<PAGE>
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SEMI-ANNUAL REPORT, JUNE 30, 1995
[LOGO OF RUSHMORE APPEARS HERE]
FUND FOR TAX-FREE INVESTORS, INC.
4922 FAIRMONT AVENUE, BETHESDA, MD 20814
(800) 622-1386 (301) 657-1510
--------------------------------------------------------------------------------
Dear Shareholders:
The supply of municipal bonds continued to decline in the early part of 1995
as fiscal conservatism dominated state and local governments. In the first
half of the year, as the demand for bonds outweighed the supply, longer term
municipal bond yields declined substantially. Recently, however, we have seen
a decrease in demand due to the fear of tax-reform.
TAX-FREE MONEY MARKET PORTFOLIO
The Tax-Free Money Market Portfolio invests in high-quality, tax-exempt
municipal bonds, notes and commercial paper with maturities of less than one
year. Short-term interest rates rose during the six month period ended June
30, 1995. Fund for Tax-Free Investors Money Market Portfolio had an annualized
net income of 3.01% of net assets for the six months ended June 30, 1995,
compared to 1.99% for the year ended December 31, 1994. The Portfolio's
average maturity was 71 days.
MARYLAND AND VIRGINIA TAX-FREE PORTFOLIOS
Maintaining its AAA rating and stable credit trend, the State of Maryland
has both excellent credit characteristics and prospects. Its diversified
economic base has provided a good foundation for solid financial operations.
As of June 30, 1995, Maryland Tax-Free Portfolio assets were $48 million.
For the six months ended June 30, 1995, the Portfolio had a total return of
8.08%. The total return of a portfolio assumes reinvested dividends and
capital gains.
The State of Virginia has maintained its conservative approach to debt,
maintaining a low level of debt relative to its substantial resources.
Virginia has a broad and diverse economy with several distinct regions. The
State has retained its AAA rating and stable credit rating.
Virginia Tax-Free Portfolio assets were $31.1 million as of June 30, 1995.
For the six month period ended June 30, 1995, Virginia Tax-Free Portfolio had
a total return of 7.96%.
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<PAGE>
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OUTLOOK
As evidenced by a decline in long-term Treasury rates, inflationary
pressures are receding and the economy is beginning to slow. If this process
continues, the economy should return to its full employment growth path and
inflationary pressures should abate. However, lurking in the background are
various proposals intended to simplify the tax code. The market has reacted
unfavorably to initial reports of tax reform. Since then, the market has
settled down, realizing that any tax changes would not occur until at least
1997 and would be less dramatic than initially proposed.
There was large scale coupon payments in June and July which put substantial
cash in bond holders' hands. With the yields on municipal securities being
more attractive when compared to other fixed income securities, we look for
increased demand for bonds for the balance of the year.
Currently, holdings consist of approximately 46% to 47% general obligation
issues and 53% to 54% revenue issues. We still maintain that the best value on
the yield curve for the balance of the year is in bonds with maturities of 15
to 20 years.
Fund for Tax-Free Investors, Inc. adheres to a long-term and conservative
investment strategy. Management selects high quality bonds with competitive
yields to insure long-term performance. We look forward to continuing to serve
your investment needs.
Sincerely,
/s/ Daniel L. O'Connor /s/ Richard J. Garvey
Daniel L. O'Connor Richard J. Garvey
Chairman
President
August 17, 1995
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<PAGE>
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FUND FOR TAX-FREE INVESTORS, INC.
PORTFOLIO OF INVESTMENTS
MONEY MARKET PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
---------- ----------
<S> <C> <C>
ALASKA 3.17%
Alaska State Housing Financial Corporation Revenue
4.20%, 12/01/95 AA..................................... $ 700,000 $ 700,859
----------
CALIFORNIA 10.53%
California School Cash Reserve Program
4.75%, 7/03/96 MIG1.................................... 800,000 807,664
Oroville Redevelopment Agency Tax Allocation Project
8.90%, 11/01/95 AAA.................................... 500,000 518,900
San Jose Multifamily Housing Floating Rate Notes+
3.90%, 11/01/07 AAA.................................... 1,000,000 1,000,000
----------
State Total............................................ 2,326,564
----------
COLORADO 6.83%
Colorado Springs Utilities Revenue
8.40%, 11/15/95 AA..................................... 250,000 253,964
Colorado Springs Hospital Revenue
4.10%, 12/15/95 AAA.................................... 255,000 254,992
Colorado Student Obligation Board Authority Floating
Rate Notes+
4.15%, 8/1/00 AAA...................................... 1,000,000 1,000,000
----------
State Total............................................ 1,508,956
----------
DELAWARE 2.26%
Delaware State General Obligation
6.80%, 7/01/95 AA...................................... 500,000 500,000
----------
FLORIDA 1.58%
New Smyrna Beach Revenue
3.20%, 10/01/95 AAA.................................... 190,000 189,437
Florida State Municipal Power Revenue
3.90%, 10/01/95 AAA.................................... 160,000 159,918
----------
State Total............................................ 349,355
----------
ILLINOIS 3.20%
Chicago Public Building Revenue
7.40%, 1/01/96 AAA..................................... 500,000 507,786
Du Page General Obligation
3.75%, 1/01/96 AAA..................................... 200,000 200,195
----------
State Total............................................ 707,981
----------
</TABLE>
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
---------- ----------
<S> <C> <C>
KANSAS 1.81%
Kansas State Development Finance Authority Revenue
4.00%, 11/01/95 A...................................... $ 400,000 $ 400,626
----------
MARYLAND 2.72%
Anne Arundel County Pollution Control Floating Rate
Notes+
3.65%, 7/01/14 A1...................................... 500,000 500,000
Baltimore Industrial Development
Authority Floating Rate Notes+
4.25%, 8/01/16 VMIG1................................... 100,000 100,000
----------
State Total............................................ 600,000
----------
MINNESOTA 9.84%
Southern Minnesota Municipal Power Revenue
7.125%, 1/01/96 AAA.................................... 360,000 373,657
City of St. Louis Park Floating Rate Notes+
3.90%, 2/01/06 AA1..................................... 1,000,000 1,000,000
St. Paul Housing and Redevelopment Authority Floating
Rate Notes+
4.00%, 3/01/13 A1...................................... 800,000 800,000
----------
State Total............................................ 2,173,657
----------
NEW JERSEY 5.22%
New Jersey State Educational Facilities Revenue
6.30%, 7/01/95 AAA..................................... 850,000 850,000
Newark State Aided School Revenue
8.50%, 10/01/95 AA..................................... 300,000 303,185
----------
State Total............................................ 1,153,185
----------
NEW MEXICO 1.13%
Albuquerque General Obligation
5.75%, 7/01/95 AA...................................... 250,000 250,000
----------
NEW YORK 5.57%
New York General Obligation Floating Rate Notes+
4.25%, 8/15/23 AAA..................................... 300,000 300,000
New York City Municipal Water Finance Authority Floating
Rate Notes+
4.25%, 6/15/22 AAA..................................... 300,000 300,000
</TABLE>
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<PAGE>
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PORTFOLIO OF INVESTMENTS
MONEY MARKET PORTFOLIO (Continued)
June 30, 1995
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
-------- ----------
<S> <C> <C>
NEW YORK (continued)
New York State Dormitory Authority Revenue
8.50%, 7/01/95 AAA........................................ $300,000 $ 300,000
Triborough Bridge & Tunnel Authority
9.00%, 7/01/95 AAA........................................ 325,000 331,500
----------
State Total............................................... 1,231,500
----------
NORTH CAROLINA 3.62%
City of Winston-Salem, Floating Rate Notes+
4.05%, 4/01/00 A1......................................... 800,000 800,000
----------
OHIO 4.64%
Hamilton County Sewer Revenue
9.50%, 12/01/95 AAA....................................... 500,000 525,956
Ohio State Educational Facility Floating Rate Notes+
4.00%, 10/01/15 AA........................................ 500,000 500,000
----------
State Total............................................... 1,025,956
----------
OREGON 2.33%
Multnomah County School District General Obligation
9.20%, 12/15/95 AAA....................................... 500,000 513,837
----------
PENNSYLVANIA 2.26%
Quakertown Floating Rate Notes+
4.00%, 12/01/11 VMIG1..................................... 500,000 500,000
----------
RHODE ISLAND 1.36%
Rhode Island State Public Buildings Authority Revenue
3.90%, 2/01/96 AAA........................................ 300,000 299,903
----------
SOUTH CAROLINA 3.82%
Piedmont Municipal Power Agency Revenue
9.70%, 1/01/96 AAA........................................ 800,000 844,936
----------
TEXAS 9.98%
Allen Independent School District General Obligation
8.25%, 8/01/95 AAA........................................ 150,000 150,512
Austin General Obligation
8.70%, 7/01/95 AAA........................................ 500,000 500,000
Austin Independent School District General Obligation
3.95%, 8/01/95 AAA........................................ 100,000 100,000
Ft. Worth Water and Sewer Revenue
5.20%, 2/15/96 AA......................................... 450,000 454,094
</TABLE>
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
---------- -----------
<S> <C> <C>
TEXAS (continued)
South Texas Higher Education Revenue
3.60%, 12/01/95 AAA................................... $ 500,000 $ 500,000
Texas A&M University
8.50%, 7/01/95 AAA.................................... 500,000 500,000
-----------
State Total........................................... 2,204,606
-----------
VIRGINIA 5.89%
Chesapeake General Obligation
8.75%, 7/01/95 AA..................................... 100,000 100,000
Chesterfield County Water and Sewer Revenue
4.70%, 11/01/95 AA.................................... 100,000 100,225
Henrico County Industrial Development Authoriity
Floating Rate Notes+
4.40%, 5/01/24 VMIG1.................................. 500,000 500,000
Virginia State Public School Authority
4.80%, 8/01/95 AA..................................... 100,000 100,066
Virginia State Resource Authority Revenue
5.60%, 10/01/95 AA.................................... 500,000 501,810
-----------
State Total........................................... 1,302,101
-----------
WASHINGTON 7.24%
Washington State Housing Finance Commission
Floating Rate Notes+
3.80%, 1/01/10 VMIG1.................................. 600,000 600,000
Washington State Public Power
4.20%, 7/01/95 AA..................................... 1,000,000 1,000,000
-----------
State Total........................................... 1,600,000
-----------
WEST VIRGINIA 3.17%
Marion County Floating Rate Notes+
4.15%, 10/01/17 VMIG1................................. 700,000 700,000
-----------
WYOMING 1.83%
Lincoln County Pollution Control Revenue Floating Rate
Notes+
4.25%, 11/01/14 A1.................................... 400,000 400,000
-----------
Total Investments--100.00%
(Cost $22,094,022*)................................... $22,094,022
===========
</TABLE>
*Same cost is used for Federal income tax purposes.
See Notes to Financial Statements.
--------
+--Daily or weekly tender bond.
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FUND FOR TAX-FREE INVESTORS, INC.
PORTFOLIO OF INVESTMENTS
VIRGINIA PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
---------- ----------
<S> <C> <C>
Alexandria Industrial Development Authority Revenue
7.40%, 1/01/08 A........................................ $ 175,000 $ 178,355
Arlington County General Obligation
5.30%, 7/15/10 AAA...................................... 500,000 487,350
6.00%, 8/01/12 AAA...................................... 500,000 514,245
Augusta County Water Authority Revenue
5.125%, 11/01/14 AAA.................................... 200,000 187,836
Chesapeake Bay Bridge & Tunnel Revenue
5.875%, 7/01/10 AAA..................................... 250,000 254,093
6.375%, 7/01/22 AAA..................................... 250,000 255,650
Chesapeake General Obligation
6.00%, 8/01/06 AA....................................... 400,000 422,824
Chesapeake Water & Sewer System Revenue
6.50%, 7/01/05 A........................................ 270,000 290,355
Chesterfield County General Obligation
6.70%, 1/01/01 AA....................................... 680,000 755,806
6.25%, 7/15/11 AAA...................................... 300,000 313,464
Chesterfield County Water & Sewer Revenue
6.375%, 11/01/07 AA..................................... 300,000 317,037
6.375%, 11/01/10 AA..................................... 500,000 519,545
Danville General Obligation
6.50%, 5/01/11 A........................................ 250,000 261,240
Fairfax County Economic Development Authority Revenue
7.75%, 2/01/11 A........................................ 300,000 323,568
Fairfax County Health Systems Revenue
5.25%, 8/15/19 AA....................................... 500,000 444,335
Fairfax County Sewer Authority Revenue
5.45%, 11/15/08 AAA..................................... 300,000 295,248
Fairfax County Water Authority Revenue
5.15%, 4/01/11 AA....................................... 500,000 471,120
5.80%, 1/01/16 AA....................................... 500,000 501,565
6.00%, 4/01/22 AA....................................... 1,000,000 1,004,540
Falls Church General Obligation
6.65%, 4/01/09 AA....................................... 250,000 266,048
</TABLE>
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
---------- ----------
<S> <C> <C>
Hampton General
Obligation
6.625%, 1/01/00 AA...... $ 500,000 $ 548,805
6.00%, 1/15/14 AA....... 350,000 354,645
Henrico County
Development Authority
Revenue
7.125%, 8/01/21 AA...... 400,000 439,512
Henrico County Water &
Sewer Revenue
6.45%, 5/01/02 AA....... 300,000 329,448
6.25%, 5/01/13 AA....... 500,000 508,555
Henry County General
Obligation
8.825%, 11/05/05 AAA.... 200,000 262,966
Isle of Wight County
General Obligation
6.40%, 1/01/08 A........ 250,000 262,000
6.50%, 1/01/10 A........ 200,000 209,364
6.70%, 1/01/12 A........ 200,000 212,506
Loudoun County General
Obligation
7.20%, 10/01/00 AA...... 675,000 766,638
Loudoun County Sanitation
Authority Revenue
6.25%, 1/01/10 AAA...... 550,000 571,956
6.25%, 1/01/16 AAA...... 500,000 511,495
Lynchburg General
Obligation
7.00%, 4/01/00 AAA...... 250,000 279,358
Metropolitan Washington,
D.C. Airport Authority
Revenue
6.50%, 10/01/06 AAA..... 300,000 321,048
5.90%, 10/01/09 AAA..... 300,000 302,421
7.60%, 10/01/14 AA...... 125,000 137,256
Newport News General
Obligation
6.125%, 6/01/12 AA...... 270,000 279,269
Norfolk General
Obligation
5.50%, 2/01/08 AA....... 400,000 399,796
5.75%, 6/01/13 AA....... 500,000 497,210
Portsmouth General
Obligation
6.375%, 8/01/11 AA...... 200,000 208,290
Portsmouth Redevelopment
& Housing Authority
Revenue
6.05%, 12/01/08 AAA..... 500,000 508,250
Potomac & Rappahannock
Transportation District
Commission
6.70%, 3/01/11 AAA...... 600,000 642,396
</TABLE>
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<PAGE>
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PORTFOLIO OF INVESTMENTS
VIRGINIA PORTFOLIO (Continued)
June 30, 1995
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
---------- -----------
<S> <C> <C>
Prince William County General Obligation
6.20%, 12/01/11 AA..................................... $ 300,000 $ 308,043
Prince William County Industrial Development Authority
7.25%, 3/01/11 A....................................... 250,000 264,858
Prince William County Park Authority
6.875%, 10/15/16 A..................................... 500,000 523,540
Richmond General Obligation
6.60%, 1/15/07 AA...................................... 200,000 214,234
Richmond Public Improvement
6.25%, 1/15/18 AA...................................... 250,000 254,040
Richmond Metro Authority Revenue
6.10%, 7/15/06 AAA..................................... 300,000 316,395
6.375%, 7/15/16 AAA.................................... 500,000 519,050
Riverside Regional Jail Authority Revenue
6.00%, 7/01/25 AAA..................................... 250,000 248,278
Roanoke County Water Authority Revenue
5.125%, 7/01/13 AAA.................................... 250,000 230,113
Roanoke County General Obligation
6.35%, 8/01/08 AA...................................... 225,000 239,686
Roanoke Hospital Revenue
7.25%, 7/01/00 AAA..................................... 200,000 226,632
Southeastern Virginia Public Service Authority
5.15%, 7/01/09 AAA..................................... 500,000 476,495
Spotsylvania County General Obligation
5.75%, 7/15/12 A....................................... 400,000 396,560
Suffolk General Obligation
6.00%, 8/01/13 A....................................... 500,000 504,145
Upper Occoquan Sewer Authority Revenue
6.50%, 7/01/01 AAA..................................... 300,000 332,499
Virginia Beach General Obligation
6.60%, 8/01/01 AA...................................... 200,000 222,916
6.50%, 8/01/07 AA...................................... 500,000 541,305
5.90%, 9/01/08 AA...................................... 500,000 516,060
Virginia Beach Water & Sewer Revenue
6.50%, 2/01/02 A....................................... 200,000 222,522
</TABLE>
<TABLE>
<CAPTION>
Face Value
Value (Note 1)
---------- -----------
<S> <C> <C>
Virginia College Building Authority
6.25%, 11/01/12 AA..................................... $ 250,000 $ 255,765
5.80%, 1/01/24 AA...................................... 500,000 484,435
Virginia General Obligation
6.00%, 6/01/09 AAA..................................... 200,000 207,674
5.00%, 6/01/11 AAA..................................... 500,000 473,685
Virginia Housing Development Authority Revenue
6.70%, 7/01/08 AA...................................... 200,000 205,950
7.40%, 7/01/09 AA...................................... 200,000 211,371
7.10%, 5/01/13 AA...................................... 200,000 211,396
6.625%, 7/01/13 AA..................................... 275,000 282,879
Virginia Public Building Authority Revenue
6.00%, 8/01/08 AA...................................... 500,000 518,835
6.50%, 8/01/11 AA...................................... 500,000 521,975
6.625%, 5/01/13 A...................................... 300,000 310,089
Virginia Public School Authority Revenue
6.25%, 1/01/00 AAA..................................... 175,000 189,476
6.20%, 8/01/13 AA...................................... 320,000 330,077
Virginia Resource Authority Revenue
6.75%, 10/01/04 AA..................................... 240,000 273,650
6.00%, 10/01/12 AA..................................... 400,000 403,912
6.45%, 4/01/13 AA...................................... 300,000 309,464
Virginia Transportation Board Revenue
6.00%, 4/01/10 AA...................................... 300,000 305,895
5.25%, 5/15/12 AA...................................... 250,000 234,797
5.625%, 5/15/13 AA..................................... 500,000 485,700
Washington D.C. Metro Transit Authority Revenue
5.25%, 7/01/14 AAA..................................... 500,000 462,084
-----------
Total Investments
(Cost $28,727,735*).................................... $29,853,888
===========
</TABLE>
*Same cost is used for Federal income tax purposes.
See Notes to Financial Statements.
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FUND FOR TAX-FREE INVESTORS, INC.
PORTFOLIO OF INVESTMENTS
MARYLAND PORTFOLIO
June 30, 1995
<TABLE>
<CAPTION>
Face Value
Amount (Note 1)
---------- -----------
<S> <C> <C>
Anne Arundel County General Obligation
6.50%, 4/15/07 AA...................................... $ 200,000 $ 216,334
6.20%, 8/01/12 AA...................................... 725,000 757,596
6.30% 8/01/16 AA....................................... 500,000 523,225
Anne Arundel County Pollution Control Revenue
6.00%, 4/01/24 A2...................................... 1,730,000 1,681,387
Anne Arundel County Water & Sewer General Obligation
6.60%, 3/15/09 AAL..................................... 200,000 215,200
Baltimore City General Obligation
6.40%, 10/15/02 AAA.................................... 965,000 1,062,079
6.30%, 10/15/04 AAA.................................... 200,000 215,724
Baltimore City Wastewater Project Revenue
6.25%, 7/01/02 AAA..................................... 250,000 275,718
Baltimore City Revenue
6.00%, 7/01/15 AAA..................................... 500,000 508,180
Baltimore City Water Utility Revenue
6.50%, 7/01/00 AAA..................................... 500,000 542,025
Baltimore County General Obligation
6.90%, 4/01/00 AAA..................................... 325,000 361,793
6.30%, 10/15/07 AAA.................................... 100,000 105,726
6.125%, 7/01/08 AAA.................................... 500,000 523,585
6.70%, 7/01/09 AAA..................................... 200,000 212,416
7.15% 10/15/09 A1...................................... 120,000 136,586
6.70%, 7/01/11 AAA..................................... 900,000 955,872
6.70%, 7/01/16 AAA..................................... 500,000 528,600
Baltimore Port Facility Revenue
6.50%, 12/01/10 AA..................................... 400,000 418,108
6.50%, 10/01/11 AA..................................... 250,000 259,285
6.50%, 10/01/11 AA..................................... 250,000 259,660
Calvert County General Obligation
6.50%, 7/01/05 AA...................................... 265,000 286,749
Carroll County General Obligation
6.10%, 10/01/08 AA..................................... 380,000 397,279
7.10%, 10/01/09 AAA.................................... 235,000 265,818
7.25%, 10/01/15 AA..................................... 300,000 332,208
6.50%, 10/01/24 AA..................................... 215,000 230,041
Cumberland Memorial Hospital Revenue
6.50%, 7/01/17 A....................................... 200,000 202,170
</TABLE>
<TABLE>
<CAPTION>
Face Value
Amount (Note 1)
---------- -----------
<S> <C> <C>
Frederick County General Obligation
6.60%, 5/01/01 AAA..................................... $ 200,000 $ 222,234
6.30%, 7/01/02 AA...................................... 500,000 532,535
6.125%, 12/01/07 AAA................................... 500,000 528,550
5.60%, 7/01/11 AA...................................... 500,000 500,430
City of Frederick General Obligation
6.00%, 10/01/11 AAA.................................... 300,000 307,869
Harford County Public Improvement General Obligation
5.70%, 9/01/07 AA...................................... 420,000 431,122
Harford County Water & Sewer Revenue
6.375%, 12/01/00 AAA................................... 200,000 219,928
6.40%, 12/01/00 AAA.................................... 200,000 220,212
Howard County Public Improvement General Obligation
6.00%, 5/15/14 AA...................................... 500,000 507,155
Howard County Metropolitan District General Obligation
6.00%, 8/15/19 AA...................................... 500,000 502,755
Howard County Special Facilities Revenue
6.10%, 2/15/13 AA...................................... 500,000 508,690
Laurel General Obligation
6.70%, 7/01/04 AAA..................................... 600,000 662,574
6.85%, 7/01/06 AAA..................................... 110,000 120,634
Maryland Community Development Administration Revenue
6.60%, 4/01/06 AA...................................... 200,000 211,902
7.375%, 4/01/10 AA..................................... 495,000 525,863
7.25%, 4/01/11 AA...................................... 200,000 212,366
7.15%, 4/01/11 AA...................................... 405,000 429,114
7.00%, 6/01/11 AAA..................................... 100,000 108,144
5.30%, 4/01/12 AA...................................... 500,000 465,785
7.25%, 4/01/16 AA...................................... 275,000 284,314
7.70%, 5/15/20 AA...................................... 250,000 265,078
7.40%, 5/15/24 AA...................................... 125,000 132,230
7.25%, 4/01/27 AA...................................... 400,000 420,720
7.45%, 4/01/32 AA...................................... 100,000 105,699
</TABLE>
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- 7 -
<PAGE>
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PORTFOLIO OF INVESTMENTS
MARYLAND PORTFOLIO (Continued)
June 30, 1995
<TABLE>
<CAPTION>
Face Value
Amount (Note 1)
---------- -----------
<S> <C> <C>
Maryland Department of Transportation Revenue
6.375%, 9/01/06 AA.................................... $ 500,000 $ 537,385
Maryland General Obligation
6.80%, 7/15/00 AAA.................................... 500,000 556,935
6.60%, 7/15/01 AAA.................................... 250,000 271,680
6.40%, 7/15/03 AAA.................................... 300,000 325,707
6.50%, 7/15/05 AAA.................................... 200,000 216,284
Maryland General Hospital Health & Higher Education
Revenue
6.125%, 7/01/14 AAA................................... 500,000 507,595
Maryland Health & Higher Education Facilities Authority
Revenue
6.50%, 7/01/02 AAA.................................... 710,000 793,510
5.25%, 7/01/12 AAA.................................... 500,000 462,880
5.375%, 7/01/13 AAA................................... 500,000 474,035
5.00%, 7/01/18 AAA.................................... 175,000 154,511
6.125%, 7/01/19 AAA................................... 500,000 505,585
6.00%, 7/01/21 A1..................................... 400,000 383,760
5.50%, 7/01/22 AA..................................... 200,000 186,710
Maryland Industrial Development Revenue
7.125%, 7/01/06 A..................................... 300,000 313,083
Maryland National Park and Planning Commission Prince
Georges County General Obligation
6.125%, 7/01/08 AA.................................... 250,000 261,070
Maryland Stadium Authority Sports Revenue
7.375%, 12/15/04 AA................................... 425,000 473,425
7.50%, 12/15/10 AA.................................... 695,000 764,535
7.60%, 12/15/19 AA.................................... 500,000 549,475
Maryland Transportation Authority Revenue
6.50%, 7/01/04 A1..................................... 500,000 540,495
5.80%, 7/01/06 A1..................................... 500,000 524,040
Maryland Water Quality Finance Administration Revenue
7.10%, 9/01/13 AA..................................... 530,000 592,625
6.70%, 9/01/13 AA..................................... 400,000 438,892
6.00%, 9/01/15 AA..................................... 1,000,000 1,011,850
Montgomery County General Obligation
6.50%, 4/01/01 AAA.................................... 200,000 221,006
7.875%, 7/01/13 A..................................... 400,000 416,828
</TABLE>
<TABLE>
<CAPTION>
Face Value
Amount (Note 1)
---------- -----------
<S> <C> <C>
Montgomery County Housing Opportunity Commission
Revenue
7.125%, 7/01/06 AA.................................... $ 100,000 $ 104,270
6.70%, 7/01/11 AA..................................... 395,000 415,955
7.80%, 7/01/12 N/R.................................... 200,000 204,440
7.375%, 7/01/17 AA.................................... 185,000 194,861
6.65%, 7/01/17 AA..................................... 245,000 255,486
7.00%, 7/01/23 A...................................... 250,000 261,188
Montgomery County Parking Revenue
6.25%, 6/01/09 AAA.................................... 300,000 311,607
North East Maryland Waste Disposal Authority Revenue
6.20%, 7/01/10 A...................................... 500,000 501,105
6.30%, 7/01/16 A...................................... 1,000,000 993,100
Ocean City General Obligation
6.30%, 11/01/01 AAA................................... 250,000 275,405
Prince Georges County General Obligation
7.20%, 2/01/99 AAA.................................... 600,000 658,182
6.625%, 7/01/03 AA.................................... 275,000 299,552
5.75%, 3/15/08 AAA.................................... 500,000 511,905
5.50%, 3/15/08 AA..................................... 350,000 344,008
Prince Georges County Housing Authority Revenue
6.35%, 7/20/20 AAA.................................... 700,000 707,952
Prince Georges County Parking Authority Revenue
6.25%, 5/01/03 AA..................................... 200,000 213,224
Prince Georges County Solid Waste Management System
Revenue
6.80%, 6/30/00 AAA.................................... 250,000 278,303
7.00%, 6/30/00 AAA.................................... 250,000 280,513
Rockville General Obligation
7.00%, 3/15/00 AA..................................... 100,000 110,047
6.40%, 10/15/01 AA.................................... 350,000 382,053
St. Mary's County General Obligation
5.65%, 11/01/07 A..................................... 250,000 248,445
5.50%, 11/01/07 AAA................................... 400,000 405,320
5.85%, 11/01/18 AAA................................... 500,000 500,720
Talbot County General Obligation
6.625%, 5/01/09 A1.................................... 100,000 106,128
</TABLE>
--------------------------------------------------------------------------------
- 8 -
<PAGE>
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
MARYLAND PORTFOLIO (Continued)
June 30, 1995
<TABLE>
<CAPTION>
Face Value
Amount (Note 1)
---------- -----------
<S> <C> <C>
University of Maryland System Auxiliary Revenue
7.20%, 10/01/99 AAA................................... $ 175,000 $ 195,984
7.20%, 10/01/09 AA.................................... 75,000 82,307
5.00%, 10/01/10 AA.................................... 500,000 465,570
6.30%, 2/01/12 AA..................................... 115,000 119,842
5.60%, 4/01/16 AA..................................... 500,000 485,040
University of Maryland Tuition Revenue
6.375%, 2/01/01 AAA................................... 350,000 383,807
6.375%, 4/01/09 AA.................................... 500,000 529,675
Washington County General Obligation
6.375%, 1/01/02 AAA................................... 275,000 301,700
6.20%, 1/01/05 A1..................................... 300,000 316,653
Washington, D.C. Metropolitan Area Transportation
Authority Revenue
6.00%, 7/01/10 AAA.................................... 275,000 282,684
5.25%, 7/01/14 AAA.................................... 250,000 231,043
</TABLE>
<TABLE>
<CAPTION>
Face Value
Amount (Note 1)
---------- -----------
<S> <C> <C>
Washington Suburban Sanitary District Revenue
6.40%, 1/01/02 AAA.................................... $ 200,000 $ 221,224
5.375%, 6/01/11 AA1................................... 500,000 486,425
5.25%, 6/01/11 AA1.................................... 850,000 815,431
6.20%, 6/01/12 AA1.................................... 900,000 925,371
Washington Suburban Sanitary District General
Obligation
6.20%, 6/01/09 AA1.................................... 300,000 313,128
Worcester County General Obligation
6.20%, 8/15/05 AA..................................... 300,000 320,880
6.75%, 5/01/14 AA..................................... 100,000 107,302
6.75%, 5/01/15 AA..................................... 100,000 107,040
-----------
Total Investments
(Cost $44,740,866*)................................... $46,638,043
===========
</TABLE>
*Same cost is used for Federal income tax purposes.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
- 9 -
<PAGE>
--------------------------------------------------------------------------------
FUND FOR TAX-FREE INVESTORS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1995
<TABLE>
<CAPTION>
Money
Market Virginia Maryland
Portfolio Portfolio Portfolio
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Securities at Value (Note 1, see portfo-
lios for cost information)............... $22,094,022 $29,853,888 $46,638,043
Cash in Custodian Bank.................... 1,076,069 271,728 477,745
Interest Receivable....................... 326,981 635,214 934,124
Receivable for Securities Sold............ 0 309,628 0
Receivable for Shares Purchased........... 1,509 80,037 25,537
Other Assets.............................. 15,622 0 0
----------- ----------- -----------
Total Assets............................. 23,514,203 31,150,495 48,075,449
----------- ----------- -----------
LIABILITIES
Dividends Payable......................... 2,721 25,933 36,142
Investment Advisory Fee Payable........... 9,208 7,680 11,821
Administration Fee Payable................ 6,545 16,429 19,087
Liability for Shares Redeemed............. 42,129 5,010 1,010
Liability for Securities Purchased........ 807,664 0 0
----------- ----------- -----------
Total Liabilities........................ 868,267 55,052 68,060
----------- ----------- -----------
NET ASSETS................................. $22,645,936 $31,095,443 $48,007,389
=========== =========== ===========
Shares Outstanding......................... 22,645,936 2,856,629 4,506,028
=========== =========== ===========
Net Asset Value Per Share.................. $1.00 $10.89 $10.65
===== ====== ======
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
- 10 -
<PAGE>
--------------------------------------------------------------------------------
FUND FOR TAX-FREE INVESTORS, INC.
STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
Money
Market Virginia Maryland
Portfolio Portfolio Portfolio
--------- ----------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME (Note 1)................... $ 441,148 $ 904,022 $ 1,384,655
--------- ----------- -----------
EXPENSES
Investment Advisory Fee (Note 2)............ 58,736 93,831 144,229
Administrative Fee (Note 2)................. 29,368 45,039 69,230
--------- ----------- -----------
Total Expenses.............................. 88,104 138,870 213,459
Less Expenses Reimbursed by Investment Advi-
sor........................................ 0 48,792 74,999
--------- ----------- -----------
Net Expenses................................ 88,104 90,078 138,460
--------- ----------- -----------
NET INVESTMENT INCOME........................ 353,044 813,944 1,246,195
NET REALIZED GAIN ON INVESTMENT TRANSACTIONS. 3,517 227,059 233,961
NET CHANGE IN UNREALIZED APPRECIATION OF
INVESTMENTS (Note 5)........................ 0 1,242,217 2,168,031
--------- ----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OP-
ERATIONS.................................... $ 356,561 $ 2,283,220 $ 3,648,187
========= =========== ===========
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
- 11 -
<PAGE>
--------------------------------------------------------------------------------
FUND FOR TAX-FREE INVESTORS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ended June 30,
<TABLE>
<CAPTION>
Money Market Virginia Maryland
Portfolio Portfolio Portfolio
------------------------ ------------------------ ------------------------
1995 1994 1995 1994 1995 1994
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM INVESTMENT
ACTIVITIES
Net Investment Income.. $ 353,044 $ 201,635 $ 813,944 $ 863,597 $ 1,246,195 $ 1,443,783
Net Realized Gain
(Loss) on Investments. 3,517 2,764 227,059 (264,739) 233,961 (739,600)
Net Change in
Unrealized
Appreciation
(Depreciation) of
Investments........... ----- ----- 1,242,217 (2,180,786) 2,168,031 (3,388,566)
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease)
in Net Assets
Resulting from
Operations............ 356,561 204,399 2,283,220 (1,581,928) 3,648,187 (2,684,383)
DISTRIBUTIONS TO
SHAREHOLDERS:
FROM NET INVESTMENT
INCOME (Note 1)....... (356,561) (204,399) (812,615) (863,567) (1,248,725) (1,442,069)
NET REALIZED GAIN...... ----- ----- ----- ----- ----- -----
FROM SHARE TRANSACTIONS
(Note 4)............... (2,940,464) (298,861) 1,695,761 (365,473) 1,222,464 (2,176,844)
----------- ----------- ----------- ----------- ----------- -----------
Total Increase (De-
crease) in Net Assets.. (2,940,464) (298,861) 3,166,366 (2,810,968) 3,621,926 (6,303,296)
NET ASSETS - Beginning
of Period.............. 25,586,400 23,283,065 27,929,077 34,371,143 44,385,463 58,094,054
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS - End of Pe-
riod................... $22,645,936 $22,984,204 $31,095,443 $31,560,175 $48,007,389 $51,790,758
=========== =========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements.
--------------------------------------------------------------------------------
- 12 -
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended December 31,
June 30, ----------------------------------------------
1995 1994 1993 1992 1991
------------ ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value -
Beginning of Period.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Net Investment Income.. 0.015 0.020 0.016 0.023 0.040
Net Realized and
Unrealized Gains on
Securities............ ----- ----- ----- ----- -----
---------- ---------- ---------- ---------- ----------
Net Increase in Net
Asset Value Resulting
from Operations....... 0.015 0.020 0.016 0.023 0.040
Dividends to
Shareholders.......... (0.015) (0.020) (0.016) (0.023) (0.040)
Distributions to
Shareholders from Net
Realized Capital
Gains................. ----- ----- ----- ----- -----
---------- ---------- ---------- ---------- ----------
Net Increase (Decrease)
in Net Asset Value.... ----- ----- ----- ----- -----
---------- ---------- ---------- ---------- ----------
Net Asset Value - End
of Period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total Investment
ReturnB................ 1.46% 2.02% 1.66% 2.25% 4.01%
Ratio to Average Net
Assets:
Expenses............... 0.75%A 0.75% 0.78% 0.80% 0.77%
Net Investment Income.. 3.01%A 1.99% 1.65% 2.25% 4.01%
Supplementary Data:
Portfolio Turnover
Rate.................. ----- ----- ----- ----- -----
Number of Shares
Outstanding at End of
Period................ 22,645,936 25,603,675 23,312,290 25,964,308 29,736,105
</TABLE>
--------
A Annualized.
B Total Investment Returns for periods of less than one year are not
annualized.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
- 13 -
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
VIRGINIA PORTFOLIO
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended December 31,
June 30, ------------------------------------------
1995 1994 1993 1992 1991
------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value -
Beginning of Period.. $10.36 $11.51 $10.84 $10.63 $10.17
--------- --------- --------- --------- ---------
Net Investment Income.. 0.289 0.578 0.582 0.610 0.615
Net Realized and
Unrealized Gains
(Losses) on
Securities............ 0.530 (1.150) 0.670 0.210 0.460
--------- --------- --------- --------- ---------
Net Increase (Decrease)
in Net Asset Value
Resulting from
Operations............ 0.819 (0.572) 1.252 0.820 1.075
Dividends to
Shareholders.......... (0.289) (0.578) (0.582) (0.610) (0.615)
Distributions to
Shareholders from Net
Realized Capital
Gains................. ----- ----- ----- ----- -----
--------- --------- --------- --------- ---------
Net Increase (Decrease)
in Net Asset Value.... 0.53 (1.15) 0.67 0.21 0.46
--------- --------- --------- --------- ---------
Net Asset Value - End
of Period............. $10.89 $10.36 $11.51 $10.84 $10.63
========= ========= ========= ========= =========
Total Investment
Return/B/.............. 7.96% (5.02)% 11.80% 7.98% 10.85%
Ratios to Average Net
Assets:
Expenses............... 0.60%/A/ 0.55% 0.50% 0.50% 0.61%
Expenses Before
Reimbursement from
Adviser............... 0.93%/A/ 0.93% 0.93% 0.93% 0.93%
Net Investment Income.. 5.42%/A/ 5.35% 5.15% 5.71% 5.91%
Supplementary Data:
Portfolio Turnover
Rate.................. 31% 33% 43% 50% 74%
Number of Shares
Outstanding at End of
Period................ 2,856,629 2,697,151 2,985,125 2,354,055 1,576,102
</TABLE>
--------
/A/ Annualized.
/B/ Total Investment Return for periods of less than one year are not
annualized.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
- 14 -
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
MARYLAND PORTFOLIO
<TABLE>
<CAPTION>
For the Six
Months Ended For the Year Ended December 31,
June 30, ------------------------------------------
1995 1994 1993 1992 1991
------------ --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net Asset Value -
Beginning of Period.. $10.11 $11.27 $10.60 $10.39 $9.99
--------- --------- --------- --------- ---------
Net Investment Income.. 0.282 0.565 0.568 0.594 0.594
Net Realized and
Unrealized Gains
(Losses) on
Securities............ 0.540 (1.157) 0.670 0.210 0.400
--------- --------- --------- --------- ---------
Net Increase (Decrease)
in Net Asset Value
Resulting from
Operations............ 0.822 (0.592) 1.238 0.804 0.994
Dividends to
Shareholders.......... (0.282) (0.565) (0.568) (0.594) (0.594)
Distributions to
Shareholders from Net
Realized Capital
Gains................. ----- (0.003) ----- ----- -----
--------- --------- --------- --------- ---------
Net Increase (Decrease)
in Net Asset Value.... 0.54 (1.16) 0.67 0.21 0.40
--------- --------- --------- --------- ---------
Net Asset Value - End
of Period............. $10.65 $10.11 $11.27 $10.60 $10.39
========= ========= ========= ========= =========
Total Investment
Return/B/.............. 8.08% (5.24)% 11.91% 8.00% 10.24%
Ratios to Average Net
Assets:
Expenses............... 0.60%/A/ 0.55% 0.50% 0.50% 0.62%
Expenses Before
Reimbursement from
Adviser............... 0.93%/A/ 0.93% 0.93% 0.93% 0.93%
Net Investment Income.. 5.40%/A/ 5.36% 5.13% 5.67% 5.85%
Supplementary Data:
Portfolio Turnover
Rate.................. 21% 38% 30% 21% 61%
Number of Shares
Outstanding at End of
Period................ 4,506,028 4,390,634 5,156,988 4,144,846 2,294,224
</TABLE>
--------
/A/ Annualized.
/B/ Total Investment Return for periods of less than one year are not
annualized.
See Notes to Financial Statements.
--------------------------------------------------------------------------------
- 15 -
<PAGE>
-------------------------------------------------------------------------------
FUND FOR TAX-FREE INVESTORS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
1. SIGNIFICANT ACCOUNTING POLICIES
Fund for Tax-Free Investors, Inc. (the Fund) is registered with the Securities
and Exchange Commission under the Investment Company Act of 1940 as a no-load,
open-end, investment company. The Fund consists of three separate portfolios
which invest primarily in securities exempt from Federal income taxes. The
following is a summary of significant accounting policies which the Fund
consistently follows:
(a) Securities of the Money Market Portfolio are valued at amortized
cost, which approximates market value. Securities of the Virginia
and Maryland Portfolios are valued by a pricing service approved by
the Board of Directors. The valuation methods used are reviewed by
the Board of Directors to determine that they reflect fair value.
(b) Investment income is recorded as earned.
(c) Net investment income is computed, and dividends are declared daily.
Dividends are paid monthly and reinvested in additional shares
unless shareholders request payment. Net capital gains, if any, will
be distributed to shareholders annually.
(d) The Fund complies with the provisions of the Internal Revenue Code
applicable to regulated investment companies and distributes all net
investment income to its shareholders. Therefore, no Federal income
tax provision is required. The Fund also meets the requirements that
allow it to designate distributions from interest income on
obligations which are exempt from Federal income tax as exempt-
interest dividends.
2. INVESTMENT ADVISER AND SHAREHOLDER SERVICING AGENT
Investment advisory and management services are provided by Money Management
Associates (the Adviser) under an agreement whereby the Fund pays a fee at an
annual rate of 0.50% of the average daily net assets of the Market Portfolio
and 0.625% of the average daily net assets of the Virginia Portfolio and of
the Maryland Portfolio. The Adviser has agreed to reimburse the Fund for
expenses, (including investment advisory fee), excluding interest and
extraordinary legal expenses, which exceed one percent of the average daily
net assets per annum. No reimbursement was required for the period ended June
30, 1995. However, the Adviser voluntarily reimbursed the Virginia and
Maryland Portfolios for a portion of their expenses. Certain officers and
Directors of the Fund are also officers and Directors of the Adviser.
Rushmore Trust and Savings, FSB, (Rushmore Trust) which is wholly owned by
Money Management Associates, provides transfer agency, dividend disbursing and
other shareholder services to the Fund. In addition, Rushmore Trust serves as
custodian of the Fund's assets and pays the operating expenses of the Fund.
For these services, Rushmore Trust receives an annual fee of 0.25% of the
average net assets of the Money Market Portfolio, and 0.30% of the average net
assets of the Virginia and Maryland Portfolios.
-------------------------------------------------------------------------------
- 16 -
<PAGE>
-------------------------------------------------------------------------------
3. SECURITIES TRANSACTIONS
Security transactions are recorded on the trade date. For the six months ended
June 30, 1995, purchases and sales (including maturities), of securities,
excluding short-term securities, were as follows:
<TABLE>
<CAPTION>
Virginia Maryland
Portfolio Portfolio
---------- -----------
<S> <C> <C>
Purchases........................................... $9,581,679 $10,133,216
---------- -----------
Sales............................................... $9,086,813 $ 9,352,231
---------- -----------
</TABLE>
4. SHARES TRANSACTIONS
On June 30, 1995, there were 200,000,000 shares of $.001 par value capital
stock authorized. Transactions in shares and dollars of the Fund for the six
months ended June 30, 1995 were as follows:
<TABLE>
<CAPTION>
Money Market Virginia Maryland
Portfolio Portfolio Portfolio
------------ ---------- -----------
<S> <C> <C> <C>
In Shares
Shares Sold............................. 19,982,090 345,194 450,191
Shares Issued in Reinvestment of Divi-
dends.................................. 326,238 62,339 100,624
----------- ---------- -----------
20,308,328 407,533 550,815
Shares Reedeemed........................ (23,248,792) (248,055) (435,421)
----------- ---------- -----------
Net Increase (Decrease) in Shares....... (2,940,464) 159,478 115,394
=========== ========== ===========
In Dollars
Shares Sold............................. $19,982,090 $3,704,694 $ 4,758,370
Shares Issued in Reinvestment of Divi-
dends.................................. 326,238 673,289 1,062,304
----------- ---------- -----------
20,308,328 4,377,983 5,820,674
Shares Redeemed......................... (23,248,792) (2,682,222) (4,598,210)
----------- ---------- -----------
Net Increase (Decrease) in Dollars...... $(2,940,464) $1,695,761 $ 1,222,464
=========== ========== ===========
</TABLE>
5. NET UNREALIZED APPRECIATION (DEPRECIATION) OF INVESTMENTS
As of June 30, 1995, net unrealized appreciation of investments in the
Virginia Portfolio for Federal income tax purposes aggregated $1,126,153 of
which $1,205,792 related to appreciated investments and $79,639 related to
depreciated investments. In the Maryland Portfolio, net unrealized
appreciation of investments for Federal income tax purposes totaled $1,897,177
of which $2,003,465 related to appreciated investments and $106,288 related to
depreciated investments.
-------------------------------------------------------------------------------
- 17 -
<PAGE>
-------------------------------------------------------------------------------
6. NET ASSETS
At June 30, 1995, net assets consisted of the following:
<TABLE>
<CAPTION>
Money Market Virginia Maryland
Portfolio Portfolio Portfolio
------------ ------------ ------------
<S> <C> <C> <C>
Paid-in Capital....................... $22,645,936 $ 30,538,879 $ 47,493,008
Undistributed Net Investment Income... ----- 1,329 2,078
Accumulated Net Realized Loss on In-
vestments............................ ----- (570,918) (1,384,874)
Net Unrealized Appreciation of Invest-
ments................................ ----- 1,126,153 1,897,177
----------- ------------ ------------
NET ASSETS............................ $22,645,936 $ 31,095,443 $ 48,007,389
=========== ============ ============
</TABLE>
7. CAPITAL LOSS CARRYOVERS
At December 31, 1994, for Federal income tax purposes, the following
portfolio's had capital loss carryovers which may be applied against future
net taxable realized gains of each succeeding year until the earlier of its
utilization or its expiration:
<TABLE>
<CAPTION>
Expires in
2002
-----------
<S> <C>
Virginia Portfolio............................................. $ 797,977
Maryland Portfolio............................................. $ 1,618,835
</TABLE>
-------------------------------------------------------------------------------
- 18 -
<PAGE>
FUND FOR TAX-FREE INVESTORS
--------------------------------------------------------------------------------
SEMIANNUAL REPORT
June 30, 1995
[LOGO OF RUSHMORE APPEARS HERE]
