SCOUT
MONEY MARKET
FUND
A no-load mutual fund
with primary emphasis
on maximum income
consistent with safety
of principal and
maintenance of liquidity.
Semiannual Report
December 31, 1996
TO THE SHAREHOLDERS
Scout Money Market Fund's Federal Portfolio earned 2.46% for the six months
ended December 31, 1996, while the Prime Portfolio earned 2.49%. The 7-day
current yield on December 31, 1996 was 4.89% for the Federal Portfolio and
5.08% 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.
On a year over year basis, the 1996 Consumer Price Index (CPI) was up 3.30%.
Federal Funds remained steady at 5.25%. Prices on treasury issues of all
maturities were higher by year end. Intermediate and longer bonds, as measured
by the Lehman Brothers Government Corporate Index, returned 4.05% and 2.90%,
respectively. When compared to these various indices, the 5.00% return on each
of the two portfolios looks quite favorable. This return, although down from
the over 5.50% earned in 1995, remained very respectable versus the under
4.00% returns of 1992 and 1994, and the 2% plus returns of 1993.
As we enter 1997, the Treasury, in late January, will offer the first
inflation-protection bond to investors. The key question for money market
investors this year remains as it was in 1996; will the Fed raise interest
rates? The debate continues to rage over the strength of the economy, with
those who believe the strength of the economy is underestimated predicting
long rates as high as 8.00%. At the other end of the spectrum, those who
believe the economy is weak, or at least very moderate in its growth
potential, believe long rates can decline to below 6.00%. Our belief is that
the moderate growth argument will ultimately prevail. However, until the data
itself resolves the issue, the long bond will continue to be volatile and will
trade in a 6.75% to 7.00% range.
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
December 31, 1996 (unaudited)
Principal Market
Amount Description Value
PRIME PORTFOLIO
SHORT-TERM CORPORATE NOTES - 72.67%
$ 3,000,000 Aluminum Co. of America,
5.30%, due January 7, 1997 $ 2,997,350
2,489,000 Aluminum Co. of America,
5.28%, due Janaury 13, 1997 2,484,619
5,000,000 American Greetings Co.,
5.70%, due January 2, 1997 4,999,208
1,795,000 American Greetings Co.,
5.80%, due January 2, 1997 1,794,711
10,000,000 AON Corp.,
5.28%, due January 10, 1997 9,986,800
5,000,000 Atlantic Richfield Co.,
5.28%, due January 10, 1997 4,993,400
1,434,000 Bell Atlantic Network Fdg.,
5.90%, due January 7, 1997 1,432,590
15,000,000 Bell Atlantic Network Fdg.,
5.33%, due January 21, 1997 14,955,583
5,000,000 BellSouth Telecommunications,
5.30%, due February 4, 1997 4,974,972
10,628,000 BP America Inc.,
6.75%, due January 2, 1997 10,626,007
5,000,000 BP America Inc.,
7.10%, due January 2, 1997 4,999,014
7,500,000 Campbell Soup Co.,
5.28%, due January 8, 1997 7,492,300
12,500,000 Disney Walt Co.,
5.26%, due January 6, 1997 12,490,868
4,900,000 Donnelly R R & Sons,
5.31%, due January 6, 1997 4,896,386
7,500,000 Dover Corp.,
5.49%, due January 21, 1997 7,477,125
8,000,000 Dover Corp.,
5.44%, due January 24, 1997 7,972,196
3,000,000 duPont (E.I.) deNemours & Co.,
5.75%, due January 27, 1997 2,987,542
12,500,000 duPont (E.I.) deNemours & Co.,
5.25%, due February 5, 1997 12,436,198
3,000,000 Gannett Co. Inc.,
5.35%, due January 9, 1997 2,996,433
12,500,000 Gannett Co. Inc.,
5.70%, due January 16, 1997 12,470,313
10,000,000 General Re Corp.,
5.30%, due February 4, 1997 9,949,944
2,500,000 General Re Corp.,
5.42%, due February 21, 1997 2,480,804
15,000,000 GTE Florida Inc.,
5.49% due January 23, 1997 14,949,675
7,000,000 Heinz (H.J.) Co.,
5.37%, due January 14, 1997 6,986,426
15,000,000 Hershey Foods Corp.,
5.32%, due January 22, 1997 14,953,450
7,500,000 Knight Ridder Inc.,
5.30%, due January 13, 1997 7,486,750
3,000,000 Laclede Gas Co.,
5.33%, due January 6, 1997 2,997,779
2,000,000 Marsh & McLennan Cos. Inc.,
5.33%, due January 7, 1997 1,998,223
15,000,000 Monsanto Co.,
5.32%, due January 15, 1997 14,968,967
9,000,000 Proctor & Gamble Co.,
5.25%, due February 5, 1997 8,954,063
10,000,000 Progress Capital Holdings Inc.,
5.43%, due January 6, 1997 9,992,458
6,100,000 Raytheon Co.,
5.39%, due January 24, 1997 6,078,994
3,500,000 South Carolina Electric Gas,
5.68%, due January 24, 1997 3,487,299
3,000,000 South Carolina Electric Gas,
5.58%, due January 28, 1997 2,987,445
12,500,000 Weyerhauser Co.,
5.30%, due January 31, 1997 12,444,792
10,000,000 Wisconsin Electric Power Co.,
5.35%, due January 8, 1997 9,989,597
5,000,000 Wisconsin Electric Power Co.,
5.60%, due January 29, 1997 4,978,222
15,000,000 Xerox Corp.,
5.35%, due January 17, 1997 14,964,333
286,846,000 286,112,837
GOVERNMENT SPONSORED ENTERPRISES - 28.12%
5,000,000 Federal Agricultural Mortgage Company,
5.24%, due January 2, 1997 4,999,272
3,000,000 Federal Farm Credit Bank,
5.33%, due January 2, 1997 3,000,000
5,000,000 Federal Farm Credit Bank,
4.95%, due March 3, 1997 4,998,442
3,500,000 Federal Farm Credit Bank,
5.22%, due March 3, 1997 3,500,000
2,500,000 Federal Farm Credit Bank,
5.25%, due April 1, 1997 2,500,000
1,000,000 Federal Farm Credit Banks
Discount Notes,
5.48%, due January 29, 1997 995,738
2,500,000 Federal Home Loan Banks
Discount Notes,
5.26%, due January 7, 1997 2,497,808
6,700,000 Federal Home Loan Banks
Discount Notes,
5.21%, due January 9, 1997 6,692,243
7,200,000 Federal Home Loan Banks
Discount Notes,
5.30%, due January 9, 1997 7,191,520
12,900,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.25%, due January 3, 1997 12,896,237
1,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.20%, due January 10, 1997 1,498,050
3,591,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.28%, due January 14, 1997 3,584,153
9,000,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.55%, due January 30, 1997 8,959,763
10,000,000 Federal National Mortgage Association
Discount Notes,
5.28%, due January 3, 1997 9,997,067
7,500,000 Federal National Mortgage Association
Discount Notes,
5.30%, due January 7, 1997 7,493,375
15,000,000 Federal National Mortgage Association
Discount Notes,
5.38%, due January 15, 1997 14,968,617
15,000,000 Federal National Mortgage Association
Discount Notes,
5.21%, due January 22, 1997 14,954,412
110,891,000 110,726,697
TOTAL INVESTMENTS - 100.79% $ 396,839,534
Other assets less liabilities - (0.79)% (3,120,742)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share;
750,000,000 shares of $0.01 par value
capital shares authorized;
393,748,477 shares outstanding) $ 393,718,792
See accompanying Notes to Financial Statements.
FEDERAL PORTFOLIO
GOVERNMENT SPONSORED ENTERPRISES - 102.15%
$ 2,000,000 Federal Farm Credit Banks,
5.33%, due January 2, 1997 $ 2,000,000
5,000,000 Federal Farm Credit Banks,
5.32%, due February 3, 1997 5,000,000
3,000,000 Federal Farm Credit Banks,
4.95%, due March 3, 1997 2,999,065
2,500,000 Federal Farm Credit Banks,
5.22%, due March 3, 1997 2,500,000
5,000,000 Federal Farm Credit Banks,
5.25%, due April 1, 1997 5,000,000
2,500,000 Federal Farm Credit Banks,
5.43%, due June 19, 1997 2,500,000
3,930,000 Federal Farm Credit Banks
Discount Notes,
5.28%, due January 6, 1997 3,927,118
5,000,000 Federal Farm Credit Banks
Discount Notes,
5.26%, due January 8, 1997 4,994,886
2,500,000 Federal Home Loan Banks
Discount Notes,
5.26%, due January 7, 1997 2,497,808
2,500,000 Federal Home Loan Banks
Discount Notes,
5.21%, due January 8, 1997 2,497,467
2,500,000 Federal Home Loan Banks
Discount Notes,
5.22%, due January 8, 1997 2,497,462
5,000,000 Federal Home Loan Banks
Discount Notes,
5.41%, due January 8, 1997 4,994,740
22,830,000 Federal Home Loan Banks
Discount Notes,
5.21%, due January 9, 1997 22,803,544
2,000,000 Federal Home Loan Banks
Discount Notes,
5.22%, due January 9, 1997 1,997,680
9,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.28%, due January 2, 1997 9,498,607
1,045,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.30%, due January 2, 1997 1,044,846
7,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.40%, due January 2, 1997 7,498,875
10,400,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.25%, due January 3, 1997 10,396,967
10,000,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.26%, due January 3, 1997 9,997,078
6,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.44%, due January 6, 1997 6,495,089
3,000,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.50%, due January 7, 1997 2,997,250
9,876,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.24%, due January 10, 1997 9,863,062
40,000,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.26%, due January 14, 1997 39,924,022
15,000,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.50%, due January 15, 1997 14,967,917
5,000,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.42%, due January 22, 1997 4,984,192
5,000,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.41%, due January 23, 1997 4,983,469
7,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.55%, due January 24, 1997 7,473,406
7,500,000 Federal Home Loan Mortgage Corporation
Discount Notes,
5.285%, due January 31, 1997 7,466,969
12,500,000 Federal National Mortgage Association
Discount Notes,
5.30%, due January 7, 1997 12,488,958
3,000,000 Federal National Mortgage Association
Discount Notes,
5.26%, due January 9, 1997 2,996,493
5,000,000 Federal National Mortgage Association
Discount Notes,
5.22%, due January 13, 1997 4,991,300
5,000,000 Federal National Mortgage Association
Discount Notes,
5.36%, due January 13, 1997 4,991,067
7,500,000 Federal National Mortgage Association
Discount Notes,
5.21%, due January 16, 1997 7,483,719
7,500,000 Federal National Mortgage Association
Discount Notes,
5.225%, due January 16, 1997 7,483,672
7,500,000 Federal National Mortgage Association
Discount Notes,
5.38%, due January 17, 1997 7,482,067
7,550,000 Federal National Mortgage Association
Discount Notes,
5.39%, due January 17,1997 7,531,914
3,000,000 Federal National Mortgage Association
Discount Notes,
5.49%, due January 21, 1997 2,990,850
7,500,000 Federal National Mortgage Association
Discount Notes,
5.37%, due January 22, 1997 7,476,506
3,250,000 Federal National Mortgage Association
Discount Notes,
5.21%, due February 4, 1997 3,234,008
7,500,000 Federal National Mortgage Association
Discount Notes,
5.22%, due February 4, 1997 7,463,025
850,000 Federal National Mortgage Association
Discount Notes,
5.42%, due February 4, 1997 845,649
1,000,000 Federal National Mortgage Association
Discount Notes,
5.44%, due March 14, 1997 989,120
7,500,000 Federal National Mortgage Association
Discount Notes,
5.30%, due April 9, 1997 7,391,792
1,000,000 Federal National Mortgage Association
Discount Notes,
5.50%, due May 14, 1997 979,681
291,231,000 290,621,340
TOTAL INVESTMENTS - 102.15% $ 290,621,340
Other assets less liabilities - (2.15)% (6,129,072)
TOTAL NET ASSETS - 100.00%
(equivalent ot $1.00 per share;
750,000,000 shares of $0.01 par value
capital shares authorized;
284,540,392 shares outstanding) $ 284,492,268
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
December 31, 1996 (unaudited)
Prime Federal
Portfolio Portfolio
ASSETS:
Investment securities, at market value
(identified cost of $394,729,327 and
$289,103,512, respectively) $ 396,839,534 $ 290,621,340
Cash (783,470) (1,275,807)
Interest receivable 137,254 135,719
Total assets 396,193,318 289,481,252
LIABILITIES AND NET ASSETS:
Securities purchased payable 2,500,000 5,000,000
Accrued management fee expense (18,655) (11,064)
Income payable (6,819) 48
Total liabilities 2,474,526 4,988,984
NET ASSETS $ 393,718,792 $ 284,492,268
NET ASSETS CONSIST OF:
Capital (capital stock and
paid-in surplus of capital) $ 393,751,839 $ 284,541,053
Accumulated net realized loss on
investment transactions (33,047) (48,785)
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 393,718,792 $ 284,492,268
Capital shares, $1.00 par value
Authorized 750,000,000 750,000,000
Outstanding 393,748,477 284,540,392
NET ASSET VALUE PER SHARE $ 1.00 $ 1.00
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statement of Operations
Six Months Ended December 31, 1996 (unaudited)
Prime Federal
Portfolio Portfolio
INVESTMENT INCOME:
Income:
Interest $ 9,931,937 $ 6,834,863
Expenses:
Management fees (Note 3) 918,566 638,364
Registration fees and other expenses 17,213 12,042
935,779 650,406
Net investment income 8,996,158 6,184,457
REALIZED GAIN (LOSS) ON INVESTMENTS (Note 1):
Realized gain (loss) from
investment transactions:
Proceeds from sales of investments 2,683,485,959 2,398,798,114
Cost of investments sold 2,683,485,959 2,398,798,114
Net realized gain from
investment transactions - -
Increase in net assets resulting
from operations $ 8,996,158 $ 6,184,457
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statements of Changes in Net Assets
Six Months Ended December 31, 1996 (unaudited)
and Year Ended June 30, 1996
Prime Federal
Portfolio Portfolio
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 8,996,158 $ 6,184,457
Net realized loss from investment activities - -
Net increase in net assets resulting from
operations 8,996,158 6,184,457
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (8,996,158) (6,184,457)
INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares sold ($1.00 per share) 400,742,795 348,416,801
Net asset value of shares issued for
reinvestment of distributions ($1.00 per share) 1,932,747 794,697
402,675,542 349,211,498
Cost of shares redeemed ($1.00 per share) (339,288,544) (292,359,523)
Net increase from capital share transactions 63,386,998 56,851,975
Total increase (decrease) in net assets 63,386,998 56,851,975
NET ASSETS - June 30, 1996 330,331,794 227,640,293
NET ASSETS - December 31, 1996 $ 393,718,792 $ 284,492,268
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 16,191,573 $ 11,552,083
Net realized loss from investment activities - -
Net increase in net assets resulting from
operations 16,191,573 11,552,083
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (16,191,573) (11,552,083)
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ($1.00 per share) 740,092,127 534,279,487
Net asset value of shares issued for
reinvestment of distributions
($1.00 per share) 3,273,738 1,378,932
743,365,865 535,658,419
Cost of shares redeemed ($1.00 per share) (658,500,776) (490,689,727)
Net increase from capital share transactions 84,865,089 44,968,692
Total increase in net assets 84,865,089 44,968,692
NET ASSETS - June 30, 1995 245,466,705 182,671,601
NET ASSETS - June 30, 1996 $ 330,331,794 $ 227,640,293
See accompanying Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF 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 separate
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 amortized 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. At December 31,
1996, the Fund has accumulated net realized losses on sales of investments for
federal income tax purposes of $33,046 (Prime Portfolio) and $48,785 (Federal
Portfolio), which are available to offset future taxable gains.
Amortization - Discounts and premiums on securities purchased are amortized
over the life of the respective securities.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates.
2. PURCHASES AND SALES OF SECURITIES - The aggregate amounts of security
transactions during the six months ended December 31, 1996, were as follows:
Other than
U.S. Government U.S. Government
Prime Portfolio Securities Securities
Purchases $ 2,316,828,957 $ 422,659,978
Proceeds from sales 2,332,764,008 350,721,951
Federal Portfolio
Purchases $ 124,600,000 $ 2,326,247,994
Proceeds from sales 124,600,000 2,274,198,114
3. MANAGEMENT FEES - UMB Bank, n.a. is the Fund's manager and investment
adviser and provides or pays the cost of all management, supervisory and
administrative services required in the normal operation of the Fund. This
includes investment management; fees of the custodian, independent public
accountants and legal counsel; remuneration of officers and directors; rent;
and shareholder services, including maintenance of the shareholders accounting
system and transfer agency. Not considered normal operating expenses and
therefore payable by the Fund are taxes, interest, fees and the other charges
of governments and their agencies for qualifying the Fund's shares for sale,
special accounting and legal fees and brokerage commissions. UMB Bank's
management fees are based on average daily net assets of the Fund at the
annual rate of .50 of one percent of net assets. Certain officers and/or
directors of the Fund are also officers and/or directors of Jones & Babson,
Inc., which serves as the Fund's underwriter and distributor.
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
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
