SCOUT
TAX-FREE
MONEY MARKET
FUND
A no-load mutual fund
principally invested in
short-term municipal
securities seeking to provide
maximum income exempt
from federal income tax
consistent with safety of
principal and maintenance
of liquidity.
Quarterly Report
September 30, 1997
TO THE SHAREHOLDERS
Scout Tax-Free Money Market Fund earned 0.78% for the quarter ended September
30, 1997. The Fund's 7-day current yield on September 30, 1997, was 3.28%.
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. Income from the fund may be subject to the federal
Alternative Minimum Tax as well as state and local taxes.
Spurred by plenty of good economic news and the Federal Reserve's decision not
to raise interest rates, the fixed income markets performed very well in the
quarter. This was particularly notable in the 30-year Treasury bond, which had
done nothing (up 0.54%) in the first six months of the year but had an
outstanding quarterly return of 6.29%. While the rally continued in early
October, based mainly on a favorable employment report, the long bond closed
the quarter below 6.25%. We believe the bond is now trading at the low end of
a 6.25%-6.75% range. Given any evidence of strength in the economy, it easily
could revert to the higher end of this range.
Throughout the quarter, tax-exempt money market rates continued to be
influenced primarily by either abundance or lack of supply. As is often the
case, rates increased significantly near the end of the quarter, to the
benefit of funds with short average maturities. The Fund entered the quarter
with a relatively short average maturity to account for the possibility of
further increases in the key Fed Funds rate, now at 5.50%, and maintained that
position throughout. The general bond markets have begun positioning for a
reduction in rates, but economic indicators continue to flash a few warning
signs.
As long as this uncertainty prevails, the Fund will maintain a moderate
average maturity. As always, we will continue to use only the highest-quality
issuers.
We appreciate your continued interest in Scout Tax-Free Money Market Fund 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
September 30, 1997
Principal Market
State Amount Description Value
ALABAMA
$ 6,700,000 Columbia Alabama Industrial Dev. Board,
Pollution Control Rev. (Alabama Power Co.),
Series D,
Var. Rate, due October 1, 2022 $ 6,700,000
ALASKA
6,100,000 Valdez Alaska Marine Terminal
(Exxon Pipeline Co.),
Var. Rate, due October 1, 2025 6,100,000
ARIZONA
2,200,000 Maricopa County Arizona
(Southern California Edition),
Tax-Exempt Commercial Paper,
3.80%, November 14, 1997 2,200,000
2,000,000 Mesa Arizona Municipal Development Corp.,
Series 96A,
Tax-Exempt Commercial Paper,
3.65%, due October 3, 1997 2,000,000
2,100,000 Mesa Arizona Municipal Development Corp,
Series 85,
Tax-Exempt Commercial Paper,
3.70%, due November 4, 1997 2,100,000
1,600,000 Mesa Arizona Municipal Development Corp,
Series 96A,
Tax-Exempt Commercial Paper,
3.65%, due November 26, 1997 1,600,000
2,350,000 Salt River Project Agricultural Improvement
& Power District,
Arizona Tax-Exempt Commercial Paper,
3.75%, due October 1, 1997 2,350,000
2,000,000 Salt River Project Agricultural Improvement
& Power District,
Arizona Tax-Exempt Commercial Paper,
3.55%, due October 21,1997 2,000,000
FLORIDA
1,000,000 Gainesville Florida Utility Systems,
Series C,
Tax-Exempt Commercial Paper,
3.85%, due November 2, 1997 1,000,000
3,000,000 Gainesville Florida Utility Systems,
Series C,
Tax-Exempt Commercial Paper,
3.80%, due November 5, 1997 3,000,000
3,700,000 Gainesville Florida Utility Systems,
Series C,
Tax-Exempt Commercial Paper,
3.80%, due November 18,1997 3,700,000
1,200,000 Jacksonville Florida
Pollution Control Rev.,
Series 94,
Tax-Exempt Commercial Paper,
3.65%, due October 22, 1997 1,200,000
GEORGIA
7,500,000 Burke County Georgia,
Pollution Control Rev.
(Georgia Power Co.),
Var. Rate, due July 1, 2024 7,500,000
6,000,000 Effingham County Georgia,
Pollution Control Rev.
(Savannah Electric & Power),
Var. Rate, due April 1, 2037 6,000,000
ILLINOIS
500,000 Sauget Illinois,
Pollution Control Rev.
(Monsanto Co. Project),
Var. Rate, due September 1, 2014 500,000
3,000,000 Sauget Illinois, Pollution Control Rev.
(Monsanto Co. Project),
Var. Rate, due May 1, 2028 3,000,000
INDIANA
5,100,000 Rockport Indiana, Pollution Control Rev.
(AEP Generating Co), Series A,
Var. Rate, due July 1, 2025 5,100,000
1,000,000 Sullivan City Indiana,
Pollution Control Rev., Series 85 L2,
Tax-Exempt Commercial Paper,
3.60%, due October 16, 1997 1,000,000
2,000,000 Sullivan City Indiana,
Pollution Control Rev., Series 85 L6,
Tax-Exempt Commercial Paper,
3.65%, due November 3, 1997 2,000,000
4,000,000 Sullivan City Indiana,
Pollution Control Rev., Series 85 L3,
Tax-Exempt Commercial Paper,
3.65%, due November 12, 1997 4,000,000
KANSAS
2,000,000 Burlington Kansas,
Pollution Control Rev., Series 85 C-1,
Tax-Exempt Commercial Paper,
3.65%, due October 14,1997 2,000,000
KENTUCKY
3,000,000 County of Trimble Kentucky
(Louisville Gas/Electric Company),
Tax-Exempt Commercial Paper,
3.80%, due November 10, 1997 3,000,000
3,000,000 County of Trimble Kentucky
(Louisville Gas/Electric Company),
Tax-Exempt Commercial Paper,
3.80%, due November 19,1997 3,000,000
MASSACHUSETTS
2,400,000 Massachusetts State, Series B,
Var. Rate, due December 1, 1997 2,400,000
2,300,000 Massachusetts State
Industrial Finance Agency,
Pollution Control Rev.
(New England Power),
Var. Rate, due October 1, 2022 2,300,000
MICHIGAN
3,000,000 University of Michigan Board of Regents,
Series A,
Tax Exempt Commercial Paper,
3.625%, due September 30, 1997 3,000,000
MISSISSIPPI
9,400,000 Jackson County Mississippi,
Port Facility Rev. (Chevron USA),
Var. Rate, due June 1, 2023 9,400,000
MISSOURI
1,150,000 Columbia Missouri, Series A,
Var. Rate, due June 1, 2008 1,150,000
1,745,000 Kansas City Missouri,
Water Rev., Series B,
6.25%, due December 1, 2007 1,769,751
4,000,000 Missouri Environment Improvement Rev.
(Union Electric Co.),
Tax-Exempt Commercial Paper,
3.70%, due October 2,1997 4,000,000
1,100,000 Missouri Environment Improvement Rev.,
Tax-Exempt Commercial Paper,
3.65%, due October 27,1997 1,100,000
900,000 Missouri State Health & Education Auth.
(Washington University), Series A,
Var. Rate, due September 1, 2030 900,000
500,000 Missouri State Health & Education Auth.
(Washington University), Series B,
Var. Rate, due September 1, 2030 500,000
4,600,000 Missouri State Health & Education Auth.
(Washington University), Series C,
Var. Rate, due September 1, 2030 4,600,000
1,200,000 St. Charles Missouri,
Industrial Development Auth.,
Pollution Control Rev. (Monsanto Co.),
Var. Rate, due July 1, 2021 1,200,000
NEBRASKA
2,000,000 Nebraska Public Power District, Series B,
Tax-Exempt Commercial Paper,
3.80%, due October 28, 1997 2,000,000
1,150,000 Omaha Public Power District Electric Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.60%, due October 16,1997 1,150,000
1,500,000 Omaha Public Power District Electric Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.60%, due October 17,1997 1,500,000
OHIO
6,000,000 Columbus Ohio, Series 1,
Var. Rate, due June 1, 2016 6,000,000
SOUTH CAROLINA
3,000,000 South Carolina Public Service Auth.,
Tax-Exempt Commercial Paper,
3.55%, due October 9, 1997 3,000,000
2,400,000 York County South Carolina (Duke Power),
Tax-Exempt Commercial Paper,
3.70%, due October 6, 1997 2,400,000
1,750,000 York County South Carolina (Duke Power),
Tax-Exempt Commercial Paper,
3.75%, due October 6, 1997 1,750,000
2,000,000 York County South Carolina (Duke Power),
Tax-Exempt Commercial Paper,
3.65%, due October 20, 1997 2,000,000
1,000,000 York County South Carolina (Duke Power),
Tax-Exempt Commercial Paper,
3.65%, due December 1, 1997 1,000,000
TENNESSEE
1,500,000 Metro Government Nashville Tennessee,
Series 89A,
Tax-Exempt Commercial Paper,
3.80%, due October 2, 1997 1,500,000
1,000,000 Metro Government Nashville Tennessee,
Series 89A,
Tax-Exempt Commercial Paper,
3.60%, due October 3, 1997 1,000,000
TEXAS
1,350,000 Austin Texas Combined Utility, Series A,
Tax-Exempt Commercial Paper,
3.65%, due October 1, 1997 1,350,000
1,100,000 Brazos River Auth. Texas (Monsanto Co.),
Var. Rate, due February 1, 2004 1,100,000
1,000,000 Brazos River Harbor Texas, Naval District,
Series 86
Tax-Exempt Commercial Paper,
3.60%, due October 15,1997 1,000,000
1,100,000 Brazos River Harbor Texas,
Industrial Development Corporation
(Monsanto Co.),
Var. Rate, due March 1, 2021 1,100,000
900,000 Gulf Coast Texas Waste Disposal Auth.
(Monsanto Co.),
Var. Rate, due July 1, 2001 900,000
1,500,000 Gulf Coast Texas Waste Disposal Auth.
(Exxon),
Var. Rate, due June 1, 2020 1,500,000
1,978,000 Harris County Texas, Series A,
Tax-Exempt Commercial Paper,
3.70%, due October 16,1997 1,978,000
1,700,000 Lower Neches Valley Texas Auth.,
Pollution Control Rev.
(River Treatment Industrial Dev. Corp.),
Var. Rate, due February 1, 2004 1,700,000
1,000,000 Port of Corpus Christi Texas Auth.,
Series 95,
Tax-Exempt Commercial Paper,
3.85%, due October 10, 1997 1,000,000
2,000,000 Port of Corpus Christi Texas Auth.,
Series 95,
Tax-Exempt Commercial Paper,
3.90% due October 10,1997 2,000,000
2,000,000 San Antonio Texas Water Systems,
Series 95,
Tax-Exempt Commercial Paper,
3.70%, due October 7, 1997 2,000,000
1,500,000 San Antonio Texas Water Systems,
Series 95,
Tax-Exempt Commercial Paper,
3.65%, due November 6, 1997 1,500,000
4,000,000 Texas A & M University Board Regents,
Series B,
Tax-Exempt Commercial Paper,
3.65%, due October 15,1997 4,000,000
4,000,000 Texas A & M University Board Regents,
Series B,
Tax-Exempt Commercial Paper,
3.65%, due October 27, 1997 4,000,000
1,520,000 University of Texas, University Fund,
Series A,
Tax-Exempt Commercial Paper,
3.60%, due November 13, 1997 1,520,000
2,000,000 University of Texas, System Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.60%, due October 7, 1997 2,000,000
3,000,000 University of Texas, System Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.65%, due October 8, 1997 3,000,000
UTAH
2,000,000 Intermountain Power Agency Utah,
Series 85-3,
Tax-Exempt Commercial Paper,
3.55%, due October 10, 1997 2,000,000
3,500,000 Intermountain Power Agency Utah,
Series 85-3,
Tax-Exempt Commercial Paper,
3.65%, due October 29, 1997 3,500,000
2,200,000 Intermountain Power Agency Utah,
Series 85F,
Tax-Exempt Commercial Paper,
3.60%, due November 17,1997 2,200,000
WASHINGTON
4,250,000 Seattle Municipal Power & Light Rev.,
Tax-Exempt Commercial Paper,
3.60%, due October 1, 1997 4,250,000
900,000 Seattle Municipal Power & Light Rev.,
Var. Rate, due November 1, 2018 900,000
WISCONSIN
1,400,000 Oak Creek Wisconsin, Pollution Control Rev.
(Wisconsin Electric Power Co.),
Var. Rate, due August 1, 2016 1,400,000
1,600,000 Sheboygan Wisconsin, Pollution Control Rev.
(Wisconsin Power & Light Co.),
Var. Rate, due August 1, 2014 1,600,000
1,500,000 Sheboygan Wisconsin, Pollution Control Rev.
(Wisconsin Electric Power Co.),
Var. Rate, due September 1, 2015 1,500,000
1,508,000 Wisconsin State G.O., Series 97B,
Tax-Exempt Commercial Paper,
3.625%, due October 23, 1997 1,508,000
Wyoming
1,800,000 Sublette County Wyoming,
Pollution Control Rev. (Exxon),
Var. Rate, due November 1, 2014 1,800,000
TOTAL INVESTMENTS - 100.57% $ 178,975,751
Other assets less liabilities - (0.57)% (1,019,029)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share;
1,000,000,000 shares of $0.01 par value
capital shares authorized;
178,056,551 shares outstanding) $ 177,956,722
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.
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
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
Baird, Kurtz & Dobson, Kansas City, Missouri
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
JB26C
