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 - 02/29/04
Item 1 - Report to Stockholders
[LOGO] Merrill Lynch Investment Managers www.mlim.ml.com
CBA Money Fund
Annual Report
February 29, 2004
[LOGO] Merrill Lynch Investment Managers
CBA Money Fund
Important Tax Information (unaudited)
Of the ordinary income dividends paid by CBA Money Fund during the year ended
February 29, 2004, 28.82% was attributable to Federal obligations. In
calculating the foregoing percentage, expenses of the Fund have been allocated
on a pro-rata basis.
The law varies in each state as to whether and what percentage of dividend
income attributable to Federal obligations is exempt from state income tax. We
recommend that you consult your tax adviser to determine if any portion of the
dividends you received is exempt from state income tax.
Please retain this information for your records.
Electronic Delivery
The Fund offers 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 FEBRUARY 29, 2004
A Letter From the President
Dear Shareholder
As I write to you at February month-end, fixed income markets in the United
States continued to reward those investors willing to accept greater risk. The
high yield market, as measured by the Credit Suisse First Boston High Yield
Index, provided a return of +10.88% over the past six months and +25.17% for the
12-month period ended February 29, 2004. In other areas of fixed income,
investment grade corporate bonds, as measured by the Merrill Lynch Corporate
Master Index, returned +6.59% and +8.11% for the six-month and 12-month periods
ended February 29, 2004, respectively. U.S. Treasury issues, as measured by the
Merrill Lynch U.S. Treasuries 1 - 10 Years Index, returned +3.16% and +2.73% for
the six-month and 12-month periods ended February 29, 2004, respectively.
At the same time, equity markets maintained their positive momentum from
year-end 2003. For the six-month and 12-month periods ended February 29, 2004,
the Standard & Poor's (S&P) 500 Index returned +14.59% and +38.52%,
respectively. Much of the boost came from improving economic conditions in the
United States.
The major signposts indicate that we are seeing a shift from economic growth
fueled primarily by fiscal and monetary stimulus to a broader-based,
self-sustaining economic expansion. Gross domestic product growth, which peaked
at an annualized rate of 8.2% in the third quarter of 2003, was 4.1% in the
fourth quarter. A similar level of growth is expected in the first quarter of
2004. For its part, the Federal Reserve Board has reiterated its willingness to
keep short-term interest rates at current low levels to ensure the economy's
strength.
Accompanying the increase in economic activity was an improvement in corporate
earnings. By February 10, 2004, 392 of the S&P 500 companies had reported their
fourth-quarter 2003 results, and 67.6% of those exceeded expectations. In the
meantime, the American consumer, who continued to spend despite the faltering
economy, may get further incentive from another round of Federal tax refunds
this year.
At Merrill Lynch Investment Managers, we believe the events and efforts of 2003
leave us with a much stronger economy and that recent optimism suggests it is
time for investors to consider what can go right in 2004. We encourage you to
revisit your portfolio and your asset allocation strategy to ensure you are well
positioned to take advantage of the opportunities that lie ahead.
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 FEBRUARY 29, 2004 3
[LOGO] Merrill Lynch Investment Managers
A Discussion With Your Fund's Portfolio Manager
The Fund maintained a longer-than-average portfolio maturity for most of
the 12-month period in order to take advantage of higher yields at the longer
end of the money market yield curve.
How did the Fund perform during the fiscal year in light of the existing market
conditions?
For the year ended February 29, 2004, CBA Money Fund paid shareholders a net
annualized dividend of .39%.* For the six-month period ended February 29, 2004,
the Fund paid shareholders a net annualized dividend of .27%.* The Fund's
seven-day yield as of February 29, 2004 was .26%.
The average portfolio maturity for CBA Money Fund at February 29, 2004 was 68
days, compared to 66 days as of August 31, 2003. The Fund's average portfolio
maturity during the six-month period ranged from a low of 45 days to a high of
74 days.
Although interest rates experienced significant volatility over the past 12
months, yields were only modestly higher at period end than they were in
February 2003. Specifically, the yield on the two-year U.S. Treasury note opened
the fiscal year at 1.51%, closed the year at 1.65%, but hit extremes of 1.09%
and 2.11% along the way. The Federal Reserve Board reduced the Federal Funds
target rate from 1.25% to 1.00% in June 2003, its lowest level since 1958.
Because of this, the Fund's performance for the fiscal year benefited from its
longer-than-average maturity compared to many of its peers and a significant
position in floating rate securities.
How did you manage the portfolio during the 12-month period?
Early in the period, we believed the Federal Reserve Board would leave
short-term interest rates low as long as the employment picture remained weak.
With that in mind, we added some longer-dated callable U.S. agency securities to
the portfolio because they offered yield enhancement and the potential for price
appreciation. Yield spreads on callable agency securities relative to straight
bullet issues were wide as interest rate volatility remained at the higher end
of the historical range for most of the year. Agency floating rate securities
also offered greater yields than commercial paper. Accordingly, floaters
represented approximately 65% of the Fund's net assets.
Later in the fiscal year, as short-term interest rates remained at historic
lows, we sold two-year U.S. Treasury notes at appreciated prices, taking
advantage of their yield spreads versus shorter-term securities. Fund
performance continued to be enhanced by our longer duration and barbell
structure -- with investments split in the three-month and under sector and the
longer than one-year sector.
* 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 FEBRUARY 29, 2004
How would you characterize the portfolio's position at the close of the period?
In light of the low yields in the short end of the money market yield curve, the
Fund's position at the close of the period was relatively aggressive (with an
average maturity of 68 days). Given the yield advantage offered by floating rate
securities, we ended the period with a significant position in these securities
and a very small allocation in commercial paper.
We believe short-term interest rates will remain in a narrow trading range until
there is dramatic improvement in the U.S. employment situation. Therefore, we
intend to maintain our longer-than-average portfolio maturity in an effort to
enhance the Fund's yield. A steeper yield curve provides us with greater
opportunities to add longer-dated issues to the portfolio, offering higher yield
spreads compared to shorter-dated commercial paper.
The Fund's portfolio composition at the end of the period and as of our last
report to shareholders is detailed below:
- --------------------------------------------------------------------------------
2/29/04 8/31/03
- --------------------------------------------------------------------------------
Bank Notes ....................................... 8.9% --
Certificates of Deposit--European ................ 1.6 --
Certificates of Deposit--Yankee* ................. 3.1 8.6%
Commercial Paper ................................. 27.6 14.5
Corporate Notes .................................. -- 3.7
Funding Agreements ............................... 10.5 8.4
Medium-Term Notes ................................ 5.5 15.6
Promissory Notes ................................. -- 0.4
U.S. Government & Agency
Obligations--Discount Notes ................... 6.6 1.8
U.S. Government & Agency
Obligations--Non-Discount Notes ............... 38.5 47.4
Liabilities in Excess of Other Assets ............ (2.3) (0.4)
--------------------
Total ............................................ 100.0% 100.0%
====================
* U.S. branches of foreign banks.
Richard J. Mejzak
Vice President and Portfolio Manager
March 15, 2004
CBA MONEY FUND FEBRUARY 29, 2004 5
[LOGO] Merrill Lynch Investment Managers
Schedule of Investments as of February 29, 2004 (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
======================================================================================
Bank Notes--8.9%
======================================================================================
Bank of America,
NA $ 9,000 1.05+ % 1/28/2005 $ 8,998
- --------------------------------------------------------------------------------------
Canadian Imperial 8,000 1.114+ 3/15/2005 8,000
Bank of Commerce
- --------------------------------------------------------------------------------------
Total Bank Notes
(Cost--$17,000) .......................................................... 16,998
======================================================================================
Certificates of Deposit--European--1.6%
======================================================================================
Credit Agricole 3,000 1.27 12/31/2004 3,001
Indosuez, London
- --------------------------------------------------------------------------------------
Total Certificates of Deposit--European
(Cost--$3,000) ........................................................... 3,001
======================================================================================
Certificates of Deposit--Yankee--3.1%
======================================================================================
BNP Paribas, NY 6,000 1.04+ 3/08/2004 6,000
- --------------------------------------------------------------------------------------
Total Certificates of Deposit--Yankee
(Cost--$6,000) ........................................................... 6,000
======================================================================================
Commercial Paper--27.6%
======================================================================================
Aspen Funding
Corp. 7,000 1.03 3/11/2004 6,997
- --------------------------------------------------------------------------------------
Falcon Asset 9,000 1.02 3/18/2004 8,995
Securitization
- --------------------------------------------------------------------------------------
Greyhawk 5,000 1.04 5/24/2004 4,987
Funding, LLC
- --------------------------------------------------------------------------------------
Morgan Stanley 1,100 1.08+ 10/28/2004 1,100
- --------------------------------------------------------------------------------------
Old Line Funding
Corp. 5,000 1.03 3/18/2004 4,997
- --------------------------------------------------------------------------------------
PB Finance 1,368 1.05 3/29/2004 1,367
(Delaware) 7,500 1.04 4/19/2004 7,489
- --------------------------------------------------------------------------------------
Sigma Finance 3,000 1.054+ 5/17/2004 3,000
Corporation 7,000 1.053+ 6/10/2004 7,000
- --------------------------------------------------------------------------------------
Svenska 1,150 1.04 3/30/2004 1,149
Handelsbanken AB 5,670 1.03 4/13/2004 5,662
- --------------------------------------------------------------------------------------
Total Commercial Paper (Cost--$52,743) ................................... 52,743
======================================================================================
Funding Agreements--10.5%
======================================================================================
Monumental Life 10,000 1.12+ 8/13/2004 10,000
Insurance Company
- --------------------------------------------------------------------------------------
New York Life 10,000 1.179+ 5/28/2004 10,000
Insurance Company
- --------------------------------------------------------------------------------------
Total Funding Agreements
(Cost--$20,000) .......................................................... 20,000
======================================================================================
Medium-Term Notes--5.5%
======================================================================================
American Honda 3,600 1.49+ 3/11/2005 3,614
Finance Corp.
- --------------------------------------------------------------------------------------
General Electric 4,000 1.174+ 3/17/2005 4,000
Capital Corp.
- --------------------------------------------------------------------------------------
Household Finance 1,100 1.171+ 8/18/2004 1,100
Corporation
- --------------------------------------------------------------------------------------
Morgan Stanley 1,000 1.10+ 3/04/2005 1,000
810 1.11+ 3/24/2005 810
- --------------------------------------------------------------------------------------
Total Medium-Term Notes
(Cost--$10,524) .......................................................... 10,524
======================================================================================
U.S. Government Agency Obligations--
Discount Notes--6.6%
======================================================================================
Fannie Mae 2,000 1.20 8/20/2004 1,990
1,000 1.21 1/07/2005 991
- --------------------------------------------------------------------------------------
Freddie Mac 400 1.035 7/13/2004 398
5,000 1.21 12/02/2004 4,957
4,301 1.22 1/11/2005 4,257
- --------------------------------------------------------------------------------------
Total U.S. Government Agency Obligations--
Discount Notes (Cost--$12,584) ........................................... 12,593
- --------------------------------------------------------------------------------------
6 CBA MONEY FUND FEBRUARY 29, 2004
Schedule of Investments (concluded) (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
=======================================================================================
U.S. Government Agency Obligations--Non-Discount
Notes--38.5%
=======================================================================================
Fannie Mae $ 5,600 0.994+% 8/17/2005 $ 5,597
340 2.125 8/19/2005 341
1,750 2.11 8/26/2005 1,758
9,000 0.973+ 8/29/2005 8,994
4,500 0.99+ 9/06/2005 4,496
550 2.07 10/21/2005 553
550 2.10 10/21/2005 553
- ---------------------------------------------------------------------------------------
Federal Farm 1,500 1.12+ 3/01/2004 1,500
Credit Bank 8,000 0.995+ 4/07/2004 8,000
7,000 1.02+ 6/21/2004 7,000
14,000 1.00+ 2/07/2005 13,997
5,000 1.00+ 2/24/2005 5,000
1,300 1.011+ 2/21/2006 1,299
750 1.041+ 2/20/2008 750
- ---------------------------------------------------------------------------------------
Federal Home 2,000 3.75 4/15/2004 2,007
Loan Bank 2,200 1.01+ 7/06/2004 2,200
800 3.875 12/15/2004 817
825 1.50 5/13/2005 826
- ---------------------------------------------------------------------------------------
Freddie Mac 1,000 2.29 10/28/2005 1,001
500 2.41 11/04/2005 503
3,250 1.125+ 11/07/2005 3,251
1,000 2.30 11/17/2005 1,008
2,000 2.35 12/09/2005 2,018
- ---------------------------------------------------------------------------------------
Total U.S. Government Agency Obligations--
Non-Discount Notes (Cost--$73,414) 73,469
- ---------------------------------------------------------------------------------------
Total Investments (Cost--$195,265)--102.3% ............................... 195,328
Liabilities in Excess of Other Assets--(2.3%) ............................ (4,478)
--------
Net Assets--100.0% ....................................................... $190,850
========
- ---------------------------------------------------------------------------------------
* 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
February 29, 2004.
+ Variable rate notes.
See Notes to Financial Statements.
CBA MONEY FUND FEBRUARY 29, 2004 7
[LOGO] Merrill Lynch Investment Managers
Statement of Assets and Liabilities
As of February 29, 2004
==============================================================================================================
Assets
- --------------------------------------------------------------------------------------------------------------
Investments, at value (identified cost--$195,265,363*) . $195,328,159
Cash ................................................... 107,765
Interest receivable .................................... 167,673
Prepaid registration fees and other assets ............. 22,614
------------
Total assets ........................................... 195,626,211
------------
==============================================================================================================
Liabilities
- --------------------------------------------------------------------------------------------------------------
Payables:
Securities purchased ................................ $ 4,495,950
Other affiliates .................................... 95,743
Distributor ......................................... 81,603
Investment adviser .................................. 74,537
Beneficial interest redeemed ........................ 12,464 4,760,297
-----------
Accrued expenses ....................................... 15,435
------------
Total liabilities ...................................... 4,775,732
------------
Net assets ............................................. $190,850,479
============
==============================================================================================================
Net Assets Consist of
- --------------------------------------------------------------------------------------------------------------
Shares of beneficial interest, $.10 par value, unlimited
number of shares authorized ........................... $ 19,078,768
Paid-in capital in excess of par ....................... 171,708,915
Unrealized appreciation on investments--net ............ 62,796
------------
Net Assets--Equivalent to $1.00 per share based on
190,787,683 shares of beneficial interest outstanding . $190,850,479
============
* Cost for Federal income tax purposes. As of February 29, 2004, net
unrealized appreciation for Federal income tax purposes amounted to
$62,796, of which $65,540 related to appreciated securities and $2,744
related to depreciated securities.
See Notes to Financial Statements.
8 CBA MONEY FUND FEBRUARY 29, 2004
Statement of Operations
For the Year Ended February 29, 2004
============================================================================================================
Investment Income
- ------------------------------------------------------------------------------------------------------------
Interest and amortization of premium and discount earned $ 3,040,084
============================================================================================================
Expenses
- ------------------------------------------------------------------------------------------------------------
Investment advisory fees ............................... $1,205,888
Transfer agent fees .................................... 366,612
Distribution fees ...................................... 297,195
Accounting services .................................... 63,372
Trustees' fees and expenses ............................ 43,175
Professional fees ...................................... 41,102
Printing and shareholder reports ....................... 38,049
Registration fees ...................................... 17,969
Custodian fees ......................................... 15,519
Pricing expense ........................................ 1,158
Other .................................................. 15,689
----------
Total expenses ......................................... 2,105,728
-----------
Investment income--net ................................. 934,356
-----------
Realized gain on investments--net ...................... 48,569
Change in unrealized appreciation on investments--net .. 7,381
-----------
Total realized and unrealized gain on investments--net . 55,950
-----------
Net Increase in Net Assets Resulting from Operations ... $ 990,306
===========
See Notes to Financial Statements.
CBA MONEY FUND FEBRUARY 29, 2004 9
[LOGO] Merrill Lynch Investment Managers
Statements of Changes in Net Assets
For the For the
Year Ended Year Ended
February 29, February 28,
Increase (Decrease) in Net Assets: 2004 2003
==================================================================================================================
Operations
- ------------------------------------------------------------------------------------------------------------------
Investment income--net ................................ $ 934,356 $ 4,510,304
Realized gain on investments--net ..................... 48,569 129,256
Change in unrealized appreciation on investments--net . 7,381 (424,398)
-------------------------------
Net increase in net assets resulting from operations .. 990,306 4,215,162
-------------------------------
==================================================================================================================
Dividends & Distributions to Shareholders
- ------------------------------------------------------------------------------------------------------------------
Investment income--net ................................ (934,356) (4,510,304)
Realized gain on investments--net ..................... (48,569) (129,256)
-------------------------------
Net decrease in net assets resulting from dividends and
distributions to shareholders ........................ (982,925) (4,639,560)
-------------------------------
==================================================================================================================
Beneficial Interest Transactions
- ------------------------------------------------------------------------------------------------------------------
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions .......... 982,787 4,639,560
Cost of shares redeemed ............................... (112,510,774) (242,512,921)
-------------------------------
Net decrease in net assets derived from beneficial
interest transactions ................................ (111,527,987) (237,873,361)
-------------------------------
==================================================================================================================
Net Assets
- ------------------------------------------------------------------------------------------------------------------
Total decrease in net assets .......................... (111,520,606) (238,297,759)
Beginning of year ..................................... 302,371,085 540,668,844
-------------------------------
End of year ........................................... $ 190,850,479 $ 302,371,085
===============================
See Notes to Financial Statements.
10 CBA MONEY FUND FEBRUARY 29, 2004
Financial Highlights
The following per share data and ratios have been derived For the For the Year Ended For the
from information provided in the financial statements. Year Ended February 28, Year Ended
February 29, ---------------------------------------- February 29,
Increase (Decrease) in Net Asset Value: 2004 2003 2002 2001 2000
================================================================================================================================
Per Share Operating Performance
- --------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of year ....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------------------------------------------------------------------
Investment income--net ................ .0037 .0110 .0331 .0567 .0473
Realized and unrealized gain (loss) on
investments--net ..................... .0002 (.0007) (.0020) .0021 (.0003)
----------------------------------------------------------------------
Total from investment operations ......... .0039 .0103 .0311 .0588 .0470
----------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ................ (.0037) (.0110) (.0331) (.0567) (.0473)
Realized gain on investments--net ..... (.0002) (.0003) (.0003) (.0001) --
----------------------------------------------------------------------
Total dividends and distributions ........ (.0039) (.0113) (.0334) (.0568) (.0473)
----------------------------------------------------------------------
Net asset value, end of year ............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======================================================================
Total investment return .................. .39% 1.13% 3.35% 5.83% 5.09%
======================================================================
================================================================================================================================
Ratios to Average Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
Expenses ................................. .87% .87% .83% .75% .70%
======================================================================
Investment income and realized gain (loss)
on investments--net ..................... .41% 1.16% 3.53% 5.67% 4.68%
======================================================================
================================================================================================================================
Supplemental Data
- --------------------------------------------------------------------------------------------------------------------------------
Net assets, end of year (in thousands) ... $ 190,850 $ 302,371 $ 540,669 $ 1,199,550 $ 2,425,888
======================================================================
See Notes to Financial Statements.
CBA MONEY FUND FEBRUARY 29, 2004 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 held in
certain accounts at Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MLPF&S"). The Fund is currently not offering any new shares to the public
except through dividend reinvestment. 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. 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 receives 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. The MLPF&S distribution fee is
to compensate MLPF&S and its financial advisors and other directly involved
branch office personnel for providing direct personal services to shareholders
and in processing share orders and administering shareholder accounts.
12 CBA MONEY FUND FEBRUARY 29, 2004
Notes to Financial Statements (concluded)
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent.
For the year ended February 29, 2004, the Fund reimbursed FAM $5,124 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 years 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.
4. Distributions to Shareholders:
The tax character of distributions paid during the fiscal years ended February
29, 2004 and February 28, 2003 was as follows:
- --------------------------------------------------------------------------------
2/29/2004 2/28/2003
- --------------------------------------------------------------------------------
Distributions paid from:
Ordinary income ......................... $ 982,925 $4,639,560
----------------------------
Total taxable distributions ................ $ 982,925 $4,639,560
============================
As of February 29, 2004, there were no significant differences between the book
and tax components of net assets.
5. Reclassification:
Certain prior year amounts have been reclassified to conform to current year
presentation. This reclassification does not affect net asset value or the
results of operations.
Independent Auditors' Report
To the Shareholders and Board of Trustees of
CBA Money Fund:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of CBA Money Fund as of February 29, 2004, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of February 29, 2004, by correspondence with the custodian
and brokers; where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of CBA
Money Fund as of February 29, 2004, the results of its operations for the period
then ended, the changes in its net assets for each of the two years in the
period then ended, and its financial highlights for each of the five years in
the period then ended, in conformity with accounting principles generally
accepted in the United States of America.
Deloitte & Touche LLP
Princeton, New Jersey
April 8, 2004
CBA MONEY FUND FEBRUARY 29, 2004 13
[LOGO] Merrill Lynch Investment Managers
Officers and Trustees (unaudited)
Number of
Portfolios in Other Public
Position(s) Length Fund Complex Directorships
Held with of Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Interested Trustee
- ------------------------------------------------------------------------------------------------------------------------------------
Terry K. P.O. Box 9011 President 1999 to President and Chairman of the Merrill Lynch 123 Funds None
Glenn* Princeton, NJ and present Investment Managers, L.P. ("MLIM")/Fund Asset 159 Portfolios
08543-9011 Trustee and Management, L.P. ("FAM")--Advised Funds since
Age: 63 1985 to 1999; Chairman (Americas Region) of MLIM from
present 2000 to 2002; Executive Vice President of FAM and
MLIM (which terms as used herein include their
corporate predecessors) from 1983 to 2002; President
of FAM Distributors, Inc. ("FAMD") from 1986 to 2002
and Director thereof from 1991 to 2002; Executive
Vice President and Director of Princeton Services,
Inc. ("Princeton Services") from 1993 to 2002;
President of Princeton Administrators, L.P. from
1989 to 2002; Director of Financial Data Services,
Inc. since 1985.
------------------------------------------------------------------------------------------------------------------------
* Mr. Glenn is a director, trustee or member of an advisory board of certain other investment companies for which MLIM
or FAM acts as investment adviser. Mr. Glenn is an "interested person," as described in the Investment Company Act, of
the Fund based on his former positions with MLIM, FAM, FAMD, Princeton Services and Princeton Administrators, L.P. The
Trustee's term is unlimited. As Fund President, Mr. Glenn serves at the pleasure of the Board of Trustees.
====================================================================================================================================
Independent Trustees*
- ------------------------------------------------------------------------------------------------------------------------------------
Ronald W. P.O. Box 9095 Trustee 1984 to Professor Emeritus of Finance, School of Business, 51 Funds None
Forbes Princeton, NJ present State University of New York at Albany since 2000 50 Portfolios
08543-9095 and Professor thereof from 1989 to 2000;
Age: 63 International Consultant at the Urban Institute from
1995 to 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia A. P.O. Box 9095 Trustee 1993 to Professor of Harvard Business School since 1989. 51 Funds Newell Rub-
Montgomery Princeton, NJ present 50 Portfolios bermaid, Inc.
08543-9095
Age: 51
- ------------------------------------------------------------------------------------------------------------------------------------
Kevin A. P.O. Box 9095 Trustee 1992 to Director Emeritus of The Boston University Center 51 Funds None
Ryan Princeton, NJ present for the Advancement of Ethics and Character from 50 Portfolios
08543-9095 1989 to 1999; Professor of Education at Boston
Age: 71 University from 1982 to 1999 and Professor Emeritus
thereof since 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Roscoe S. P.O. Box 9095 Trustee 2000 to President of Middle East Institute from 1995 to 51 Funds None
Suddarth Princeton, NJ present 2001; Foreign Service Officer of United States 50 Portfolios
08543-9095 Foreign Service from 1961 to 1995 and Career
Age: 68 Minister from 1989 to 1995; Deputy Inspector General
of U.S. Department of State from 1991 to 1994; U.S.
Ambassador to the Hashemite Kingdom of Jordan from
1987 to 1990.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard R. P.O. Box 9095 Trustee 1984 to Professor of Finance, New York University, 51 Funds Bowne &
West Princeton, NJ present Leonard N. Stern School of Business Administration 50 Portfolios Co., Inc.;
08543-9095 from 1982 to 1994 and Dean Emeritus thereof Vornado
Age: 66 since 1994. Operating
Company;
Vornado
Realty Trust;
Alexander's,
Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
14 CBA MONEY FUND FEBRUARY 29, 2004
Officers and Trustees (unaudited) (concluded)
Number of
Portfolios in Other Public
Position(s) Length Fund Complex Directorships
Held with of Time Overseen by Held by
Name Address & Age Fund Served Principal Occupation(s) During Past 5 Years Trustee Trustee
====================================================================================================================================
Interested Trustees* (concluded)
- ------------------------------------------------------------------------------------------------------------------------------------
Edward D. P.O. Box 9095 Trustee 2000 to Self-employed financial consultant since 1994; 51 Funds None
Zinbarg Princeton, NJ present Executive Vice President of The Prudential Insurance 50 Portfolios
08543-9095 Company of America from 1988 to 1994; Former
Age: 69 Director of Prudential Reinsurance Company and
former Trustee of The Prudential Foundation.
------------------------------------------------------------------------------------------------------------------------
* The Trustee's term is unlimited. Trustees serve until their resignation, removal or death, or until December 31 of the
year in which they turn 72.
- ------------------------------------------------------------------------------------------------------------------------------------
Position(s) Length
Held with of Time
Name Address & Age Fund Served* Principal Occupation(s) During Past 5 Years
====================================================================================================================================
Fund Officers
- ------------------------------------------------------------------------------------------------------------------------------------
Donald C. P.O. Box 9011 Vice 1993 to First Vice President of MLIM and FAM since 1997 and Treasurer thereof since 1999;
Burke Princeton, NJ President present Senior Vice President and Treasurer of Princeton Services since 1999; Vice
08543-9011 and and President of FAMD since 1999; Director of MLIM Taxation since 1990.
Age: 43 Treasurer 1999 to
present
- ------------------------------------------------------------------------------------------------------------------------------------
Richard J. P.O. Box 9011 Vice 2001 to Director (Global Fixed Income) of MLIM since 2000; Vice President of MLIM from
Mejzak Princeton, NJ President present 1996 to 2000.
08543-9011
Age: 35
- ------------------------------------------------------------------------------------------------------------------------------------
Phillip S. P.O. Box 9011 Secretary 2000 to First Vice President of MLIM since 2001; Director (Legal Advisory) of MLIM from
Gillespie Princeton, NJ present 2000 to 2001; Vice President of MLIM from 1999 to 2000; Attorney associated with
08543-9011 MLIM since 1998.
Age: 40
------------------------------------------------------------------------------------------------------------------------
* Officers of the Fund serve at the pleasure of the Board of Trustees.
- ------------------------------------------------------------------------------------------------------------------------------------
Further information about the Fund's Officers and Trustees is available in the Fund's Statement of Additional
Information, which can be obtained without charge by calling 1-800-MER-FUND.
- ------------------------------------------------------------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
Charles C. Reilly, Trustee of CBA Money Fund, has recently retired. The Fund's
Board of Trustees wishes Mr. Reilly well in his retirement.
- --------------------------------------------------------------------------------
CBA MONEY FUND FEBRUARY 29, 2004 15
[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.
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available (1) without
charge, upon request, by calling toll-free 1-800-MER-FUND (1-800-637-3863); (2)
on www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's
website at http://www.sec.gov.
CBA Money Fund
Box 9011
Princeton, NJ
08543-9011
#11676 -- 2/04
Item 2 - Code of Ethics - The registrant has adopted 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
and principal accounting officer, or persons performing similar
functions. A copy of the code of ethics is available without charge
upon request by calling toll-free 1-800-MER-FUND (1-800-637-3863).
Item 3 - Audit Committee Financial Expert - The registrant's board of directors
has determined that (i) the registrant has the following audit
committee financial experts serving on its audit committee and (ii)
each audit committee financial expert is independent: (1) Ronald W.
Forbes, (2) Richard R. West, and (3) Edward D. Zinbarg.
Item 4 - Principal Accountant Fees and Services
(a) Audit Fees - Fiscal Year Ending February 29, 2004 - $25,000
Fiscal Year Ending February 28, 2003 - $25,000
(b) Audit-Related Fees - Fiscal Year Ending February 29, 2004 - $0
Fiscal Year Ending February 28, 2003 - $0
(c) Tax Fees - Fiscal Year Ending February 29, 2004 - $5,200
Fiscal Year Ending February 28, 2003 - $5,400
The nature of the services include tax compliance, tax advice and tax
planning.
(d) All Other Fees - Fiscal Year Ending February 29, 2004 - $0
Fiscal Year Ending February 28, 2003 - $0
(e)(1) The registrant's audit committee (the "Committee") has adopted
policies and procedures with regard to the pre-approval of services.
Audit, audit-related and tax compliance services provided to the
registrant on an annual basis require specific pre-approval by the
Committee. The Committee also must approve other non-audit services
provided to the registrant and those non-audit services provided to the
registrant's affiliated service providers that relate directly to the
operations and the financial reporting of the registrant. Certain of
these non-audit services that the Committee believes are a) consistent
with the SEC's auditor independence rules and b) routine and recurring
services that will not impair the independence of the independent
accountants may be approved by the Committee without consideration on a
specific case-by-case basis ("general pre-approval"). However, such
services will only be deemed pre-approved provided that any individual
project does not exceed $5,000 attributable to the registrant or
$50,000 for the project as a whole. Any proposed services exceeding the
pre-approved cost levels will require specific pre-approval by the
Committee, as will any other services not subject to general
pre-approval (e.g., unanticipated but permissible services). The
Committee is informed of each service approved subject to general
pre-approval at the next regularly scheduled in-person board meeting.
(e)(2) 0%
(f) Not Applicable
(g) Fiscal Year Ending February 29, 2004 - $17,838,364
Fiscal Year Ending February 28, 2003 - $17,256,337
(h) The registrant's audit committee has considered and determined that
the provision of non-audit services that were rendered to the
registrant's 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.
Regulation S-X Rule 2-01(c)(7)(ii) - $541,640, 0%
Item 5 - Audit Committee of Listed Registrants - Not Applicable
Item 6 - Schedule of Investments - Not Applicable
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies - Not Applicable
Item 8 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 9 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 10 - Controls and Procedures
10(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.
10(b) - There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR
270.30a-3(d)) that occurred during the second fiscal half-year of the
period covered by this report that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
Item 11 - Exhibits attached hereto
11(a)(1) - Code of Ethics - See Item 2
11(a)(2) - Certifications - Attached hereto
11(a)(3) - Not Applicable
11(b) - Certifications - 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: April 16, 2004
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: April 16, 2004
By: /s/ Donald C. Burke
-----------------------------
Donald C. Burke,
Chief Financial Officer of
CBA Money Fund
Date: April 16, 2004