UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21196
811-21299
Name of Fund: WCMA Money Fund
Master Money Trust
Fund Address: P.O. Box 9011
Princeton, NJ 08543-9011
Name and address of agent for service: Robert C. Doll, Jr., Chief Executive
Officer, WCMA Money Fund and Master Money Trust, 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: 03/31/06
Date of reporting period: 04/01/05 - 09/30/05
Item 1 - Report to Stockholders
WCMA Money Fund
Semi-Annual Report
September 30, 2005
WCMA Money Fund
Officers and Trustees
Robert C. Doll, Jr., President and Trustee
Ronald W. Forbes, Trustee
Cynthia A. Montgomery, Trustee
Jean Margo Reid, Trustee
Roscoe S. Suddarth, Trustee
Richard R. West, Trustee
Edward D. Zinbarg, Trustee
Richard J. Mejzak, Vice President
Donald C. Burke, Vice President and Treasurer
Jeffrey Hiller, Chief Compliance Officer
Alice A. Pellegrino, 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 WCMA account, call 800-262-4636.
Availability of Quarterly Schedule of Investments
The Fund files its complete schedule of portfolio holdings with the Securities
and Exchange Commission ("SEC") for the first and third quarters of each fiscal
year on Form N-Q. The Fund's Forms N-Q are available on the SEC's Web site at
http://www.sec.gov. The Fund's Forms N-Q may also be reviewed and copied at the
SEC's Public Reference Room in Washington, DC. Information on the operation of
the Public Reference Room may be obtained by calling 1-800-SEC-0330.
2 WCMA MONEY FUND SEPTEMBER 30, 2005
A Letter From the President
Dear Shareholder
Amid what we've coined a "muddle through" year for the financial markets, the
major benchmark indexes managed to post positive results for the current
reporting period:
Total Returns as of September 30, 2005 6-month 12-month
=====================================================================================
U.S. equities (Standard & Poor's (S&P) 500 Index) +5.02% +12.25%
- -------------------------------------------------------------------------------------
Small-cap U.S. equities (Russell 2000 Index) +9.21% +17.95%
- -------------------------------------------------------------------------------------
International equities (MSCI Europe Australasia Far East Index) +9.26% +25.79%
- -------------------------------------------------------------------------------------
Fixed income (Lehman Brothers Aggregate Bond Index) +2.31% + 2.80%
- -------------------------------------------------------------------------------------
Tax-exempt fixed income (Lehman Brothers Municipal Bond Index) +2.80% + 4.05%
- -------------------------------------------------------------------------------------
High yield bonds (Credit Suisse First Boston High Yield Index) +2.82% + 6.31%
- -------------------------------------------------------------------------------------
Since June 2004, the Federal Reserve Board (the Fed) has tirelessly advanced its
interest rate hiking program, raising the federal funds rate 11 times to 3.75%
by period-end. The Fed admittedly remains more concerned about inflation than
slowing economic growth, causing some to worry that the central bank may
overreact to inflation and increase interest rates more than is necessary to
maintain a healthy economic balance. Recent disruptions to production and
spending from Hurricanes Katrina and Rita are likely to distort the economic
data in the short term, muddying the underlying trends. However, any
hurricane-induced slowdown is likely to be short lived, and the fiscal stimulus
associated with reconstruction efforts in the Gulf could add to gross domestic
product growth in 2006.
U.S. equities exhibited resilience over the past several months as investors
generally tended to proceed with caution. After a strong finish to 2004, the S&P
500 Index remained largely range-bound in 2005, with the last three months
representing the best quarter of the year. Up to this point, strong corporate
earnings reports and low long-term bond yields have worked in favor of equities.
Looking ahead, high energy prices, continued interest rate hikes, a potential
consumer slowdown and/or disappointing earnings pose the greatest risks to U.S.
stocks. Internationally, many markets have benefited from strong economic
statistics, trade surpluses and solid finances.
In the bond market, the yield curve continued to flatten as short-term interest
rates moved in concert with the Fed rate hikes and longer-term interest rates
remained more constant or declined. The difference between two-year and 10-year
Treasury yields collapsed from 151 basis points (1.51%) on September 30, 2004 to
70 basis points on March 31, 2005, to just 16 basis points at period-end.
Financial markets are likely to face continued crosscurrents in the months
ahead. Nevertheless, opportunities do exist and we encourage you to work with
your financial advisor to diversify your portfolio among a variety of asset
types. This can help to diffuse risk while also tapping into the potential
benefits of a broader range of investment alternatives. As always, 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/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
President and Trustee
WCMA MONEY FUND SEPTEMBER 30, 2005 3
A Discussion With Your Fund's Portfolio Manager
We maintained a relatively conservative approach for much of the period as
the Fed continued to increase short-term interest rates, but began to see
greater yield and capital appreciation potential in the two-year sector by
period-end.
How did the Fund perform during the period in light of the existing market
conditions?
For the six-month period ended September 30, 2005, WCMA Money Fund's Class 1,
Class 2, Class 3 and Class 4 Shares paid shareholders net annualized dividends
of 1.75%, 2.33%, 2.66% and 2.66%, respectively. The Fund's seven-day yields as
of September 30, 2005 were 2.23% for Class 1, 2.81% for Class 2, 3.10% for Class
3 and 3.10% for Class 4.
The average portfolio maturity of WCMA Money Fund at September 30, 2005 was 60
days, unchanged from March 31, 2005. However, the Fund's average portfolio
maturity ranged from a high of 68 days to a low of 53 days during the six-month
period.
During the past six months, economic growth remained solid albeit slightly
slower than that of 2004 and the first quarter of 2005. The economy grew at an
annualized rate of 3.3% in the second quarter, a pace that, according to the
Federal Reserve Board (the Fed), still warranted removal of "accommodative"
monetary policy. Thus, the Fed continued its "measured" series of interest rate
hikes with quarter-point moves at the May, June, August and September Federal
Open Market Committee meetings. This brought the federal funds rate to 3.75% at
period-end.
Oil remained a hot topic throughout the period, although there was often
disagreement among market participants as to whether a $20-per-barrel increase
in the price of oil posed a greater risk of inflation or a greater threat to
consumer spending. Consumer sentiment figures grew weaker as oil prices rose,
but Fed officials consistently warned that higher crude prices were sure to
result in pricing pressures. This supported their rate increases over the past
six months, which were accompanied by clear indications that the Fed intends to
continue raising interest rates through the remainder of 2005. Short-term yields
climbed in accordance with the Fed's moves while long-term yields actually fell.
Over the past six months, the two-year Treasury yield rose from 3.80% to 4.18%
as the 10-year Treasury yield fell from 4.50% to 4.34%. This resulted in a
flattening of the yield curve, a typical phenomenon in rising interest rate
environments.
Despite this dynamic, the steepness of the yield curve in the front end offered
enticing value. The greatest value seemed to be in the six-month, nine-month and
12-month sectors. We were able to add higher yields to the portfolio while still
maintaining a relatively short average duration. This allowed us to be
constructive while minimizing our interest rate exposure, an approach we thought
was prudent given the likelihood of additional rate hikes.
How did you manage the portfolio during the period?
Early in the period, our investment strategy was formulated on the premise that
the federal funds target would ultimately reach 4%. We then searched for sectors
that were attractively priced given that view. The two-year sector was quite
expensive in our estimation, while shorter sectors such as six and 12 months
offered much greater value. At June 30, 2005, the mid-point of the period, the
two-year Treasury yielded 3.66%, while the six-month London InterBank Offered
Rate (LIBOR) was 3.71% and 12-month LIBOR was 3.90%. Given our view that
interest rates were headed higher, being able to capture higher yields in
shorter-dated maturities was a fairly straightforward decision.
Our efforts were concentrated on these sectors for a majority of the time, while
we continued to target an average portfolio duration in the somewhat
conservative 60-day range. In terms of security selection, spreads on variable
rate product were extremely expensive in our judgment. This was a result of
increased demand but, even more so, was due to a slowdown in agency issuance.
New regulations forced the Federal National Mortgage Association (Fannie Mae) to
reduce its balance sheet. The fewer mortgages Fannie was permitted to own, the
less borrowing it needed to do in order to fund its holdings. Thus, discount
notes outstanding, which had been the agencies' primary tool of short-term
issuance, dipped by $125 billion over the past six months. With all of this
supply now missing from the market, spreads on short-term agency debt collapsed.
Notably, variable rate debt, which once had spreads as wide as LIBOR minus four
basis points, were now trading at LIBOR minus 11 basis points. This, in turn,
tightened spreads on bank and corporate names as well, leaving us with little
interest in the variable rate arena. Moreover, our holdings of variable rate
securities dropped from a high of 67% of the portfolio's net assets in late
April, to 38% by the end of September. These assets were reallocated mostly to
short-dated commercial paper and certificates of deposit. This allowed us to
maintain a shorter average duration and sustain ample liquidity. Having
4 WCMA MONEY FUND SEPTEMBER 30, 2005
significant overnight positions in a rising rate environment proves beneficial
because it is the most effective way to meet redemptions while also allowing us
to capitalize immediately when the Fed raises interest rates.
How would you characterize the portfolio's position at the close of the period?
As long as the Fed considers its monetary policy "accommodative," we intend to
proceed as if the central bank will continue to raise the federal funds target
until it reaches a level deemed to be neutral. Although Hurricanes Katrina and
Rita seemed to pose a legitimate threat to economic growth, the fixed income
markets dismissed this as merely a temporary shock. It seems the economy is
strong enough to absorb a brief slowdown, and that lofty oil prices and the
rebuilding efforts in the Gulf may justify even higher rates.
Nonetheless, after 11 interest rate increases over 16 months, we believe that
the tightening cycle may be completed by the first quarter of 2006. Once the Fed
has communicated to the markets that neutral policy has been achieved, we would
expect the spread between the federal funds rate and the two-year Treasury
yield, which is typically positively sloped, to invert. That being said, at this
time, we are beginning to favor the longer sectors of our market. We believe the
two-year sector currently offers the greatest value from both a yield and
capital appreciation perspective. Yields exceeding 4.75% are currently
available, providing substantial protection against several more rate increases.
We recently increased our average duration target modestly to the 65-day range,
believing that home heating costs, when combined with already high gas prices,
may substantially impact consumer spending in the fourth quarter.
The portfolio's composition, as a percent of net assets, at the end of September
and as of our last report to shareholders is detailed below:
- --------------------------------------------------------------------------------
9/30/05 3/31/05
- --------------------------------------------------------------------------------
Bank Notes .......................................... 3.3% 2.4%
Certificates of Deposit ............................. 4.9 4.1
Certificates of Deposit--European ................... 3.1 0.6
Certificates of Deposit--Yankee* .................... 12.7 8.4
Commercial Paper .................................... 33.8 17.9
Corporate Notes ..................................... 3.0 3.9
Funding Agreements .................................. 7.4 6.8
Master Notes ........................................ 1.0 0.9
Medium-Term Notes ................................... 10.2 13.4
Promissory Notes .................................... 0.7 0.8
U.S. Government Agency Obligations--
Discount Notes .................................... 0.1 --
U.S. Government & Agency Obligations--
Non-Discount Notes ................................ 16.4 40.5
Repurchase Agreements ............................... 3.1 --
Short-Term Securities ............................... 0.6 --
Liabilities in Excess of Other Assets ............... (0.3) --
Other Assets Less Liabilities ....................... -- 0.3
------------------------
Total ............................................... 100.0% 100.0%
========================
* U.S. branches of foreign banks.
Richard J. Mejzak
Vice President and Portfolio Manager
October 7, 2005
WCMA MONEY FUND SEPTEMBER 30, 2005 5
Disclosure of Expenses
Shareholders of this Fund may incur the following charges: (a) expenses related
to transactions, including sales charges, redemption fees and exchange fees; and
(b) operating expenses, including advisory fees, distribution fees including
12(b)-1 fees, and other Fund expenses. The following example (which is based on
a hypothetical investment of $1,000 invested on April 1, 2005 and held through
September 30, 2005) is intended to assist shareholders both in calculating
expenses based on an investment in the Fund and in comparing these expenses with
similar costs of investing in other mutual funds.
The first table below provides information about actual account values and
actual expenses. In order to estimate the expenses a shareholder paid during the
period covered by this report, shareholders can divide their account value by
$1,000 and then multiply the result by the number in the first line under the
heading entitled "Expenses Paid During the Period."
The second table below provides information about hypothetical account values
and hypothetical expenses based on the Fund's actual expense ratio and an
assumed rate of return of 5% per year before expenses. In order to assist
shareholders in comparing the ongoing expenses of investing in this Fund and
other funds, compare the 5% hypothetical example with the 5% hypothetical
examples that appear in other funds' shareholder reports.
The expenses shown in the table are intended to highlight shareholders ongoing
costs only and do not reflect any transactional expenses, such as sales charges,
redemption fees, or exchange fees. Therefore, the second table is useful in
comparing ongoing expenses only, and will not help shareholders determine the
relative total expenses of owning different funds. If these transactional
expenses were included, shareholder expenses would have been higher.
Expenses Paid
Beginning Ending During the Period*
Account Value Account Value April 30, 2005 to
April 1, 2005 September 30, 2005 September 30, 2005
====================================================================================================================
Actual
====================================================================================================================
Class 1 $1,000 $1,008.70 $7.40
- --------------------------------------------------------------------------------------------------------------------
Class 2 $1,000 $1,011.60 $4.54
- --------------------------------------------------------------------------------------------------------------------
Class 3 $1,000 $1,013.20 $2.93
- --------------------------------------------------------------------------------------------------------------------
Class 4 $1,000 $1,013.20 $2.93
====================================================================================================================
Hypothetical (5% annual return before expenses)**
====================================================================================================================
Class 1 $1,000 $1,017.70 $7.44
- --------------------------------------------------------------------------------------------------------------------
Class 2 $1,000 $1,020.56 $4.56
- --------------------------------------------------------------------------------------------------------------------
Class 3 $1,000 $1,022.16 $2.94
- --------------------------------------------------------------------------------------------------------------------
Class 4 $1,000 $1,022.16 $2.94
- --------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.47% for Class 1, .90% for Class 2, .58% for Class 3
and .58% for Class 4), multiplied by the average account value over the
period, multiplied by 183/365 (to reflect the one-half year period shown).
Because the Fund is a feeder fund, the expense table example reflects the
expenses of both the feeder fund and the master fund in which it invests.
** Hypothetical 5% annual return before expenses is calculated by pro-rating
the number of days in the most recent fiscal half-year divided by 365.
6 WCMA MONEY FUND SEPTEMBER 30, 2005
Statement of Assets and Liabilities WCMA Money Fund
As of September 30, 2005
================================================================================================================================
Assets
- --------------------------------------------------------------------------------------------------------------------------------
Investment in Master Money Trust (the "Trust"),
at value (identified cost--$7,281,583,238) ................... $ 7,275,520,962
Prepaid expenses .............................................. 776,937
---------------
Total assets .................................................. 7,276,297,899
---------------
================================================================================================================================
Liabilities
- --------------------------------------------------------------------------------------------------------------------------------
Payables:
Distributor ................................................. $ 3,347,556
Other affiliates ............................................ 131,142
Administrator ............................................... 17,821 3,496,519
---------------
Other liabilities ............................................. 854
---------------
Total liabilities ............................................. 3,497,373
---------------
================================================================================================================================
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
Net assets .................................................... $ 7,272,800,526
===============
================================================================================================================================
Net Assets Consist of
- --------------------------------------------------------------------------------------------------------------------------------
Class 1 Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized ........................ $ 77,217,079
Class 2 Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized ........................ 266,423,417
Class 3 Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized ........................ 294,758,161
Class 4 Shares of beneficial interest, $.10 par value,
unlimited number of shares authorized ........................ 89,487,624
Paid-in capital in excess of par .............................. 6,550,976,521
Undistributed investment income--net .......................... $ 138,901
Accumulated realized capital losses allocated from the
Trust--net ................................................... (138,901)
Unrealized depreciation allocated from the Trust--net ......... (6,062,276)
---------------
Total accumulated losses--net ................................. (6,062,276)
---------------
Net Assets .................................................... $ 7,272,800,526
===============
================================================================================================================================
Net Asset Value
- --------------------------------------------------------------------------------------------------------------------------------
Class 1--Based on net assets of $771,589,962 and
772,170,787 shares of beneficial interest outstanding ........ $ 1.00
===============
Class 2--Based on net assets of $2,662,093,660 and
2,664,234,171 shares of beneficial interest outstanding ...... $ 1.00
===============
Class 3--Based on net assets of $2,945,155,475 and
2,947,581,610 shares of beneficial interest outstanding ...... $ 1.00
===============
Class 4--Based on net assets of $893,961,429 and
894,876,236 shares of beneficial interest outstanding ........ $ 1.00
===============
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2005 7
Statement of Operations WCMA Money Fund
For the Six Months Ended September 30, 2005
================================================================================================================================
Investment Income
- --------------------------------------------------------------------------------------------------------------------------------
Interest ...................................................... $ 320,823
Net investment income allocated from the Trust:
Interest and amortization of premium and discount earned .... 121,251,698
Securities lending--net ..................................... 4,310
Expenses .................................................... (5,617,433)
---------------
Total income .................................................. 115,959,398
---------------
================================================================================================================================
Expenses
- --------------------------------------------------------------------------------------------------------------------------------
Administration fees ........................................... $ 9,478,554
Account maintenance and distribution fees--Class 2 ............ 9,238,769
Account maintenance and distribution fees--Class 3 ............ 5,705,179
Account maintenance and distribution fees--Class 1 ............ 3,751,923
Registration fees ............................................. 2,408,572
Account maintenance and distribution fees--Class 4 ............ 1,844,601
Transfer agent fees--Class 3 .................................. 172,544
Transfer agent fees--Class 2 .................................. 154,204
Printing and shareholder reports .............................. 69,514
Transfer agent fees--Class 4 .................................. 56,777
Transfer agent fees--Class 1 .................................. 42,579
Professional fees ............................................. 29,820
Other ......................................................... 17,621
---------------
Total expenses before waiver and reimbursement ................ 32,970,657
Waiver and reimbursement of expenses .......................... (8,792,680)
---------------
Total expenses after waiver and reimbursement ................. 24,177,977
---------------
Investment income--net ........................................ 91,781,421
---------------
================================================================================================================================
Realized & Unrealized Gain (Loss) Allocated from the Trust--Net
- --------------------------------------------------------------------------------------------------------------------------------
Realized loss on investments--net ............................. (138,901)
Change in unrealized depreciation on investments--net ......... 146,906
---------------
Total realized and unrealized gain--net ....................... 8,005
---------------
Net Increase in Net Assets Resulting from Operations .......... $ 91,789,426
===============
See Notes to Financial Statements.
8 WCMA MONEY FUND SEPTEMBER 30, 2005
Statements of Changes in Net Assets WCMA Money Fund
For the Six For the
Months Ended Year Ended
September 30, March 31,
Increase (Decrease) in Net Assets: 2005 2005
================================================================================================================================
Operations
- --------------------------------------------------------------------------------------------------------------------------------
Investment income--net ........................................ $ 91,781,421 $ 82,206,303
Realized gain (loss)--net ..................................... (138,901) 155,326
Change in unrealized appreciation/depreciation--net ........... 146,906 (8,910,476)
-----------------------------------
Net increase in net assets resulting from operations .......... 91,789,426 73,451,153
-----------------------------------
================================================================================================================================
Dividends & Distributions to Shareholders
- --------------------------------------------------------------------------------------------------------------------------------
Investment income--net:
Class 1 ..................................................... (6,576,490) (3,473,807)
Class 2 ..................................................... (31,540,704) (25,587,530)
Class 3 ..................................................... (40,286,306) (39,201,342)
Class 4 ..................................................... (13,239,020) (13,943,624)
Realized gain--net:
Class 1 ..................................................... -- (16,303)
Class 2 ..................................................... -- (56,278)
Class 3 ..................................................... -- (61,601)
Class 4 ..................................................... -- (21,144)
-----------------------------------
Net decrease in net assets resulting from dividends
and distributions to shareholders ............................ (91,642,520) (82,361,629)
-----------------------------------
================================================================================================================================
Beneficial Interest Transactions
- --------------------------------------------------------------------------------------------------------------------------------
Net decrease in net assets derived from beneficial
interest transactions ........................................ (411,346,074) (729,160,194)
-----------------------------------
================================================================================================================================
Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets .................................. (411,199,168) (738,070,670)
Beginning of period ........................................... 7,683,999,694 8,422,070,364
-----------------------------------
End of period ................................................. $ 7,272,800,526 $ 7,683,999,694
===================================
* Undistributed investment income--net ...................... $ 138,901 --
===================================
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2005 9
Financial Highlights WCMA Money Fund
Class 1
------------------------------------------------------------------------
For the Six For the Year Ended For the Period
Months Ended March 31, March 20, 2003+
The following per share data and ratios have been derived September 30, -------------------------------- to March 31,
from information provided in the financial statements. 2005 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------------
Investment income--net ................. .0087 .0043 .0003 .0003
Realized and unrealized gain (loss)--net (.0007) (.0011) .0005 .0001
------------------------------------------------------------------------
Total from investment operations ....... .0080 .0032 .0008 .0004
------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net .............. (.0087) (.0043) (.0003) (.0003)
Realized gain--net .................. -- --* (.0001) --
------------------------------------------------------------------------
Total dividends and distributions ...... (.0087) (.0043) (.0004) (.0003)
------------------------------------------------------------------------
Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================================================================
Total investment return ................ .87%@ .44% .04% .04%
========================================================================
===================================================================================================================================
Ratios to Average Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and
reimbursement** ....................... 1.47%++ 1.35% 1.12% .01%
========================================================================
Total expenses** ....................... 1.47%++ 1.47% 1.49% .01%
========================================================================
Total investment income and realized
gain (loss)--net ...................... 1.73%++ .43% .04% .03%
========================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 771,590 $ 869,839 $ 927,790 $ 25
========================================================================
* Amount is less than $(.0001) per share.
** Includes the Fund's share of the Trust's allocated expenses.
+ Effective date of the Fund's registration.
++ Annualized.
@ Aggregate total investment return.
See Notes to Financial Statements.
10 WCMA MONEY FUND SEPTEMBER 30, 2005
Financial Highlights (continued) WCMA Money Fund
Class 2
------------------------------------------------------------------------
For the Six For the Year Ended For the Period
Months Ended March 31, March 20, 2003+
The following per share data and ratios have been derived September 30, -------------------------------- to March 31,
from information provided in the financial statements. 2005 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------------
Investment income--net ................. .0115 .0088 .0024 .0003
Realized and unrealized gain (loss)--net (.0008) (.0011) .0006 .0001
------------------------------------------------------------------------
Total from investment operations ....... .0107 .0077 .0030 .0004
------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net .............. (.0115) (.0088) (.0024) (.0003)
Realized gain--net .................. -- --* (.0001) --
------------------------------------------------------------------------
Total dividends and distributions ...... (.0115) (.0088) (.0025) (.0003)
------------------------------------------------------------------------
Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================================================================
Total investment return ................ 1.16%@ .89% .25% .04%
========================================================================
===================================================================================================================================
Ratios to Average Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and
reimbursement** ....................... .90%++ .91% .91% .01%
========================================================================
Total expenses** ....................... 1.15%++ 1.15% 1.17% .01%
========================================================================
Total investment income and realized
gain (loss)--net ...................... 2.30%++ .87% .24% .03%
========================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,662,094 $ 2,723,114 $ 3,041,555 $ 25
========================================================================
* Amount is less than $(.0001) per share.
** Includes the Fund's share of the Trust's allocated expenses.
+ Effective date of the Fund's registration.
++ Annualized.
@ Aggregate total investment return.
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2005 11
Financial Highlights (continued) WCMA Money Fund
Class 3
------------------------------------------------------------------------
For the Six For the Year Ended For the Period
Months Ended March 31, March 20, 2003+
The following per share data and ratios have been derived September 30, -------------------------------- to March 31,
from information provided in the financial statements. 2005 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------------
Investment income--net ................. .0131 .0120 .0056 .0003
Realized and unrealized gain (loss)--net (.0008) (.0011) .0006 .0001
------------------------------------------------------------------------
Total from investment operations ....... .0123 .0109 .0062 .0004
------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net .............. (.0131) (.0120) (.0056) (.0003)
Realized gain--net .................. -- --* (.0001) --
------------------------------------------------------------------------
Total dividends and distributions ...... (.0131) (.0120) (.0057) (.0003)
------------------------------------------------------------------------
Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================================================================
Total investment return ................ 1.32%@ 1.21% .57% .04%
========================================================================
===================================================================================================================================
Ratios to Average Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and
reimbursement** ....................... .58%++ .58% .59% .01%
========================================================================
Total expenses** ....................... .85%++ .85% .87% .01%
========================================================================
Total investment income and realized
gain (loss)--net ...................... 2.63%++ 1.20% .57% .03%
========================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 2,945,155 $ 3,032,612 $ 3,337,395 $ 25
========================================================================
* Amount is less than $(.0001) per share.
** Includes the Fund's share of the Trust's allocated expenses.
+ Effective date of the Fund's registration.
++ Annualized.
@ Aggregate total investment return.
See Notes to Financial Statements.
12 WCMA MONEY FUND SEPTEMBER 30, 2005
Financial Highlights (concluded) WCMA Money Fund
Class 4
------------------------------------------------------------------------
For the Six For the Year Ended For the Period
Months Ended March 31, March 20, 2003+
The following per share data and ratios have been derived September 30, -------------------------------- to March 31,
from information provided in the financial statements. 2005 2005 2004 2003
===================================================================================================================================
Per Share Operating Performance
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period ... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------------------------------------------------------------------
Investment income--net ................. .0131 .0120 .0056 .0003
Realized and unrealized gain (loss) .... (.0009) (.0011) .0005 .0001
------------------------------------------------------------------------
Total from investment operations ....... .0122 .0109 .0061 .0004
------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net .............. (.0131) (.0120) (.0056) (.0003)
Realized gain--net .................. -- --* (.0001) --
------------------------------------------------------------------------
Total dividends and distributions ...... (.0131) (.0120) (.0057) (.0003)
------------------------------------------------------------------------
Net asset value, end of period ......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========================================================================
Total investment return ................ 1.32%@ 1.21% .57% .04%
========================================================================
===================================================================================================================================
Ratios to Average Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver and
reimbursement** ....................... .58%++ .58% .59% .01%
========================================================================
Total expenses** ....................... .84%++ .84% .87% .01%
========================================================================
Total investment income and realized
gain (loss)--net ...................... 2.62%++ 1.22% .57% .03%
========================================================================
===================================================================================================================================
Supplemental Data
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $ 893,961 $ 1,058,434 $ 1,115,330 $ 25
========================================================================
* Amount is less than $(.0001) per share.
** Includes the Fund's share of the Trust's allocated expenses.
+ Effective date of the Fund's registration.
++ Annualized.
@ Aggregate total investment return.
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2005 13
Notes to Financial Statements WCMA Money Fund
1. Significant Accounting Policies:
WCMA Money Fund (the "Fund") is registered under the Investment Company Act of
1940, as amended, as a no load, diversified, open-end management investment
company. The Fund seeks to achieve its investment objective by investing all of
its assets in the Master Money Trust (the "Trust"), which has the same
investment objective and strategies as the Fund. The value of the Fund's
investment in the Trust reflects the Fund's proportionate interest in the net
assets of the Trust. The performance of the Fund is directly affected by the
performance of the Trust. The financial statements of the Trust, including the
Schedule of Investments, are included elsewhere in this report and should be
read in conjunction with the Fund's financial statements. The Fund's financial
statements are prepared in conformity with U.S. generally accepted accounting
principles, which may require the use of management accruals and estimates.
Actual results may differ from these estimates. These unaudited financial
statements reflect all adjustments, which are, in the opinion of management,
necessary to present a fair statement of the results for the interim period. All
such adjustments are of a normal, recurring nature. The percentage of the Trust
owned by the Fund at September 30, 2005 was 51.1%. The Fund is divided into
multiple classes, designated Class 1, Class 2, Class 3 and Class 4. Each Class
1, Class 2, Class 3 and Class 4 Share represents interests in the same assets of
the Fund and has identical voting, dividend, liquidation and other rights and
the same terms and conditions, except that each class bears certain expenses
related to the distribution of such shares and the incremental transfer agency
costs resulting from the conversion of shares and has exclusive voting rights
with respect to matters relating to such account maintenance and distribution
expenditures. Income, expenses (other than expenses attributed to a specific
class) and realized and unrealized gains and losses are allocated daily to each
class based on its relative net assets. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments -- The Fund records its investments in the Trust at
fair value. Valuation of securities held by the Trust is discussed in Note 1(a)
of the Trust's Notes to Financial Statements, which are included elsewhere in
this report.
(b) Investment income and expenses -- The Fund records daily its proportionate
share of the Trust's income, expenses and realized and unrealized gains and
losses. In addition, the Fund accrues its own income and expenses.
(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 substantially all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
(d) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(e) 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.
(f) Investment transactions -- Investment transactions in the Trust are
accounted for on a trade date basis.
2. Transactions with Affiliates:
The Fund has entered into an Administration Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), a wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."),
which is the limited partner. The Fund pays a monthly fee at an annual rate of
..25% of the Fund's average daily net assets for the performance of
administrative services (other than investment advice and related portfolio
activities) necessary for the operation of the Fund.
The Fund has adopted Distribution Plans in compliance with Rule 12b-1 under the
Investment Company Act of 1940, pursuant to which Merrill Lynch, Pierce, Fenner
& Smith Incorporated ("MLPF&S"), an affiliate of FAM, receives account
maintenance and distribution fees from the Fund. The fees are accrued daily and
paid monthly at annual rates based upon the average daily net assets of the
shares of the Fund as follows:
- --------------------------------------------------------------------------------
Account Distribution
Maintenance Fee Fee
- --------------------------------------------------------------------------------
Class 1 ............................ .25% .75%
Class 2 ............................ .25% .425%
Class 3 ............................ .25% .125%
Class 4 ............................ .25% .125%
- --------------------------------------------------------------------------------
The ongoing account maintenance fee compensates MLPF&S for providing account
maintenance services to shareholders. The ongoing distribution fee compensates
MLPF&S for providing shareholder and distribution related services to
14 WCMA MONEY FUND SEPTEMBER 30, 2005
Notes to Financial Statements (concluded) WCMA Money Fund
shareholders. The Fund has entered into a contractual arrangement with FAM and
MLPF&S to waive and/or reimburse a portion of the Fund's fees and expenses to
ensure that the net expenses for the Fund's Class 2 Shares is .32% higher than
that of CMA Money Fund, and Class 3 and Class 4 Shares is equal to that of CMA
Money Fund. The fee/expense waiver or reimbursement includes account maintenance
and distribution fees. This arrangement has a one-year term and is renewable.
The Distributor has voluntarily agreed to waive a portion of its distribution
fees in order to ensure that each class of shareholders receives a positive
yield on each daily dividend. For the six months ended September 30, 2005, FAM
and MLPF&S earned fees of $9,478,554 and $20,540,472, respectively, of which
$8,792,680 was waived and/or reimbursed.
Financial Data Services, Inc. ("FDS"), a wholly-owned subsidiary of ML & Co., is
the Fund's transfer agent. Interest is earned by the Fund from FDS based on the
difference, if any, between estimated and actual daily beneficial share
activity, which results in uninvested net proceeds from sales of Fund shares.
Certain officers and/or trustees of the Fund are officers and/or directors of
FAM, PSI, FDS, and/or ML & Co.
3. Shares of Beneficial Interest:
Net decrease in net assets derived from beneficial interest transactions was
$411,346,074 and $729,160,194 for the six months ended September 30, 2005 and
for the year ended March 31, 2005, respectively.
- -------------------------------------------------------------------------------
Class 1 Shares for the Six Months Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 5,286,571,420 $ 5,286,571,420
Shares issued to shareholders in
reinvestment of dividends ..... 6,576,317 6,576,317
---------------------------------------
Total issued ..................... 5,293,147,737 5,293,147,737
Shares redeemed .................. (5,391,440,321) (5,391,440,321)
---------------------------------------
Net decrease ..................... (98,292,584) $ (98,292,584)
=======================================
- -------------------------------------------------------------------------------
Class 1 Shares for the Year Dollar
Ended March 31, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 10,727,013,888 $ 10,727,013,888
Shares issued to shareholders
in reinvestment of dividends
and distributions ............. 3,489,645 3,489,645
---------------------------------------
Total issued ..................... 10,730,503,533 10,730,503,533
Shares redeemed .................. (10,787,610,308) (10,787,610,308)
---------------------------------------
Net decrease ..................... (57,106,775) $ (57,106,775)
=======================================
- -------------------------------------------------------------------------------
Class 2 Shares for the Six Months Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 9,401,405,380 $ 9,401,405,380
Shares issued to shareholders in
reinvestment of dividends ..... 31,540,717 31,540,717
---------------------------------------
Total issued ..................... 9,432,946,097 9,432,946,097
Shares redeemed .................. (9,494,016,667) (9,494,016,667)
---------------------------------------
Net decrease ..................... (61,070,570) $ (61,070,570)
=======================================
- -------------------------------------------------------------------------------
Class 2 Shares for the Year Dollar
Ended March 31, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 19,076,403,931 $ 19,076,403,931
Shares issued to shareholders
in reinvestment of dividends
and distributions ............. 25,642,525 25,642,525
---------------------------------------
Total issued ..................... 19,102,046,456 19,102,046,456
Shares redeemed .................. (19,417,249,369) (19,417,249,369)
---------------------------------------
Net decrease ..................... (315,202,913) $ (315,202,913)
=======================================
- -------------------------------------------------------------------------------
Class 3 Shares for the Six Months Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 14,165,013,367 $ 14,165,013,367
Shares issued to shareholders in
reinvestment of dividends ..... 40,286,306 40,286,306
---------------------------------------
Total issued ..................... 14,205,299,673 14,205,299,673
Shares redeemed .................. (14,292,800,434) (14,292,800,434)
---------------------------------------
Net decrease ..................... (87,500,761) $ (87,500,761)
=======================================
- -------------------------------------------------------------------------------
Class 3 Shares for the Year Dollar
Ended March 31, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 29,412,629,830 $ 29,412,629,830
Shares issued to shareholders
in reinvestment of dividends
and distributions ............. 39,261,452 39,261,452
---------------------------------------
Total issued ..................... 29,451,891,282 29,451,891,282
Shares redeemed .................. (29,753,093,570) (29,753,093,570)
---------------------------------------
Net decrease ..................... (301,202,288) $ (301,202,288)
=======================================
- -------------------------------------------------------------------------------
Class 4 Shares for the Six Months Dollar
Ended September 30, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 8,206,286,430 $ 8,206,286,430
Shares issued to shareholders in
reinvestment of dividends ..... 13,239,019 13,239,019
---------------------------------------
Total issued ..................... 8,219,525,449 8,219,525,449
Shares redeemed .................. (8,384,007,608) (8,384,007,608)
---------------------------------------
Net decrease ..................... (164,482,159) $ (164,482,159)
=======================================
- -------------------------------------------------------------------------------
Class 4 Shares for the Year Dollar
Ended March 31, 2005 Shares Amount
- -------------------------------------------------------------------------------
Shares sold ...................... 19,173,357,780 $ 19,173,357,780
Shares issued to shareholders
in reinvestment of dividends
and distributions ............. 13,964,268 13,964,268
---------------------------------------
Total issued ..................... 19,187,322,048 19,187,322,048
Shares redeemed .................. (19,242,970,266) (19,242,970,266)
---------------------------------------
Net decrease ..................... (55,648,218) $ (55,648,218)
=======================================
WCMA MONEY FUND SEPTEMBER 30, 2005 15
Schedule of Investments Master Money Trust (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
=================================================================================================
Bank Notes--3.3%
=================================================================================================
Bank of $375,000 3.815%+ 2/22/2006 $ 375,000
America, NA
- -------------------------------------------------------------------------------------------------
LaSalle National 100,000 4.00+ 4/24/2006 99,805
Bank
- -------------------------------------------------------------------------------------------------
Total Bank Notes (Cost--$475,000) .............................................. 474,805
=================================================================================================
Certificates of Deposit--4.9%
=================================================================================================
First Tennessee 200,000 3.64 10/17/2005 199,998
Bank NA
- -------------------------------------------------------------------------------------------------
Wells Fargo 500,000 3.80+ 12/13/2005 500,000
Bank, NA
- -------------------------------------------------------------------------------------------------
Total Certificates of Deposit (Cost--$700,000) ................................. 699,998
=================================================================================================
Certificates of Deposit--European--3.1%
=================================================================================================
Banco Bilbao 73,000 3.59 12/19/2005 72,923
Vizcaya
Argentaria SA
- -------------------------------------------------------------------------------------------------
Barclays Bank 150,000 3.325 10/11/2005 149,983
Plc 125,000 3.805 6/20/2006 124,510
- -------------------------------------------------------------------------------------------------
CALYON 100,000 3.27 11/30/2005 99,868
- -------------------------------------------------------------------------------------------------
Total Certificates of Deposit--European
(Cost--$447,977) ............................................................... 447,284
=================================================================================================
Certificates of Deposit--Yankee--12.7%
=================================================================================================
ABN AMRO 99,000 3.648+ 2/13/2006 98,988
Bank NV
- -------------------------------------------------------------------------------------------------
Barclays Bank Plc 325,000 3.755 11/17/2005 325,000
- -------------------------------------------------------------------------------------------------
Canadian 97,000 2.955 12/30/2005 96,715
Imperial Bank 180,000 3.828+ 10/13/2006 180,000
of Commerce
- -------------------------------------------------------------------------------------------------
DEPFA-Bank 75,000 3.02 10/21/2005 74,968
Europe Plc
- -------------------------------------------------------------------------------------------------
Fortis Bank 90,000 3.43 12/30/2005 89,851
100,000 3.46 12/30/2005 99,842
93,500 3.95 4/20/2006 93,336
66,500 3.97 8/11/2006 66,259
- -------------------------------------------------------------------------------------------------
HBOS Treasury 61,000 2.95 12/30/2005 60,820
Services Plc 184,000 3.05 12/30/2005 183,506
- -------------------------------------------------------------------------------------------------
Royal Bank of 100,000 3.91 9/06/2006 99,558
Canada
- -------------------------------------------------------------------------------------------------
Toronto- 100,000 2.95 12/30/2005 99,705
Dominion Bank 98,000 3.03 12/30/2005 97,731
98,000 3.825 6/26/2006 97,618
40,000 3.95 7/24/2006 39,861
- -------------------------------------------------------------------------------------------------
Total Certificates of Deposit--Yankee
(Cost--$1,806,768) ............................................................. 1,803,758
=================================================================================================
Commercial Paper--33.8%
=================================================================================================
Amstel 104,972 3.75 10/25/2005 104,699
Funding Corp. 157,528 3.80 10/28/2005 157,062
- -------------------------------------------------------------------------------------------------
Amsterdam 65,000 3.61 10/05/2005 64,967
Funding Corp. 81,743 3.72 10/17/2005 81,599
- -------------------------------------------------------------------------------------------------
Blue Ridge Asset 50,000 3.75 10/19/2005 49,901
Funding Corp.
- -------------------------------------------------------------------------------------------------
CRC Funding, LLC 50,000 3.74 10/20/2005 49,896
- -------------------------------------------------------------------------------------------------
Clipper 118,797 3.75 10/03/2005 118,760
Receivables Corp.
- -------------------------------------------------------------------------------------------------
Compass 37,000 3.75 10/18/2005 36,930
Securitization LLC 186,690 3.77 10/24/2005 186,222
- -------------------------------------------------------------------------------------------------
Edison Asset 99,000 3.70 10/14/2005 98,857
Securitization, LLC 78,510 3.75 10/27/2005 78,289
- -------------------------------------------------------------------------------------------------
Falcon Asset 201,349 3.70 10/17/2005 200,997
Securitization 168,067 3.71 10/18/2005 167,755
Corp. 80,584 3.75 10/25/2005 80,374
75,000 3.78 10/31/2005 74,756
- -------------------------------------------------------------------------------------------------
Fortis Funding LLC 100,000 3.47 12/22/2005 99,090
- -------------------------------------------------------------------------------------------------
Grampian 150,000 3.75 10/13/2005 149,797
Funding Ltd.
- -------------------------------------------------------------------------------------------------
Greyhawk 150,000 3.75 10/25/2005 149,609
Funding LLC 113,000 3.70 11/15/2005 112,457
- -------------------------------------------------------------------------------------------------
Jupiter 71,741 3.66 10/14/2005 71,639
Securitization 47,795 3.68 10/17/2005 47,711
Corp. 85,435 3.74 10/19/2005 85,266
108,440 3.77 10/31/2005 108,088
- -------------------------------------------------------------------------------------------------
Klio II Funding, Ltd. 65,105 3.89 10/05/2005 65,070
- -------------------------------------------------------------------------------------------------
Lehman Brothers 46,000 3.863+ 12/05/2005 46,000
Holdings Inc. 125,000 3.863+ 12/06/2005 125,000
- -------------------------------------------------------------------------------------------------
Morgan Stanley 76,000 3.893+ 2/21/2006 76,000
85,000 3.893+ 3/03/2006 85,000
41,300 3.893+ 3/07/2006 41,300
- -------------------------------------------------------------------------------------------------
Newport Funding 75,000 3.74 10/19/2005 74,852
Corp.
- -------------------------------------------------------------------------------------------------
Old Line 198,819 3.73 10/18/2005 198,448
Funding, LLC 75,344 3.77 11/02/2005 75,084
- -------------------------------------------------------------------------------------------------
Park Avenue 100,000 3.70 10/18/2005 99,815
Receivables Co. 51,334 3.77 10/28/2005 51,183
LLC
- -------------------------------------------------------------------------------------------------
Preferred 176,634 3.65 10/14/2005 176,380
Receivables 123,000 3.70 10/17/2005 122,785
Funding Corp.
- -------------------------------------------------------------------------------------------------
Ranger Funding 81,331 3.61 10/04/2005 81,298
Co. LLC 110,000 3.73 10/17/2005 109,806
- -------------------------------------------------------------------------------------------------
SEB AB 150,000 3.766+ 1/20/2006 150,000
- -------------------------------------------------------------------------------------------------
Sheffield 106,025 3.68 10/11/2005 105,906
Receivables Corp. 343,975 3.76 10/21/2005 343,221
- -------------------------------------------------------------------------------------------------
Solitaire Funding 235,443 3.64 10/21/2005 234,934
LLC
- -------------------------------------------------------------------------------------------------
Swedbank 75,000 3.76 10/31/2005 74,757
(Forenings-
Sparbanken)
- -------------------------------------------------------------------------------------------------
Thunder Bay 105,118 3.73 10/17/2005 104,933
Funding LLC
- -------------------------------------------------------------------------------------------------
Total Commercial Paper
(Cost--$4,816,612) ............................................................. 4,816,493
=================================================================================================
Corporate Notes--3.0%
=================================================================================================
Blue Heron 93,000 3.86+ 2/22/2006 93,000
Funding IX Ltd.
- -------------------------------------------------------------------------------------------------
Newcastle CDO 60,000 3.86+ 3/24/2006 60,000
III, Ltd. 40,000 3.86+ 9/25/2006 40,000
- -------------------------------------------------------------------------------------------------
16 WCMA MONEY FUND SEPTEMBER 30, 2005
Schedule of Investments (continued) Master Money Trust (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
=================================================================================================
Corporate Notes (concluded)
=================================================================================================
Permanent $114,000 3.688%+ 3/10/2006 $ 114,000
Financing Plc 114,000 3.663+ 6/12/2006 114,000
- -------------------------------------------------------------------------------------------------
Total Corporate Notes (Cost--$421,000) ......................................... 421,000
=================================================================================================
Funding Agreements (a)--7.4%
=================================================================================================
Allstate Life 45,000 3.793+ 11/01/2005 45,000
Insurance Co.
- -------------------------------------------------------------------------------------------------
General Electric 50,000 3.773+ 11/01/2005 50,000
Capital Assurance 150,000 3.753+ 12/01/2005 150,000
Co.
- -------------------------------------------------------------------------------------------------
ING USA Annuity 50,000 3.859+ 8/18/2006 50,000
and Life Insurance
Co.
- -------------------------------------------------------------------------------------------------
Jackson National 15,000 3.773+ 5/01/2006 15,000
Life Insurance Co.
- -------------------------------------------------------------------------------------------------
MetLife Funding, 88,000 3.793+ 2/01/2006 88,000
Inc. 165,000 3.793+ 4/03/2006 165,000
- -------------------------------------------------------------------------------------------------
Monumental Life 145,000 3.838+ 2/15/2006 145,000
Insurance Co.
- -------------------------------------------------------------------------------------------------
New York Life 226,000 3.73+ 5/26/2006 226,000
Insurance Co.
- -------------------------------------------------------------------------------------------------
The Travelers 45,000 3.753+ 3/01/2006 45,000
Insurance Co. 25,000 3.763+ 3/01/2006 25,000
25,000 3.753+ 5/01/2006 25,000
25,000 3.822+ 9/15/2006 25,000
- -------------------------------------------------------------------------------------------------
Total Funding Agreements
(Cost--$1,054,000) ............................................................. 1,054,000
=================================================================================================
Master Notes--1.0%
=================================================================================================
JPMorgan 139,000 3.703+ 5/16/2006 139,000
Securities, Inc.
- -------------------------------------------------------------------------------------------------
Total Master Notes (Cost--$139,000) ............................................ 139,000
=================================================================================================
Medium-Term Notes--10.2%
=================================================================================================
ASIF Global 54,000 3.82+ 10/23/2006 54,000
Financing
- -------------------------------------------------------------------------------------------------
American Honda 50,000 3.71+ 11/09/2005 49,998
Finance Corp.
- -------------------------------------------------------------------------------------------------
General Electric 37,500 3.70+ 10/24/2005 37,502
Capital Corp. 290,605 3.889+ 9/15/2006 290,605
- -------------------------------------------------------------------------------------------------
Goldman Sachs 202,600 3.758+ 10/13/2006 202,600
Group, Inc.
- -------------------------------------------------------------------------------------------------
HSBC Finance 143,125 3.82+ 10/24/2006 143,125
Inc. 47,000 3.713+ 10/27/2006 47,033
- -------------------------------------------------------------------------------------------------
MetLife 60,000 3.67+ 10/06/2006 60,000
Funding, Inc. 50,500 3.828+ 10/13/2006 50,500
- -------------------------------------------------------------------------------------------------
Nationwide 52,500 4.03+ 10/27/2006 52,500
Building Society
- -------------------------------------------------------------------------------------------------
Northern Rock Plc 91,000 3.838+ 10/06/2006 90,997
- -------------------------------------------------------------------------------------------------
Restructured 60,000 3.803+ 5/02/2006 60,000
Asset Securities
with Enhanced
Returns, Series
1998-MM-7-1 Trust
- -------------------------------------------------------------------------------------------------
Stanfield Victoria 32,000 3.863+ 5/10/2006 31,996
Finance Ltd. 55,500 3.82+ 5/15/2006 55,497
75,000 4.11 8/01/2006 74,580
- -------------------------------------------------------------------------------------------------
Toyota Motor 50,000 3.646+ 10/03/2006 50,000
Credit Corp.
- -------------------------------------------------------------------------------------------------
Westpac Banking 44,000 3.844+ 10/11/2006 43,993
Corp.
- -------------------------------------------------------------------------------------------------
White Pine 50,000 3.81+ 1/25/2006 49,997
Finance Corp.
- -------------------------------------------------------------------------------------------------
Total Medium-Term Notes
(Cost--$1,445,342) ............................................................. 1,444,923
=================================================================================================
Promissory Notes--0.7%
=================================================================================================
Goldman Sachs 100,000 3.933+ 1/13/2006 100,000
Group, Inc.
- -------------------------------------------------------------------------------------------------
Total Promissory Notes (Cost--$100,000) ........................................ 100,000
=================================================================================================
U.S. Government Agency Obligations--
Discount Notes--0.1%
=================================================================================================
Federal Home 11,955 3.77 8/25/2006 11,505
Loan Bank System
- -------------------------------------------------------------------------------------------------
Total U.S. Government Agency Obligations--
Discount Notes--(Cost--$11,543) ................................................ 11,505
=================================================================================================
U.S. Government & Agency Obligations--
Non-Discount Notes--16.4%
=================================================================================================
Fannie Mae 55,000 2.10 10/21/2005 54,949
52,510 2.375 5/04/2006 51,938
- -------------------------------------------------------------------------------------------------
Federal Farm 82,000 3.732+ 2/21/2006 81,994
Credit Banks 50,000 3.74+ 5/24/2006 49,984
50,000 3.73+ 11/24/2006 49,989
44,950 3.631+ 4/04/2007 44,927
50,000 3.76+ 9/27/2007 49,985
54,750 3.746+ 2/20/2008 54,737
- -------------------------------------------------------------------------------------------------
Federal Home 170,000 3.505+ 10/03/2005 170,000
Loan Bank 85,000 2.25 5/15/2006 83,959
System 500,000 3.702+ 8/21/2006 499,735
65,000 3.125 9/15/2006 64,256
49,500 2.75 11/15/2006 48,626
49,500 3.25 11/29/2006 48,873
25,000 3.75 11/30/2006 24,782
59,235 3.375 12/15/2006 58,598
165,000 3.80 12/29/2006 163,850
54,000 3.45 1/10/2007 53,378
50,500 4.00 6/13/2007 50,114
- -------------------------------------------------------------------------------------------------
Freddie Mac 60,000 2.15 10/28/2005 59,919
49,000 2.41 11/04/2005 48,940
100,000 2.30 11/17/2005 99,787
36,185 2.375 11/25/2005 36,106
102,000 2.35 12/09/2005 101,694
27,600 2.55 5/10/2006 27,319
74,500 3.00 11/09/2006 73,219
30,000 3.75 11/15/2006 29,794
50,000 4.45 9/28/2007 49,745
25,000 4.625 10/05/2007 25,000
- -------------------------------------------------------------------------------------------------
U.S. Treasury Notes 32,000 1.50 3/31/2006 (d) 31,624
50,000 2.50 10/31/2006 (d) 49,146
- -------------------------------------------------------------------------------------------------
Total U.S. Government & Agency Obligations--
Non-Discount Notes (Cost--$2,345,314) 2,336,967
- -------------------------------------------------------------------------------------------------
WCMA MONEY FUND SEPTEMBER 30, 2005 17
Schedule of Investments (continued) Master Money Trust (in Thousands)
Face
Amount Issue Value
=================================================================================================
Repurchase Agreements--3.1%
=================================================================================================
$444,765 UBS Securities LLC, purchased on 9/30/2005
to yield 3.83% to 10/03/2005, repurchase
price $444,907, collateralized by Farmer Mac
Discount Note, due 10/11/2005, Federal Home
Loan Bank, 2.05% to 5.863% due 6/15/2018,
FICO STRIP*** due 9/26/2016, FICO STRIP***
Principal Only due 11/30/2017, FNMA STRIP***
due 11/15/2005 to 11/15/2030, FNMA STRIP***
Principal Only due 1/15/2030, FNMA, 3.75%
due 5/17/2007, Sallie Mae due 10/03/2022,
FNMA, 2.25% due 12/30/2005 and Tennessee
Valley Authority, 4.70% to 7.125% due
11/13/2008 to 7/15/2033 $ 444,765
- -------------------------------------------------------------------------------------------------
Total Repurchase Agreements
(Cost--$444,765) ............................................................... 444,765
Beneficial
Interest
=================================================================================================
Short-Term Securities--0.6%
=================================================================================================
$82,980 Merrill Lynch Liquidity Series, LLC
Money Market Series (b)(c) $ 82,980
- -------------------------------------------------------------------------------------------------
Total Short-Term Securities (Cost--$82,980) .................................... 82,980
- -------------------------------------------------------------------------------------------------
Total Investments
(Cost--$14,290,301**)--100.3% .................................................. 14,277,478
Liabilities in Excess of Other Assets--(0.3%) .................................. (46,436)
-----------
Net Assets--100.0% ............................................................. $14,231,042
===========
* 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. Other securities bear interest at the
rates shown, payable at fixed dates through maturity. Interest rates on
variable rate securities are adjustable periodically based upon
appropriate indexes. The interest rates shown are the rates in effect at
September 30, 2005.
** The cost and unrealized appreciation (depreciation) of investments as of
September 30, 2005, as computed for federal income tax purposes, were as
follows:
Aggregate cost ........................................ $ 14,290,301
================
Gross unrealized appreciation ......................... --@
Gross unrealized depreciation ......................... $ (12,823)
----------------
Net unrealized depreciation ........................... $ (12,823)
================
@ Amount is less than $1,000.
*** Separately Traded Registered Interest and Principal of Securities.
+ Variable rate notes.
(a) Restricted securities as to resale, representing 7.4% of net assets, were
as follows:
------------------------------------------------------------------------------------------------------------------------------
Issue Acquisition Date Cost Value
------------------------------------------------------------------------------------------------------------------------------
Allstate Life Insurance Co., 3.793% due 11/01/2005 11/01/2004 $ 45,000 $ 45,000
General Electric Capital Assurance Co.:
3.773% due 11/01/2005 11/01/2004 50,000 50,000
3.753% due 12/01/2005 12/01/2004 150,000 150,000
ING USA Annuity and Life Insurance Co., 3.859% due 8/18/2006 7/18/2005 50,000 50,000
Jackson National Life Insurance Co., 3.773% due 5/01/2006 5/02/2005 15,000 15,000
MetLife Funding, Inc.:
3.793% due 2/01/2006 2/01/2005 88,000 88,000
3.793% due 4/03/2006 4/01/2005 165,000 165,000
Monumental Life Insurance Co., 3.838% due 2/15/2006 2/17/2005 145,000 145,000
New York Life Insurance Co., 3.73% due 5/26/2006 5/27/2005 226,000 226,000
The Travelers Insurance Co.:
3.753% due 3/01/2006 3/01/2005 45,000 45,000
3.763% due 3/01/2006 3/01/2005 25,000 25,000
3.753% due 5/01/2006 5/02/2005 25,000 25,000
3.822% due 9/15/2006 9/16/2005 25,000 25,000
------------------------------------------------------------------------------------------------------------------------------
Total $1,054,000 $1,054,000
========== ==========
(b) Investments in companies considered to be an affiliate of the Trust, for
purposes of Section 2(a)(3) of the Investment Company Act of 1940, were as
follows:
---------------------------------------------------------------------------------------
Affiliate Net Activity Interest Income
---------------------------------------------------------------------------------------
Merrill Lynch Liquidity Series, LLC Money Market Series $82,980 $8
---------------------------------------------------------------------------------------
(c) Security was purchased with cash proceeds from securities loans.
(d) Security, or portion of security, is on loan.
See Notes to Financial Statements.
18 WCMA MONEY FUND SEPTEMBER 30, 2005
Statement of Assets and Liabilities Master Money Trust
As of September 30, 2005
=========================================================================================================================
Assets
- -------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at
value (including securities loaned of $80,770,194)
(identified cost--$14,207,320,597) ................ $ 14,194,498,240
Investments in affiliated securities, at value
(identified cost--$82,980,000) .................... 82,980,000
Cash ............................................... 1,228
Receivables:
Interest ....................................... $ 56,186,965
Securities sold ................................ 6,048,768
Contributions .................................. 1,147,567
Securities lending ............................. 1,926 63,385,226
-----------------
Prepaid expenses ................................... 52,097
-----------------
Total assets ....................................... 14,340,916,791
-----------------
=========================================================================================================================
Liabilities
- -------------------------------------------------------------------------------------------------------------------------
Collateral on securities loaned, at value .......... 82,980,000
Payables:
Securities purchased ........................... 25,000,000
Investment adviser ............................. 1,469,125
Other affiliates ............................... 158,507 26,627,632
-----------------
Accrued expenses and other liabilities ............. 266,966
-----------------
Total liabilities .................................. 109,874,598
-----------------
=========================================================================================================================
Net Assets
- -------------------------------------------------------------------------------------------------------------------------
Net assets ......................................... $ 14,231,042,193
=================
=========================================================================================================================
Net Assets Consist of
- -------------------------------------------------------------------------------------------------------------------------
Investors' capital ................................. $ 14,243,864,550
Unrealized depreciation--net ....................... (12,822,357)
-----------------
Net Assets ......................................... $ 14,231,042,193
=================
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2005 19
Statement of Operations Master Money Trust
For the Six Months Ended September 30, 2005
=========================================================================================================================
Investment Income
- -------------------------------------------------------------------------------------------------------------------------
Interest and amortization of premium and
discount earned .................................... $ 236,190,063
Securities lending--net ............................ 8,322
-----------------
Total income ....................................... 236,198,385
-----------------
=========================================================================================================================
Expenses
- -------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ........................... $ 9,682,107
Accounting services ................................ 900,189
Custodian fees ..................................... 176,426
Trustees' fees and expenses ........................ 53,690
Professional fees .................................. 41,984
Pricing fees ....................................... 22,925
Printing and shareholder reports ................... 1,788
Other .............................................. 73,892
-----------------
Total expenses ..................................... 10,953,001
-----------------
Investment income--net ............................. 225,245,384
-----------------
=========================================================================================================================
Realized & Unrealized Gain (Loss)--Net
- -------------------------------------------------------------------------------------------------------------------------
Realized loss on investments--net .................. (266,920)
Change in unrealized depreciation on investments--net 406,739
-----------------
Total realized and unrealized gain--net ............ 139,819
-----------------
Net Increase in Net Assets Resulting from Operations $ 225,385,203
=================
See Notes to Financial Statements.
20 WCMA MONEY FUND SEPTEMBER 30, 2005
Statements of Changes in Net Assets Master Money Trust
For the Six For the
Months Ended Year Ended
September 30, March 31,
Increase (Decrease) in Net Assets: 2005 2005
=========================================================================================================================
Operations
- -------------------------------------------------------------------------------------------------------------------------
Investment income--net ............................. $ 225,245,384 $ 275,675,984
Realized gain (loss)--net .......................... (266,920) 350,251
Change in unrealized appreciation/depreciation--net 406,739 (19,014,309)
---------------------------------------
Net increase in net assets resulting from operations 225,385,203 257,011,926
---------------------------------------
=========================================================================================================================
Capital Transactions
- -------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions ........................ 57,231,818,690 128,134,342,599
Fair value of withdrawals .......................... (58,655,065,834) (132,249,310,652)
---------------------------------------
Net decrease in net assets derived from
capital transactions ............................... (1,423,247,144) (4,114,968,053)
---------------------------------------
=========================================================================================================================
Net Assets
- -------------------------------------------------------------------------------------------------------------------------
Total decrease in net assets ....................... (1,197,861,941) (3,857,956,127)
Beginning of period ................................ 15,428,904,134 19,286,860,261
---------------------------------------
End of period ...................................... $ 14,231,042,193 $ 15,428,904,134
=======================================
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2005 21
Financial Highlights Master Money Trust
For the Six For the Year Ended For the Period
Months Ended March 31, February 13, 2003+
The following per share data and ratios have been derived September 30, ------------------------------ to March 31,
from information provided in the financial statements. 2005 2005 2004 2003
==================================================================================================================================
Total Investment Return
- ----------------------------------------------------------------------------------------------------------------------------------
Total investment return ................ 1.53%** 1.64% 1.06% .90%*
======================================================================
==================================================================================================================================
Ratios to Average Net Assets
- ----------------------------------------------------------------------------------------------------------------------------------
Expenses ............................... .15%* .15% .15% .21%*
======================================================================
Investment income and realized gain--net 3.04%* 1.60% 1.08% 1.25%*
======================================================================
==================================================================================================================================
Supplemental Data
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) $14,231,042 $15,428,904 $19,286,860 $23,129,013
======================================================================
* Annualized.
** Aggregate total investment return.
+ Commencement of operations.
See Notes to Financial Statements.
22 WCMA MONEY FUND SEPTEMBER 30, 2005
Notes to Financial Statements Master Money Trust
1. Significant Accounting Policies:
Master Money Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended, and is organized as a Delaware statutory trust. The
Declaration of Trust permits the Trustees to issue nontransferable interest in
the Trust, subject to certain limitations. The Trust's financial statements are
prepared in conformity with U.S. generally accepted accounting principles, which
may require the use of management accruals and estimates. Actual results may
differ from these estimates. These unaudited financial statements reflect all
adjustments, which are, in the opinion of management, necessary to present a
fair statement of the results for the interim period. All such adjustments are
of a normal, recurring nature. The following is a summary of significant
accounting policies followed by the Trust.
(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 value quotations are
not available are valued at fair value as determined in good faith by or under
the direction of the Board of Trustees.
(b) Repurchase agreements -- The Trust may invest in U.S. government securities
pursuant to repurchase agreements. Under such agreements, the counterparty
agrees to repurchase the security at a mutually agreed upon time and price. The
Trust 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
Trust may be delayed or limited.
(c) Income taxes -- The Trust is classified as a partnership for federal income
tax purposes. As such, each investor in the Trust is treated as owner of its
proportionate share of the net assets, income, expenses and realized and
unrealized gains and losses of the Trust. Therefore, no federal income tax
provision is required. It is intended that the Trust's assets will be managed so
an investor in the Trust can satisfy the requirements of subchapter M of the
Internal Revenue Code.
(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) Securities lending -- The Trust may lend securities to financial
institutions that provide cash or securities issued or guaranteed by the U.S.
government as collateral, which will be maintained at all times in an amount
equal to at least 100% of the current market value of the loaned securities. The
market value of the loaned securities is determined at the close of business of
the Trust and any additional required collateral is delivered to the Trust on
the next business day. Where the Trust receives securities as collateral for the
loaned securities, it collects a fee from the borrower. The Trust typically
receives the income on the loaned securities but does not receive the income on
the collateral. Where the Trust receives cash collateral, it may invest such
collateral and retain the amount earned on such investment, net of any amount
rebated to the borrower. Loans of securities are terminable at any time and the
borrower, after notice, is required to return borrowed securities within five
business days. The Trust may pay reasonable finder's, lending agent,
administrative and custodial fees in connection with its loans. In the event
that the borrower defaults on its obligation to return borrowed securities
because of insolvency or for any other reason, the Trust could experience delays
and costs in gaining access to the collateral. The Trust also could suffer a
loss where the value of the collateral falls below the market value of the
borrowed securities, in the event of borrower default or in the event of losses
on investments made with cash collateral.
WCMA MONEY FUND SEPTEMBER 30, 2005 23
Notes to Financial Statements (concluded) Master Money Trust
2. Investment Advisory Agreement and Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agree-ment 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 Trust's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Trust. For such services, the Trust pays a monthly fee
based upon the average daily value of the Trust's net assets at the following
annual rates: .25% of the Trust's average daily net assets not exceeding $500
million; .175% of the average daily net assets in excess of $500 million, but
not exceeding $1 billion; and .125% of the average daily net assets in excess of
$1 billion.
The Trust has received an exemptive order from the Securities and Exchange
Commission permitting it to lend portfolio securities to Merrill Lynch, Pierce,
Fenner & Smith Incorporated, an affiliate of FAM, or its affiliates. Pursuant to
that order, the Trust also has retained Merrill Lynch Investment Managers, LLC
("MLIM, LLC"), an affiliate of FAM, as the securities lending agent for a fee
based on a share of the returns on investment of cash collateral. MLIM, LLC may,
on behalf of the Trust, invest cash collateral received by the Trust for such
loans, among other things, in a private investment company managed by MLIM, LLC
or in registered money market funds advised by FAM or its affiliates. For the
six months ended September 30, 2005, MLIM, LLC received $4,060 in securities
lending agent fees.
For the six months ended September 30, 2005, the Trust reimbursed FAM $162,908
for certain accounting services.
Certain officers and/or trustees of the Trust are officers and/or directors of
FAM, PSI, ML & Co., and/or MLIM, LLC.
24 WCMA MONEY FUND SEPTEMBER 30, 2005
Disclosure of Investment Advisory Agreement
Activities and Composition of the Board of Trustees
All but one member of the Board of Trustees is an independent trustee whose only
affiliation with Fund Asset Management, L.P. (the "Investment Adviser") or other
Merrill Lynch affiliates is as a trustee of the Master Money Trust (the "Trust")
and the Fund and certain other funds advised by the Investment Adviser or its
affiliates. The Chairman of the Board is also an independent trustee. New
trustee nominees are chosen as nominees by a Nominating Committee comprised of
independent Trustees. All independent Trustees also are members of the Board's
Audit Committee and the independent Trustees meet in executive session at each
in-person Board meeting. The Board and Audit Committee meet in person for at
least two days each quarter and conduct other in-person and telephone meetings
throughout the year, some of which are formal board meetings, and some of which
are informational meetings. The independent counsel to the independent Trustees
attends all in-person Board and Audit Committee meetings and other meetings at
the independent Trustees' request.
Investment Advisory Agreement -- Matters Considered by the Board
Every year, the Board considers approval of the investment advisory agreement
between the Investment Adviser and the Trust (the "Investment Advisory
Agreement"). The Board also reviews and evaluates the performance of and
services provided by the Investment Adviser throughout each year. The Board
assesses the nature, scope and quality of the services provided to the Trust and
the Fund by the personnel of the Investment Adviser and its affiliates,
including administrative services, shareholder services, oversight of fund
accounting, marketing services and assistance in meeting legal and regulatory
requirements. The Board also receives and assesses information regarding the
services provided to the Trust and the Fund by certain unaffiliated service
providers.
At various times throughout the year, the Board also considers a range of
information in connection with its oversight of the services provided by the
Investment Adviser and its affiliates. Among the matters considered are: (a) any
fees (in addition to management fees) paid to the Investment Adviser and its
affiliates by the Trust or by the Fund, such as transfer agency fees and fees
for marketing and distribution; (b) Trust/Fund operating expenses paid to third
parties; (c) the resources devoted to and compliance reports relating to the
Trust's and the Fund's investment objective, policies and restrictions, and its
compliance with its Code of Ethics and the Investment Adviser's compliance
policies and procedures; and (d) the nature, cost and character of
non-investment management services provided by the Investment Adviser and its
affiliates.
The Board believes that the Investment Adviser is one of the most experienced
global asset management firms and considers the overall services provided by the
Investment Adviser to be generally of high quality. The Board also believes that
the Investment Adviser is financially sound and well managed and notes that the
Investment Adviser is affiliated with one of America's largest financial firms.
The Board works closely with the Investment Adviser in overseeing the Investment
Adviser's efforts to achieve good performance. As part of this effort, the Board
discusses portfolio Investment Adviser effectiveness and, when performance is
not satisfactory, discusses with the Investment Adviser taking steps such as
changing investment personnel.
Annual Consideration of Approval by the Board of Trustees
In the period prior to the Board meeting to consider renewal of the Investment
Advisory Agreement, the Board requests and receives materials specifically
relating to the Trust's Investment Advisory Agreement. These materials include
(a) information on the fees and expenses and the investment performance of the
Trust/Fund as compared to the Fund's competitors as determined by the Investment
Adviser ("Competitors"); (b) a discussion by the Trust's/Fund's portfolio
management team on investment strategies used by the Trust/Fund during its most
recent fiscal year; (c) information on the profitability to the Investment
Adviser and its affiliates of the Investment Advisory Agreement and other
relationships with the Trust and/or Fund; (d) information on the profitability
to the Investment Adviser and its affiliates of the Investment Advisory
Agreements and other relationships with the Trust/Fund; and (e) information
provided by the Investment Adviser concerning investment advisory fees charged
to other clients, such as institutional clients. The Board also considers other
matters it deems important to the approval process such as payments made to the
Investment Adviser or its affiliates relating to the distribution of Fund
shares, services related to the valuation and pricing of Trust/Fund portfolio
holdings, allocation of Trust/Fund brokerage fees, and direct and indirect
benefits to the Investment Adviser and its affiliates from their relationship
with the Trust/Fund.
Certain Specific Renewal Data
In connection with the most recent renewal of the Trust's Investment Advisory
Agreement in August 2005, the independent Trustees' and Board's review included
the following:
WCMA MONEY FUND SEPTEMBER 30, 2005 25
Disclosure of Investment Advisory Agreement (concluded)
Investment Adviser's Services and Fund Performance -- The Board reviewed the
nature, extent and quality of services provided by the Investment Adviser,
including the investment advisory services and the resulting performance of the
Fund. The Board focused primarily on the Investment Adviser's investment
advisory services and the Fund's investment performance, having concluded that
the other services provided to the Trust/Fund by the Investment Adviser were
satisfactory. Because the Trust/Fund is competing against sweep funds operated
by banks for short-term liquidity needs, the Board compared the Fund's
performance to a performance index of the National Bank Effective Government
Fund Rates and to sweep accounts offered by Competitors. While the Board
generally reviews performance data quarterly, the Board noted that the
performance of the Trust/Fund was competitive with both the National Bank
Effective Government Fund Rates and with similar Competitor products for the
period ended August 31, 2005. The Board concluded that the Trust's/Fund's
performance was consistent with the continuation of the management fee rate at
its current level and the renewal of the applicable Investment Advisory
Agreement.
The Investment Adviser's Personnel and Investment Process -- The Board reviewed
the Trust's/Fund's investment objectives and strategies. The Board discussed
with senior management of the Investment Adviser responsible for investment
operations and the senior management of the Investment Adviser's taxable
fixed-income investing group the strategies being used to achieve the stated
objectives. Among other things, the Board considered the size, education and
experience of the Investment Adviser's investment staff, its use of technology,
and the Investment Adviser's approach to training and retaining portfolio
Investment Advisers and other research, advisory and management personnel. The
Board also reviewed the Investment Adviser's compensation policies and practices
with respect to the Trust's/Fund's portfolio manager. The Board also considered
the experience of the Trust's portfolio manager and noted that Mr. Mejzak has
over ten years' experience investing in money market securities. The Board
concluded that the Investment Adviser and its investment staff and the
Trust's/Fund's portfolio manager have extensive experience in analyzing and
managing the types of investments used by the Trust and the Fund and that the
Trust and the Fund benefit from that expertise.
Management Fees and Other Expenses -- The Board reviewed the Trust's/Fund's
management fee rate as a percentage of total assets at common asset levels
compared to its Competitors. It also compares the Trust's/Fund's total expenses
to those of its Competitors. The Board considered the services provided to and
the fees charged by the Investment Adviser to other types of clients such as
institutional clients. The Board noted that, as a general matter, fees charged
to institutional clients were lower than the fees charged to the Trust/Fund, but
determined that the Investment Adviser provided less extensive services to such
clients, which tended to hold much larger accounts. The Board noted that
management fees and total expenses were reasonable when compared to fees and
expenses of Competitors. The Board concluded that the management fee and fee
rate and overall expense ratio were reasonable when compared to those of
Competitors.
Profitability -- The Board considered the cost of the services provided to the
Trust and Fund by the Investment Adviser and the Investment Adviser's and its
affiliates' profits in relating to the management and distribution of the Trust
and Fund and the MLIM/FAM-advised funds. As part of its analysis, the Board
reviews the Investment Adviser's and its affiliates' methodology in allocating
costs to the management of the Trust/Fund and concluded that there was a
reasonable basis for the allocation. The Board believes the profits of the
Investment Adviser and its affiliates are acceptable in relation to the nature
and quality of services provided and given the level of fees and expenses
overall. The Board also considered the federal court decisions discussing an
investment adviser's profitability, and the profitability levels considered to
be reasonable in those decisions.
Economies of Scale -- The Board considered the extent to which economies of
scale might be realized as the assets of the Trust/Fund increase and whether
there should be changes in the management fee rate or structure in order to
enable a Trust and a Fund to participate in these economies of scale. The Board
noted that the Trust's/Fund's current management fee rate schedule includes
breakpoints that would reduce the Trust's/Fund's management fee rate if its
assets increase above certain levels. The Board determined that no changes were
currently necessary.
Conclusion
After the independent Trustees deliberated in executive session, the Board,
including all of the independent Trustees, approved the renewal of the existing
Investment Advisory Agreement, concluding that the advisory fee was reasonable
in relation to the services provided and that a contract renewal was in the best
interests of the shareholders.
26 WCMA MONEY FUND SEPTEMBER 30, 2005
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 Web
site at 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.
WCMA MONEY FUND SEPTEMBER 30, 2005 27
[LOGO] Merrill Lynch Investment Managers
www.mlim.ml.com
- --------------------------------------------------------------------------------
Mercury Advisors
A Division of Merrill Lynch Investment Managers
www.mercury.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 the value of 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. Refer to www.mlim.ml.com to obtain
performance data current to the most recent month-end. 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)
at www.mutualfunds.ml.com; and (3) on the Securities and Exchange Commission's
Web site at http://www.sec.gov. Information about how the Fund voted proxies
relating to securities held in the Fund's portfolio during the most recent
12-month period ended June 30 is available (1) at www.mutualfunds.ml.com and (2)
on the Securities and Exchange Commission's Web site at http://www.sec.gov.
WCMA Money Fund
Box 9011
Princeton, NJ
08543-9011
#WCMAM -- 9/05
Item 2 - Code of Ethics - Not Applicable to this semi-annual report
Item 3 - Audit Committee Financial Expert - Not Applicable to this semi-annual
report
Item 4 - Principal Accountant Fees and Services - Not Applicable to this
semi-annual report
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 - Portfolio Managers of Closed-End Management Investment Companies - Not
Applicable
Item 9 - Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers - Not Applicable
Item 10 - Submission of Matters to a Vote of Security Holders - Not Applicable
Item 11 - Controls and Procedures
11(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.
11(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 last 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 12 - Exhibits attached hereto
12(a)(1) - Code of Ethics - Not Applicable to this semi-annual report
12(a)(2) - Certifications - Attached hereto
12(a)(3) - Not Applicable
12(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.
WCMA Money Fund and Master Money Trust
By: /s/ Robert C. Doll, Jr.
---------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
WCMA Money Fund and Master Money Trust
Date: November 17, 2005
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/ Robert C. Doll, Jr.
---------------------------
Robert C. Doll, Jr.,
Chief Executive Officer of
WCMA Money Fund and Master Money Trust
Date: November 17, 2005
By: /s/ Donald C. Burke
---------------------------
Donald C. Burke,
Chief Financial Officer of
WCMA Money Fund and Master Money Trust
Date: November 17, 2005