TO THE SHAREHOLDERS
During the quarter ended September 30, 1995, Scout Tax-Free Money Market
Fund's portfolio returned an annualized yield of 3.12%. This figure increased
to 3.16% for those shareholders who reinvested their dividends.
The tone for the quarter was set early by the Federal Reserve when, on
July 6, it lowered the Federal Funds rate from 6.00% to 5.75%. This decrease
effectively lowered the ceiling for short-term rates and by the next day
commercial paper rates had declined from about 6.00% to 5.75% and agency
discount notes had declined from 5.85% to 5.60%. As the quarter progressed
money market rates traded within a five to ten basis point band subject to
the market's latest thoughts on whether the Fed would or would not continue
to ease. In fact, the Fed took no further action during third quarter and by
September 30 rates were essentially unchanged from their July 7 levels. What
had changed was the new message from the Federal Reserve that their tightening
moves were over and that the direction of future action would be toward
further easing.
During the second fiscal quarter the debate over the Fed's next easing move
continues. If economic data confirms that further weakness in the economy is
yet to come the Fed will undoubtedly ease. One other powerful factor for
lowering rates would be Congressional action on a credible deficit reduction
package. This seems more and more likely. The new quarter will be interesting
but may prove to be quite volatile depending on what actions the markets sees
from Congress and the Fed.
With this in mind, Scout Tax-Free Money Market will adhere to its
long-standing policy of focusing on quality and liquidity, without the use of
derivatives. This policy has and will continue to serve our shareholders well
during this difficult market environment.
We appreciate your continued interest in Scout Tax-Free Money Market Fund and
the entire family of Scout Funds.
Sincerely,
Larry D. Armel
President
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 federally
insured by the Federal Deposit Insurance Corporation or any other
federal agency. These shares involve investment risks, including the possible
loss of the principal amount invested.
FINANCIAL STATEMENTS
Statement of Net Assets
September 30, 1995
Principal Market
State Amount Description Value
ARIZONA
$ 2,000,000 Salt River Project Agricultural Improvement &
Power Dist., Arizona Tax-Exempt Commercial
Paper (LOC: Union Bank of Switzerland),
3.85%, due October 11, 1995 $ 2,000,000
2,000,000 Salt River Project Agricultural Improvement &
Power Dist., Arizona Tax-Exempt Commercial
Paper (LOC: Union Bank of Switzerland),
3.80%, due December 11, 1995 2,000,000
CONNECTICUT
1,200,000 Connecticut Economic Recovery Notes (SBPA:
National Westminster Bank; Canadian Imperial
Bank of Commerce; Industrial Bank of Japan),
Fltg. Rate, 4.35%, due June 1, 1996 1,200,000
FLORIDA
1,000,000 Dade Cnty., Florida Industrial Dev. Auth.
(Florida Power & Light),
Fltg. Rate, 4.45%, due June 1, 2021 1,000,000
2,200,000 Hillsborough Cnty., Florida Industrial
Dev. Auth. Pollution Control Rev.
(Tampa Electric Co.),
4.50%, due May 15, 2018 2,200,000
1,000,000 Jacksonville, Florida Electric Rev. Tax-Exempt
Commercial Paper (LOC: Morgan Guaranty Trust Co.),
3.60%, due December 6, 1995 1,000,000
2,500,000 Jacksonville, Florida Electric Auth. (Escrowed
in U.S. Gov't. Securities),
9.50%, due October 1, 1995 2,550,361
1,000,000 Jacksonville, Florida Electric Auth. Tax-Exempt
Commercial Paper,
3.95%, due October 3, 1995 1,000,000
2,000,000 Jacksonville, Florida Electric Auth. Tax-Exempt
Commercial Paper (Line: Credit Suisse Bank),
3.65%, due November 29, 1995 2,000,000
GEORGIA
3,000,000 Burke Cnty., Georgia Dev. Auth. Pollution Control
Rev. (Oglethorpe Power Corp.) (FGIC Insured),
Series A (LOC: Credit Locale de France),
Fltg. Rate, 4.30%, due January 1, 2019 3,000,000
HAWAII
1,500,000 Hawaii GO, Series BU, 7.00%, due November 1, 1995 1,503,488
ILLINOIS
3,000,000 Chicago, Illinois GO, 3.50%, due October 31, 1995 3,000,000
1,500,000 Illinois Dev. Finance Auth. Rev. (Olin Corp.),
Series A (LOC: Credit Suisse Bank),
Fltg. Rate, 4.55%, due June 1, 2004 1,500,000
ILLINOIS (Continued)
1,225,000 Illinois Educational Fac. Auth. Rev. (Univ.
of Chicago),
6.00%, due December 1, 1995 1,229,734
3,400,000 Illinois Health Fac. Auth. Rev. (Northwestern
Memorial Hosp.) (Line: Northern Trust Co.),
Fltg. Rate, 4.80%, due August 15, 2025 3,400,000
KANSAS
3,500,000 Kansas Dept. of Transportation Highway Rev.,
Series 94 B,
Fltg. Rate, 4.45%, due September 1, 2014 3,500,000
LOUISIANA
1,800,000 Louisiana Offshore Terminal Auth. Deepwater
Port Rev. Ref. (LOC: Union Bank of Switzerland),
Fltg. Rate, 4.55%, due September 1, 2006 1,800,000
1,500,000 Louisiana Recovery Dist. Sales Tax Rev.,
Fltg. Rate, 4.75%, due July 21, 1988 1,500,000
MASSACHUSETTS
1,000,000 Massachusetts Bay Transportation Auth.
System Rev., 3.85%, due October 12, 1995 1,000,000
2,500,000 Massachusetts Bay Transportation Auth. System
Rev. (LOC: State Street Bank) (Optional Putable
3/1/96 @ 100), Series 84 A,
Fltg. Rate, 3.75, due March 1, 2014 2,500,000
MICHIGAN
2,500,000 Delta Cnty., Michigan Economic Dev. Corp.
Environmental Improvement Rev. (Mead Paper),
Series A (LOC: Bank of Nova Scotia),
Fltg. Rate, 3.45%, due November 7, 1995 2,500,000
900,000 Delta Cnty., Michigan Economic Dev. Corp.
Environmental Improvement Rev. (Mead Paper),
Series C (LOC: Bank of Nova Scotia),
Fltg. Rate, 4.60%, due December 1, 2023 900,000
MINNESOTA
2,700,000 Rochester, Minnesota Health Fac. Rev.
(Mayo Foundation/Mayo Medical Center), Series E
(Mandatory Redemption 10/2/95 @ 100) (SBPA:
Credit Suisse Bank),
3.60%, due November 15, 1995 2,700,000
MISSISSIPPI
1,000,000 Jackson Cnty., Mississippi Pollution Control
Rev. (Chevron USA Inc.),
Fltg. Rate, 4.40%, due December 1, 2016 1,000,000
1,300,000 Jackson Cnty., Mississippi Port Fac. Rev.
(Chevron USA Inc.),
Fltg. Rate, 4.40%, due June 1, 2023 1,300,000
MISSOURI
1,000,000 Missouri Environmental Improvement Auth.
Pollution Control Rev. Tax-Exempt Commercial
Paper (Union Electric Co.)
(LOC: Union Bank of Switzerland),
3.80%, due October 6, 1995 1,000,000
1,500,000 Missouri Environmental Improvement Auth.
Pollution Control Rev. Tax-Exempt Commercial
Paper (Union Electric Co.)
(LOC: Union Bank of Switzerland),
3.65%, due October 25, 1995 1,500,000
1,000,000 Missouri Environmental Improvement Auth.
Pollution Control Rev.Tax-Exempt Commercial
Paper (Union Electric Co.)
(LOC: Union Bank of Switzerland),
3.60%, due November 27, 1995 1,000,000
NORTH CAROLINA
3,100,000 Wake Cnty., North Carolina Industrial Fac.
& Pollution Control Financing Auth. Rev.
(Carolina Power & Light Co.), Series A,
Fltg. Rate, 4.85%, due May 1, 2015 3,100,000
2,700,000 Winston-Salem, North Carolina Water & Sewer
System Rev. (SBPA: Wachovia Bank NC),
Fltg. Rate, 4.30%, due June 1, 2014 2,700,000
TENNESSEE
2,000,000 Metropolitan Gov't. Nashville & Davidson Cnty.,
Tennessee Water & Sewer Rev. (Escrowed in U.S.
Gov't. Securities) (Pre-refunded 12/1/95 @ 102),
8.75%, due January 1, 1996 2,063,665
TEXAS
1,200,000 Angelina & Neches River Auth., Texas Industrial
Dev. Corp. Solid Waste Rev. (TEEC-Temple Inland),
Series 84 B (LOC: Credit Suisse Bank),
Fltg. Rate, 4.85%, due May 1, 2014 1,200,000
300,000 Angelina & Neches River Auth., Texas Industrial
Dev. Corp. Solid Waste Rev. (TEEC-Temple Inland),
Series 84 D (LOC: Credit Suisse Bank),
Fltg. Rate, 4.85%, due May 1, 2014 300,000
2,200,000 Angelina & Neches River Auth., Texas Industrial
Dev. Corp. Solid Waste Rev. (TEEC-Temple Inland),
Series 84 E (LOC: Credit Suisse Bank),
Fltg. Rate, 4.85%, due May 1, 2014 2,200,000
400,000 Grapevine, Texas Industrial Dev. Corp. Rev.
(American Airlines), Series A-1 (LOC: Morgan
Guaranty Trust Co.),
Fltg. Rate, 4.75%, due December 1, 2024 400,000
TEXAS (Continued)
1,100,000 Harris Cnty., Texas Industrial Dev. Corp.
Pollution Control Rev.
(Exxon Corp.), Series 84 B,
Fltg. Rate, 4.60%, due March 1, 2024 1,100,000
2,750,000 Texas A & M Univ. Rev. (Permanent Univ. Fund)
(LOC: Morgan Guaranty Trust Co.), Series B,
3.30%, due October 18, 1995 2,750,000
1,000,000 Texas A & M Univ. Rev. (Permanent Univ. Fund)
(LOC: Morgan Guaranty Trust Co.), Series B,
3.70%, due November 8, 1995 1,000,000
2,000,000 Texas Public Finance Auth. GO, Series 93 A,
3.25%, due October 5, 1995 2,000,000
UTAH
2,000,000 Intermountain Power Agency, Utah Power Supply
Rev., Series 85 F (LOC: Swiss Bank Corp.)
(Optional Putable 3/15/96 @ 100),
3.75%, due July 1, 2015 2,000,000
1,500,000 Intermountain Power Agency, Utah Power Supply
Rev., Series 85 F (SBPA: Bank of America)
(Optional Putable 11/13/95 @ 100),
3.80%, due July 1, 2021 1,500,000
3,000,000 Salt Lake Cnty., Utah Tax & Rev. Anticipation Notes,
4.50%, due December 29, 1995 3,006,010
VERMONT
1,000,000 Vermont Educational & Health Buildings Financing
Agency Rev. (Middlebury College), Series 88 A
(Optional Putable 11/1/95 @ 100),
4.15%, due November 1, 2027 1,000,000
WASHINGTON
1,250,000 Seattle, Washington Municipal Light & Power Rev.
(LOC: Morgan Guaranty Trust Co.),
3.90%, due November 1, 2015 1,250,000
WISCONSIN
3,400,000 Oak Creek, Wisconsin Pollution Control Rev.
(Wisconsin Electric Power Co.), Series 86,
Fltg. Rate, 4.35%, due August 1, 2016 3,400,000
1,600,000 Sheboygan, Wisconsin Pollution Control Rev.
(Wisconsin Power & Light Co.),
Fltg. Rate, 4.30%, due August 1, 2014 1,600,000
WYOMING
300,000 Lincoln Cnty., Wyoming Pollution Control Rev.
(Exxon Corp.), Series B,
Fltg. Rate, 3.55%, due November 1, 2014 300,000
500,000 Lincoln Cnty., Wyoming Pollution Control Rev.
(Exxon Corp.), Series D,
Fltg. Rate, 4.60%, due November 1, 2014 500,000
300,000 Lincoln Cnty., Wyoming Pollution Control Rev.
(Exxon Corp.),
Fltg. Rate, 4.40%, due August 1, 2015 300,000
1,700,000 Sublette Cnty., Wyoming Pollution Control Rev.
(Exxon Corp.),
Fltg. Rate, 4.40%, due November 1, 2014 1,700,000
500,000 Uinta Cnty., Wyoming Pollution Control Rev.
(Chevron USA Inc.),
Fltg. Rate, 4.40%, due December 1, 2022 500,000
TOTAL INVESTMENTS _ 99.73% $ 86,653,258
Other assets less liabilities _ 0.27% 235,533
TOTAL NET ASSETS _ 100.00%
(equivalent to $1.00 per share; 1,000,000,000 shares of
$0.01 par value capital shares authorized;
86,965,446 shares outstanding) $ 86,888,791
Line (Line of Credit)
LOC (Letter of Credit)
SBPA (Stand by Purchase Agreement)
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 Tax-Free 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.
