to audit the registrant's
financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal
accountant's full-time, permanent employees. N/A.
(g) Disclose the aggregate non-audit fees billed by the registrant's
accountant for services rendered to the registrant, and rendered to
the registrant's investment adviser (not including any sub-adviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
adviser that provides ongoing services to the registrant for each
of the last two fiscal years of the registrant. N/A.
(h) Disclose whether the registrant's audit committee has considered
whether the provision of non-audit services that were rendered to
the registrant's investment adviser (not including any subadviser
whose role is primarily portfolio management and is subcontracted
with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence. N/A.
Item 5 - If the registrant is a listed issuer as defined in Rule 10A-3 under the
Exchange Act, state whether or not the registrant has a
separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act. If the
registrant has such a committee, however designated, identify each
committee member. If the entire board of directors is acting as the
registrant's audit committee in Section 3(a)(58)(B) of the Exchange
Act, so state.
If applicable, provide the disclosure required by Rule 10A-3(d) under
the Exchange Act regarding an exemption from the listing standards for
audit committees. N/A
(Listed issuers must be in compliance with the new listing rules by the
earlier of their first annual shareholders meeting after January 2004,
or October 31, 2004 (annual requirement))
Item 6 - Reserved
Item 7 - For closed-end funds that contain voting securities in their portfolio,
describe the policies and procedures that it uses to determine how to
vote proxies relating to those portfolio securities. N/A
Item 8 -- Reserved
Item 9(a) - The registrant's certifying officers have reasonably designed such
disclosure controls and procedures to ensure material information
relating to the registrant is made known to us by others
particularly during the period in which this report is being
prepared. The registrant's certifying officers have determined that
the registrant's disclosure controls and procedures are effective
based on our evaluation of these controls and procedures as of a
date within 90 days prior to the filing date of this report.
Item 9(b) -- There were no significant changes in the registrant's internal
controls or in other factors that could significantly affect these
controls subsequent to the date of their evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Item 10 - Exhibits
10(a) - Attach code of ethics or amendments/waivers, unless code of ethics or
amendments/waivers is on website or offered to shareholders upon request
without charge. N/A.
10(b) - Attach certifications pursuant to Section 302 of the Sarbanes-Oxley Act.
Attached hereto.
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CBA Money Fund
By: /s/ Terry K. Glenn
----------------------------
Terry K. Glenn,
President of
CBA Money Fund
Date: October 24, 2003
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/ Terry K. Glenn
----------------------------
Terry K. Glenn,
President of
CBA Money Fund
Date: October 24, 2003
By: /s/ Donald C. Burke
----------------------------
Donald C. Burke,
Chief Financial Officer of
CBA Money Fund
Date: October 24, 2003
Attached hereto as a furnished exhibit are the certifications pursuant
to Section 906 of the Sarbanes-Oxley Act.