MESSAGE
To Our Shareholders
Babson Money Market Fund's Federal Portfolio earned an annualized yield of
4.93% during the six months ended December 31, 1995, while the Prime
Portfolio earned 5.01%. These figures increased to 5.04% and 5.13%,
respectively, for those shareholders who reinvested their dividends.
Money market funds are neither insured nor guaranteed by the U.S. Government.
There is no assurance that the fund will maintain a stable net asset value of
one dollar per share.
The decline in interest rates that began in the early part of 1995 continued
throughout the second half of the year as the economy slowed in response to
the tightening of monetary policy by the Federal Reserve in 1994.
Recognizing the slowing rate of economic growth, the Fed responded by cutting
the Federal Funds rate by one-quarter of a percent in July. Investors spent
the rest of the year anticipating future easing moves. Three-month Treasury
bills, which had started 1995 with a yield of nearly 6%, fell from 5.6% to 5%.
The expectation of further rate declines also produced an inverted money
market yield curve, with rates on longer maturity instruments lower than
those of shorter dated ones.
As the year drew to a close, it became difficult to accurately gauge the
economy's situation. A month long shutdown of the federal government halted
the release of economic data, and severe winter weather in much of the
country in December and January dampened activity by an uncertain amount.
It is clear, though, that the economy continues to slow, and the Fed pushed
rates down by another one-quarter of a percent in January.
No one can predict where interest rates will go from here, but there is room
for several more rate cuts if the economy can continue to grow at a moderate
enough pace so that investors do not have to worry about inflation. Any
reacceleration of growth, though, might prompt the Fed to return to a more
restrictive stance.
No matter what path rates take, we believe that our
policy of focusing on quality and liquidity without
the use of derivatives should continue to serve our
shareholders well.
Sincerely,
Larry D. Armel
President
<PAGE>
STATEMENT OF NET ASSETS
December 31, 1995 (unaudited)
PRIME PORTFOLIO
PRINCIPAL MARKET
AMOUNT VALUE
BANKERS' ACCEPTANCES _ 7.89%
Bank of New York, 5.57%, due March 8, 1996 $ 2,000,000 $ 1,943,681
Republic National Bank - New York, 5.52%,
due April 19, 1996 1,000,000 973,167
3,000,000 2,916,848
SHORT-TERM CORPORATE NOTES _ 70.20%
Abbott Laboratories, 5.60%, due January 23, 1996 1,700,000 1,693,389
AIG Funding, Incorporated, 5.25%, due July 31, 1996 1,700,000 1,642,235
AT & T Company, 5.62%, due March 22, 1996 1,000,000 974,710
Ameritech Corporation, 5.54%, due March 5, 1996 2,000,000 1,932,443
duPont (E.I.) deNemours & Company, 5.65%,
due January 26, 1996 1,700,000 1,688,527
Emerson Electric Company, 5.60%,
due February 14, 1996 1,700,000 1,687,307
Ford Motor Credit Company Discount Notes,
5.57%, due March 15, 1996 1,000,000 981,588
Gillette Company, 5.68%, due January 16, 1996 1,700,000 1,691,149
Heinz (H.J.) Company, 5.72%, due January 19, 1996 1,425,000 1,415,264
IBM Corporation, 5.74%, due January 26, 1996 1,700,000 1,688,345
Lilly (Eli) & Company, 5.58%, due February 8, 1996 2,000,000 1,950,400
Motorola, Incorporated, 5.72%, due January 26, 1996 1,700,000 1,689,736
Pacific Bell Telephone, 5.70%, due January 31, 1996 1,700,000 1,690,579
PHH Corporation, 5.66%, due January 18, 1996 1,000,000 985,850
Proctor & Gamble Company, 5.66%, due January 19, 1996 1,000,000 984,592
Procter & Gamble Company, 5.60%, due February 16, 1996 600,000 595,333
Transamerica Finance Corporation,
5.35%, due April 3, 1996 1,000,000 961,212
Weyerhauser Company, 5.80%, due January 12, 1996 1,700,000 1,696,166
26,325,000 25,948,825
GOVERNMENT SPONSORED ENTERPRISES _ 3.83%
Federal Home Loan Banks Discount Notes,
6.28%, due February 2, 1996 500,000 469,472
Federal Home Loan Banks Discount Notes,
5.22%, due October 28, 1996 1,000,000 947,800
1,500,000 1,417,272
REPURCHASE AGREEMENT _ 15.33% (Note 4)
Morgan Guaranty Trust Company, 5.75%,
due January 2, 1996
(Collateralized by U.S. Treasury Notes,
7.25%, due August 15, 2022) 5,665,000 5,665,000
TOTAL INVESTMENTS _ 97.25% $ 35,947,945
Other assets less liabilities _ 2.75% 1,014,843
TOTAL NET ASSETS _ 100.00%
(equivalent to $1.00 per share; 1,000,000,000
shares of $0.01 par value
capital shares authorized; 36,966,991
shares outstanding) $ 36,962,788
<PAGE>
STATEMENT OF NET ASSETS
December 31, 1995 (unaudited)
FEDERAL PORTFOLIO
PRINCIPAL MARKET
AMOUNT VALUE
GOVERNMENT SPONSORED ENTERPRISES _ 77.93%
Federal Farm Credit Banks Discount Notes,
5.45%, due January 26, 1996 $ 1,000,000 $ 995,458
Federal Farm Credit Banks Discount Notes,
5.50%, due January 26, 1996 1,200,000 1,194,867
Federal Farm Credit Banks Discount Notes,
5.25%, due May 3, 1996 325,000 311,208
Federal Farm Credit Banks Discount Notes,
5.38%, due June 28, 1996 370,000 351,034
Federal Home Loan Banks Discount Notes,
5.57%, due February 14, 1996 500,000 493,115
Federal Home Loan Banks Discount Notes,
5.49%, due March 22, 1996 500,000 487,647
Federal Home Loan Banks Discount Notes,
5.34%, due May 10, 1996 205,000 199,800
Federal Home Loan Banks Discount Notes,
5.22%, due October 28, 1996 200,000 189,560
Federal Home Loan Mortgage Corporation Discount
Notes, 5.64%, due January 16, 1996 1,000,000 994,830
Federal Home Loan Mortgage Corporation Discount
Notes, 5.65%, due January 19, 1996 1,000,000 995,449
Federal National Mortgage Association Discount
Notes, 5.55%, due February 7, 1996 550,000 544,064
Federal National Mortgage Association Discount
Notes, 5.51%, due March 5, 1996 310,000 303,832
Federal National Mortgage Association Discount
Notes, 5.46%, due March 25, 1996 250,000 243,137
7,410,000 7,304,001
REPURCHASE AGREEMENT _ 22.14% (Note 4)
Morgan Guaranty Trust Company,
5.75%, due January 2, 1996
(Collateralized by U.S. Treasury Notes,
7.25%, due August 15, 2022) 2,075,000 2,075,000
TOTAL INVESTMENTS _ 100.07% $ 9,379,001
Other assets less liabilities _ (0.07%) (6,559)
TOTAL NET ASSETS _ 100.00%
(equivalent to $1.00 per share; 1,000,000,000
shares of $0.01 par value
capital shares authorized; 9,371,820
shares outstanding) $ 9,372,442
<PAGE>
STATEMENT OF ASSETS
AND LIABILITIES
December 31, 1995 (unaudited)
PRIME FEDERAL
PORTFOLIO PORTFOLIO
ASSETS:
Investment securities, at market value
(identified cost of $35,947,945 and
$9,379,001, respectively) $ 35,947,945 $ 9,379,001
Cash 748,735 _
Interest receivable 266,592 44,636
Other assets 2,655 438
Total assets 36,965,927 9,424,075
LIABILITIES AND NET ASSETS:
Cash overdraft _ 50,355
Payable to shareholders 3,139 1,278
Total liabilities 3,139 51,633
NET ASSETS $ 36,962,788 $ 9,372,442
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 36,974,348 $ 9,372,502
Accumulated net realized loss on investments (11,560) (60)
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 36,962,788 $ 9,372,442
Capital shares, $0.01 par value
Authorized 1,000,000,000 1,000,000,000
Outstanding 36,966,991 9,371,820
NET ASSET VALUE PER SHARE $ 1.00 $ 1.00
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1995 (unaudited)
PRIME FEDERAL
PORTFOLIO PORTFOLIO
INVESTMENT INCOME:
Income:
Interest $ 1,167,374 $ 279,397
Expenses:
Management fees (Note 3) 168,353 40,817
Registration fees and other expenses 12,878 3,123
181,231 43,940
Net investment income 986,143 235,457
REALIZED GAIN ON INVESTMENTS (Note 1):
Realized gain from investment transactions:
Proceeds from sales of investments 1,038,163,359 406,223,572
Cost of investments sold 1,038,163,359 406,223,572
Net realized gain from investment
transactions _ _
Increase in net assets resulting from
operations $ 986,143 $ 235,457
<PAGE>
STATEMENTS OF CHANGES
IN NET ASSETS
Six Months Ended December 31, 1995 (unaudited)
and Year Ended June 30, 1995
PRIME FEDERAL
PORTFOLIO PORTFOLIO
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 1,901,675 $ 431,984
Net realized loss from investment transactions (6,722) (50)
Net increase in net assets resulting from
operations 1,894,953 431,934
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,901,675) (431,984)
DECREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ($1.00 per share) 38,007,450 8,173,682
Net asset value of shares issued for
reinvestment of distributions
($1.00 per share) 1,735,407 409,010
39,742,857 8,582,692
Cost of shares redeemed ($1.00 per share) (42,628,667) (9,193,077)
Net decrease from capital share transactions (2,885,810) (610,385)
Total decrease in net assets (2,892,532) (610,435)
NET ASSETS _ June 30, 1994 42,783,767 10,263,064
NET ASSETS _ June 30, 1995 $ 39,891,235 $ 9,652,629
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 986,143 $ 235,457
Net realized gain from investment transactions _ _
Net increase in net assets resulting from
operations 986,143 235,457
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (986,143) (235,457)
DECREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ($1.00 per share) 21,609,385 2,649,751
Net asset value of shares issued for
reinvestment of distributions
($1.00 per share) 905,434 224,875
22,514,819 2,874,626
Cost of shares redeemed ($1.00 per share) (25,443,266) (3,154,813)
Net decrease from capital share transactions (2,928,447) (280,187)
Total decrease in net assets (2,928,447) (280,187)
NET ASSETS _ June 30, 1995 39,891,235 9,652,629
NET ASSETS _ December 31, 1995 $ 36,962,788 $ 9,372,442
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940, as amended,
as a diversified open-end management investment company. Its shares are
currently issued in two series with each series, in effect, representing a
seperate Fund. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
Investments _ Valuation of securities is on the basis of amortized cost which
approximates market value. Investment transactions are recorded on the trade
date. Investment income and dividends to shareholders are recorded daily and
dividends are distributed monthly. Realized gains and losses from investment
transactions are reported on the identified cost basis.
Federal and State Taxes _ The Fund's policy is to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Therefore, no provision for federal or state tax is required.
2. PURCHASES AND SALES OF SECURITIES:
The aggregate amounts of security transactions during the period ended
December 31, 1995, were as follows:
Prime Portfolio
Purchases $ 1,034,627,495
Proceeds from sales 1,038,163,359
Federal Portfolio
Purchases $ 406,023,994
Proceeds from sales 406,223,572
3. MANAGEMENT FEES:
Management fees, which include all normal expenses of the Fund other than
taxes, fees and other charges of governmental agencies for qualifying the
Fund's shares for sale, special legal fees, interest and brokerage
commissions, are paid to Jones & Babson, Inc., an affiliated company. These
fees are based on average daily net assets of the Fund at the annual rate of
.85 of one percent of net assets. Certain officers and/or directors of the
Fund are also officers and/or directors of Jones & Babson, Inc.
4. REPURCHASE AGREEMENTS:
Securities purchased under agreements to resell are held by the Fund's
custodian, UMB Bank, n.a. The Fund's adviser monitors the market values of
the underlying securities which they have purchased on behalf of the Fund to
ensure that they are sufficient to protect the Fund in the event of default
by the seller. In the event of bankruptcy or other default of the seller, the
Fund could experience delays in liquidating the underlying securities and
possible loss to the extent that the repurchase agreement and accrued
interest is more than proceeds received upon liquidation of the underlying
securities.
This report has been prepared for the information of the Shareholders of D.L.
Babson Money Market Fund, Inc., and is not to beconstrued as an offering of
the shares of the Fund. Shares of this Fund and of the other Babson Funds
are offered only by the Prospectus, a copy of which may be obtained from
Jones & Babson, Inc.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000313565
<NAME> D L BABSON MONEY MARKET FUND INC
<SERIES>
<NUMBER> 2
<NAME> PRIME PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 35947945
<INVESTMENTS-AT-VALUE> 35947945
<RECEIVABLES> 266592
<ASSETS-OTHER> 751390
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 36965927
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3139
<TOTAL-LIABILITIES> 3139
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 36974348
<SHARES-COMMON-STOCK> 36966991
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (11560)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 36962788
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1167374
<OTHER-INCOME> 0
<EXPENSES-NET> 181231
<NET-INVESTMENT-INCOME> 986143
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 986143
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (2928447)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 168353
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 181231
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000313565
<NAME> D L BABSON MONEY MARKET FUND INC
<SERIES>
<NUMBER> 1
<NAME> FEDERAL PORTFOLIO
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 9379001
<INVESTMENTS-AT-VALUE> 9379001
<RECEIVABLES> 44636
<ASSETS-OTHER> 438
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 9424075
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 51633
<TOTAL-LIABILITIES> 51633
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9372502
<SHARES-COMMON-STOCK> 9371820
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (60)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 9372442
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 279397
<OTHER-INCOME> 0
<EXPENSES-NET> 43940
<NET-INVESTMENT-INCOME> 235457
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 235457
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 235457
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (280187)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 40817
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 43940
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
