SCOUT
MONEY MARKET
FUND
A no-load mutual fund
with primary emphasis
on maximum income
consistent with safety
of principal and
maintenance of liquidity.
Quarterly Report
March 31, 1997
TO THE SHAREHOLDERS
Scout Money Market Fund's Federal Portfolio earned 1.20% for the quarter ended
March 31, 1997, while the Prime Portfolio earned 1.21%. The 7-day current
yield on March 31, 1997 was 4.72% for the Federal Portfolio and 4.91% for the
Prime Portfolio.
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.
For money market investors, the most significant event of the quarter was the
decision by the Federal Reserve to raise the Federal Funds rate by 25 basis
points to 5.50%. The market, as efficient as it sometimes is, had anticipated
the increase, and by the day of the announcement, the increase was already
included in short term yields. By quarter end, thirty-day commercial paper,
which began the year yielding 5.25% was at or above 5.50%. In the wake of the
Federal Reserve's action, the question now becomes, "Will there be another
increase at the May meeting of the Federal Open Market Committee?" If economic
data continues to support the case for a growing economy, we suspect the Fed
will raise rates by another 25 basis points.
In mid-quarter, in anticipation of what we thought would be a rising rate
environment, we began to shorten the average maturity of both the Federal and
Prime portfolios. By the end of the first quarter, the Federal portfolio had
an average maturity of 12 days; the Prime portfolio, 17 days. In view of the
March 26, 1997 action by the Federal Reserve, the shorter average maturity of
the portfolios will speed the process of reinvesting at higher yields. We
remain aware of the possibility of another increase in the Fed Funds rate at
the May 20, 1997 FOMC meeting. Unless the economic data confirms a slowing
economy, we will continue to maintain a relatively short average life in both
portfolios.
We appreciate your continued interest in Scout Money Market Fund, Inc., and we
welcome your comments and questions.
Sincerely,
/s/William A. Faust
William A. Faust
UMB Investment Advisors
Shares of the Scout Funds are not deposits or obligations of, nor guaranteed
by, UMB Bank, n.a. or any other banking institution, nor are they insured by
the Federal Deposit Insurance Corporation or any other applicable deposit
insurance. These shares involve investment risks, including the possible loss
of the principal amount invested.
FINANCIAL STATEMENTS
Statement of Net Assets
March 31, 1997
Principal Market
Amount Description Value
PRIME PORTFOLIO
SHORT-TERM CORPORATE NOTES - 89.65%
$ 6,000,000 Abbott Laboratories,
5.24%, due April 3, 1997 $ 5,998,253
10,000,000 Air Products & Chemicals,
5.48%, due April 23, 1997 9,966,511
10,000,000 American Greetings Co.,
5.34%, due April 16, 1997 9,977,750
3,500,000 American Greetings Co.,
5.35%, due June 3, 1997 3,467,231
12,000,000 Ameritech Capital Funding Corp.,
5.28%, due April 17, 1997 11,971,840
3,000,000 Ameritech Corp.,
5.25%, due April 24, 1997 2,989,938
5,000,000 Anheuser-Busch Cos. Inc.,
6.25%, due April 1, 1997 5,000,000
17,500,000 Archer-Daniels-Midland Co.,
5.29%, due April 2, 1997 17,497,428
2,500,000 Atlantic Richfield Co.,
5.27%, due April 16, 1997 2,494,510
2,500,000 Atlantic Richfield Co.,
5.29%, due April 16, 1997 2,494,490
2,200,000 Bell Atlantic Network Fdg.,
5.60%, due April 2, 1997 2,199,658
4,500,000 BellSouth Telecommunications,
5.31%, due April 21, 1997 4,486,725
10,000,000 Donnelly R R & Sons,
5.55%, due April 14, 1997 9,979,958
7,500,000 Dow Chemical Co.,
5.25%, due April 1, 1997 7,500,000
12,500,000 Dow Chemical Co.,
5.25%, due April 3, 199 12,496,354
11,000,000 duPont (E.I.) deNemours & Co.,
5.27%, due April 17, 1997 10,974,236
4,600,000 duPont (E.I.) deNemours & Co.,
5.27%, due April 18, 1997 4,588,552
15,000,000 Duke Power Co.,
5.27%, due April 11, 1997 14,978,042
15,000,000 Emerson Electric Co.,
5.23%, due April 4, 1997 14,993,463
12,500,000 Gannett Co. Inc.,
5.28%, due April 7, 1997 12,489,000
12,230,000 General Mills Inc.,
5.26%, due April 4, 1997 12,224,639
7,500,000 General Re Corp.,
5.75%, due April 1, 1997 7,500,000
5,000,000 General Re Corp.,
5.28%, due April 28, 1997 4,980,200
4,000,000 General Re Corp.,
5.25%, due May 15, 1997 3,974,333
12,500,000 Heinz (H.J.) Co.,
5.25%, due April 10, 1997 12,483,594
4,000,000 Heinz (H.J.) Co.,
5.34%, due April 22, 1997 3,987,540
5,000,000 International Business Machines Corp.,
Medium Term Notes,
5.65%, due January 22, 1998 4,996,107
5,950,000 Kellogg Co.,
5.32%, due May 20, 1997 5,906,915
15,000,000 Knight Ridder Inc.,
5.29%, due April 23, 1997 14,951,508
5,000,000 Laclede Gas Co.,
5.35%, due April 7, 1997 4,995,542
5,000,000 Laclede Gas Co.,
5.29%, due April 9, 1997 4,994,056
12,500,000 Marsh & McLennan Cos. Inc.,
5.75%, due April 11, 1997 12,480,035
20,000,000 Minnesota Mining & Mfg. Co.,
5.25%, due April 21, 1997 19,941,667
10,000,000 Monsanto Co.,
5.65%, due April 2, 1997 9,998,431
2,500,000 Monsanto Co.,
5.45%, due April 3, 1997 2,499,243
7,500,000 Monsanto Co.,
5.34%, due June 2, 1997 7,431,025
20,000,000 Motorola Inc.,
5.36%, due April 25, 1997 19,928,533
5,300,000 Progress Capital Holdings Inc.,
5.30%, due April 2, 1997 5,299,220
5,000,000 Progress Capital Holdings Inc.,
5.70%, due April 2, 1997 4,999,208
15,000,000 Shell Oil Co. Ser A,
5.25%, due April 8, 1997 14,984,688
5,000,000 Weyerhauser Co.,
5.30%, due April 9, 1997 4,994,111
5,000,000 Weyerhauser Co.,
5.29%, due April 11, 1997 4,992,653
2,500,000 Weyerhauser Co.,
5.30%, due April 22, 1997 2,492,271
5,000,000 Wisconsin Electric Power Co.,
5.50%, due April 14, 1997 4,990,069
4,000,000 Xerox Corp.,
5.31%, due May 2, 1997 3,981,710
367,280,000 366,551,237
GOVERNMENT SPONSORED ENTERPRISES - 11.27%
2,500,000 Federal Farm Credit Bank,
5.25%, due April 1, 1997 2,500,000
6,450,000 Federal Farm Credit Banks
Discount Notes,
5.40%, due April 1, 1997 6,450,000
12,200,000 Federal Home Loan Banks
Discount Notes,
5.21%, due April 10, 1997 12,184,110
17,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.30%, due April 18, 1997 17,456,201
7,500,000 Federal National Mortgage Association
Discount Notes,
6.50%, due April 1, 1997 7,500,000
46,150,000 46,090,311
TOTAL INVESTMENTS - 100.92% $ 412,641,548
Other assets less liabilities - (0.92%) (3,769,236)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share;
750,000,000 shares of $0.01 par value
capital shares authorized;
408,901,997 shares outstanding) $ 408,872,312
Valuation of securities is on the basis of amortized cost, which approximates
market value.
FEDERAL PORTFOLIO
GOVERNMENT SPONSORED ENTERPRISES - 100.15%
$ 15,000,000 Federal Agriculture Mortgage Corporation
Discount Notes,
5.32%, due April 15, 1997 $ 14,968,967
5,000,000 Federal Farm Credit Banks,
5.25%, due April 1, 1997 5,000,000
4,000,000 Federal Farm Credit Banks,
5.28%, due June 2, 1997 4,000,000
10,200,000 Federal Farm Credit Banks
Discount Notes,
5.19%, due April 8, 1997 10,189,706
7,000,000 Federal Farm Credit Banks
Discount Notes,
5.49%, due April 25, 1997 6,974,380
11,700,000 Federal Home Loan Banks
Discount Note,
5.40%, due April 1, 1997 11,700,000
15,000,000 Federal Home Loan Banks
Discount Note,
6.45%, due April 1, 1997 15,000,000
940,000 Federal Home Loan Banks
Discount Notes,
5.45%, due April 3, 1997 939,715
12,500,000 Federal Home Loan Banks
Discount Notes,
5.21%, due April 4, 1997 12,494,573
8,300,000 Federal Home Loan Banks
Discount Notes,
5.21%, due April 10, 1997 8,289,189
20,000,000 Federal Home Loan Banks
Discount Notes,
5.35%, due April 17, 1997 19,952,444
7,100,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.24%, due April 4, 1997 7,096,900
7,090,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.50%, due April 17, 1997 7,072,669
2,800,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.23%, due April 18, 1997 2,793,085
7,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.35%, due April 18, 1997 7,481,052
2,080,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.25%, due April 21, 1997 2,073,933
2,500,000 Federal National Mortgage Association
Debenture,
5.43%, due June 19, 1997 2,500,000
50,000,000 Federal National Mortgage Association
Discount Notes,
6.50%, due April 1, 1997 50,000,000
15,000,000 Federal National Mortgage Association
Discount Notes,
5.46%, due April 3, 1997 14,995,450
4,170,000 Federal National Mortgage Association
Discount Notes,
5.20%, due April 7, 1997 4,166,386
12,000,000 Federal National Mortgage Association
Discount Notes,
5.23%, due April 7, 1997 11,989,540
12,500,000 Federal National Mortgage Association
Discount Notes,
5.21%, due April 9, 1997 12,485,528
7,500,000 Federal National Mortgage Association
Discount Notes,
5.30%, due April 9, 1997 7,491,167
2,860,000 Federal National Mortgage Association
Discount Notes,
5.20%, due April 10, 1997 2,856,282
6,000,000 Federal National Mortgage Association
Discount Notes,
5.22%, due April 10,1997 5,992,170
10,000,000 Federal National Mortgage Association
Discount Notes,
5.23%, due April 11, 1997 9,985,472
20,000,000 Federal National Mortgage Association
Discount Notes,
5.20%, due April 14, 1997 19,962,445
5,000,000 Federal National Mortgage Association
Discount Notes,
5.25%, due April 14, 1997 4,990,521
20,000,000 Federal National Mortgage Association
Discount Notes,
5.28%, due April 16, 1997 19,956,000
GOVERNMENT SPONSORED ENTERPRISES (Continued)
3,470,000 Federal National Mortgage Association
Discount Notes,
5.25%, due April 21, 1997 3,459,879
1,000,000 Federal National Mortgage Association
Discount Notes,
5.50%, due May 14, 1997 993,431
5,000,000 Federal National Mortgage Association
Discount Notes,
5.19%, due August 18, 1997 4,899,804
313,210,000 312,750,688
TOTAL INVESTMENTS - 100.15% $ 312,750,688
Other assets less liabilities - (0.15%) (465,437)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share;
750,000,000 shares of $0.01 par value
capital shares authorized;
312,331,428 shares outstanding) $ 312,285,251
Valuation of securities is on the basis of amortized cost, which approximates
market value.
This report has been prepared for the information of the Shareholders of Scout
Money Market Fund, Inc., and is not to be construed as an offering of the
shares of the Fund. Shares of this Fund and of the other Scout Funds are
offered only by the Prospectus, a copy of which may be obtained from Jones &
Babson, Inc.
BOARD OF DIRECTORS
AND OFFICERS
Board of Directors
Larry D. Armel
William E. Hoffman, D.D.S.
Eric T. Jager
Stephen F. Rose
Stuart Wien
Officers
Larry D. Armel, President
P. Bradley Adams, Vice President & Treasurer
Elizabeth L. Allwood, Vice President
Michael A. Brummel, Vice President
Martin A. Cramer, Vice President & Secretary
John G. Dyer, Vice President
Constance E. Martin, Vice President
Investment Counsel
UMB Bank, n.a., Kansas City, Missouri
Auditors
Geo. S. Olive & Co. LLC, Evansville, Indiana
Legal Counsel
Stradley, Ronon, Stevens & Young,
Philadelphia, Pennsylvania
John G. Dyer, Kansas City, Missouri
Custodian
UMB Bank, n.a., Kansas City, Missouri
JONES & BABSON
MUTUAL FUNDS
P.O. Box 410498
Kansas City, MO 64141-0498
TOLL-FREE 1-800-996-2862