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: 03/31/07
Date of reporting period: 04/01/06 - 09/30/06
Item 1 - Report to Stockholders
Semi-Annual Report
September 30, 2006
WCMA Money Fund
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
Donald C. Burke, Vice President and Treasurer
Richard J. Mejzak, Vice President
Jeffrey Hiller, Fund 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.
Proxy Results
During the six-month period ended September 30, 2006, the holders of interests
in Master Money Trust (including WCMA Money Fund, which invests all of its
assets in the Trust) voted on the following proposals. On August 15, 2006, the
special meeting was adjourned with respect to Proposals 1 and 3 until September
27, 2006, at which time they passed. A description of the proposals and number
of interests voted were as follows:
- ------------------------------------------------------------------------------------------------------------------------
Interests Voted Interests Voted Interests Voted
For Against Abstain
- ------------------------------------------------------------------------------------------------------------------------
1. To approve a new investment advisory agreement
with BlackRock Advisors, Inc. 7,232,645,471 241,379,990 309,564,868
- ------------------------------------------------------------------------------------------------------------------------
3. To approve a contingent subadvisory agreement
with BlackRock Advisors, Inc. 7,213,692,875 254,853,248 315,044,206
- ------------------------------------------------------------------------------------------------------------------------
On July 31, 2006, the special shareholder meeting of WCMA Money Fund was
adjourned with respect to Proposals 1 and 3 until September 27, 2006. A
description of the proposals and number of shares voted were as follows:
- ------------------------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted Shares Voted
For Against Abstain
- ------------------------------------------------------------------------------------------------------------------------
1. To approve a new investment advisory agreement
between Master Money Trust and BlackRock
Advisors, Inc. 3,050,789,089 111,512,660 151,807,820
- ------------------------------------------------------------------------------------------------------------------------
3. To approve a contingent subadvisory agreement
with BlackRock Advisors, Inc. 3,042,287,339 115,816,694 156,005,536
- ------------------------------------------------------------------------------------------------------------------------
2 WCMA MONEY FUND SEPTEMBER 30, 2006
A Letter to Shareholders
Dear Shareholder
It is my pleasure to welcome you to BlackRock.
On September 29, 2006, BlackRock, Inc. ("BlackRock") and Merrill Lynch
Investment Managers, L.P. ("MLIM") united to form one of the largest asset
management firms in the world. Now with more than $1 trillion in assets under
management, over 4,000 employees in 18 countries and representation in key
markets worldwide, BlackRock's global presence means greater depth and scale to
serve you.
The new BlackRock unites some of the finest money managers in the industry. Our
ranks include more than 500 investment professionals globally -- portfolio
managers, research analysts, risk management professionals and traders. With
offices strategically located around the world, our investment professionals
have in-depth local knowledge and the ability to leverage our global presence
and robust infrastructure to deliver focused investment solutions. BlackRock's
professional investors are supported by disciplined investment processes and
best-in-class technology, ensuring that our portfolio managers are well equipped
to research, uncover and capitalize on the opportunities the world's markets
have to offer.
The BlackRock culture emphasizes excellence, teamwork and integrity in the
management of a variety of equity, fixed income, cash management, alternative
investment and real estate products. Our firm's core philosophy is grounded in
the belief that experienced investment and risk professionals using disciplined
investment processes and sophisticated analytical tools can consistently add
value to client portfolios.
As you probably are aware, most former MLIM investment products now carry the
"BlackRock" name. This is reflected in newspapers and online fund reporting
resources. Your account statements, as of the October month-end reporting
period, also reflect the BlackRock name. Unless otherwise communicated to you,
your funds maintain the same investment objectives that they did prior to the
combination of MLIM and BlackRock. Importantly, this union does not affect your
brokerage account or your relationship with your financial advisor. Clients of
Merrill Lynch remain clients of Merrill Lynch.
We view this combination of asset management leaders as a complementary union
that reinforces our commitment to shareholders. Individually, each firm made
investment performance its single most important mission. Together, we are even
better prepared to capitalize on market opportunities on behalf of our
shareholders. Our focus on investment excellence is accompanied by an unwavering
commitment to service, enabling us to assist clients, in cooperation with their
financial professionals, in working toward their investment goals. We thank you
for allowing us the opportunity, and we look forward to serving your investment
needs in the months and years ahead as the new BlackRock.
Sincerely,
/s/ Robert C. Doll, Jr.
Robert C. Doll, Jr.
Vice Chairman
BlackRock, Inc.
Data, including assets under management, are as of June 30, 2006.
WCMA MONEY FUND SEPTEMBER 30, 2006 3
A Discussion With Your Fund's Portfolio Manager
We maintained a relatively conservative approach throughout the period as
the longer end of the money market yield curve remained relatively flat and
presented few compelling opportunities.
How did the Fund perform during the period in light of the existing market
conditions?
For the six-month period ended September 30, 2006, WCMA Money Fund's Class 1,
Class 2, Class 3 and Class 4 Shares paid shareholders net annualized dividends
of 3.67%, 4.26%, 4.59% and 4.59%, respectively. The Fund's seven-day yields as
of September 30, 2006 were 3.80% for Class 1, 4.36% for Class 2, 4.69% for Class
3 and 4.69% for Class 4.
The Fund's average portfolio maturity at September 30, 2006 was 43 days,
compared to 60 days at March 31, 2006.
Higher interest rates, coupled with a slowdown in both housing and employment,
served to drag down economic activity in the second quarter of 2006, with gross
domestic product (GDP) advancing at a rate of 2.6%. Although a significant
slowdown from the robust 5.6% rate recorded in the first quarter, the economy
remained on track for above-trend growth heading into the second half of the
year. It would seem that the continued tightening of monetary policy by the
Federal Reserve Board (the Fed) has finally had the desired effect of slowing
economic activity to a more sustainable pace. At its June 29 meeting, the Fed
raised the federal funds rate 25 basis points (.25%) for the 17th consecutive
time, lifting the benchmark rate to its current level of 5.25%. The central bank
subsequently left the target rate unchanged at both the August and September
meetings, indicating that monetary policy will be "data dependant" going
forward.
Earlier in the period, as the economy and inflation grew above expectations, the
new Fed Chairman, Ben Bernanke, was under pressure to establish credibility as
an inflation hawk. Yields in the short end of the curve rose as investors priced
in several more interest rate hikes for the year. One-year London InterBank
Offered Rate (LIBOR) rose more than 50 basis points during the second quarter,
peaking at 5.77% in late June. At the same time, longer-term yields remained in
a narrow range, with investors giving more credence to a scenario of a weaker
economy within the next few quarters and exhibiting confidence in the Fed's
ability to contain inflation.
As yields in the front end continued to climb, our significant exposure to
variable rate sectors proved beneficial. We looked to maintain a 50% allocation,
typically favoring corporate and bank issues. Spreads on agency issues remained
at extremely rich levels and, in our view, warranted little attention. We
gradually reduced the portfolio's duration throughout the period. This allowed
the Fund to avoid unnecessary unrealized losses as long as the Fed was actively
raising interest rates.
How did you manage the portfolio during the period?
Our average duration target, which had been consistently in the 55- to 65-day
range in prior periods, was modestly reduced to the 45- to 55-day range. Along
with variable rate product, we preferred fixed rate instruments in only the
three- and six-month sectors. We felt these areas offered the greatest value
from a risk/reward standpoint, enabling us to capture some steepness in the
front end of the curve while limiting our interest rate exposure. We did believe
there could be one or perhaps even two additional interest rate hikes; however,
we believed that if we could find yields approaching 5.50% in the aforementioned
sectors, we would be fairly compensated for the risks. As the curve was
relatively flat from six months out to two years, there was no incentive to
consider longer maturities. When yields were not available at our targeted
levels, we were resigned to invest in overnight issues. Consequently, those
holdings grew to nearly 33% of the portfolio at certain times during the period.
How would you characterize the portfolio's position at the close of the period?
In the last three months of the period, short-term yields retraced their
second-quarter move higher. At period-end, one-year LIBOR was back at 5.30% and
the two-year Treasury yield had fallen to 4.70%. Federal funds futures, which
were predicting further rate increases only a short time ago, were now pricing
in the probability of an interest rate cut at some point over the next few
Federal Open Market Committee meetings.
4 WCMA MONEY FUND SEPTEMBER 30, 2006
This market shift had been fueled by recent comments from Fed Chairman Bernanke,
in which he expressed concern over the weakening housing sector and its threat
to economic growth. Higher interest rates have had a negative impact on home
affordability for consumers. Data on existing home sales and housing starts has
shown persistent weakness, with prices falling in some parts of the country. At
the same time, inventories of unsold homes are at records highs. If we were to
see a sizable increase in the number of borrowers who are unable to keep up with
the higher mortgage payments on their adjustable rate loans, and assuming less
availability to do cash-out refinancing, it is feared that consumer spending
could be sharply curtailed.
Still, we continue to believe that the likelihood of a Fed interest rate hike is
greater than the probability of a rate cut. Moreover, we believe there is a much
greater chance that if the next move in monetary policy is in fact a cut, it
will occur much later than current levels are pricing. That being said, we are
slightly more cautious at these levels than we were earlier in the period.
Recently, we have concentrated our efforts solely on maturities of 90 days and
shorter. Overnight investments are no longer a viable option, as they have been
trading at levels well through the federal funds target of 5.25%. Thus, we have
added significant holdings of one-, two- and three-month commercial paper and
certificates of deposit. With the front end of the yield curve now inverted, we
will continue to buy the higher-yielding, shorter-dated maturities as opposed to
the lower-yielding, longer-dated maturities, which will require an imminent rate
cut in order to prove beneficial. The unemployment rate remains low at 4.6% and
the oil price has settled in around $60 per barrel, both providing a tailwind
for the consumer. Most importantly, according to the most recent Fed speak,
inflation is still a concern. Thus, unless the economic landscape changes
dramatically or yields return to more attractive levels, we continue to be
cautious.
The Trust's 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:
- --------------------------------------------------------------------------------
9/30/06 3/31/06
- --------------------------------------------------------------------------------
Bank Notes ................................................ -- 1.3%
Certificates of Deposit ................................... 5.0% 4.9
Certificates of Deposit -- European ....................... 3.5 2.1
Certificates of Deposit -- Yankee* ........................ 20.8 19.6
Commercial Paper .......................................... 32.1 21.4
Corporate Notes ........................................... 20.5 18.6
Funding Agreements ........................................ 6.4 6.7
Promissory Notes .......................................... 1.2 1.3
Time Deposits ............................................. 2.3 5.2
U.S. Government, Agency & Instrumentality Obligations --
Non-Discount Notes ....................................... 10.1 12.3
Repurchase Agreements ..................................... -- 6.2
Short-Term Securities ..................................... 0.5 0.2
Other Assets Less Liabilities ............................. -- 0.2
Liabilities in Excess of Other Assets ..................... (2.4) --
-------------------
Total ..................................................... 100.0% 100.0%
===================
* U.S. branches of foreign banks.
Richard J. Mejzak
Vice President and Portfolio Manager
October 2, 2006
- --------------------------------------------------------------------------------
We are pleased to announce that, effective October 2, 2006, Patrick J. Ford is
responsible for the day-to-day management of the Fund's portfolio. Mr. Ford is a
Director and Portfolio Manager with BlackRock, Inc. (Cash Management Group).
Prior to joining BlackRock in 1989, he was responsible for the trading of
federal funds and Eurodollars in the national market for the Treasury Division
of PNC Bank, starting in 1984. Prior to that, Mr. Ford worked for PFPC, Inc. as
a mutual fund accounting supervisor.
- --------------------------------------------------------------------------------
WCMA MONEY FUND SEPTEMBER 30, 2006 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
12b-1 fees, and other Fund expenses. The following example (which is based on a
hypothetical investment of $1,000 invested on April 1, 2006 and held through
September 30, 2006) 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 1, 2006 to
April 1, 2006 September 30, 2006 September 30, 2006
=============================================================================================================================
Actual
=============================================================================================================================
Class 1 $ 1,000 $1,018.20 $ 7.40
- -----------------------------------------------------------------------------------------------------------------------------
Class 2 $ 1,000 $1,021.10 $ 4.59
- -----------------------------------------------------------------------------------------------------------------------------
Class 3 $ 1,000 $1,022.80 $ 2.98
- -----------------------------------------------------------------------------------------------------------------------------
Class 4 $ 1,000 $1,022.80 $ 2.98
=============================================================================================================================
Hypothetical (5% annual return before expenses)**
=============================================================================================================================
Class 1 $ 1,000 $1,017.57 $ 7.39
- -----------------------------------------------------------------------------------------------------------------------------
Class 2 $ 1,000 $1,020.36 $ 4.58
- -----------------------------------------------------------------------------------------------------------------------------
Class 3 $ 1,000 $1,021.96 $ 2.97
- -----------------------------------------------------------------------------------------------------------------------------
Class 4 $ 1,000 $1,021.96 $ 2.97
- -----------------------------------------------------------------------------------------------------------------------------
* For each class of the Fund, expenses are equal to the annualized expense
ratio for the class (1.47% for Class 1, .91% for Class 2, .59% for Class 3
and .59% for Class 4), multiplied by the average account value over the
period, multiplied by 182/365 (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 trust 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, 2006
Statement of Assets and Liabilities WCMA Money Fund
As of September 30, 2006
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investment in Master Money Trust (the "Trust"), at value (identified
cost--$7,436,290,083) ..................................................... $ 7,433,155,710
Prepaid expenses and other assets .......................................... 1,336,135
-----------------
Total assets ............................................................... 7,434,491,845
-----------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Payables:
Distributor ............................................................... $ 1,805,597
Administrator ............................................................. 1,450,068
Other affiliates .......................................................... 132,899
-----------------
Total liabilities .......................................................... 3,388,564
-----------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ................................................................. $ 7,431,103,281
=================
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Class 1 Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized ...................................................... $ 73,597,944
Class 2 Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized ...................................................... 257,319,938
Class 3 Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized ...................................................... 301,401,029
Class 4 Shares of beneficial interest, $.10 par value, unlimited number
of shares authorized ...................................................... 111,104,839
Paid-in capital in excess of par ........................................... 6,690,813,751
Undistributed investment income--net ....................................... 104,098
Accumulated realized capital losses allocated from the Trust--net .......... (103,945)
Unrealized depreciation allocated from the Trust--net ...................... (3,134,373)
-----------------
Total accumulated losses--net .............................................. (3,134,220)
-----------------
Net Assets ................................................................. $ 7,431,103,281
=================
===================================================================================================================================
Net Asset Value
- -----------------------------------------------------------------------------------------------------------------------------------
Class 1--Based on net assets of $735,655,575 and 735,979,444 shares of
beneficial interest outstanding ........................................... $ 1.00
=================
Class 2--Based on net assets of $2,572,080,280 and 2,573,199,383 shares
of beneficial interest outstanding ........................................ $ 1.00
=================
Class 3--Based on net assets of $3,012,756,149 and 3,014,010,287 shares
of beneficial interest outstanding ........................................ $ 1.00
=================
Class 4--Based on net assets of $1,110,611,277 and 1,111,048,389 shares
of beneficial interest outstanding ........................................ $ 1.00
=================
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2006 7
Statement of Operations WCMA Money Fund
For the Six Months Ended September 30, 2006
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest from affiliates ................................................... $ 602,964
Net investment income allocated from the Trust:
Interest and amortization of premium and discount earned .................. 185,935,278
Securities lending--net ................................................... 20,240
Expenses .................................................................. (5,321,016)
-----------------
Total income ............................................................... 181,237,466
-----------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Administration fees ........................................................ $ 9,183,720
Account maintenance and distribution fees--Class 2 ......................... 8,694,923
Account maintenance and distribution fees--Class 3 ......................... 5,446,256
Account maintenance and distribution fees--Class 1 ......................... 3,456,880
Registration fees .......................................................... 2,553,333
Account maintenance and distribution fees--Class 4 ......................... 2,055,607
Transfer agent fees--Class 4 ............................................... 270,549
Transfer agent fees--Class 3 ............................................... 69,703
Transfer agent fees--Class 2 ............................................... 61,452
Printing and shareholder reports ........................................... 55,380
Professional fees .......................................................... 37,421
Transfer agent fees--Class 1 ............................................... 16,559
Other ...................................................................... 13,989
-----------------
Total expenses before waiver ............................................... 31,915,772
Waiver of expenses ......................................................... (8,421,524)
-----------------
Total expenses after waiver ................................................ 23,494,248
-----------------
Investment income--net ..................................................... 157,743,218
-----------------
===================================================================================================================================
Realized & Unrealized Gain Allocated from the Trust--Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain on investments--net .......................................... 10,187
Change in unrealized depreciation on investments--net ...................... 3,150,745
-----------------
Total realized and unrealized gain--net .................................... 3,160,932
-----------------
Net Increase in Net Assets Resulting from Operations ....................... $ 160,904,150
=================
See Notes to Financial Statements.
8 WCMA MONEY FUND SEPTEMBER 30, 2006
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: 2006 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income--net ..................................................... $ 157,743,218 $ 221,287,720
Realized gain (loss)--net .................................................. 10,187 (100,558)
Change in unrealized depreciation--net ..................................... 3,150,745 (75,936)
---------------------------------------
Net increase in net assets resulting from operations ....................... 160,904,150 221,111,226
---------------------------------------
===================================================================================================================================
Dividends & Distributions to Shareholders
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income--net:
Class 1 ................................................................... (12,551,694) (16,738,447)
Class 2 ................................................................... (53,892,625) (75,779,223)
Class 3 ................................................................... (65,838,986) (96,383,200)
Class 4 ................................................................... (25,459,913) (32,282,752)
Realized gain--net:
Class 1 ................................................................... (877) (268)
Class 2 ................................................................... (3,531) (1,213)
Class 3 ................................................................... (4,104) (1,542)
Class 4 ................................................................... (1,522) (517)
---------------------------------------
Net decrease in net assets resulting from dividends and distributions
to shareholders ........................................................... (157,753,252) (221,187,162)
---------------------------------------
===================================================================================================================================
Beneficial Interest Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets derived from beneficial interest
transactions .............................................................. 134,981,945 (390,953,320)
---------------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .................................... 138,132,843 (391,029,256)
Beginning of period ........................................................ 7,292,970,438 7,683,999,694
---------------------------------------
End of period* ............................................................. $ 7,431,103,281 $ 7,292,970,438
=======================================
* Undistributed investment income--net .................................... $ 104,098 $ 104,098
=======================================
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2006 9
Financial Highlights WCMA Money Fund
Class 1
-----------------------------------------------------------------------------
For the
For the Period
The following per share data Six Months For the Year Ended March 20,
and ratios have been derived Ended March 31, 2003+ to
from information provided in Sept. 30, ------------------------------------------ March 31,
the financial statements. 2006 2006 2005 2004 2003
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------------
Investment income--net .......... .0180 .0224 .0043 .0003 .0003
Realized and unrealized gain
(loss)--net ................... .0004 (.0008) (.0011) .0005 .0001
-----------------------------------------------------------------------------
Total from investment operations .0184 .0216 .0032 .0008 .0004
-----------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ........ (.0043) (.0003) (.0003) (.0208) (.0281)
Realized gain--net ............ --* --* --* (.0001) --
-----------------------------------------------------------------------------
Total dividends and distributions (.0180) (.0224) (.0043) (.0004) (.0003)
-----------------------------------------------------------------------------
Net asset value, end of period .. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================
Total investment return ......... 1.82%+++ 2.26% .44% .04% .04%
=============================================================================
==================================================================================================================
Ratios to Average Net Assets**
- ------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement .......... 1.47%++ 1.47% 1.35% 1.12% .01%
=============================================================================
Total expenses .................. 1.47%++ 1.47% 1.47% 1.49% .01%
=============================================================================
Total investment income and
realized gain (loss)--net ..... 3.60%++ 2.23% .43% .04% .03%
=============================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) ................ $ 735,656 $ 861,336 $ 869,839 $ 927,790 $ 25
=============================================================================
Class 2
-----------------------------------------------------------------------------
For the
For the Period
The following per share data Six Months For the Year Ended March 20,
and ratios have been derived Ended March 31, 2003+ to
from information provided in Sept. 30, ------------------------------------------ March 31,
the financial statements. 2006 2006 2005 2004 2003
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------------
Investment income--net .......... .0208 .0281 .0088 .0024 .0003
Realized and unrealized gain
(loss)--net ................... .0004 (.0008) (.0011) .0006 .0001
-----------------------------------------------------------------------------
Total from investment operations .0212 .0273 .0077 .0030 .0004
-----------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ........ (.0208) (.0281) (.0088) (.0024) (.0003)
Realized gain--net ............ --* --* --* (.0001) --
-----------------------------------------------------------------------------
Total dividends and distributions (.0208) (.0281) (.0088) (.0025) (.0003)
-----------------------------------------------------------------------------
Net asset value, end of period .. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================
Total investment return ......... 2.11%+++ 2.85% .89% .25% .04%
=============================================================================
==================================================================================================================
Ratios to Average Net Assets**
- ------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement .......... .91%++ .89% .91% .91% .01%
=============================================================================
Total expenses .................. 1.15%++ 1.15% 1.15% 1.17% .01%
=============================================================================
Total investment income and
realized gain (loss)--net ..... 4.17%++ 2.80% .87% .24% .03%
=============================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) ................ $2,572,080 $2,538,640 $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 and/or
investment income and realized gain (loss)--net.
+ Effective date of the Fund's registration.
++ Annualized.
+++ Aggregate total investment return.
See Notes to Financial Statements.
10 WCMA MONEY FUND SEPTEMBER 30, 2006
Financial Highlights (concluded) WCMA Money Fund
Class 3
-----------------------------------------------------------------------------
For the
For the Period
The following per share data Six Months For the Year Ended March 20,
and ratios have been derived Ended March 31, 2003+ to
from information provided in Sept. 30, ------------------------------------------ March 31,
the financial statements. 2006 2006 2005 2004 2003
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------------
Investment income--net .......... .0224 .0314 .0120 .0056 .0003
Realized and unrealized gain
(loss)--net ................... .0004 (.0008) (.0011) .0006 .0001
-----------------------------------------------------------------------------
Total from investment operations .0228 .0306 .0109 .0062 .0004
-----------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ........ (.0120) (.0056) (.0003) (.0224) (.0120)
Realized gain--net ............ --* --* --* (.0001) --
-----------------------------------------------------------------------------
Total dividends and distributions (.0224) (.0314) (.0120) (.0057) (.0003)
-----------------------------------------------------------------------------
Net asset value, end of period .. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================
Total investment return ......... 2.28%+++ 3.18% 1.21% .57% .04%
=============================================================================
==================================================================================================================
Ratios to Average Net Assets**
- ------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement .......... .59%++ .57% .58% .59% .01%
=============================================================================
Total expenses .................. .85%++ .85% .85% .87% .01%
=============================================================================
Total investment income and
realized gain (loss)--net ..... 4.49%++ 3.13% 1.20% .57% .03%
=============================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) ................ $3,012,756 $2,921,499 $3,032,612 $3,337,395 $ 25
=============================================================================
Class 4
-----------------------------------------------------------------------------
For the
For the Period
The following per share data Six Months For the Year Ended March 20,
and ratios have been derived Ended March 31, 2003+ to
from information provided in Sept. 30, ------------------------------------------ March 31,
the financial statements. 2006 2006 2005 2004 2003
==================================================================================================================
Per Share Operating Performance
- ------------------------------------------------------------------------------------------------------------------
Net asset value, beginning
of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-----------------------------------------------------------------------------
Investment income--net .......... .0224 .0314 .0120 .0056 .0003
Realized and unrealized gain
(loss)--net ................... .0004 (.0009) (.0011) .0005 .0001
-----------------------------------------------------------------------------
Total from investment operations .0228 .0305 .0109 .0061 .0004
-----------------------------------------------------------------------------
Less dividends and distributions:
Investment income--net ........ (.0224) (.0314) (.0120) (.0056) (.0003)
Realized gain--net ............ --* --* --* (.0001) --
-----------------------------------------------------------------------------
Total dividends and distributions (.0224) (.0314) (.0120) (.0057) (.0003)
-----------------------------------------------------------------------------
Net asset value, end of period .. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=============================================================================
Total investment return ......... 2.28%+++ 3.18% 1.21% .57% .04%
=============================================================================
==================================================================================================================
Ratios to Average Net Assets**
- ------------------------------------------------------------------------------------------------------------------
Total expenses, net of waiver
and/or reimbursement .......... .59%++ .57% .58% .59% .01%
=============================================================================
Total expenses .................. .84%++ .84% .84% .87% .01%
=============================================================================
Total investment income and
realized gain (loss)--net ..... 4.50%++ 3.15% 1.22% .57% .03%
=============================================================================
==================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(in thousands) ................ $1,110,611 $ 971,495 $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 and/or
investment income and realized gain (loss)--net.
+ Effective date of the Fund's registration.
++ Annualized.
+++ Aggregate total investment return.
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2006 11
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 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 interests 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, 2006 was 45.1%. 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) Recent accounting pronouncement -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48") entitled
"Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109." FIN 48 prescribes the minimum recognition threshold a tax
position must meet in connection with accounting for uncertainties in income tax
positions taken or expected to be taken by an entity including mutual funds
before being measured and recognized in the financial statements. Adoption of
FIN 48 is required for fiscal years beginning after December 15, 2006. The
impact on the Fund's financial statements, if any, is currently being assessed.
(e) Prepaid registration fees -- Prepaid registration fees are charged to
expense as the related shares are issued.
(f) Dividends and distributions to shareholders -- The Fund declares dividends
daily and reinvests daily such dividends (net of non-resident alien tax and
backup withholding tax withheld) in additional fund shares at net asset value.
Dividends are declared from the total of net investment income. Distributions of
net realized gain, if any, on investment are paid at least annually.
(g) 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.
12 WCMA MONEY FUND SEPTEMBER 30, 2006
Notes to Financial Statements (continued) WCMA Money 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
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.
For the six months ended September 30, 2006, MLPF&S earned fees of $19,653,666,
of which $8,421,524 was waived.
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.
In February 2006, ML & Co. and BlackRock, Inc. entered into an agreement to
contribute ML & Co.'s investment management business, including FAM, to the
investment management business of BlackRock, Inc. The transaction closed on
September 29, 2006.
On September 27, 2006, shareholders of the Fund approved a new Investment
Advisory Agreement for the Trust with BlackRock Advisors, Inc. (the "Manager"),
a wholly owned subsidiary of BlackRock, Inc. BlackRock Advisors, Inc. was
reorganized into BlackRock Advisors, LLC. The new advisory agreement became
effective on September 29, 2006 and the investment advisory fee is unchanged. In
addition, the Manager will provide administrative services and the
administrative fee is unchanged.
Prior to the closing, certain officers and/or trustees of the Fund are officers
and/or directors of FAM, PSI, FDS, and/or ML & Co.
Commencing September 29, 2006, certain officers and/or trustees of the Fund are
officers and/or directors of BlackRock, Inc. or its affiliates.
3. Shares of Beneficial Interest:
Net increase (decrease) in net assets derived from beneficial interest
transactions was $134,981,945 and $(390,953,320) for the six months ended
September 30, 2006 and the year ended March 31, 2006, respectively.
Transactions in shares of beneficial interest for each class were as follows:
- --------------------------------------------------------------------------------
Class 1 Shares for the
Six Months Ended Dollar
September 30, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 4,664,965,604 $ 4,664,965,604
Shares issued to shareholders
in reinvestment of dividends
and distributions .................. 12,552,509 12,552,509
-------------------------------------
Total issued ......................... 4,677,518,113 4,677,518,113
Shares redeemed ...................... (4,803,482,163) (4,803,482,163)
-------------------------------------
Net decrease ......................... (125,964,050) $ (125,964,050)
=====================================
- --------------------------------------------------------------------------------
Class 1 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 10,804,408,249 $ 10,804,408,249
Shares issued to shareholders in
reinvestment of dividends
and distributions .................. 16,738,855 16,738,855
-------------------------------------
Total issued ......................... 10,821,147,104 10,821,147,104
Shares redeemed ...................... (10,829,666,981) (10,829,666,981)
-------------------------------------
Net decrease ......................... (8,519,877) $ (8,519,877)
=====================================
WCMA MONEY FUND SEPTEMBER 30, 2006 13
Notes to Financial Statements (concluded) WCMA Money Fund
- --------------------------------------------------------------------------------
Class 2 Shares for the
Six Months Ended Dollar
September 30, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 9,863,440,517 $ 9,863,440,517
Shares issued to shareholders
in reinvestment of dividends
and distributions .................. 53,896,143 53,896,143
-------------------------------------
Total issued ......................... 9,917,336,660 9,917,336,660
Shares redeemed ...................... (9,884,996,108) (9,884,996,108)
-------------------------------------
Net increase ......................... 32,340,552 $ 32,340,552
=====================================
- --------------------------------------------------------------------------------
Class 2 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 19,544,017,339 $ 19,544,017,339
Shares issued to shareholders in
reinvestment of dividends
and distributions .................. 75,780,480 75,780,480
-------------------------------------
Total issued ......................... 19,619,797,819 19,619,797,819
Shares redeemed ...................... (19,804,243,729) (19,804,243,729)
-------------------------------------
Net decrease ......................... (184,445,910) $ (184,445,910)
=====================================
- --------------------------------------------------------------------------------
Class 3 Shares for the
Six Months Ended Dollar
September 30, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 14,404,121,425 $ 14,404,121,425
Shares issued to shareholders
in reinvestment of dividends
and distributions .................. 65,843,091 65,843,091
-------------------------------------
Total issued ......................... 14,469,964,516 14,469,964,516
Shares redeemed ...................... (14,379,967,330) (14,379,967,330)
-------------------------------------
Net increase ......................... 89,997,186 $ 89,997,186
=====================================
- --------------------------------------------------------------------------------
Class 3 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 30,518,050,529 $ 30,518,050,529
Shares issued to shareholders in
reinvestment of dividends
and distributions .................. 96,384,743 96,384,743
-------------------------------------
Total issued ......................... 30,614,435,272 30,614,435,272
Shares redeemed ...................... (30,725,504,542) (30,725,504,542)
-------------------------------------
Net decrease ......................... (111,069,270) $ (111,069,270)
=====================================
- --------------------------------------------------------------------------------
Class 4 Shares for the
Six Months Ended Dollar
September 30, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 10,302,654,331 $ 10,302,654,331
Shares issued to shareholders
in reinvestment of dividends
and distributions .................. 25,461,435 25,461,435
-------------------------------------
Total issued ......................... 10,328,115,766 10,328,115,766
Shares redeemed ...................... (10,189,507,509) (10,189,507,509)
-------------------------------------
Net increase ......................... 138,608,257 $ 138,608,257
=====================================
- --------------------------------------------------------------------------------
Class 4 Shares for the Year Dollar
Ended March 31, 2006 Shares Amount
- --------------------------------------------------------------------------------
Shares sold .......................... 19,504,359,859 $ 19,504,359,859
Shares issued to shareholders in
reinvestment of dividends
and distributions .................. 32,283,269 32,283,269
-------------------------------------
Total issued ......................... 19,536,643,128 19,536,643,128
Shares redeemed ...................... (19,623,561,391) (19,623,561,391)
-------------------------------------
Net decrease ......................... (86,918,263) $ (86,918,263)
=====================================
14 WCMA MONEY FUND SEPTEMBER 30, 2006
Schedule of Investments Master Money Trust (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
===============================================================================
Certificates of Deposit -- 5.0%
===============================================================================
SunTrust Bank $ 77,500 5.294% (a) 6/28/2007 $ 77,511
- -------------------------------------------------------------------------------
Wells Fargo 20,000 5.30 (a) 3/16/2007 20,000
Bank, NA 500,000 5.30 (a) 5/08/2007 498,886
220,000 5.30 (a) 9/05/2007 220,000
- -------------------------------------------------------------------------------
Total Certificates of Deposit
(Cost -- $817,511) ............................................... 816,397
===============================================================================
Certificates of Deposit -- European -- 3.5%
===============================================================================
BNP Paribas, 200,000 5.20 3/30/2007 199,736
London
- -------------------------------------------------------------------------------
Societe Generale, 375,000 5.405 3/21/2007 375,080
London
- -------------------------------------------------------------------------------
Total Certificates of Deposit -- European
(Cost -- $575,005) ............................................... 574,816
===============================================================================
Certificates of Deposit -- Yankee -- 20.8%
===============================================================================
ABN AMRO 248,000 5.268 (a) 12/07/2006 247,993
Bank NV, NY
- -------------------------------------------------------------------------------
BNP Paribas, NY 125,000 5.27 (a) 10/03/2007 124,975
125,000 5.448 (a) 10/03/2007 124,978
- -------------------------------------------------------------------------------
Banco Bilbao 200,000 5.443 (a) 10/02/2006 199,999
Vizcaya Argentaria
SA, NY
- -------------------------------------------------------------------------------
Barclays Bank 150,000 5.28 (a) 11/03/2006 150,000
Plc, NY 325,000 5.273 (a) 12/22/2006 324,987
- -------------------------------------------------------------------------------
Calyon Indosuez, 300,000 5.298 (a) 3/12/2007 299,997
NY
- -------------------------------------------------------------------------------
Canadian Imperial 60,000 5.28 (a) 1/30/2007 60,018
Bank of Commerce, 35,000 5.31 (a) 2/23/2007 35,002
NY 180,000 5.41 (a) 10/15/2007 180,000
- -------------------------------------------------------------------------------
Credit Suisse, NY 450,000 5.295 12/27/2006 449,975
- -------------------------------------------------------------------------------
Dexia Bank, NY 100,000 5.27 (a) 6/11/2007 99,986
- -------------------------------------------------------------------------------
Fortis Bank, NY 250,000 5.268 (a) 5/29/2007 249,968
- -------------------------------------------------------------------------------
HBOS Treasury 40,000 5.426 (a) 10/06/2006 40,000
Services Plc, NY
- -------------------------------------------------------------------------------
Nordea North 160,000 5.27 (a) 10/31/2006 159,996
America, Inc., NY
- -------------------------------------------------------------------------------
Royal Bank of 100,000 5.305 (a) 11/13/2006 100,001
Canada, NY 102,000 5.317 (a) 12/22/2006 101,995
- -------------------------------------------------------------------------------
Royal Bank of 87,000 5.27 (a) 10/04/2006 87,000
Scotland, NY 295,000 5.275 (a) 11/16/2006 294,996
- -------------------------------------------------------------------------------
Toronto-Dominion 100,000 5.24 4/04/2007 99,884
Bank, NY
- -------------------------------------------------------------------------------
Total Certificates of Deposit -- Yankee
(Cost -- $3,431,892) ............................................. 3,431,750
===============================================================================
Commercial Paper -- 32.1%
===============================================================================
Amsterdam 300,000 5.26 10/19/2006 299,123
Funding Corp.
- -------------------------------------------------------------------------------
Barton Capital 138,355 5.26 10/05/2006 138,234
Corp. 188,307 5.26 10/23/2006 187,647
- -------------------------------------------------------------------------------
Chariot Funding, 60,000 5.25 10/11/2006 59,895
LLC 100,000 5.26 10/23/2006 99,649
79,707 5.25 10/24/2006 79,416
- -------------------------------------------------------------------------------
Clipper 247,000 5.26 10/02/2006 246,892
Receivables Corp.
- -------------------------------------------------------------------------------
Compass 91,210 5.27 10/10/2006 91,063
Securitization LLC 50,000 5.26 10/23/2006 49,824
- -------------------------------------------------------------------------------
Falcon Asset 75,000 5.25 10/02/2006 74,967
Securitization Corp. 75,000 5.25 10/06/2006 74,923
99,714 5.26 10/20/2006 99,408
129,741 5.26 10/24/2006 129,267
70,545 5.26 11/07/2006 70,143
- -------------------------------------------------------------------------------
General Electric 250,000 5.025 10/10/2006 249,603
Capital Corp.
- -------------------------------------------------------------------------------
Grampian 150,000 5.26 10/12/2006 149,715
Funding Ltd.
- -------------------------------------------------------------------------------
Greyhawk 125,000 5.26 10/03/2006 124,927
Funding LLC 105,000 5.25 10/05/2006 104,908
82,000 5.26 10/27/2006 81,665
- -------------------------------------------------------------------------------
Jupiter 104,692 5.26 10/05/2006 104,600
Securitization 70,000 5.26 10/06/2006 69,928
Corp. 101,464 5.26 10/13/2006 101,256
101,464 5.26 10/16/2006 101,212
72,380 5.26 10/26/2006 72,095
- -------------------------------------------------------------------------------
Kitty Hawk 203,738 5.26 10/18/2006 203,172
Funding Corp.
- -------------------------------------------------------------------------------
Lehman Brothers 105,000 5.29 (a) 3/19/2007 105,000
Holdings Inc.
- -------------------------------------------------------------------------------
Morgan Stanley 76,000 5.32 (a) 11/17/2006 76,000
41,300 5.32 (a) 12/01/2006 41,300
- -------------------------------------------------------------------------------
Newport Funding 100,000 5.26 10/17/2006 99,737
Corp.
- -------------------------------------------------------------------------------
Park Avenue 62,904 5.26 10/03/2006 62,867
Receivables Co., 57,275 5.25 10/04/2006 57,233
LLC 200,917 5.25 10/23/2006 200,214
- -------------------------------------------------------------------------------
Preferred 152,638 5.25 10/24/2006 152,082
Receivables
Funding Corp.
- -------------------------------------------------------------------------------
Ranger Funding 82,100 5.26 10/18/2006 81,872
Co., LLC
- -------------------------------------------------------------------------------
Sheffield 161,549 5.26 10/02/2006 161,478
Receivables Corp. 75,000 5.26 10/13/2006 74,847
100,400 5.26 10/18/2006 100,121
64,634 5.26 10/23/2006 64,407
- -------------------------------------------------------------------------------
Skandinaviska 142,000 5.30 (a) 1/23/2007 142,000
Enskilda Banken AB
- -------------------------------------------------------------------------------
Solitaire Funding, 300,000 5.26 10/12/2006 299,430
LLC 75,000 5.26 10/13/2006 74,847
140,000 5.26 10/23/2006 139,509
- -------------------------------------------------------------------------------
Surrey Funding 50,000 5.26 10/11/2006 49,912
Corp.
- -------------------------------------------------------------------------------
Swedbank 50,000 5.26 10/03/2006 49,971
(ForeningsSparbanken)
- -------------------------------------------------------------------------------
Variable Funding 187,500 5.25 10/27/2006 186,734
Capital Corp.
- -------------------------------------------------------------------------------
Total Commercial Paper
(Cost -- $5,283,109) ............................................. 5,283,093
- -------------------------------------------------------------------------------
WCMA MONEY FUND SEPTEMBER 30, 2006 15
Schedule of Investments (continued) Master Money Trust (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
===============================================================================
Corporate Notes -- 20.5%
===============================================================================
ABN AMRO $297,550 5.464% (a) 5/11/2007 $ 297,729
Bank NV
- -------------------------------------------------------------------------------
ASIF Global 54,000 5.34 (a) 10/23/2007 54,000
Financing
- -------------------------------------------------------------------------------
American Honda 70,000 5.35 (a) 12/06/2006 70,000
Finance Corp.
- -------------------------------------------------------------------------------
Bank of America 375,000 5.29 (a) 12/29/2006 375,000
Corp.
- -------------------------------------------------------------------------------
Bank of Ireland 43,300 5.30 (a) 10/19/2007 43,300
- -------------------------------------------------------------------------------
Beta Finance Inc. 158,000 5.31 (a) 11/27/2006 157,999
217,000 5.298 (a) 3/20/2007 216,995
- -------------------------------------------------------------------------------
CC (USA) Inc. 145,000 5.275 (a) 2/20/2007 145,000
(Centauri) 150,000 5.298 (a) 3/15/2007 149,997
- -------------------------------------------------------------------------------
Dorada Finance 75,000 5.28 (a) 11/15/2006 74,999
Inc.
- -------------------------------------------------------------------------------
General Electric 163,605 5.43 (a) 10/17/2007 163,605
Capital Corp.
- -------------------------------------------------------------------------------
Goldman Sachs 202,600 5.38 (a) 10/15/2007 202,600
Group, Inc.
- -------------------------------------------------------------------------------
HSBC Holdings 109,000 5.475 (a) 10/19/2006 109,006
Plc 47,000 5.54 (a) 10/27/2006 47,002
101,000 5.41 (a) 12/14/2006 101,018
- -------------------------------------------------------------------------------
JPMorgan 139,000 5.34 (a) 2/09/2007 139,000
Securities Inc.
- -------------------------------------------------------------------------------
Links Finance LLC 50,000 5.318 (a) 5/21/2007 49,999
- -------------------------------------------------------------------------------
MetLife Funding, 50,500 5.42 (a) 10/15/2007 50,500
Inc.
- -------------------------------------------------------------------------------
Mound Financing 100,000 5.29 (a) 11/08/2006 100,000
Plc
- -------------------------------------------------------------------------------
Newcastle CDO III, 60,000 5.36 (a) 3/24/2007 60,000
Ltd.
- -------------------------------------------------------------------------------
Northern Rock Plc 91,000 5.46 (a) 10/09/2007 91,049
- -------------------------------------------------------------------------------
Permanent 120,000 5.30 (a) 3/10/2007 120,000
Financing Plc
- -------------------------------------------------------------------------------
Restructured Asset 60,000 5.48 (a) 2/08/2007 60,000
Securities with
Enhanced Returns,
Series 1998-MM-7-1
Trust
- -------------------------------------------------------------------------------
Sigma Finance 261,000 5.335 (a) 10/25/2006 260,998
Corp.
- -------------------------------------------------------------------------------
Toyota Motor 150,000 5.255 (a) 5/04/2007 150,000
Credit Corp.
- -------------------------------------------------------------------------------
U.S. Bank, NA 51,000 5.263 (a) 10/02/2006 51,000
- -------------------------------------------------------------------------------
Westpac Banking 44,000 5.43 (a) 10/11/2007 44,001
Corp.
- -------------------------------------------------------------------------------
Total Corporate Notes
(Cost -- $3,384,756) ............................................. 3,384,797
===============================================================================
Funding Agreements -- 6.4%
===============================================================================
General Electric 50,000 5.42 (a) 11/01/2006 50,000
Capital 150,000 5.42 (a) 12/01/2006 150,000
Assurance Co. (f)
- -------------------------------------------------------------------------------
ING USA Annuity 50,000 5.41 (a) 9/18/2007 50,000
and Life
Insurance Co. (f)
- -------------------------------------------------------------------------------
Jackson 55,000 5.39 (a) 5/01/2007 55,000
National Life
Insurance Co. (f)
- -------------------------------------------------------------------------------
MetLife 100,000 5.41 (a) 2/01/2007 100,000
Funding, Inc. (f)
- -------------------------------------------------------------------------------
Metropolitan Life 165,000 5.41 (a) 4/02/2007 165,000
Insurance Co. (f) 25,000 5.38 (a) 9/17/2007 25,000
- -------------------------------------------------------------------------------
Monumental Life 145,000 5.475 (a) 11/16/2006 145,000
Insurance Co. (f)
- -------------------------------------------------------------------------------
New York Life 226,000 5.38 (a) 5/25/2007 226,000
Insurance Co. (f)
- -------------------------------------------------------------------------------
The Travelers 70,000 5.38 (a) 3/01/2007 70,000
Insurance Co. (f) 25,000 5.39 (a) 5/01/2007 25,000
- -------------------------------------------------------------------------------
Total Funding Agreements
(Cost -- $1,061,000) ............................................. 1,061,000
===============================================================================
Promissory Notes -- 1.2%
===============================================================================
Goldman Sachs 200,000 5.36 (a) 10/10/2006 200,000
Group, Inc.
- -------------------------------------------------------------------------------
Total Promissory Notes
(Cost -- $200,000) ............................................... 200,000
===============================================================================
Time Deposits -- 2.3%
===============================================================================
Rabobank 372,530 5.36 10/02/2006 372,530
Nederland
- -------------------------------------------------------------------------------
Total Time Deposits
(Cost -- $372,530) ............................................... 372,530
===============================================================================
U.S. Government, Agency & Instrumentality Obligations -- Non-Discount -- 10.1%
===============================================================================
Fannie Mae 25,000 4.00 6/29/2007 24,766
225,000 4.875 1/11/2008 224,370
- -------------------------------------------------------------------------------
Federal Farm 136,000 5.23 (a) 10/19/2006 135,999
Credit Banks 68,000 5.24 (a) 4/13/2007 67,996
102,000 5.25 (a) 10/05/2007 101,990
35,000 5.25 (a) 10/26/2007 35,003
- -------------------------------------------------------------------------------
Federal Home 49,500 2.75 11/15/2006 49,343
Loan Bank System 49,500 3.25 11/29/2006 49,336
25,000 3.75 11/30/2006 24,935
59,235 3.375 12/15/2006 59,009
165,000 3.80 12/29/2006 164,389
54,000 3.45 1/10/2007 53,726
50,500 4.00 6/13/2007 50,048
50,000 4.15 7/05/2007 49,602
33,750 4.25 9/14/2007 33,470
37,250 4.50 12/14/2007 36,996
30,000 4.625 2/01/2008 29,836
- -------------------------------------------------------------------------------
16 WCMA MONEY FUND SEPTEMBER 30, 2006
Schedule of Investments (concluded) Master Money Trust (in Thousands)
Face Interest Maturity
Issue Amount Rate* Date Value
===============================================================================
U.S. Government, Agency & Instrumentality Obligations -- Non-Discount
(concluded)
===============================================================================
Freddie Mac $ 74,500 3.00 % 11/09/2006 $ 74,298
30,000 3.75 11/15/2006 29,944
15,400 4.125 4/12/2007 15,306
50,000 4.45 9/28/2007 49,671
25,000 4.625 10/05/2007 24,876
100,000 4.705 10/11/2007 99,578
100,000 4.725 10/19/2007 99,595
- -------------------------------------------------------------------------------
U.S. Treasury Notes 50,000 2.50 (d) 10/31/2006 49,887
33,000 4.375 (d) 12/31/2007 32,805
- -------------------------------------------------------------------------------
Total U.S. Government, Agency & Instrumentality
Obligations -- Non-Discount
(Cost -- $1,671,747) ............................................. 1,666,774
===============================================================================
Beneficial
Interest Issue
===============================================================================
Short-Term Securities -- 0.5%
===============================================================================
$81,617 BlackRock Liquidity Series, LLC
Money Market Series,
5.33% (b)(c)(e) 81,617
- -------------------------------------------------------------------------------
Total Short-Term Securities
(Cost -- $81,617) ................................................ 81,617
- -------------------------------------------------------------------------------
Total Investments
(Cost -- $16,879,167**) -- 102.4% ................................ 16,872,774
Liabilities in Excess of
Other Assets -- (2.4%) ........................................... (394,028)
-----------
Net Assets -- 100.0% ............................................. $16,478,746
===========
* Commercial Paper and certain U.S. Government, Agency and Instrumentality
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 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, 2006.
** The cost and unrealized appreciation (depreciation) of investments as of
September 30, 2006, as computed for federal income tax purposes, were as
follows:
Aggregate cost ............................................. $16,879,327
===========
Gross unrealized appreciation .............................. $ 141
Gross unrealized depreciation .............................. (6,694)
-----------
Net unrealized depreciation ................................ $ (6,553)
===========
(a) Floating rate security.
(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
---------------------------------------------------------------------------------------------
BlackRock Liquidity Series, LLC Money Market Series $ 51,658 $ 43
---------------------------------------------------------------------------------------------
(c) Security was purchased with the cash proceeds from securities loans.
(d) Security, or a portion of security, is on loan.
(e) Represents the current yield as of September 30, 2006
(f) Restricted securities as to resale, representing 6.4% of net assets, were
as follows:
----------------------------------------------------------------------------------------------------------------
Issue Acquisition Date Cost Value
----------------------------------------------------------------------------------------------------------------
General Electric Capital Assurance Co.:
5.42% due 11/01/2006 11/01/2005 $ 50,000 $ 50,000
5.42% due 12/01/2006 11/30/2005 150,000 150,000
ING USA Annuity and Life Insurance Co., 5.41% due 9/18/2007 8/18/2006 50,000 50,000
Jackson National Life Insurance Co., 5.39% due 5/01/2007 5/01/2006 55,000 55,000
MetLife Funding, Inc., 5.41% due 2/01/2007 2/01/2006 100,000 100,000
Metropolitan Life Insurance Co.:
5.41% due 4/02/2007 4/03/2006 165,000 165,000
5.38% due 9/17/2007 9/15/2006 25,000 25,000
Monumental Life Insurance Co., 5.475% due 11/16/2006 11/18/2005 145,000 145,000
New York Life Insurance Co., 5.38% due 5/25/2007 5/26/2006 226,000 226,000
The Travelers Insurance Co.:
5.38% due 3/01/2007 2/28/2006 70,000 70,000
5.39% due 5/01/2007 5/01/2006 25,000 25,000
----------------------------------------------------------------------------------------------------------------
Total $ 1,061,000 $ 1,061,000
=========== ===========
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2006 17
Statement of Assets and Liabilities Master Money Trust
As of September 30, 2006
===================================================================================================================================
Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Investments in unaffiliated securities, at value (including
securities loaned of $79,014,130) (identified cost--$16,797,550,801) ...... $ 16,791,157,630
Investments in affiliated securities, at value
(identified cost--$81,616,500) ............................................ 81,616,500
Receivables:
Interest ................................................................ $ 64,941,059
Securities lending ...................................................... 5,227 64,946,286
-----------------
Prepaid expenses and other assets .......................................... 504,788
-----------------
Total assets ............................................................... 16,938,225,204
-----------------
===================================================================================================================================
Liabilities
- -----------------------------------------------------------------------------------------------------------------------------------
Collateral on securities loaned, at value .................................. 81,616,500
Bank overdraft ............................................................. 444,492
Payables:
Securities purchased .................................................... 375,000,000
Investment adviser ...................................................... 1,646,651
Withdrawals ............................................................. 220,407
Other affiliates ........................................................ 149,097 377,016,155
-----------------
Accrued expenses ........................................................... 402,527
-----------------
Total liabilities .......................................................... 459,479,674
-----------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets ................................................................. $ 16,478,745,530
=================
===================================================================================================================================
Net Assets Consist of
- -----------------------------------------------------------------------------------------------------------------------------------
Investors' capital ......................................................... $ 16,485,138,701
Unrealized depreciation--net ............................................... (6,393,171)
-----------------
Net Assets ................................................................. $ 16,478,745,530
=================
See Notes to Financial Statements.
18 WCMA MONEY FUND SEPTEMBER 30, 2006
Statement of Operations Master Money Trust
For the Six Months Ended September 30, 2006
===================================================================================================================================
Investment Income
- -----------------------------------------------------------------------------------------------------------------------------------
Interest and amortization of premium and discount earned ................... $ 395,720,739
Securities lending--net .................................................... 43,076
-----------------
Total income ............................................................... 395,763,815
-----------------
===================================================================================================================================
Expenses
- -----------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees ................................................... $ 10,205,183
Accounting services ........................................................ 660,054
Custodian fees ............................................................. 199,622
Professional fees .......................................................... 83,221
Trustees' fees and expenses ................................................ 37,915
Pricing fees ............................................................... 22,588
Printing and shareholder reports ........................................... 1,934
Other ...................................................................... 108,875
-----------------
Total expenses ............................................................. 11,319,392
-----------------
Investment income--net ..................................................... 384,444,423
-----------------
===================================================================================================================================
Realized & Unrealized Gain--Net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain on investments--net .......................................... 21,751
Change in unrealized depreciation on investments--net ...................... 6,874,260
-----------------
Total realized and unrealized gain--net .................................... 6,896,011
-----------------
Net Increase in Net Assets Resulting from Operations ....................... $ 391,340,434
=================
See Notes to Financial Statements.
WCMA MONEY FUND SEPTEMBER 30, 2006 19
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: 2006 2006
===================================================================================================================================
Operations
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income--net ..................................................... $ 384,444,423 $ 521,267,632
Realized gain (loss)--net .................................................. 21,751 (196,097)
Change in unrealized depreciation--net ..................................... 6,874,260 (38,335)
---------------------------------------
Net increase in net assets resulting from operations ....................... 391,340,434 521,033,200
---------------------------------------
===================================================================================================================================
Capital Transactions
- -----------------------------------------------------------------------------------------------------------------------------------
Proceeds from contributions ................................................ 63,515,735,860 123,778,818,394
Fair value of withdrawals .................................................. (62,662,742,667) (124,494,343,825)
---------------------------------------
Net increase (decrease) in net assets derived from capital transactions .... 852,993,193 (715,525,431)
---------------------------------------
===================================================================================================================================
Net Assets
- -----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets .................................... 1,244,333,627 (194,492,231)
Beginning of period ........................................................ 15,234,411,903 15,428,904,134
---------------------------------------
End of period .............................................................. $ 16,478,745,530 $ 15,234,411,903
=======================================
See Notes to Financial Statements.
Financial Highlights Master Money Trust
For the Period
For the Six For the Year Ended February 13,
Months Ended March 31, 2003+
The following ratios have been derived from September 30, --------------------------------------- to March 31,
information provided in the financial statements. 2006 2006 2005 2004 2003
====================================================================================================================================
Total Investment Return
- ------------------------------------------------------------------------------------------------------------------------------------
Total investment return ....................... 2.50%** 3.59% 1.64% 1.06% .90%*
=======================================================================
====================================================================================================================================
Ratios to Average Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses ...................................... .14%* .15% .15% .15% .21%*
=======================================================================
Investment income and realized gain (loss)--net 4.92%* 3.54% 1.60% 1.08% 1.25%*
=======================================================================
====================================================================================================================================
Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (in thousands) ...... $16,478,746 $15,234,412 $15,428,904 $19,286,860 $23,129,013
=======================================================================
* Annualized.
** Aggregate total investment return.
+ Commencement of operations.
See Notes to Financial Statements.
20 WCMA MONEY FUND SEPTEMBER 30, 2006
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 interests 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. Valuation of other short-term investment vehicles is generally
based on the net asset value of the underlying investment vehicle or amortized
cost. 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) Recent accounting pronouncement -- In July 2006, the Financial Accounting
Standards Board ("FASB") issued Interpretation No. 48 ("FIN 48") entitled
"Accounting for Uncertainty in Income Taxes -- an interpretation of FASB
Statement No. 109." FIN 48 prescribes the minimum recognition threshold a tax
position must meet in connection with accounting for uncertainties in income tax
positions taken or expected to be taken by an entity including mutual funds
before being measured and recognized in the financial statements. Adoption of
FIN 48 is required for fiscal years beginning after December 15, 2006. The
impact on the Trust's financial statements, if any, is currently being assessed.
(e) 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.
(f) 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
WCMA MONEY FUND SEPTEMBER 30, 2006 21
Notes to Financial Statements (concluded) Master Money Trust
default or in the event of losses on investments made with cash collateral.
(g) Bank overdraft -- The Trust recorded a bank overdraft resulting from a
timing difference of security transaction settlements.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Trust has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect, wholly owned subsidiary of Merrill Lynch & Co., Inc. ("ML
& Co."), which is the limited partner.
FAM is responsible for the management of the 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 Merrill Lynch Investment
Managers, L.P. ("MLIM"), an affiliate of FAM. For the six months ended September
30, 2006, MLIM, LLC received $18,510 in securities lending agent fees.
For the six months ended September 30, 2006, the Trust reimbursed FAM $159,930
for certain accounting services.
In February 2006, ML & Co. and BlackRock, Inc. entered into an agreement to
contribute ML & Co.'s investment management business, including FAM, to the
investment management business of BlackRock, Inc. The transaction closed on
September 29, 2006.
On September 27, 2006, the shareholders of the investors of the Trust approved a
new Investment Advisory Agreement with BlackRock Advisors, Inc. (the "Manager"),
a wholly owned subsidiary of BlackRock, Inc. BlackRock Advisors, Inc. was
reorganized into BlackRock Advisors, LLC. The new advisory agreement became
effective on September 29, 2006 and the investment advisory fee is unchanged. In
addition, the Manager has entered into a sub-advisory agreement with BlackRock
Institutional Management Corporation, an affiliate, under which the Manager pays
each Sub-Adviser for services it provides a fee equal to 59% of the management
fee paid to the Manager.
In connection with the closing, MLIM, LLC, the security lending agent, became
BlackRock Investment Management, LLC.
Prior to the closing, certain officers and/or trustees of the Trust are officers
and/or directors of FAM, PSI, ML & Co., MLIM, and/or MLIM, LLC.
Commencing September 29, 2006, certain officers and/or trustees of the Trust are
officers and/or directors of BlackRock, Inc. or its affiliates.
22 WCMA MONEY FUND SEPTEMBER 30, 2006
Disclosure of Investment Advisory Agreement
Disclosure of FAM Management Agreement
The Board of Trustees of Master Money Trust (the "Trust") and the Board of
Trustees of WCMA Money Fund (the "Fund") met in August 2006 to consider approval
of the management agreement between the Trust, on behalf of the Fund, and Fund
Asset Management, L.P., the Trust's manager at that time ("FAM").
Activities and Composition of the Board of Trustees
All but one member of each Board of Trustees is an independent trustee whose
only association with FAM or other Merrill Lynch affiliates was as a trustee of
the Fund and the Trust and as a trustee or director of certain other funds
advised by FAM or its affiliates. The Chairman of each Board is also an
independent trustee. New trustee nominees are chosen by a Nominating Committee
comprised of independent trustees. All independent trustees also are members of
the respective Board's Audit Committee, and the independent trustees meet in
executive session at each in-person Board meeting. The Boards and the Audit
Committees 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.
FAM Management Agreement -- Matters Considered by the Boards
Every year, each Board reviews and considers approval of the Trust's management
agreement on behalf of the Fund. Each Board assesses the nature, scope and
quality of the services provided to the Fund and the Trust by the personnel of
the manager and its affiliates, including administrative services, shareholder
services, oversight of fund accounting, marketing services and assistance in
meeting legal and regulatory requirements. Each Board also receives and assesses
information regarding the services provided to the Fund and the Trust by certain
unaffiliated service providers.
At various times throughout the year, each Board also considers a range of
information in connection with its oversight of the services provided by the
manager and its affiliates. Among the matters considered are: (a) fees (in
addition to management fees) paid to the manager and its affiliates by the Fund
and/or the Trust, 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/Fund's
investment objective, policies and restrictions, and the Trust's/Fund's
compliance with its Code of Ethics and compliance policies and procedures; and
(d) the nature, cost and character of non-investment management services
provided by the manager and its affiliates.
The Boards noted their view of FAM as one of the most experienced global asset
management firms and considered the overall services provided by FAM to be of
high quality. The Boards also noted their view of FAM as financially sound and
well managed and noted FAM's affiliation with one of America's largest financial
firms. The Boards work closely with the manager in overseeing the manager's
efforts to achieve good performance. As part of this effort, each Board
discusses portfolio manager effectiveness and, when performance is not
satisfactory, discusses with the manager taking steps such as changing
investment personnel.
Annual Consideration of Approval by the Boards
In the period prior to the Board meeting to consider renewal of the management
agreement, each Board requests and receives materials specifically relating to
the management agreement. These materials include (a) information on the fees
and expenses and the investment performance of the Trust/Fund or its predecessor
(which had the same investment objectives and strategies as the Trust/Fund) as
compared to a comparable group of funds; (b) a discussion by the Trust's/Fund's
portfolio management team regarding investment strategies used by the Trust/Fund
during its most recent fiscal year; (c) information on the profitability to the
manager and its affiliates of the management agreement and certain other
relationships with the Trust and/or the Fund; and (d) information provided by
the manager concerning management fees charged to other clients, such as
institutional clients, under similar investment mandates. Each Board also
considers other matters it deems important to the approval process, such as
payments made to the manager 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 manager and its affiliates from their relationship with
the Fund and the Trust. Neither Board identified any particular information as
controlling, and each member of the Board may have attributed different weights
to the various items considered.
WCMA MONEY FUND SEPTEMBER 30, 2006 23
Disclosure of Investment Advisory Agreement (concluded)
Certain Specific Renewal Data
In connection with the most recent renewal of the management agreement between
the Trust, on behalf of the Fund, and FAM (the "FAM Management Agreement") in
August 2006, the independent trustees' and Boards' review included the
following:
Services Provided by the Manager -- Each Board reviewed the nature, extent and
quality of services provided by FAM, including the management services and the
resulting performance of the Trust/Fund. Each Board focused primarily on FAM's
investment advisory services and the Trust's/Fund's investment performance.
While each Board reviews performance data at least quarterly, the Board attaches
more importance to performance over relatively long periods of time, typically
three to five years. The Boards concluded that the comparative data indicated
that the Fund's performance was competitive. Considering all these factors, each
Board concluded that the Trust's/Fund's performance and the nature and quality
of the services provided supported the continuation of the FAM Management
Agreement.
FAM's Personnel and Investment Process -- Each Board reviewed the Trust's/Fund's
investment objectives and strategies. The Boards discussed with FAM's senior
management responsible for investment operations and the senior management of
FAM's taxable fixed income investing group the strategies being used to achieve
the stated objectives. Among other things, the Boards considered the size,
education and experience of FAM's investment staff, its use of technology, and
FAM's approach to training and retaining portfolio managers and other research,
advisory and management personnel. The Boards also reviewed FAM's compensation
policies and practices with respect to the Trust's/Fund's portfolio manager. The
Boards also considered the experience of Mr. Mejzak, the Trust's/Fund's
portfolio manager at that time. Each Board considered the extensive experience
of FAM and its investment staff in analyzing and managing the types of
investments used by the Trust and the Fund and concluded that the Trust and the
Fund benefit from that experience.
Management Fees and Other Expenses -- Each Board reviews the Trust's/Fund's
contractual management fee rate and actual management fee rate as a percentage
of total assets at common asset levels -- the actual rate includes advisory and
administrative service fees and the effects of any fee waivers -- compared to
the other comparable funds. It also compares the Trust's/Fund's total expenses
to those of other comparable funds. Each Board determined that the Fund's
contractual and actual management fee rates, as well as total expenses, were
competitive with those of comparable funds. Each Board concluded that the Fund's
management fee rate and overall expense ratio were reasonable.
Profitability -- Each Board considers the cost of the services provided to the
Trust and the Fund by the manager and the manager's and its affiliates' profits
relating to the management and distribution of the Trust and the Fund and the
funds advised by the manager and its affiliates. As part of its analysis, each
Board reviewed FAM's methodology in allocating its costs to the management of
the Trust and the Fund and concluded that there was a reasonable basis for the
allocation. Each Board also considered federal court decisions discussing an
investment adviser's profitability and profitability levels considered to be
reasonable in those decisions. The Boards concluded that the profits of FAM and
its affiliates were acceptable in relation to the nature and quality of services
provided and given the level of fees and expenses overall.
Economies of Scale -- Each Board considered the extent to which economies of
scale might be realized as the assets of the Trust and the Fund increase and
whether there should be changes in the management fee rate or structure in order
to enable the Trust and the Fund to participate in these economies of scale.
Each Board concluded that the Trust's/Fund's management fee rate schedule, which
includes breakpoints, appropriately allows shareholders to participate in the
benefits of economies of scale. The Boards determined that no changes were
currently necessary.
Conclusion
After the independent trustees of the Fund and the independent trustees of the
Trust deliberated in executive session, each entire Board, including all of the
independent trustees, approved the renewal of the existing FAM Management
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.
24 WCMA MONEY FUND SEPTEMBER 30, 2006
Disclosure of New Investment Advisory Agreement
New BlackRock Management Agreement -- Matters Considered by the Boards
In connection with the combination of Merrill Lynch's investment advisory
business, including Fund Asset Management, L.P. (the "Previous Manager"), with
that of BlackRock, Inc. ("BlackRock") to create a new independent company ("New
BlackRock") (the "Transaction"), the Board of Trustees of the Trust, on behalf
of the Fund, considered and approved a new management agreement (the "BlackRock
Management Agreement") between the Trust and BlackRock Advisors, LLC ("BlackRock
Advisors"). Because the Fund is a feeder fund that invests all of its assets in
the Trust, the Board of Trustees of the Fund also considered the BlackRock
Management Agreement. Shareholders subsequently approved the BlackRock
Management Agreement, and it became effective on September 29, 2006, replacing
the management agreement with the Previous Manager (the "Previous Management
Agreement").
Each Board discussed the BlackRock Management Agreement at telephonic and
in-person meetings held during April and May 2006. Each Board, including the
independent trustees, approved the BlackRock Management Agreement at an
in-person meeting held on May 12, 2006.
To assist each Board in its consideration of the BlackRock Management Agreement,
BlackRock provided materials and information about BlackRock, including its
financial condition and asset management capabilities and organization, and
Merrill Lynch provided materials and information about the Transaction. The
independent trustees, through their independent legal counsel, also requested
and received additional information from Merrill Lynch and BlackRock in
connection with their consideration of the BlackRock Management Agreement. The
additional information was provided in advance of the May 12, 2006 meetings. In
addition, the independent trustees consulted with their counsel and counsel for
the Fund and the Trust on numerous occasions, discussing, among other things,
the legal standards and certain other considerations relevant to each Board's
deliberations.
At each Board meeting, the trustees discussed with Merrill Lynch management and
certain BlackRock representatives the Transaction, its strategic rationale and
BlackRock's general plans and intentions regarding the Fund and the Trust. At
these Board meetings, representatives of Merrill Lynch and BlackRock made
presentations to and responded to questions from each Board. Each Board also
inquired about the plans for and anticipated roles and responsibilities of
certain employees and officers of the Previous Manager, and of its affiliates,
to be transferred to BlackRock in connection with the Transaction. The
independent trustees also conferred separately and with their counsel about the
Transaction and other matters related to the Transaction on a number of
occasions, including in connection with the April and May 2006 meetings. After
the presentations and after reviewing the written materials provided, the
independent trustees met in executive sessions with their counsel to consider
the BlackRock Management Agreement.
In connection with each Board's review of the BlackRock Management Agreement,
Merrill Lynch and/or BlackRock advised the Boards about a variety of matters.
The advice included the following, among other matters:
o that there was not expected to be any diminution in the nature, quality
and extent of services provided to the Fund and the Trust and their
shareholders by BlackRock Advisors, including compliance services;
o that operation of New BlackRock as an independent investment management
firm would enhance its ability to attract and retain talented
professionals;
o that the Fund and the Trust were expected to benefit from having access to
BlackRock's state of the art technology and risk management analytic
tools, including investment tools, provided under the BlackRock
Solutions(R) brand name;
o that BlackRock had no present intention to alter any applicable expense
waivers or reimbursements that were currently in effect and, while it
reserved the right to do so in the future, it would seek the approval of
each Board before making any changes;
o that BlackRock and Merrill Lynch would enter into an agreement, for an
initial three-year period and automatically renewable from year to year
thereafter, in connection with the Transaction under which Merrill
Lynch-affiliated broker-dealers would continue to offer the Fund as an
investment product;
o that BlackRock Advisors would have substantially the same access to the
Merrill Lynch sales force when distributing shares of the Fund as was
currently being provided to the Previous Manager and that other
arrangements between the Previous Manager and Merrill Lynch sales channels
would be preserved;
WCMA MONEY FUND SEPTEMBER 30, 2006 25
Disclosure of New Investment Advisory Agreement (continued)
o that in connection with the Transaction, Merrill Lynch and BlackRock had
agreed to conduct, and use reasonable best efforts to cause their
respective affiliates to conduct, their respective businesses in
compliance with the conditions of Section 15(f) of the Investment Company
Act of 1940 (the "1940 Act") in relation to any public funds advised by
BlackRock or the Previous Manager (or affiliates), respectively; and
o that Merrill Lynch and BlackRock would derive benefits from the
Transaction and that, as a result, they had a financial interest in the
matters being considered that was different from that of Fund or Trust
shareholders.
Each Board considered the information provided by Merrill Lynch and BlackRock
above, and, among other factors, the following:
o the potential benefits to Fund and Trust shareholders from being part of a
combined fund family with BlackRock-sponsored funds, including possible
economies of scale and access to investment opportunities;
o the reputation, financial strength and resources of BlackRock and its
investment advisory subsidiaries and the anticipated financial strength
and resources of New BlackRock;
o the compliance policies and procedures of BlackRock Advisors;
o the terms and conditions of the BlackRock Management Agreement, including
the fact that the schedule of the Fund's/Trust's total advisory and
administrative fees would not increase under the BlackRock Management
Agreement, but would remain the same;
o that in August 2005, each Board had performed a full annual review of each
respective Previous Management Agreement, as required by the 1940 Act, and
had determined that the Previous Manager had the capabilities, resources
and personnel necessary to provide the advisory and administrative
services that were then being provided to the Fund/Trust; and that the
advisory and/or management fees paid by the Fund/Trust, taking into
account any applicable agreed-upon fee waivers and breakpoints, had
represented reasonable compensation to the Previous Manager in light of
the services provided, the costs to the Previous Manager of providing
those services, economies of scale, the fees and other expenses paid by
similar funds, and such other matters as the trustees had considered
relevant in the exercise of their reasonable judgment; and
o that Merrill Lynch had agreed to pay all expenses of the Fund and Trust in
connection with the Board's consideration of the BlackRock Management
Agreement and related agreements and all costs of shareholder approval of
the BlackRock Management Agreement and as a result the Fund and the Trust
would bear no costs in obtaining shareholder approval of the BlackRock
Management Agreement.
Certain of these considerations are discussed in more detail below.
In its review of the BlackRock Management Agreement, each Board assessed the
nature, quality and scope of the services to be provided to the Fund and the
Trust by the personnel of BlackRock Advisors and its affiliates, including
administrative services, shareholder services, oversight of fund accounting,
marketing services and assistance in meeting legal and regulatory requirements.
In its review of the BlackRock Management Agreement, each Board also considered
a range of information in connection with its oversight of the services to be
provided by BlackRock Advisors and its affiliates. Among the matters considered
were: (a) fees (in addition to management fees) to be paid to BlackRock Advisors
and its affiliates by the Fund and the Trust; (b) Fund and Trust operating
expenses paid to third parties; (c) the resources devoted to and compliance
reports relating to the Fund's and the Trust's investment objective, policies
and restrictions, and their compliance with their Code of Ethics and BlackRock
Advisors' compliance policies and procedures; and (d) the nature, cost and
character of non-investment management services to be provided by BlackRock
Advisors and its affiliates.
In the period prior to the Board meetings to consider renewal of the Previous
Management Agreement, each Board had requested and received materials
specifically relating to the Previous Management Agreement. These materials
included (a) information on the fees and expenses and the investment performance
of the Fund as compared to a comparable group of funds; (b) a discussion by the
Trust's portfolio management team on investment strategies used by the Trust
during its most recent fiscal year; (c) information on the profitability to the
Previous Manager of the Previous Management Agreement and other payments
received by the Previous Manager and its affiliates from the Fund and the Trust;
and (d) information provided by the Previous Manager concerning services related
to the valuation and pricing of
26 WCMA MONEY FUND SEPTEMBER 30, 2006
the Trust's portfolio holdings, allocation of Trust brokerage fees, the Trust's
portfolio turnover statistics, and direct and indirect benefits to the Previous
Manager and its affiliates from their relationship with the Fund and the Trust.
In its deliberations, each Board considered information received in connection
with its most recent approval of the continuance of the Previous Management
Agreement, in addition to information provided by BlackRock and BlackRock
Advisors in connection with their evaluation of the terms and conditions of the
BlackRock Management Agreement. The trustees did not identify any particular
information that was all-important or controlling, and each trustee attributed
different weights to the various factors. Each Board, including a majority of
the Board's independent trustees, concluded that the terms of the BlackRock
Management Agreement are appropriate, that the fees to be paid are reasonable in
light of the services to be provided to the Fund/Trust, and that the BlackRock
Management Agreement should be approved and recommended to Fund/Trust
shareholders.
Nature, Quality and Extent of Services Provided -- Each Board reviewed the
nature, quality and extent of services provided by the Previous Manager,
including the investment advisory services and the resulting performance of the
Fund and the Trust, as well as the nature, quality and extent of services
expected to be provided by BlackRock Advisors. Each Board focused primarily on
the Previous Manager's investment advisory services and the investment
performance of the Fund and the Trust, but also considered certain areas in
which both the Previous Manager and the Fund/Trust received services as part of
the Merrill Lynch complex. Each Board compared the Fund's performance -- both
including and excluding the effects of fees and expenses -- to the performance
of a comparable group of mutual funds, and the performance of a relevant index
or combination of indexes. While each Board reviews performance data at least
quarterly, consistent with the Previous Manager's investment goals, the Board
attaches more importance to performance over relatively long periods of time,
typically three to five years.
In evaluating the nature, quality and extent of the services to be provided by
BlackRock Advisors under the BlackRock Management Agreement, each Board
considered, among other things, the expected impact of the Transaction on the
operations, facilities, organization and personnel of New BlackRock and how it
would affect the Fund and the Trust; the ability of BlackRock Advisors to
perform its duties after the Transaction; and any anticipated changes to the
investment and other practices of the Fund or the Trust.
Each Board was given information with respect to the potential benefits to the
Fund and the Trust and their shareholders from having access to BlackRock's
state of the art technology and risk management analytic tools, including the
investment tools provided under the BlackRock Solutions brand name.
Each Board was advised that, as a result of Merrill Lynch's equity interest in
BlackRock after the Transaction, the Fund and the Trust would continue to be
subject to restrictions concerning certain transactions involving Merrill Lynch
affiliates (for example, transactions with a Merrill Lynch broker-dealer acting
as principal) absent revised or new regulatory relief. Each Board was advised
that a revision of existing regulatory relief with respect to these restrictions
was being sought from the Securities and Exchange Commission and was advised of
the possibility of receipt of such revised regulatory relief.
Based on their review of the materials provided and the assurances they had
received from the management of Merrill Lynch and of BlackRock, the trustees
determined that the nature and quality of services to be provided to the
Fund/Trust under the BlackRock Management Agreement were expected to be as good
as or better than that provided under the Previous Management Agreement. It was
noted, however, that changes in personnel were expected to follow the
Transaction and the combination of the operations of the Previous Manager and
its affiliates with those of BlackRock. The trustees noted that if portfolio
managers or other personnel were to cease to be available prior to the closing
of the Transaction, each Board would consider all available options, including
seeking the investment advisory or other services of BlackRock affiliates.
Accordingly, each Board concluded that, overall, the Board was satisfied at the
present time with assurances from BlackRock and BlackRock Advisors as to the
expected nature, quality and extent of the services to be provided to the
Fund/Trust under the BlackRock Management Agreement.
Costs of Services Provided and Profitability -- It was noted that, in
conjunction with the most recent review of the Previous Management Agreement,
each Board had received, among other things, information comparing the Fund's
fees and expenses to those of comparable funds and information as to the fees
charged by the Previous Manager or its affiliates to other registered investment
company clients for investment management services. Each Board reviewed the
Fund's/Trust's contractual management fee rate and actual management fee rate as
a percentage of total assets at common asset levels -- the actual rate includes
advisory and administrative service fees and the effects of any fee waivers --
compared to
WCMA MONEY FUND SEPTEMBER 30, 2006 27
Disclosure of New Investment Advisory Agreement (concluded)
comparable funds. Each Board also compared the Fund's total expenses to those of
comparable funds. Each Board concluded that the Fund's/Trust's management fee
and fee rate and overall expense ratio are reasonable compared to those of
comparable funds.
In evaluating the costs of the services to be provided by BlackRock Advisors
under the BlackRock Management Agreement, each Board considered, among other
things, whether advisory and administrative fees or other expenses would change
as a result of the Transaction.
The Fund's Board noted that in addition to the BlackRock Management Agreement,
it was considering a new administration agreement with BlackRock Advisors as
administrator to replace the Fund's administration agreement under which the
Previous Manager was serving as administrator. Based on its review of the
materials provided, and the fact that the BlackRock Management Agreement and the
new administration agreement are substantially similar to the corresponding
previous agreement in all material respects, including the rate of compensation,
each Board determined that the Transaction should not increase the total fees
payable, including any fee waivers and expense reimbursements, for advisory and
administrative services. Each Board noted that it was not possible to predict
how the Transaction would affect BlackRock Advisor's profitability from its
relationship with the Fund and the Trust.
Each Board discussed with BlackRock Advisors its general methodology to be used
in determining New BlackRock's profitability with respect to its relationship
with the Fund and the Trust. The trustees noted that they expect to receive
profitability information from BlackRock Advisors on at least an annual basis
and thus be in a position to evaluate whether any adjustments in fees and/or fee
breakpoints would be appropriate.
Fees and Economies of Scale -- Each Board considered the extent to which
economies of scale might be realized as the assets of the Fund and the Trust
increase and whether there should be changes in the management fee rate or
structure in order to enable the Fund and the Trust to participate in these
economies of scale. Each Board determined that changes were not currently
necessary.
In reviewing the Transaction, each Board considered, among other things, whether
advisory and administrative fees or other expenses would change as a result of
the Transaction. Based on the fact that the BlackRock Management Agreement was
substantially similar to the Previous Management Agreement in all material
respects, including the rate of compensation, and the fact that the proposed new
administration agreement with BlackRock Advisors was also substantially similar
to the administration agreement then in effect, each Board determined that as a
result of the Transaction, the Fund's/Trust's total advisory and administrative
fees would be no higher than the fees under the corresponding Previous
Management Agreement and administration agreement. Each Board noted that in
conjunction with the most recent deliberations concerning the Previous
Management Agreement, the trustees had determined that the total fees for
advisory and administrative services for the Fund and the Trust were reasonable
in light of the services provided. It was noted that in conjunction with the
recent review of the Previous Management Agreement, the Boards had received,
among other things, information comparing the fees, expenses and performance of
the Fund/Trust to those of comparable funds and information as to the fees
charged by the Previous Manager to other registered investment company clients
for investment management services. Each Board concluded that because the rates
for advisory and administrative fees for the Fund/Trust would be no higher than
the fee rates in effect at the time, the proposed management fee structure,
including any fee waivers, was reasonable and that no additional changes were
currently necessary.
Fall-Out Benefits -- In evaluating the fall-out benefits to be received by
BlackRock Advisors under the BlackRock Management Agreement, each Board
considered whether BlackRock Advisors would experience such benefits to the same
extent that the Previous Manager was experiencing such benefits under the
Previous Management Agreement. Based on their review of the materials provided,
including materials received in connection with their most recent approval of
the continuance of the Previous Management Agreement, and their discussions with
management of the Previous Manager and BlackRock, the trustees determined that
BlackRock Advisors' fall-out benefits could include increased ability for
BlackRock to distribute shares of its funds and other investment products. Each
Board noted that fall-out benefits were difficult to quantify with certainty at
this time, and indicated that the Board would continue to evaluate them going
forward.
Investment Performance -- Each Board considered investment performance for the
Fund and the Trust. Each Board compared the performance of the Fund and the
Trust -- both including and excluding the effects of fees and expenses -- to the
performance of a comparable group of mutual funds, and the performance of a
relevant index or combination of indexes. The comparative information showed
Fund performance at
28 WCMA MONEY FUND SEPTEMBER 30, 2006
various levels within the range of performance of comparable funds over
different time periods. While each Board reviews performance data at least
quarterly, consistent with the Previous Manager's investment goals, the Board
attaches more importance over relatively long periods of time, typically three
to five years. Each Board believed the Fund's performance was satisfactory.
Also, each Board took into account the investment performance of funds advised
by BlackRock Advisors. Each Board considered comparative information from Lipper
Inc. which showed that the performance of the funds advised by BlackRock
Advisors was within the range of performance of comparable funds over different
time periods. Each Board noted BlackRock's considerable investment management
experience and capabilities, but was unable to predict what effect, if any,
consummation of the Transaction would have on the future performance of the
Fund.
Conclusion -- After the independent trustees of the Fund and the independent
trustees of the Trust deliberated in executive session, each entire Board,
including the independent trustees, approved the BlackRock Management Agreement,
concluding that the advisory fee rate was reasonable in relation to the services
provided and that the BlackRock Management Agreement was in the best interests
of the shareholders. In approving the BlackRock Management Agreement, each Board
noted that it anticipated reviewing the continuance of the agreement in advance
of the expiration of the initial two-year period.
New BlackRock Sub-Advisory Agreement -- Matters Considered by the Boards
At an in-person meeting held on August 14-16, 2006, each Board, including the
independent trustees, discussed and approved the sub-advisory agreement with
respect to the Trust (the "BlackRock Sub-Advisory Agreement") between BlackRock
Advisors and BlackRock Institutional Management Corporation, an affiliate of
BlackRock Advisors (the "Sub-Adviser"). The BlackRock Sub-Advisory Agreement
became effective on September 29, 2006, at the same time the BlackRock
Management Agreement became effective.
Pursuant to the BlackRock Sub-Advisory Agreement, the Sub-Adviser receives a
monthly fee from BlackRock Advisors equal to 59% of the advisory fee received by
BlackRock Advisors from the Trust. BlackRock Advisors pays the Sub-Adviser out
of its own resources, and there is no increase in Fund or Trust expenses as a
result of the BlackRock Sub-Advisory Agreement.
In approving the BlackRock Sub-Advisory Agreement at the August in-person
meeting, each Board reviewed its considerations in connection with its approval
of the BlackRock Management Agreement in May 2006. The Boards relied on the same
information and considered the same factors as those discussed above in
connection with the approval of the BlackRock Management Agreement and came to
the same conclusion. In reviewing the sub-advisory fee rate provided in the
BlackRock Sub-Advisory Agreement, each Board noted the fact that BlackRock
Advisors and the Sub-Adviser each have significant responsibilities under their
respective advisory agreements. BlackRock Advisors remains responsible for
oversight of the Fund's and the Trust's operations and administration, and the
Sub-Adviser provides advisory services to the Fund/Trust and is responsible for
the day-to-day management of the Fund's/Trust's portfolio under the BlackRock
Sub-Advisory Agreement. The Boards also took into account the fact that there is
no increase in total advisory fees paid by the Fund or the Trust as a result of
the BlackRock Sub-Advisory Agreement. Under all of the circumstances, each Board
concluded that it was a reasonable allocation of fees for the Sub-Adviser to
receive 59% of the advisory fee paid by the Trust to BlackRock Advisors.
After the independent trustees of the Fund and the independent trustees of the
Trust deliberated in executive session, each entire Board, including the
independent trustees, approved each BlackRock Sub-Advisory Agreement, concluding
that the sub-advisory fee was reasonable in relation to the services provided
and that the BlackRock Sub-Advisory Agreement was in the best interests of
Fund/Trust shareholders.
WCMA MONEY FUND SEPTEMBER 30, 2006 29
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.
Electronic Delivery
Electronic copies of most financial reports and prospectuses are available on
the Fund's Web site. Shareholders can sign up for e-mail notifications of
quarterly statements, annual and semi-annual reports and prospectuses by
enrolling in the Fund's electronic delivery program.
To enroll:
Shareholders Who Hold Accounts with Investment Advisers, Banks or Brokerages:
Please contact your financial adviser. Please note that not all investment
advisers, banks or brokerages may offer this service.
30 WCMA MONEY FUND SEPTEMBER 30, 2006
BlackRock Privacy Principles
BlackRock is committed to maintaining the privacy of its current and former fund
investors and individual clients (collectively, "Clients") and to safeguarding
their nonpublic personal information. The following information is provided to
help you understand what personal information BlackRock collects, how we protect
that information and why in certain cases we share such information with select
parties.
If you are located in a jurisdiction where specific laws, rules or regulations
require BlackRock to provide you with additional or different privacy-related
rights beyond what is set forth below, then BlackRock will comply with those
specific laws, rules or regulations.
BlackRock obtains or verifies personal nonpublic information from and about you
from different sources, including the following: (i) information we receive from
you or, if applicable, your financial intermediary, on applications, forms or
other documents; (ii) information about your transactions with us, our
affiliates, or others; (iii) information we receive from a consumer reporting
agency; and (iv) from visits to our Web sites.
BlackRock does not sell or disclose to nonaffiliated third parties any nonpublic
personal information about its Clients, except as permitted by law or as is
necessary to service Client accounts. These nonaffiliated third parties are
required to protect the confidentiality and security of this information and to
use it only for its intended purpose.
We may share information with our affiliates to service your account or to
provide you with information about other BlackRock products or services that may
be of interest to you. In addition, BlackRock restricts access to nonpublic
personal information about its Clients to those BlackRock employees with a
legitimate business need for the information. BlackRock maintains physical,
electronic and procedural safeguards that are designed to protect the nonpublic
personal information of its Clients, including procedures relating to the proper
storage and disposal of such information.
WCMA MONEY FUND SEPTEMBER 30, 2006 31
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. 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 1-800-441-7762; (2) at
www.blackrock.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.blackrock.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 -- 9/06
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 - The registrant's
Nominating Committee will consider nominees to the Board recommended
by shareholders when a vacancy becomes available. Shareholders who
wish to recommend a nominee should send nominations which include
biographical information and sets forth the qualifications of the
proposed nominee to the registrant's Secretary. There have been no
material changes to these procedures.
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, 2006
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, 2006
By: /s/ Donald C. Burke
-----------------------------------
Donald C. Burke,
Chief Financial Officer of
WCMA Money Fund and Master Money Trust
Date: November 17, 2006