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
March 31, 1997
TO THE SHAREHOLDERS
Scout Tax-Free Money Market Fund earned 0.69% for the quarter ended
March 31, 1997. The Fund's 30-day current yield on March 31, 1997, was
2.90%.
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.
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.
The Fund has continued to focus its holdings in tax-exempt commercial
paper and floating rate issues of top-rated municipalities. The yield
difference between top-tier and second-tier issuers has not proven
enticing enough to persuade the Fund to compromise on credit quality.
Both the continued threat of additional increases in the Fed Funds rate
and the current flatness in the money market yield curve have prompted
the Fund to maintain a relatively short average maturity. This tactic
has proven beneficial by providing the Fund with ample liquidity to re-
invest as rates have increased. We will maintain the current portfolio
structure unless economic data begin to soften, indicating a likelihood
of lower rates.
We appreciate your continued interest in Scout
Tax-Free Money Market Fund, Inc.
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
State Amount Description Value
ALASKA
500,000 Alaska State Housing Finance Corp.,
Series C,
Var. Rate, due June 1, 2026 500,000
ARIZONA
2,200,000 Maricopa County Arizona
(Southern California Edison),
Tax-Exempt Commercial Paper,
3.30%, due April 3, 1997 2,200,000
2,000,000 Mesa Arizona, Municipal Development Corp.,
Series A,
Tax-Exempt Commercial Paper,
3.35%, due April 1, 1997 2,000,000
2,000,000 Salt River Project Agricultural
Improvement & Power District,
Arizonia Tax-Exempt Commercial Paper,
3.35%, due April 7, 1997 2,000,000
1,400,000 Salt River Project Agricultural
Improvement & Power District,
Arizonia Tax-Exempt Commercial Paper,
3.00%, due April 17, 1997 1,400,000
FLORIDA
1,000,000 Jacksonville Florida,
Electric Auth., Series A,
Tax-Exempt Commercial Paper,
3.40%, due April 3, 1997 1,000,000
3,000,000 Jacksonville Florida,
Electric Auth., Series D1,
Tax-Exempt Commercial Paper,
3.35%, due April 4, 1997 3,000,000
1,000,000 Jacksonville Florida,
Electric Auth., Series A,
Tax-Exempt Commercial Paper,
3.05%, due April 18, 1997 1,000,000
1,000,000 Jacksonville Florida,
Pollution Control Revenue, Series 94,
Tax-Exempt Commercial Paper,
3.10%, due April 21, 1997 1,000,000
1,200,000 Palm Beach County Florida
Housing Finance Auth.
(Cotton Bay Apartments) Series D,
Var. Rate, due November 1, 2007 1,200,000
GEORGIA
1,000,000 Burke County Georgia,
Pollution Control Rev. (Georgia Power Co.),
Var. Rate, due July 1, 2024 1,000,000
1,500,000 Floyd County Georgia,
Pollution Control Rev.
(Georgia Power Co. Plt. Hammond Project),
Var. Rate, due September 1, 2026 1,500,000
ILLINOIS
1,000,000 Illinois Educational Facilities
Auth. Rev. (National Louis University),
Var. Rate, due May 1, 2022 1,000,000
7,000,000 Jackson/Union County Illinois
Regional Port Dist., Port Facs Rev.,
Var. Rate, due April 1,2024 7,000,000
2,100,000 Sauget Illinois,
Pollution Control Rev.,
(Monsanto Co. Project),
Var. Rate, due September 1, 2014 2,100,000
INDIANA
3,000,000 Jasper County Indiana,
Pollution Control Rev. (N. Ind Psc),
Tax Exempt Commercial Paper,
3.25%, due April 3, 1997 3,000,000
IOWA
2,000,000 Muscatine County Iowa,
Pollution Control Rev.
(Monsanto Co. Project),
Var. Rate, due October 1, 2007 2,000,000
KANSAS
1,000,000 Burlington Kansas, Pollution Control Rev.,
Series 85 C-2,
3.00%, due April 23, 1997 1,000,000
MARYLAND
2,000,000 Maryland Health Education
Finance Auth. (John Hopkins),
Tax-Exempt Commercial Paper,
3.40%, due April 8, 1997 2,000,000
2,764,000 Maryland Health Education
Finance Auth. (John Hopkins),
Tax-Exempt Commercial Paper,
3.50%, due April 8, 1997 2,764,000
Massachusetts
3,600,000 Massachusetts Bay Transportation Auth.,
Series C,
Tax Exempt Commercial Paper,
3.25%, due April 9, 1997 3,600,000
1,300,000 Massachusetts Bay Transportation Auth.,
Series C,
Tax Exempt Commercial Paper,
3.25%, due April 28, 1997 1,300,000
3,700,000 Massachusetts State Health &
Education Auth. (Salem Hospital),
7.25%, due July 1, 2009 3,734,151
MINNESOTA
3,000,000 Becker Minnesota,
Pollution Control Rev.
(North States Pwr.),
3.35%, due April 4, 1997 3,000,000
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.,
6.25%, due December 1, 2007 1,791,655
1,000,000 Missouri Environment Improvement Rev.,
(EUP), Tax-Exempt Commercial Paper
3.30%, due April 2, 1997 1,000,000
1,200,000 Missouri Environment Improvement Rev.,
(UEP), Tax-Exempt Commercial Paper
3.30%, due April 2, 1997 1,200,000
2,000,000 Missouri Environment Improvement Rev.,
Tax-Exempt Commercial Paper
3.35%, due April 10, 1997 2,000,000
200,000 Missouri State Health & Education Auth.
(Sisters Of Saint Mary), Series C,
Var. Rate, due June 1, 2022 200,000
900,000 Missouri State Health & Education Auth.
(Washington University), Series D,
Var. Rate, due September 1, 2030 900,000
NEW JERSEY
1,000,000 New Jersey T/Ran, Series 97A,
Tax-Exempt Commercial Paper,
3.25%, due April 30, 1997 1,000,000
NEBRASKA
1,550,000 Omaha Public Power District
Electric Revenue,
Tax-Exempt Commercial Paper,
3.05%, due April 21, 1997 1,550,000
OHIO
3,450,000 Ohio State Highway, Series T,
4.80%, due May 15, 1997 3,455,941
PENNSYLVANIA
1,230,000 Pennsylvania State, TAN,
4.50%, due June 30, 1997 1,232,809
SOUTH CAROLINA
5,000,000 South Carolina Public Service Auth.
Tax-Exempt Commercial Paper,
3.40%, due April 10, 1997 5,000,000
4,150,000 York County South Carolina (Duke Power),
Tax-Exempt Commercial Paper,
3.30%, due April 2, 1997 4,150,000
1,300,000 York County South Carolina (Duke Power),
Tax-Exempt Commercial Paper,
3.50%, due May 27, 1997 1,300,000
TENNESSEE
1,000,000 Metro Government, Nashville Tennessee,
Tax Exempt Commercial Paper,
3.00%, due April 22, 1997 1,000,000
TEXAS
2,400,000 Austin Texas Combined Utility Revenue,
Series A, Tax-Exempt Commercial Paper,
3.35%, due April 3, 1997 2,400,000
1,500,000 Austin Texas Combined Utility Revenue,
Series A, Tax-Exempt Commercial Paper,
3.10%, due April 18, 1997 1,500,000
1,000,000 Austin Texas Combined Utility Revenue,
Series A, Tax-Exempt Commercial Paper,
3.35%, due May 1, 1997 1,000,000
1,400,000 Dallas Texas G.O.,
Tax-Exempt Commercial Paper,
3.50%, due April 2, 1997 1,400,000
3,443,000 Harris County Texas,
Series A,
3.50%, due April 1, 1997 3,443,000
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 San Antonio Texas Water Systems,
Tax-Exempt Commercial Paper,
3.40%, due April 9, 1997 1,000,000
2,000,000 Texas A&M University Board of Regents,
Series B, Tax-Exempt Commercial Paper,
3.30%, due April 29, 1997 2,000,000
2,500,000 Texas Municipal Power Agency,
Tax Exempt Commercial Paper,
3.40%, due April 14, 1997 2,500,000
2,000,000 Texas Public Finance Auth.,
Series 93A,
Tax Exempt Commercial Paper,
3.40%, due June 6, 1997 2,000,000
1,800,000 University of Texas University Fund,
Tax-Exempt Commercial Paper,
3.40%, due April 10, 1997 1,800,000
4,000,000 University of Texas Sys. Revenue,
Series A, Tax-Exempt Commercial Paper,
3.40%, due April 9, 1997 4,000,000
WASHINGTON
4,250,000 Seattle Municipal Power & Light,
Tax-Exempt Commercial Paper,
3.35%, due May 6, 1997 4,250,000
1,000,000 Seattle Municipal Power & Light,
Tax-Exempt Commercial Paper,
3.375%, due June 5, 1997 1,000,000
2,000,000 Washington State, Series VR-96A,
Var. Rate, due June 1, 2020 2,000,000
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, P
ollution Control Rev.
(Wisconsin Electric Power Co.),
Var. Rate, due September 1, 2015 1,500,000
TOTAL INVESTMENTS - 100.04% $ 113,721,556
Other assets less liabilities - (0.04)% (48,062)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share;
1,000,000,000 shares of $0.01 par value
capital shares authorized;
113,773,323 shares outstanding) $ 113,673,494
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.
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
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
