Form N-CSRS EDWARD JONES MONEY MARKE For: Aug 31
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Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-2993
(Investment Company Act File Number)
Edward Jones Money Market Fund
______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant's Telephone Number)
John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(Notices should be sent to the Agent for Service)
Date of Fiscal Year End: 02/28/17
Date of Reporting Period: Six months ended 08/31/16
Item 1. Reports to Stockholders
Portfolio of Investments
Summary Table (unaudited)
At August 31, 2016, the
Fund's portfolio composition1 was:
| Security Type | Percentage of Total Net Assets |
| U.S. Government Agency Securities | 47.1% |
| U.S. Treasury Securities | 3.8% |
| Repurchase Agreements | 48.9% |
| Other Assets and Liabilities—Net2 | 0.2% |
| TOTAL | 100.0% |
At August 31, 2016, the
Fund's effective maturity3 schedule was follows:
| Securities With an Effective Maturity of: | Percentage of Total Net Assets |
| 1-7 Days | 51.5% |
| 8 to 30 Days | 14.4% |
| 31 to 90 Days | 10.6% |
| 91 to 180 Days | 16.7% |
| 181 Days or more | 6.6% |
| Other Assets and Liabilities—Net2 | 0.2% |
| TOTAL | 100.0% |
| 1 | See the Fund's Prospectus and Statement of Additional Information for a description of the principle types of securities in which the Fund invests. |
| 2 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
| 3 | Effective maturity is determined in accordance with the requirements of Rule 2a-7 under the Investment Company Act of 1940, as amended (the “Act”), which regulates money market mutual funds. |
Semi-Annual Shareholder Report
1
Portfolio of
Investments
August 31, 2016 (unaudited)
| Principal Amount | Value | ||
| GOVERNMENT AGENCIES—47.1% | |||
| $649,500,000 | 1 | Federal Farm Credit System Discount Notes, 0.500%—0.650%, 9/21/2016 - 5/17/2017 | $647,773,489 |
| 1,107,500,000 | 2 | Federal Farm Credit System Floating Rate Notes, 0.458%—0.684%, 9/1/2016 - 9/28/2016 | 1,107,516,570 |
| 21,900,000 | Federal Farm Credit System, 0.800%, 6/5/2017 | 21,931,028 | |
| 3,342,309,000 | 1 | Federal Home Loan Bank System Discount Notes, 0.280%—0.800%, 9/16/2016 - 5/5/2017 | 3,337,340,781 |
| 1,687,500,000 | 2 | Federal Home Loan Bank System Floating Rate Notes, 0.449%—0.818%, 9/3/2016 - 11/28/2016 | 1,687,463,549 |
| 1,061,250,000 | Federal Home Loan Bank System, 0.440%—1.625%, 9/9/2016 - 7/3/2017 | 1,061,156,419 | |
| 406,500,000 | 2 | Federal Home Loan Mortgage Corp. Floating Rate Notes, 0.508%—0.681%, 9/8/2016 - 9/12/2016 | 406,486,956 |
| 137,875,000 | Federal Home Loan Mortgage Corp., 0.625%—0.875%, 10/14/2016 - 5/26/2017 | 137,907,126 | |
| 188,000,000 | 1 | Federal National Mortgage Association Discount Notes, 0.500%—0.520%, 9/1/2016 - 12/16/2016 | 187,895,884 |
| 431,300,000 | 2 | Federal National Mortgage Association Floating Rate Notes, 0.508%—0.635%, 9/8/2016 - 10/11/2016 | 431,324,605 |
| TOTAL GOVERNMENT AGENCIES | 9,026,796,407 | ||
| U.S. TREASURY—3.8% | |||
| 231,000,000 | United States Treasury Notes, 0.500%—2.750%, 11/30/2016 | 231,982,130 | |
| 143,000,000 | United States Treasury Notes, 0.500%—3.125%, 1/31/2017 | 144,131,451 | |
| 231,500,000 | United States Treasury Notes, 0.750%, 1/15/2017 | 231,804,632 | |
| 124,500,000 | United States Treasury Notes, 0.875%—3.250%, 12/31/2016 | 125,275,581 | |
| TOTAL U.S. TREASURY | 733,193,794 | ||
| REPURCHASE AGREEMENTS—48.9% | |||
| 744,000,000 | Interest in $1,250,000,000 joint repurchase agreement 0.35%, dated 8/31/2016 under which ABN Amro Bank N.V., Netherlands will repurchase securities provided as collateral for $1,250,012,153 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury securities with various maturities to 8/20/2066 and the market value of those underlying securities was $1,280,554,587. | 744,000,000 |
Semi-Annual Shareholder Report
2
| Principal Amount | Value | ||
| REPURCHASE AGREEMENTS—continued | |||
| $150,000,000 | Interest in $250,000,000 joint repurchase agreement 0.36%, dated 8/31/2016 under which ABN Amro Bank N.V., Netherlands will repurchase securities provided as collateral for $250,002,500 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury securities with various maturities to 12/1/2043 and the market value of those underlying securities was $256,145,584. | $150,000,000 | |
| 700,000,000 | Interest in $3,800,000,000 joint repurchase agreement 0.31%, dated 8/31/2016 under which BNP Paribas S.A. will repurchase securities provided as collateral for $3,800,032,722 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 2/15/2046 and the market value of those underlying securities was $3,876,033,377. | 700,000,000 | |
| 500,000,000 | Interest in $2,000,000,000 joint repurchase agreement 0.33%, dated 8/31/2016 under which BNP Paribas S.A. will repurchase securities provided as collateral for $2,000,018,333 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury securities with various maturities to 1/1/2049 and the market value of those underlying securities was $2,043,554,291. | 500,000,000 | |
| 80,000,000 | 3 | Interest in $500,000,000 joint repurchase agreement 0.38%, dated 8/3/2016 under which Bank of Nova Scotia will repurchase securities provided as collateral for $500,453,889 on 10/28/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 2/15/2045 and the market value of those underlying securities was $510,156,198. | 80,000,000 |
| 85,000,000 | 3 | Interest in $250,000,000 joint repurchase agreement 0.50%, dated 5/3/2016 under which Bank of Nova Scotia will repurchase securities provided as collateral for $250,586,806 on 10/20/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 6/1/2046 and the market value of those underlying securities was $255,534,379. | 85,000,000 |
| 250,000,000 | Repurchase agreement 0.34%, dated 8/31/2016 under which Citibank, N.A. will repurchase securities provided as collateral for $250,002,361 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency and U.S. Treasury securities with various maturities to 8/25/2054 and the market value of those underlying securities was $256,093,442. | 250,000,000 | |
| 250,000,000 | Interest in $1,000,000,000 joint repurchase agreement 0.33%, dated 8/25/2016 under which Citigroup Global Markets, Inc. will repurchase securities provided as collateral for $1,000,064,167 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 7/25/2054 and the market value of those underlying securities was $1,025,524,284. | 250,000,000 |
Semi-Annual Shareholder Report
3
| Principal Amount | Value | ||
| REPURCHASE AGREEMENTS—continued | |||
| $99,000,000 | Interest in $3,750,000,000 joint repurchase agreement 0.31%, dated 8/31/2016 under which Credit Agricole CIB New York will repurchase securities provided as collateral for $3,750,032,292 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 7/15/2026 and the market value of those underlying securities was $3,825,032,949. | $99,000,000 | |
| 500,000,000 | Interest in $1,000,000,000 joint repurchase agreement 0.33%, dated 8/31/2016 under which Credit Suisse Securities (USA) LLC will repurchase securities provided as collateral for $1,000,009,167 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 12/16/2056 and the market value of those underlying securities was $1,030,002,900. | 500,000,000 | |
| 3,000,000,000 | Repurchase agreement 0.25%, dated 8/31/2016 under which Federal Reserve Bank of New York will repurchase securities provided as collateral for $3,000,020,833 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 2/15/2043 and the market value of those underlying securities was $3,000,020,936. | 3,000,000,000 | |
| 200,000,000 | Interest in $1,000,000,000 joint repurchase agreement 0.31%, dated 8/26/2016 under which Goldman Sachs & Co. will repurchase securities provided as collateral for $1,000,060,278 on 9/2/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 9/1/2046 and the market value of those underlying securities was $1,026,246,533. | 200,000,000 | |
| 200,000,000 | 3 | Interest in $1,000,000,000 joint repurchase agreement 0.32%, dated 8/24/2016 under which Goldman Sachs & Co. will repurchase securities provided as collateral for $1,000,302,222 on 9/27/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 12/15/2053 and the market value of those underlying securities was $1,026,456,910. | 200,000,000 |
| 100,000,000 | Interest in $300,000,000 joint repurchase agreement 0.32%, dated 8/31/2016 under which ING Financial Markets LLC will repurchase securities provided as collateral for $300,018,667 on 9/7/2016. The securities provided as collateral at the end of the period held with JPMorgan Chase as tri-party agent, were U.S. Government Agency securities with various maturities to 3/1/2045 and the market value of those underlying securities was $309,001,935. | 100,000,000 | |
| 500,000,000 | Repurchase agreement 0.33%, dated 8/31/2016 under which Merrill Lynch, Pierce, Fenner and Smith will repurchase securities provided as collateral for $500,004,583 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 7/20/2066 and the market value of those underlying securities was $511,683,146. | 500,000,000 |
Semi-Annual Shareholder Report
4
| Principal Amount | Value | ||
| REPURCHASE AGREEMENTS—continued | |||
| $750,000,000 | Interest in $1,350,000,000 joint repurchase agreement 0.34%, dated 8/31/2016 under which Mizuho Securities USA, Inc. will repurchase securities provided as collateral for $1,350,012,750 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 1/15/2048 and the market value of those underlying securities was $1,377,529,655. | $750,000,000 | |
| 200,000,000 | 3 | Interest in $500,000,000 joint repurchase agreement 0.38%, dated 7/11/2016 under which RBC Capital Markets, LLC will repurchase securities provided as collateral for $500,332,500 on 9/12/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 8/1/2046 and the market value of those underlying securities was $510,281,735. | 200,000,000 |
| 125,000,000 | 3 | Interest in $500,000,000 joint repurchase agreement 0.39%, dated 7/22/2016 under which RBC Capital Markets, LLC will repurchase securities provided as collateral for $500,487,500 on 10/20/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 7/1/2046 and the market value of those underlying securities was $510,227,412. | 125,000,000 |
| 100,000,000 | Interest in $500,000,000 joint repurchase agreement 0.32%, dated 8/30/2016 under which Societe Generale, New York will repurchase securities provided as collateral for $500,031,111 on 9/6/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 8/15/2045 and the market value of those underlying securities was $510,009,110. | 100,000,000 | |
| 300,000,000 | Interest in $1,500,000,000 joint repurchase agreement 0.33%, dated 8/25/2016 under which Societe Generale, New York will repurchase securities provided as collateral for $1,500,096,250 on 9/1/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 11/15/2045 and the market value of those underlying securities was $1,530,098,176. | 300,000,000 | |
| 50,000,000 | Interest in $200,000,000 joint repurchase agreement 0.34%, dated 8/30/2016 under which Societe Generale, New York will repurchase securities provided as collateral for $200,013,222 on 9/6/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 6/1/2046 and the market value of those underlying securities was $205,589,606. | 50,000,000 | |
| 250,000,000 | 3 | Interest in $1,500,000,000 joint repurchase agreement 0.35%, dated 8/22/2016 under which Societe Generale, New York will repurchase securities provided as collateral for $1,500,452,083 on 9/22/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Treasury securities with various maturities to 2/15/2042 and the market value of those underlying securities was $1,530,148,750. | 250,000,000 |
Semi-Annual Shareholder Report
5
| Principal Amount | Value | ||
| REPURCHASE AGREEMENTS—continued | |||
| $125,000,000 | 3 | Interest in $525,000,000 joint repurchase agreement 0.41%, dated 7/5/2016 under which Wells Fargo Securities LLC will repurchase securities provided as collateral for $525,376,688 on 9/6/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 7/25/2048 and the market value of those underlying securities was $537,160,354. | $125,000,000 |
| 100,000,000 | 3 | Interest in $420,000,000 joint repurchase agreement 0.41%, dated 7/7/2016 under which Wells Fargo Securities LLC will repurchase securities provided as collateral for $420,301,350 on 9/8/2016. The securities provided as collateral at the end of the period held with BNY Mellon as tri-party agent, were U.S. Government Agency securities with various maturities to 9/1/2046 and the market value of those underlying securities was $428,673,225. | 100,000,000 |
| TOTAL REPURCHASE AGREEMENTS | 9,358,000,000 | ||
| TOTAL INVESTMENTS—99.8% (AT AMORTIZED COST)4 | 19,117,990,201 | ||
| OTHER ASSETS AND LIABILITIES - NET—0.2%5 | 29,271,037 | ||
| TOTAL NET ASSETS—100% | $19,147,261,238 |
| 1 | Discount rate(s) at time of purchase. |
| 2 | Floating rate notes with current rate(s) and next reset date(s) shown. |
| 3 | Although the repurchase date is more than seven days after the date of purchase, the Fund has the right to terminate the repurchase agreement at any time with seven-days' notice. |
| 4 | Also represents cost for federal tax purposes. |
| 5 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Note: The categories of investments
are shown as a percentage of total net assets at August 31, 2016.
Various inputs are used in
determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level
1—quoted prices in active markets for identical securities.
Level
2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level
3—significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).The inputs or methodology used for valuing securities are not an indication of the risk
associated with investing in those securities.
As of August 31, 2016, all
investments of the Fund are valued at amortized cost, which is considered a Level 2 input, in valuing the Fund's assets.
The following acronyms are used
throughout this portfolio:
| LLC | —Limited Liability Corporation |
| SA | —Support Agreement |
See Notes which are an integral part
of the Financial Statements
Semi-Annual Shareholder Report
6
Financial Highlights–Investment Shares
(For a Share Outstanding
Throughout Each Period)
| Six Months Ended (unaudited) 8/31/2016 | Year Ended February 28 or 29, | |||||
| 2016 | 2015 | 2014 | 2013 | 2012 | ||
| Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| Income From Investment Operations: | ||||||
| Net investment income | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 |
| Net realized gain on investments | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 |
| TOTAL FROM INVESTMENT OPERATIONS | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 |
| Less Distributions: | ||||||
| Distributions from net investment income | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 |
| Distributions from net realized gain on investments | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 |
| TOTAL DISTRIBUTIONS | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 |
| Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| Total Return2 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| Ratios to Average Net Assets: | ||||||
| Net expenses | 0.41%3 | 0.18% | 0.09% | 0.11% | 0.19% | 0.15% |
| Net investment income | 0.01%3 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| Expense waiver/reimbursement4 | 0.39%3 | 0.63% | 0.72% | 0.77% | 0.62% | 0.66% |
| Supplemental Data: | ||||||
| Net assets, end of period (000 omitted) | $15,033,245 | $11,379,671 | $11,385,586 | $11,486,370 | $11,459,019 | $11,081,114 |
| 1 | Represents less than $0.001. |
| 2 | Based on net asset value. Total returns for periods of less than one year are not annualized. |
| 3 | Computed on an annualized basis. |
| 4 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
See Notes which are an integral part
of the Financial Statements
Semi-Annual Shareholder Report
7
Financial Highlights–Retirement Shares
(For a Share Outstanding
Throughout Each Period)
| Six Months Ended (unaudited) 8/31/2016 | Year Ended February 28 or 29, | |||||
| 2016 | 2015 | 2014 | 2013 | 2012 | ||
| Net Asset Value, Beginning of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| Income From Investment Operations: | ||||||
| Net investment income | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 |
| Net realized gain on investments | 0.0001 | 0.0001 | 0.000 | 0.0001 | 0.0001 | 0.0001 |
| TOTAL FROM INVESTMENT OPERATIONS | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 | 0.0001 |
| Less Distributions: | ||||||
| Distributions from net investment income | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 |
| Distributions from net realized gain on investments | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 |
| TOTAL DISTRIBUTIONS | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 | (0.000)1 |
| Net Asset Value, End of Period | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| Total Return2 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| Ratios to Average Net Assets: | ||||||
| Net expenses | 0.41%3 | 0.18% | 0.09% | 0.11% | 0.19% | 0.15% |
| Net investment income | 0.01%3 | 0.01% | 0.01% | 0.01% | 0.01% | 0.01% |
| Expense waiver/reimbursement4 | 0.49%3 | 0.72% | 0.80% | 0.77% | 0.67% | 0.71% |
| Supplemental Data: | ||||||
| Net assets, end of period (000 omitted) | $4,114,017 | $3,185,729 | $3,088,759 | $3,203,566 | $3,100,526 | $2,798,615 |
| 1 | Represents less than $0.001. |
| 2 | Based on net asset value. Total returns for periods of less than one year are not annualized. |
| 3 | Computed on an annualized basis. |
| 4 | This expense decrease is reflected in both the net expense and the net investment income ratios shown above. |
See Notes which are an integral part
of the Financial Statements
Semi-Annual Shareholder Report
8
Statement of Assets and Liabilities
August 31, 2016 (unaudited)
| Assets: | ||
| Investment in repurchase agreements | $9,358,000,000 | |
| Investment in securities | 9,759,990,201 | |
| Total investment in securities, at amortized cost and fair value | $19,117,990,201 | |
| Cash | 850,019 | |
| Income receivable | 6,678,460 | |
| Receivable for shares sold | 489,913,122 | |
| TOTAL ASSETS | 19,615,431,802 | |
| Liabilities: | ||
| Payable for investments purchased | $395,830,797 | |
| Payable for shares redeemed | 68,853,141 | |
| Income distribution payable | 42,743 | |
| Payable to adviser (Note 4) | 2,835,544 | |
| Accrued expenses (Note 4) | 608,339 | |
| TOTAL LIABILITIES | 468,170,564 | |
| Net assets for 19,147,237,577 shares outstanding | $19,147,261,238 | |
| Net Assets Consist of: | ||
| Paid-in capital | $19,147,237,624 | |
| Accumulated net realized gain on investments | 12,106 | |
| Undistributed net investment income | 11,508 | |
| TOTAL NET ASSETS | $19,147,261,238 | |
| Net Asset Value, Offering Price and Redemption Proceeds Per Share | ||
| Investment Shares: | ||
| ($15,033,244,653 ÷ 15,033,225,829 shares outstanding), no par value, unlimited shares authorized | $1.00 | |
| Retirement Shares: | ||
| $4,114,016,585 ÷ 4,114,011,748 shares outstanding, no par value, unlimited shares authorized | $1.00 |
See Notes which are an integral part
of the Financial Statements
Semi-Annual Shareholder Report
9
Statement of Operations
Six Months Ended August 31, 2016
(unaudited)
| Investment Income: | |||
| Interest | $32,221,434 | ||
| Expenses: | |||
| Investment adviser fee (Note 4) | $31,231,986 | ||
| Administrative fee (Note 4) | 5,982,662 | ||
| Custodian fees | 200,799 | ||
| Transfer agent fee (Note 4) | 5,503,172 | ||
| Directors'/Trustees' fees (Note 4) | 61,296 | ||
| Auditing fees | 10,712 | ||
| Legal fees | 3,674 | ||
| Portfolio accounting fees | 101,509 | ||
| Other service fees (Note 2) | 19,126,156 | ||
| Share registration costs | 459,197 | ||
| Printing and postage | 413,940 | ||
| Miscellaneous (Note 4) | 46,966 | ||
| Interest expense | 2,951 | ||
| TOTAL EXPENSES | 63,145,020 | ||
| Waivers and Reimbursements: | |||
| Waiver of investment adviser fee (Note 4) | $(6,437,569) | ||
| Waiver/reimbursements of other operating expenses (Notes 2 and 4) | $(25,196,277) | ||
| TOTAL WAIVERS AND REIMBURSEMENTS | (31,633,846) | ||
| Net expenses | 31,511,174 | ||
| Net investment income | 710,260 | ||
| Net realized gain on investments | 12,106 | ||
| Change in net assets resulting from operations | $722,366 |
See Notes which are an integral part
of the Financial Statements
Semi-Annual Shareholder Report
10
Statement of Changes in Net Assets
| Six Months Ended (unaudited) 8/31/2016 | Year Ended 2/29/2016 | |
| Increase (Decrease) in Net Assets | ||
| Operations: | ||
| Net investment income | $710,260 | $1,309,847 |
| Net realized gain on investments | 12,106 | 36,457 |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | 722,366 | 1,346,304 |
| Distributions to Shareholders: | ||
| Distributions from net investment income | ||
| Investment Shares | (552,395) | (1,023,421) |
| Retirement Shares | (152,059) | (277,954) |
| Distributions from net realized gain on investments | ||
| Investment Shares | (1,501) | (30,907) |
| Retirement Shares | (412) | (8,704) |
| CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS | (706,367) | (1,340,986) |
| Share Transactions: | ||
| Proceeds from sale of shares | 44,263,502,910 | 66,443,750,678 |
| Net asset value of shares issued to shareholders in payment of distributions declared | 676,229 | 1,316,978 |
| Cost of shares redeemed | (39,682,333,850) | (66,354,017,760) |
| CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS | 4,581,845,289 | 91,049,896 |
| Change in net assets | 4,581,861,288 | 91,055,214 |
| Net Assets: | ||
| Beginning of period | 14,565,399,950 | 14,474,344,736 |
| End of period (including undistributed net investment income of $11,508 and $5,702, respectively) | $19,147,261,238 | $14,565,399,950 |
See Notes which are an integral part
of the Financial Statements
Semi-Annual Shareholder Report
11
Notes to Financial
Statements
August 31, 2016 (unaudited)
1. ORGANIZATION
Edward Jones Money Market Fund (the
“Fund”) is registered under the Investment Act of 1940, as amended (the Act), as a diversified, open-end management investment company. The investment objective of the Fund is stability of principal and
current income consistent with stability of principal. The Fund pursues this objective by investing primarily in a portfolio of short-term Treasury and government securities.
The Fund offers
two classes of shares: Investment Shares and Retirement Shares. All shares of the Fund have equal rights with respect to voting, except on class specific matters.
On February 18,
2016, the Board of Directors of Federated Investors, Inc. (“Federated”) approved the transfer by Federated Investment Management Company (FIMCO) of FIMCO's general partnership interest in Passport
Research, Ltd. (the “Adviser”) to Passport Holdings LLC, a wholly owned subsidiary of The Jones Financial Companies, L.L.L.P. After the transfer, it is anticipated that the Adviser will remain as the
adviser for the Fund, FIMCO will be the sub-adviser for the Fund, and, Federated Administrative Services (FAS) will continue to provide certain administrative services with respect to the Fund. The transfer, subject
to shareholder approval, is expected to be consummated in the fourth quarter of 2016.
2. SIGNIFICANT ACCOUNTING
POLICIES
The following is a summary of
significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
Securities are valued at amortized
cost. Under the amortized cost valuation method, an investment is valued initially at its cost as determined in accordance with GAAP. The Fund then adjusts the amount of interest income accrued each day over the term
of the investment to account for any difference between the initial cost of the investment and the amount payable at its maturity. If amortized cost is determined not to approximate fair value, the value of the
portfolio securities will be determined in accordance with the procedures described below.
The Trustees have
ultimate responsibility for determining the fair value of investments. The Trustees have appointed a valuation committee (“Valuation Committee”) comprised of officers of the Fund, FIMCO, the general
partner of the Adviser and certain of FIMCO's affiliated companies to assist in determining fair value of securities and in overseeing the comparison of amortized cost to market-based value. The Trustees have also
authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of monitoring the relationship of market-based
value and amortized cost. The Valuation Committee employs various methods for reviewing third-party pricing-service evaluations including periodic reviews of third-party pricing services' policies, procedures and
valuation methods (including key inputs and assumptions), and review of price challenges by the Adviser based on recent market activity. In the event that market quotations and price evaluations are not available for
an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Trustees. The Trustees periodically review and approve the fair valuations made by the
Valuation Committee and any changes made to the procedures.
Semi-Annual Shareholder Report
12
Repurchase Agreements
The Fund may invest in repurchase
agreements for short-term liquidity purposes. It is the policy of the Fund to require the other party to a repurchase agreement to transfer to the Fund's custodian or sub-custodian eligible securities or cash with a
market value (after transaction costs) at least equal to the repurchase price to be paid under the repurchase agreement. The eligible securities are transferred to accounts with the custodian or sub-custodian in which
the Fund holds a “securities entitlement” and exercises “control” as those terms are defined in the Uniform Commercial Code. The Fund has established procedures for monitoring the market value
of the transferred securities and requiring the transfer of additional eligible securities if necessary to equal at least the repurchase price. These procedures also allow the other party to require securities to be
transferred from the account to the extent that their market value exceeds the repurchase price or in exchange for other eligible securities of equivalent market value.
The insolvency of
the other party or other failure to repurchase the securities may delay the disposition of the underlying securities or cause the Fund to receive less than the full repurchase price. Under the terms of the repurchase
agreement, any amounts received by the Fund in excess of the repurchase price and related transaction costs must be remitted to the other party.
The Fund may enter
into repurchase agreements in which eligible securities are transferred into joint trading accounts maintained by the custodian or sub-custodian for investment companies and other clients advised by the Fund's Adviser
and its affiliates. The Fund will participate on a pro rata basis with the other investment companies and clients in its share of the securities transferred under such repurchase agreements and in its share of
proceeds from any repurchase or other disposition of such securities.
Repurchase
agreements are subject to Master Netting Agreements which are agreements between the Fund and its counterparties that provide for the net settlement of all transactions and collateral with the Fund, through a single
payment, in the event of default or termination. Amounts presented on the Portfolio of Investments and Statement of Assets and Liabilities are not net settlement amounts but gross. As indicated above, the cash or
securities to be repurchased, as shown on the Portfolio of Investments, exceeds the repurchase price to be paid under the agreement reducing the net settlement amount to zero.
Investment Income, Gains and
Losses, Expenses and Distributions
Investment transactions are
accounted for on a trade-date basis. Interest income and expenses are accrued daily. Distributions to shareholders are recorded on the ex-dividend date. Distributions of net investment income are declared daily and
paid monthly. Investment income, realized gains and losses, and certain fund-level expenses are allocated to each class based on relative average daily net assets, except that Investment Shares and Retirement Share
may bear other service fees unique to those classes. The detail of the total fund expense waivers and reimbursement of $31,633,846 are disclosed in various locations in this Note 2 and Note 4.
Dividends are
declared separately for each class. No class has preferential dividend rights; differences in per share dividend rates are generally due to differences in separate class expenses.
Semi-Annual Shareholder Report
13
Other Service Fees
The Fund may pay other service fees
up to 0.25% of the average daily net assets of the Fund's Investment Shares and Retirement Shares to Edward Jones. Edward Jones may voluntarily choose to waive any portion of its other service fees. Edward Jones can
modify or terminate this voluntary waiver at any time at its sole discretion. For the six months ended August 31, 2016, other service fees for the Fund were as follows:
| Other Service Fees Incurred | Other Service Fees Waived | ||
| Investment Shares | $14,930,274 | $(14,930,274) | |
| Retirement Shares | $4,195,882 | $(4,195,882) | |
| TOTAL | $19,126,156 | $(19,126,156) |
Premium and Discount
Amortization
All premiums and discounts are
amortized/accreted daily until maturity.
Federal Taxes
It is the Fund's policy to comply
with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is
necessary. As of and during the six months ended August 31, 2016, the Fund did not have a liability for any uncertain tax positions. The Fund recognizes interest and penalties, if any, related to tax liabilities as
income tax expense in the Statement of Operations. As of August 31, 2016, tax years 2013 through 2016 remain subject to examination by the Fund's major tax jurisdictions, which include the United States of America and
the Commonwealth of Massachusetts.
When-Issued and Delayed-Delivery
Transactions
The Fund may engage in when-issued
or delayed-delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed-delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market
conditions or the failure of counterparties to perform under the contract.
Other
The preparation of financial
statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could
differ from those estimated. The Fund applies Investment Company accounting and reporting guidance.
Semi-Annual Shareholder Report
14
3. SHARES OF BENEFICIAL
INTEREST
The following tables summarize share
activity:
| Six Months Ended 8/31/2016 | Year Ended 2/29/2016 | |||
| Investment Shares: | Shares | Amount | Shares | Amount |
| Shares sold | 24,477,890,691 | $24,477,890,691 | 39,315,813,583 | $39,315,813,583 |
| Shares issued to shareholders in payment of distributions declared | 533,052 | 533,052 | 1,042,996 | 1,042,996 |
| Shares redeemed | (20,824,862,851) | (20,824,862,851) | (39,322,776,268) | (39,322,776,268) |
| NET CHANGE RESULTING FROM INVESTMENT SHARE TRANSACTIONS | 3,653,560,892 | $3,653,560,892 | (5,919,689) | $(5,919,689) |
| Six Months Ended 8/31/2016 | Year Ended 2/29/2016 | |||
| Retirement Shares: | Shares | Amount | Shares | Amount |
| Shares sold | 19,785,612,219 | $19,785,612,219 | 27,127,937,095 | $27,127,937,095 |
| Shares issued to shareholders in payment of distributions declared | 143,177 | 143,177 | 273,982 | 273,982 |
| Shares redeemed | (18,857,470,999) | (18,857,470,999) | (27,031,241,492) | $(27,031,241,492) |
| NET CHANGE RESULTING FROM RETIREMENT SHARE TRANSACTIONS | 928,284,397 | $928,284,397 | 96,969,585 | $96,969,585 |
| NET CHANGE RESULTING FROM TOTAL FUND SHARE TRANSACTIONS | 4,581,845,289 | $4,581,845,289 | 91,049,896 | $91,049,896 |
4. INVESTMENT ADVISER FEE AND
OTHER TRANSACTIONS WITH AFFILIATES
Investment Adviser Fee
The advisory agreement between the
Fund and the Adviser provides for an annual fee based on average daily net assets of the Fund as follows: 0.500% on the first $500 million in average daily net assets; 0.475% on the second $500 million in average
daily net assets; 0.450% on the third $500 million in average daily net assets; 0.425% on the fourth $500 million in average daily net assets; and 0.400% of average daily net assets in excess of $2 billion. The
Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. For the six months ended August 31, 2016, the Adviser
voluntarily waived $6,437,569 of its fee and voluntarily reimbursed $413,940 of printing and postage fees.
Adviser's Background
The Adviser is a Pennsylvania
limited partnership organized in 1981. FIMCO is the general partner of the Adviser and has a 50.5% interest in the Adviser. FIMCO is an indirect wholly owned subsidiary of Federated. Edward D. Jones & Co., L.P.,
doing business as Edward Jones, is the limited partner of the Adviser and has a 49.5% interest in the Adviser. Edward Jones may receive revenue in excess of its partnership interest under allocation agreements
periodically agreed upon by Federated and Edward Jones. In addition, Federated and Edward Jones may
Semi-Annual Shareholder Report
15
allocate the revenue each party receives in
connection with Fund-paid affiliated services (administrative, transfer agent and other service fees) according to a mutually agreed upon formula which is negotiated and may vary over time. Including revenue resulting
from the Fund's payment of expenses for these affiliated services as well as partnership distributions and allocations from the Adviser to both parties, these arrangements resulted in Edward Jones receiving a
substantial majority of the total amounts paid to Edward Jones and Federated subsidiaries for the six months ended August 31, 2016.
Administrative Fee
FAS, under the Administrative
Services Agreement, provides the Fund with administrative personnel and services. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Funds
subject to a fee under the Administrative Services Agreement. The fee paid to FAS is based on the average daily net assets of the Investment Complex as specified below, plus certain out-of-pocket expenses:
| Administrative Fee | Average Daily Net Assets of the Investment Complex |
| 0.150% | on the first $5 billion |
| 0.125% | on the next $5 billion |
| 0.100% | on the next $10 billion |
| 0.075% | on assets in excess of $20 billion |
FAS may voluntarily choose to waive
any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the six months ended August 31, 2016, FAS waived $153,009 of its fee. The net fee paid to FAS was
0.076% of average daily net assets of the Fund.
Transfer Agent
Edward Jones serves as transfer
agent for the Fund. The fee paid to Edward Jones is based on the size, type and number of accounts. Edward Jones may voluntarily choose to waive any portion of its fee. Edward Jones can modify or terminate this
voluntarily waiver at any time at its sole discretion. For the six months ended August 31, 2016, Edward Jones waived $2,055,066 of its fee. In addition, Federated Shareholder Services Company has voluntarily agreed to
reimburse $3,448,106 of the transfer agent fees. This reimbursement can be modified or terminated at any time.
General
Certain Officers and Trustees of the
Fund are Officers and Directors or Trustees of certain of the above companies. To efficiently facilitate payment, Directors'/Trustees' fees and certain expenses related to conducting meetings of the Directors/Trustees
and other miscellaneous expenses are paid by an affiliate of the Adviser which in due course are reimbursed by the Fund. Such expenses may be included in Accrued and Miscellaneous Expenses on the Statement of Assets
and Liabilities and Statement of Operations, respectively.
5. LINE OF CREDIT
The Fund participates with certain
other Federated Funds, on a several basis, in and up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to finance temporarily the repurchase or
redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC
Semi-Annual Shareholder Report
16
if an inter-fund loan is outstanding. The Fund's
ability to borrow under the LOC also is subject to the limitations of the Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a
fluctuating rate per annum equal to the highest, on any day, of (a) (i) the federal funds effective rate, or (ii) the one month London Interbank Offer Rate (LIBOR), or (iii) 0.0%, plus (b) a margin. The LOC also
requires the Fund to pay, quarterly in arrears and at maturity, its pro rata share of a commitment fee based on the amount of the lenders' commitment that has not been utilized. As of August 31, 2016, the Fund had no
outstanding loans. During the six months ended August 31, 2016, the Fund did not utilize the LOC.
6. INTERFUND LENDING
Pursuant to an Exemptive Order
issued by the Securities and Exchange Commission (SEC), the Fund, along with other funds advised by subsidiaries of Federated, may participate in an interfund lending program. This program provides an alternative
credit facility allowing the Fund to borrow from other participating affiliated funds. As of August 31, 2016, there were no outstanding loans. During the six months ended August 31, 2016, the program was not
utilized.
7. REGULATORY MATTERS
On July 23, 2014, the SEC voted to
amend the rules under the Act which currently govern the operations of the Fund. The amended rules created three categories of money market funds: Government, Retail and Institutional. Government and Retail money
market funds will continue to be able to transact at $1.00 per share and to use amortized cost to value their portfolio securities. Institutional money market funds will be required to “float” their Net
Asset Value (NAV) per share by pricing their shares to four decimals (i.e. $1.0000) and valuing their portfolio securities using market prices rather than amortized cost (except where otherwise permitted under SEC
rules). In addition, Retail and Institutional money market funds must adopt policies and procedures to permit the Fund's Board to impose liquidity fees or redemption gates under certain conditions. The amendments have
staggered compliance dates, with a majority of these amendments having an October 14, 2016 final compliance date.
The Fund will
operate as a Government money market fund. As a Government money market fund, the Fund (1) invests at least 99.5% of its total assets in (i) cash, (ii) securities issued or guaranteed by the United States or certain
U.S. government agencies or instrumentalities and/or (iii) repurchase agreements that are collateralized fully, (2) generally continues to use amortized cost to value its portfolio securities and transact at a stable
$1.00 NAV, and (3) has elected not to be subject to the liquidity fees and gates requirement at this time as permitted under the amendments.
Beginning on April
14, 2016, FederatedInvestors.com included additional fund level disclosure relating to these amended rules including, among certain other information, daily disclosure of daily and weekly liquid assets, net
shareholder inflows or outflows and market-based NAVs per share, as applicable.
8. SUBSEQUENT EVENT
Effective October 1, 2016, the Fund
will no longer participate in the LOC disclosed above.
Semi-Annual Shareholder Report
17
Shareholder Expense Example
(unaudited)
As a shareholder of the
Fund, you incur ongoing costs, including management fees and to the extent applicable, other service fees and other Fund expenses. This Example is intended to help you to understand your ongoing costs (in dollars) of
investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. It is based on an investment of $1,000 invested at the beginning of the period and held for the entire period
from March 1, 2016 to August 31, 2016.
ACTUAL EXPENSES
The first section of the
table below provides information about actual account values and actual expenses. You may use the information in this section, together with the amount you invested, to estimate the expenses that you incurred over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses attributable to your investment during this period.
HYPOTHETICAL EXAMPLE FOR
COMPARISON PURPOSES
The second section of the
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, which is not the Fund's actual return. Thus, you should not use the hypothetical account values and expenses to estimate the actual ending account balance or your expenses for the period. Rather, these figures are required to be provided
to enable you to compare the ongoing costs of investing in the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the
other funds.
Semi-Annual Shareholder Report
18
Please
note that the expenses shown in the table are meant to highlight your ongoing costs only. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the
relative total costs of owning different funds.
| Beginning Account Value 3/1/2016 | Ending Account Value 8/31/2016 | Expenses Paid During Period1 | |
| Actual: | |||
| Investment Shares | $1,000 | $1,000.10 | $2.07 |
| Retirement Shares | $1,000 | $1,000.10 | $2.07 |
| Hypothetical (assuming a 5% return before expenses): | |||
| Investment Shares | $1,000 | $1,023.14 | $2.09 |
| Retirement Shares | $1,000 | $1,023.14 | $2.09 |
| 1 | Expenses are equal to the Fund's annualized net expense ratios, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half-year period). The annualized net expense ratios are as follows: |
| Investment Shares | 0.41% |
| Retirement Shares | 0.41% |
| 2 | Actual and Hypothetical expenses paid during the period utilizing the Fund's Investment Shares current annualized expense ratio of 0.81%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect expenses paid as if they had been in effect throughout the most recent one-half-year period) would be $4.08 and $4.13, respectively. |
| 3 | Actual and Hypothetical expenses paid during the period utilizing the Fund's Retirement Shares current annualized expense ratio of 0.90%, multiplied by the average account value over the period, multiplied by 184/365 (to reflect expenses paid as if they had been in effect throughout the most recent one-half-year period) would be $4.54 and $4.58, respectively. |
Semi-Annual Shareholder Report
19
Evaluation and Approval
of Advisory Contract–May 2016
Edward Jones Money Market Fund
(the “Fund”)
Following a review and
recommendation of approval by the Fund's independent trustees, the Fund's Board of Trustees (the “Board”) reviewed and unanimously approved at its May 2016 meetings the continuation of the Fund's
investment advisory contract for an additional one-year term. The Board's decision regarding the contract reflects the exercise of its business judgment after consideration of all of the information received on
whether to continue the existing arrangements.
The
Board had previously appointed a Senior Officer, whose duties include specified responsibilities relating to the process by which advisory fees are to be charged to a Federated fund. The Senior Officer has the
authority to retain consultants, experts, or staff as may be reasonably necessary to assist in the performance of his duties, reports directly to the Board, and may be terminated only with the approval of a majority
of the independent members of the Board. The Senior Officer prepared and furnished to the Board an independent, written evaluation that covered topics discussed below (the “Senior Officer's Evaluation”).
The Board considered the Senior Officer's Evaluation, along with other information, in deciding to approve the investment advisory contract.
The
Board is also familiar with and considered judicial decisions concerning allegedly excessive investment advisory fees, which have indicated that the following factors may be relevant to an adviser's fiduciary duty
with respect to its receipt of compensation from a fund: the nature and quality of the services provided by an adviser to a fund and its shareholders, including the performance and fees and expenses of the fund and of
comparable funds; an adviser's cost of providing the services, including the profitability to an adviser of providing advisory services to a fund; the extent to which an adviser may realize “economies of
scale” as a fund grows larger and, if such economies of scale exist, whether they have been shared with a fund and its shareholders or the family of funds; any “fall-out financial benefits” that
accrue to an adviser because of its relationship with a fund (including research services received from brokers that execute fund trades and any fees paid to affiliates of an adviser for services rendered to a fund);
comparative fee and expense structures, including a comparison of fees paid to an adviser with those paid by similar funds; and the extent of care, conscientiousness and independence with which board members perform
their duties and their expertise, including whether they are fully informed about all facts the board deems relevant to its consideration of an adviser's services and fees. The Board noted that the Securities and
Exchange Commission (“SEC”) disclosure requirements regarding the basis for the Board's approval of the Fund's investment advisory contract generally track the factors listed above. Consistent with these
judicial decisions and SEC disclosure requirements, the Board also considered management fees charged to
Semi-Annual Shareholder Report
20
institutional and other clients of
Passport Research, Ltd. (the “Adviser”) for what might be viewed as like services. The Board was aware of these factors and was guided by them in its review of the Fund's investment advisory contract to
the extent it considered them to be appropriate and relevant, as discussed further below.
The
Board considered and weighed these circumstances in light of its substantial accumulated experience in governing the Fund and working with Federated Investors, Inc. and its affiliates (“Federated”) on
matters relating to the Federated funds, and was assisted in its deliberations by independent legal counsel. Throughout the year, and in connection with its May meetings, the Board requested and received substantial
and detailed information about the Fund and the Federated organization that was in addition to the extensive materials that comprise and accompany the Senior Officer's Evaluation. Federated provided much of this
information at each regular meeting of the Board, and furnished additional substantial information in connection with the May meetings at which the Board's formal review of the investment advisory contract occurred.
At the May meetings, in addition to meeting in separate sessions of the independent trustees without management present, senior management of the Adviser also met with the independent trustees and their counsel to
discuss the materials presented and any other matters thought relevant by the Adviser or the trustees. Between regularly scheduled meetings, the Board also received information on particular matters as the need arose.
Thus, the Board's consideration of the investment advisory contract included review of the Senior Officer's Evaluation, accompanying data and additional information covering such matters as: the Adviser's investment
philosophy, revenue, profitability, personnel and processes; investment and operating strategies; the Fund's short- and long-term performance (in absolute terms, both on a gross basis and net of expenses, as well as
in relationship to its particular investment program and certain competitor or “peer group” funds and/or other benchmarks, as appropriate), and comments on the reasons for performance; the Fund's
investment objectives; the Fund's expenses (including the advisory fee itself and the overall expense structure of the Fund, both in absolute terms and relative to similar and/or competing funds, with due regard for
contractual or voluntary expense limitations); the use and allocation of brokerage commissions derived from trading the Fund's portfolio securities (if any); and the nature, quality and extent of the advisory and
other services provided to the Fund by the Adviser and its affiliates. The Board also considered the preferences and expectations of Fund shareholders; the entrepreneurial risk assumed by the Adviser in sponsoring the
Fund; the continuing state of competition in the mutual fund industry and market practices; the range of comparable fees for similar funds in the mutual fund industry; the Fund's relationship to the Federated funds
which include a comprehensive array of funds with different investment objectives, policies and strategies which are generally available for exchange without the incurrence of additional sales charges; compliance
and
Semi-Annual Shareholder Report
21
audit reports concerning the Federated
funds and the Federated companies that service them (including communications from regulatory agencies), as well as Federated's responses to any issues raised therein; and relevant developments in the mutual fund
industry and how the Federated funds and/or Federated are responding to them. The Board's evaluation process is evolutionary. The criteria considered and the emphasis placed on relevant criteria change in recognition
of changing circumstances in the mutual fund marketplace.
While
mindful that courts have cautioned against giving such comparisons too much weight, the Board has found the use of comparisons of the Fund's fees and expenses to other mutual funds with comparable investment programs
to be relevant to its deliberations. In this regard, the Board was presented with, and considered, information regarding the contractual advisory fee rates, net advisory fee rates, total expense ratios and each
element of the Fund's total expense ratio (i.e., gross and net advisory fees, custody fees, portfolio accounting fees and transfer agency fees) relative to the Fund's peers. The Board focused on comparisons with other
similar mutual funds more heavily than non-mutual fund products or services because it is believed that they are more relevant. For example, other mutual funds are the products most like the Fund, they are readily
available to Fund shareholders as alternative investment vehicles, and they are the type of investment vehicle in fact chosen and maintained by the Fund's investors. The range of their fees and expenses therefore
appears to be a relevant indicator of what consumers have found to be reasonable in the precise marketplace in which the Fund competes.
It was
noted in the materials for the Board meeting that for the period covered by the Senior Officer's Evaluation, the Fund's investment advisory fee was waived in its entirety. The Board reviewed the contractual advisory
fee rate, net advisory fee rate and other expenses of the Fund with the Adviser and noted the position of the Fund's fee rates relative to its peers. In this regard, the Board noted that the contractual advisory fee
rate was above the median of the relevant peer group, but the Board noted that the investment advisory fee was waived in its entirety, and that the overall expense structure of the Fund remained competitive in the
context of other factors considered by the Board.
By
contrast, the Senior Officer has reviewed Federated's fees for providing advisory services to products outside the Federated funds (e.g., institutional and separate accounts and sub-adviser services). He concluded
that mutual funds and institutional accounts are inherently different products. Those differences include, but are not limited to, different types of targeted investors; being subject to different laws and regulations;
different legal structures; different average account sizes and portfolio management techniques made necessary by different cash flows and different associated costs; and the time spent by portfolio managers and
their teams, funds financial services, legal, compliance and risk management in reviewing securities pricing, addressing different administrative
Semi-Annual Shareholder Report
22
responsibilities, addressing different
degrees of risk associated with management and a variety of different costs. The Senior Officer did not consider the fees for providing advisory services to these outside products to be determinative in judging the
appropriateness of mutual fund advisory fees.
Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Fund are reasonable and supported renewal of the investment advisory contract with respect to
the Fund.
The
Board considered the nature, extent and quality of the services provided to the Fund by the Adviser and the resources of the Adviser and its affiliates dedicated to the Fund. In this regard, the Board evaluated, among
other things, the Adviser's personnel, experience, track record, overall reputation and willingness to invest in personnel and infrastructure that benefit the Fund. In addition, the Board reviewed the qualifications,
backgrounds and responsibilities of the portfolio management team primarily responsible for the day-to-day management of the Fund. The Board noted the compliance programs of and the compliance-related resources
provided to the Fund by the Adviser. The Fund's ability to deliver competitive performance when compared to its peer group was also deemed to be relevant by the Board as a useful indicator of how the Adviser is
executing the Fund's investment program, which in turn was one of the Board's considerations in reaching a conclusion that the nature, extent, and quality of the Adviser's investment management services were such as
to warrant continuation of the investment advisory contract.
In
evaluating the Fund's investment performance, the Board considered performance results in light of the Fund's investment objective, strategies and risks, as disclosed in the Fund's prospectus. The Board particularly
considered detailed investment reports on the Fund's performance provided to the Board throughout the year and in connection with the May meetings. The Senior Officer also reviewed information compiled by Federated,
using data supplied by independent fund ranking organizations, regarding the performance of, and fees charged by, other mutual funds, noting his view that comparisons to fund peer groups may be helpful, though not
conclusive, in judging the reasonableness of the proposed fees. The Board considered, in evaluating such comparisons, that in some cases individual funds may exhibit significant and unique differences in their
objectives and management techniques when compared to other funds within an industry peer group.
The
Fund's performance was above the median of the relevant peer group for the one-year period covered by the Senior Officer's Evaluation.
Following such evaluation, the Board concluded, within the context of its full deliberations, that the performance of the Fund supported renewal of the investment advisory contract with respect to the Fund.
Semi-Annual Shareholder Report
23
The
Board also received financial information about Federated, including information regarding the compensation and ancillary (or “fall-out”) benefits Federated derived from its relationships with the
Federated funds. This information covered not only the fees under the investment advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated funds under
separate contracts (e.g., for serving as the Federated funds' administrator). The information also detailed any indirect benefit Federated may derive from its receipt of research services from brokers who execute
Federated fund trades. In addition, the Board considered the fact that, in order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waived fees and/or reimbursed expenses and have
disclosed to fund investors and/or indicated to the Board their intention to do so in the future, where appropriate. Moreover, the Board receives regular reporting as to the institution, adjustment or elimination of
these voluntary waivers.
The
Board considered Federated's previous reductions in contractual management fees to certain funds in response to the Senior Officer's recommendations.
In May
2014, the Senior Officer recommended that Federated review the fee structures of its money market funds to determine whether it would be appropriate to consider alternative pricing structures. Federated combined that
review with its consideration of the re-structuring of its money market fund product line in response to the recently adopted amendments to Rule 2a-7 under the Investment Company Act of 1940, as amended (the
“1940 Act”) and previously proposed, and the Board approved, meaningful reductions to the contractual advisory fees of certain Federated money market funds.
Federated furnished information, requested by the Senior Officer, that reported revenues on a fund-by-fund basis and made estimates of the allocation of expenses on a fund-by-fund basis, using allocation
methodologies specified by the Senior Officer. The Senior Officer noted that, while these cost allocation reports apply consistent allocation processes, the inherent difficulties in allocating costs continues to cause
the Senior Officer to question the precision of the process and to conclude that such reports may be unreliable, since a single change in an allocation estimate may dramatically alter the resulting estimate of cost
and/or profitability of a fund and may produce unintended consequences. The allocation information, including the Senior Officer's view that fund-by-fund estimations may be unreliable, was considered in the analysis
by the Board.
The
Board and the Senior Officer also reviewed information compiled by Federated comparing profitability information for Federated to other publicly held fund management companies. In this regard, the Senior Officer
concluded that Federated's profit margins did not appear to be excessive. The Senior Officer also noted that Federated appeared financially sound, with the resources to fulfill its obligations under its contracts with
the Fund.
Semi-Annual Shareholder Report
24
The
Senior Officer's Evaluation also discussed the notion of possible realization of “economies of scale” as a fund grows larger. The Board considered in this regard that the Adviser has made significant and
long-term investments in areas that support all of the Federated funds, such as personnel and processes for the portfolio management, shareholder services, compliance, internal audit, and risk management functions, as
well as systems technology (including technology relating to cybersecurity), and that the benefits of these efforts (as well as any economies of scale, should they exist) were likely to be enjoyed by the fund family
as a whole. The Board noted that the Adviser's investments in these areas are extensive. In addition, the Board considered that Federated and its affiliates have frequently waived fees and/or reimbursed expenses and
that this has allowed fund shareholders to share potential economies of scale from a fund's inception. Federated, as it does throughout the year, and again in connection with the Board's review, furnished information
relative to revenue sharing or adviser paid fees. Federated and the Senior Officer noted that this information should be viewed to determine if there was an incentive to either not apply breakpoints or to apply
breakpoints at higher levels and should not be viewed to determine the appropriateness of advisory fees, because it would represent marketing and distribution expenses. Finally, the Board also noted the absence of any
applicable regulatory or industry guidelines on this subject, which (as discussed in the Senior Officer's Evaluation) is compounded by the lack of any common industry practice or general pattern with respect to
structuring fund advisory fees with “breakpoints” that serve to reduce the fee as a fund attains a certain size.
The
Senior Officer noted that, subject to the comments and recommendations made within the Senior Officer's Evaluation, his observations and the information accompanying the Senior Officer's Evaluation supported a finding
by the Board that the management fee for the Fund was reasonable. Under these circumstances, no objection was raised to the continuation of, the Fund's investment advisory contract.
In its
decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a
result of a decision to terminate or not renew an investment advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing
and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the investment advisory contract reflected the fact that
it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund. The Board concluded that, in light of the factors discussed above, including the nature, quality and scope of
the services provided to the Fund by the Adviser and its affiliates, continuation of the investment advisory contract was appropriate.
Semi-Annual Shareholder Report
25
The
Board based its decision to approve the investment advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and
considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve
the continuation of the contract reflects its determination that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangement.
Semi-Annual Shareholder Report
26
Voting Proxies on Fund Portfolio
Securities
A description of the
policies and procedures that the Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A
report on “Form N-PX” of how the Fund voted any such proxies during the most recent 12-month period ended June 30 is available, without charge and upon request, by calling 1-800-341-7400 and is also
available at the SEC's website at www.sec.gov.
Quarterly Portfolio
Schedule
The Fund files with the
SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on “Form N-Q.” These filings are available on the SEC's website at www.sec.gov and may
be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.)
IMPORTANT NOTICE
ABOUT FUND DOCUMENT DELIVERY
In an
effort to reduce costs and avoid duplicate mailings, the Fund intends to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund resides (so-called
“householding”), as permitted by applicable rules. The Fund's “householding” program covers its Prospectus and Statement of Additional Information, and supplements to each, as well as
Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the “householding” program. The Fund is also permitted
to treat a shareholder as having given consent (“implied consent”) if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive
mail at the same post office box, (ii) the Fund gives notice of its intent to “household” at least sixty (60) days before it begins “householding” and (iii) none of the shareholders in the
household have notified the Fund or its agent of the desire to “opt out” of “householding.” Shareholders who have granted written consent, or have been deemed to have granted implied consent,
can revoke that consent and opt out of “householding” at any time: shareholders who purchased shares through an intermediary should contact their representative or may call the Fund at
1-800-341-7400.
Semi-Annual Shareholder Report
27
Item 2. Code of Ethics
Not Applicable
Item 3. Audit Committee Financial Expert
Not Applicable
Item 4. Principal Accountant Fees and Services
Not Applicable
Item 5. Audit Committee of Listed Registrants
Not Applicable
Item 6. Schedule of Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.
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
No Changes to Report
Item 11. Controls and Procedures
(a) The registrant’s President and Treasurer have concluded that the
registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
(a)(1) Code of Ethics- Not Applicable to this Report.
(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.
(a)(3) Not Applicable.
(b) Certifications pursuant to 18 U.S.C. Section 1350.
SIGNATURES
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.
Registrant Edward Jones Money Market Fund
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date October 24, 2016
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/ J. Christopher Donahue
J. Christopher Donahue, Principal Executive Officer
Date October 24, 2016
By /S/ Lori A. Hensler
Lori A. Hensler, Principal Financial Officer
Date October 24, 2016
N-CSR Item 12(a)(2) - Exhibits: Certifications
I, J. Christopher Donahue, certify that:
- I have reviewed this report on Form N-CSR of Edward Jones Money Market Fund ("registrant");
- Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
- The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
- designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
- Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
- evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
- disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter 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; and
- The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
- all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
- any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 24, 2016
/S/ J. Christopher Donahue
J. Christopher Donahue, President - Principal Executive Officer
N-CSR Item 12(a)(2) - Exhibits: Certifications
I, Lori A. Hensler, certify that:
- I have reviewed this report on Form N-CSR of Edward Jones Money Market Fund ("registrant");
- Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
- The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
- designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
- Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
- evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
- disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter 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; and
- The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
- all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and
- any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: October 24, 2016
/S/ Lori A. Hensler
Lori A. Hensler, Treasurer - Principal Financial Officer
N-CSR Item 12(b) - Exhibits: Certifications
SECTION 906 CERTIFICATION
Pursuant to 18 U.S.C.§ 1350, the undersigned officers of Edward Jones Money Market Fund (the “Registrant”), hereby certify, to the best of our knowledge, that the Registrant’s Report on Form N-CSR for the period ended August 31, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities and Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Dated: October 24, 2016
/s/ J. Christopher Donahue
J. Christopher Donahue
Title: President, Principal Executive Officer
Dated: October 24, 2016
/s/ Lori A. Hensler
Lori A. Hensler
Title: Treasurer, Principal Financial Officer
This certification is being furnished solely pursuant to 18 U.S.C.§ 1350 and is not being filed as part of the Report or as a separate disclosure document.
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