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.
Semi-Annual Report
December 31, 1997
TO THE SHAREHOLDERS
Scout Tax-Free Money Market Fund earned 0.80% for the quarter ended
December 31, 1997. The Fund's 7-day current yield on December 31, 1997,
was 3.29%.
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.
The Fund's 7-day yield of 3.29% at the quarter's end compares favorably
with a 3.38% average yield for the tax-free money market overall. The
Fund's yield was virtually unchanged from the final third-quarter yield
of 3.28%. We are quite pleased that our management strategies have
continued to deliver market-matching performance, while maintaining what
we believe to be a substantially higher level of credit quality. We will
maintain a moderate average maturity in the 15- to 25-day range.
This management system should continue to make the Fund an outstanding
option for investors in the upper tax brackets who seek solid yields
combined with top-tier credit quality.
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
Pie Chart - SECTOR DIVERSIFICAITON
Commercial Paper 73%
Demand Notes 21%
General Market Notes 6%
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 ("FDIC").
These shares involve investment risks, including the possible loss of
the principal invested.
FINANCIAL STATEMENTS
Statement of Net Assets
December 31, 1997 (unaudited)
Principal Market
State Amount Description Value
ALABAMA
$ 2,400,000 Columbia Alabama Industrial Dev. Board,
Pollution Control Rev.
(Alabama Power Co.), Series D,
Var. Rate, due October 1, 2022 $ 2,400,000
ARIZONA
2,200,000 Maricopa County Arizona
(Southern California Edition),
Tax-Exempt Commercial Paper,
3.80%, January 16, 1998 2,200,000
1,000,000 Maricopa County Arizona
(Southern California Edition),
Tax-Exempt Commercial Paper,
3.65%, February 9, 1998 1,000,000
1,600,000 Mesa Arizona Municipal Dev. Corp.,
Series 96A,
Tax-Exempt Commercial Paper,
3.75%, due January 26, 1998 1,600,000
2,600,000 Mesa Arizona Municipal Dev. Corp.,
Series 85,
Tax-Exempt Commercial Paper,
3.65%, due January 28, 1998 2,600,000
2,000,000 Mesa Arizona Municipal Dev. Corp.,
Series 96A,
Tax-Exempt Commercial Paper,
3.75%, due January 28, 1998 2,000,000
2,000,000 Salt River Project
Agricultural Improvement & Power District,
Arizona Tax-Exempt Commercial Paper,
3.80%, due January 6, 1998 2,000,000
2,000,000 Salt River Project
Agricultural Improvement & Power District,
Arizona Tax-Exempt Commercial Paper,
3.80%, due January 14, 1998 2,000,000
2,350,000 Salt River Project
Agricultural Improvement & Power District,
Arizona Tax-Exempt Commercial Paper,
3.70%, due January 21, 1998 2,350,000
FLORIDA
3,000,000 Gainesville Florida Utility Systems,
Series C,
Tax-Exempt Commercial Paper,
3.70%, due January 13, 1998 3,000,000
3,700,000 Gainesville Florida Utility Systems,
Series C,
Tax-Exempt Commercial Paper,
3.80%, due January 15, 1998 3,700,000
1,100,000 Jacksonville Florida
Pollution Control Rev.,
Series 92,
Tax-Exempt Commercial Paper,
3.75%, due January 7, 1998 1,100,000
1,000,000 Jacksonville Florida
Pollution Control Rev.,
Series 92,
Tax-Exempt Commercial Paper,
3.75%, due January 15, 1998 1,000,000
1,200,000 Jacksonville Florida
Pollution Control Rev.,
Series 94,
Tax-Exempt Commercial Paper,
3.80%, due January 8, 1998 1,200,000
GEORGIA
4,280,000 Burke County Georgia,
Pollution Control Rev.
(Georgia Power Co.),
Var. Rate, due July 1, 2024 4,280,000
6,000,000 Effingham County Georgia,
Pollution Control Rev.
(Savannah Electric & Power),
Var. Rate, due April 1, 2037 6,000,000
ILLINOIS
1,500,000 Illinois Development Finance Auth.,
Pollution Control Rev.
(Amoco Oil Company Project),
Var. Rate, due November 1, 2012 1,500,000
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
1,000,000 Sullivan City Indiana,
Pollution Control Rev.,
Series 85 L2,
Tax-Exempt Commercial Paper,
3.75%, due January 6, 1998 1,000,000
4,000,000 Sullivan City Indiana,
Pollution Control Rev.,
Series 85 L6,
Tax-Exempt Commercial Paper,
3.80%, due January 9, 1998 4,000,000
1,000,000 Sullivan City Indiana,
Pollution Control Rev.,
Series 85 L3,
Tax-Exempt Commercial Paper,
3.65%, due February 3, 1998 1,000,000
KANSAS
1,800,000 Burlington Kansas,
Pollution Control Rev.,
Series 85 C-1,
Tax-Exempt Commercial Paper,
3.75%, due January 5, 1998 1,800,000
KENTUCKY
2,000,000 County of Trimble Kentucky
(Louisville Gas/Electric Company),
Tax-Exempt Commercial Paper,
3.75%, due January 5, 1998 2,000,000
2,000,000 County of Trimble Kentucky
(Louisville Gas/Electric Company),
Tax-Exempt Commercial Paper,
3.80%, due January 13, 1998 2,000,000
2,000,000 County of Trimble Kentucky
(Louisville Gas/Electric Company),
Tax-Exempt Commercial Paper,
3.75%, due January 15, 1998 2,000,000
MASSACHUSETTS
1,300,000 Massachusetts State
Industrial Finance Auth.
(New England Power Project),
Var. Rate, due October 1, 2022 1,300,000
1,500,000 Massachusetts State
Industrial Finance Agency,
Pollution Control Rev., Series 93A,
3.70%, due January 28, 1998 1,500,000
MISSOURI
2,000,000 Missouri Environment Improvement Rev.
Tax-Exempt Commercial Paper,
3.80%, due January 22, 1998 2,000,000
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
900,000 Missouri State Health & Education Auth.
(Washington University), Series D,
Var. Rate, due September 1, 2030 900,000
1,200,000 St. Charles Missouri,
Industrial Dev. Auth.,
Pollution Control Rev. (Monsanto Co.),
Var. Rate, due July 1, 2021 1,200,000
NEBRASKA
1,100,000 Nebraska Public Power District,
Series B,
Tax-Exempt Commercial Paper,
3.80%, due January 27, 1998 1,100,000
1,000,000 Omaha Public Power District Electric Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.75%, due January 7, 1998 1,000,000
2,500,000 Omaha Public Power District Electric Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.70%, due February 3, 1998 2,500,000
1,150,000 Omaha Public Power District Electric Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.65%, due February 10, 1998 1,150,000
NEW JERSEY
1,500,000 New Jersey T/RAN, Series 98A,
3.70%, due January 13, 1998 1,500,000
OHIO
1,000,000 Columbus Ohio, Series 1,
Var. Rate, due June 1, 2016 1,000,000
SOUTH CAROLINA
2,000,000 York County South Carolina (Duke Energy),
Tax-Exempt Commercial Paper,
3.75%, due January 5, 1998 2,000,000
2,000,000 York County South Carolina (Duke Energy),
Tax-Exempt Commercial Paper,
3.75%, due January 22, 1998 2,000,000
1,100,000 York County South Carolina (Duke Energy),
Tax-Exempt Commercial Paper,
3.70%, due January 27, 1998 1,100,000
1,000,000 York County South Carolina (Duke Energy),
Tax-Exempt Commercial Paper,
3.65%, due January 29, 1998 1,000,000
TENNESSEE
1,000,000 Metro Government Nashville Tennessee,
Series 89A,
Tax-Exempt Commercial Paper,
3.80%, due January 14, 1998 1,000,000
1,500,000 Metro Government Nashville Tennessee,
Series 89A,
Tax-Exempt Commercial Paper,
3.70%, due February 3, 1998 1,500,000
4,000,000 Shelby County Tennessee, Series 97A,
Tax Exempt Commercial Paper,
3.80%, due January 20, 1998 4,000,000
2,000,000 Shelby County Tennessee, Series 97A,
Tax Exempt Commercial Paper,
3.70%, due February 4, 1998 2,000,000
TEXAS
1,100,000 Austin Texas Combined Utility Series A,
Tax-Exempt Commercial Paper,
3.80%, due January 12, 1998 1,100,000
1,950,000 Austin Texas Combined Utility Series A,
Tax-Exempt Commercial Paper,
3.75%, due January 15, 1998 1,950,000
1,850,000 Austin Texas Combined Utility Series A,
Tax-Exempt Commercial Paper,
3.70%, due January 20, 1998 1,850,000
1,500,000 Austin Texas Combined Utility Series A,
Tax-Exempt Commercial Paper,
3.75%, due February 2, 1998 1,500,000
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,
3.70%, due January 14, 1998 1,000,000
1,100,000 Brazos River Harbor Texas,
Industrial Dev. Corp. (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
500,000 Gulf Coast Texas Waste Disposal Auth.
(Exxon),
Var. Rate, due June 1, 2020 500,000
1,978,000 Harris County Texas, Series A,
Tax-Exempt Commercial Paper,
3.70%, due February 2, 1998 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
1,500,000 San Antonio Texas Water Systems,
Series 95,
Tax-Exempt Commercial Paper,
3.75%, due January 16, 1998 1,500,000
2,000,000 San Antonio Texas Water Systems,
Series 95,
Tax-Exempt Commercial Paper,
3.65%, due February 6, 1998 2,000,000
4,000,000 Texas A & M University Board Regents,
Series B,
Tax-Exempt Commercial Paper,
3.75%, due January 8, 1998 4,000,000
2,500,000 Texas A & M University Board Regents,
Series B,
Tax-Exempt Commercial Paper,
3.65%, due January 29, 1998 2,500,000
3,000,000 Texas State T/RAN, Series 97B,
Tax-Exempt Commercial Paper,
3.75%, due January 7, 1998 3,000,000
1,000,000 University of Texas, University Fund,
Series A,
Tax-Exempt Commercial Paper,
3.75%, due January 6, 1998 1,000,000
3,000,000 University of Texas, System Rev.,
Series A,
Tax-Exempt Commercial Paper,
3.75%, due January 20, 1998 3,000,000
UTAH
3,500,000 Intermountain Power Agency Utah,
Series 85-3,
Tax-Exempt Commercial Paper,
3.70%, due January 9, 1998 3,500,000
2,000,000 Intermountain Power Agency Utah,
Series 85-3,
Tax-Exempt Commercial Paper,
3.80%, due January 12, 1998 2,000,000
2,500,000 Intermountain Power Agency Utah,
Series B1,
Tax-Exempt Commercial Paper,
3.70%, due February 5, 1998 2,500,000
1,700,000 Salt Lake County Utah,
Pollution Control Rev.
(Service Station Holdings Project),
Var. Rate, due February 1, 2008 1,700,000
3,000,000 Utah State, Series 97A,
Tax-Exempt Commercial Paper,
3.70%, due January 16, 1998 3,000,000
2,000,000 Utah State, Series 97A,
Tax-Exempt Commercial Paper,
3.70%, due January 30, 1998 2,000,000
1,500,000 Utah State, Series 97A,
Tax-Exempt Commercial Paper,
3.60%, due February 5, 1998 1,500,000
WASHINGTON
2,250,000 Seattle Municipal Power & Light Rev.,
Tax-Exempt Commercial Paper,
3.70%, due January 12, 1998 2,250,000
1,000,000 Seattle Municipal Power & Light Rev.,
Tax-Exempt Commercial Paper,
3.65%, due February 11, 1998 1,000,000
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
1,412,000 Wisconsin State G.O., Series 97B,
Tax-Exempt Commercial Paper,
3.65%, due January 28, 1998 1,412,000
TOTAL INVESTMENTS - 100.09% $ 150,920,000
Other assets less liabilities - (0.09%) (135,854)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share;
1,000,000,000 shares of $0.01 par value
capital shares authorized;
150,883,974 shares outstanding) $ 150,784,146
See accompanying Notes to Financial Statements.
Statement of Assets and Liabilities
December 31, 1997 (unaudited)
ASSETS:
Investment securities, at market value $ 150,920,000
Cash (770,455)
Interest receivable 630,578
Total assets 150,780,123
LIABILITIES AND NET ASSETS:
Accrued management fee expense (4,023)
Income payable -
Total liabilities (4,023)
NET ASSETS $ 150,784,146
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in surplus of capital) $ 150,885,111
Accumulated net realized loss on investment transactions (100,965)
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 150,784,146
Capital shares, $1.00 par value
Authorized 1,000,000,000
Outstanding 150,883,974
NET ASSET VALUE PER SHARE $ 1.00
See accompanying Notes to Financial Statements.
Statement of Operations
Six Months Ended December 31, 1997 (unaudited)
INVESTMENT INCOME:
Income:
Interest $ 3,183,932
Expenses:
Management fees (Note 3) 436,333
Registration fees and other expenses 14,994
451,327
Net investment income 2,732,605
REALIZED gain (LOSS) ON INVESTMENTS (Note 1):
Realized gain (loss) from investment transactions:
Proceeds from sales of investments 458,854,868
Cost of investments sold 458,854,868
Net realized gain from investment transactions -
Increase in net assets resulting from operations $ 2,732,605
See accompanying Notes to Financial Statements.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1997 Year Ended
(unaudited) June 30, 1997
</CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 2,732,605 $ 3,858,121
Net realized loss from investment activities - (23,173)
Net increase in net assets resulting from operations 2,732,605 3,834,948
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (2,732,605) (3,858,121)
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ($1.00 per share) 170,788,880 349,106,370
Net asset value of shares issued for reinvestment of
distributions ($1.00 per share) 260,916 350,045
171,049,796 349,456,415
Cost of shares redeemed ($1.00 per share) (182,614,566) (315,092,608)
Net increase from capital share transactions (11,564,770) 34,363,807
Total increase (decrease) in net assets (11,564,770) 34,340,634
NET ASSETS:
Beginning of perod 162,348,916 128,008,282
End of period $ 150,784,146 $ 162,348,916
</TABLE>
See accompanying 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. 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
provided. At December 31, 1997, the Fund has an accumulated net realized
loss on sale of investments for federal income tax purposes of $100,971,
which is available to offset future tax-able 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, 1997, were as
follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 448,083,418 $ -
Proceeds from sales 458,854,868 -
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 com-
missions. 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
Tax-Free Money Market Fund, Inc., and is not to be construed as an offering of
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
www.umb.com
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<INVESTMENTS-AT-COST> 150920000
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