UMB SCOUT FUNDS
CAPITAL PRESERVATION FUND
QUARTERLY REPORT
SEPTEMBER 30, 1998
A no-load mutual fund that seeks long-term capital growth
by investing in companies whose earnings or tangible assets
are expected to outpace inflation
TO THE SHAREHOLDERS
The UMB Scout Capital Preservation Fund closed the quarter ended
September 30, 1998, at $9.13 per share and had a total return (price
change and reinvested distributions) of -6.26%. The Fund began trading
February 23, 1998. Its objective is to outpace inflation over the long-
term by investing in common stocks of companies whose business is
related to the production and distribution of raw materials. These
investments may be in domestic or foreign securities.
Gold stocks increased in value for the first time in four months amid
stock market volatility that resulted in overall negative returns for
the broad market. The Fund increased its exposure to mineral-related
stocks by adding a new position in Cyprus Amax Minerals Co. and by
purchasing additional shares of Barrick Gold Corp.
Additional purchases also were made in Georgia Pacific Timber; Placer
Dome, Inc.; Helmerich & Payne, Inc.; Royal Dutch Petroleum; and Canadian
Pacific Limited. Your Fund added new positions during the quarter in
Engelhard Corp. and Dresser Industries, Inc. Positions were eliminated
in Calgon Carbon Corp. and Deere & Co.
As of September 30, 1998, approximately 66% of the Fund's assets were
invested in stocks, emphasizing the key sectors of energy, metals and
mining, precious metals, water, agriculture and timber. The remaining
assets were in cash reserves and will be invested gradually as
opportunities arise.
We want to remind all shareholders that the Fund name is changing to UMB
Scout Capital Preservation Fund, Inc., effective October 31, 1998.
Thank you for your investment in the UMB Scout Capital Preservation
Fund. We welcome your questions and comments.
Sincerely,
/s/David R. Bagby
David R. Bagby
UMB Investment Advisors
COMPARATIVE RATES OF RETURN
as of September 30, 1998
Month Quarter Inception
UMB Scout Capital
Preservation Fund 12.30% -6.26% -8.70%
Goldman Sachs
Commodity Index* 10.22% -4.44% N.A.
Consumer Price Index+ 0.12% 0.37% N.A.
Producer Price
Index-Finished Goods+ 0.31% 0.15% N.A.
Inception - February 23, 1998.
Performance data contained in this report are for past periods only.
Past performance is not indicative of future results. Investment return
and share value will fluctuate, and redemption value may be more or less
than original cost.
* Unmanaged index of stocks, bonds, commodities or mutual funds (there
are no direct investments or fees in these indices).
+ Index of average prices paid by various sectors of the U.S. economy,
as calculated by the U.S. Department of Labor.
FUND DIVERSIFICATION - PIE CHART
TOP TEN EQUITY HOLDINGS
Market Percent
Value (000's) of Total
Placer Dome, Inc. $ 20.7 4.27%
Barrick Gold Corp. 20.0 4.13%
Homestake Mining Co. 18.2 3.75%
Helmerich & Payne, Inc. 16.8 3.47%
Rio Tinto PLC 14.7 3.03%
Newmont Mining Corp. 14.6 3.00%
Canadian Pacific Ltd. 14.5 2.99%
Royal Dutch Petroleum Co. 14.3 2.95%
Exxon Corp. 14.0 2.90%
Layne Christensen Co. 13.9 2.87%
Top 10 Equity Holdings Total: $ 161.7 33.36%
As of September 30, 1998, statement of assets.
Shares of the UMB 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
SEPTEMBER 30, 1998 (unaudited)
Statement of Net Assets
Market
Shares Company Value
COMMON STOCKS - 66.25%
Basic Materials - 36.24%
600 ASA Ltd. $ 12,450
1,000 Barrick Gold Corp. 20,000
800 Broken Hill Proprietary Ltd. 11,450
700 Cyprus Amax Minerals Co. 9,275
100 Deltic Timber Corp. 1,800
700 Engelhard Corp. 12,381
400 Georgia Pacific Corp. Timber Group 7,775
1,500 Homestake Mining Co. 18,187
200 Nalco Chemical Co. 5,900
600 Newmont Mining Corp. 14,550
250 Phelps Dodge Corp. 13,047
1,500 Placer Dome, Inc. 20,719
300 Rio Tinto PLC 14,700
1,100 WMC Ltd. 13,475
175,709
Capital Goods - 7.99%
350 Instituform Technologies, Inc., Cl. A 4,637
1,500 Isco, Inc. 9,188
1,400 Layne Christensen Co. 13,912
900 Valmont Industries, Inc. 11,025
38,762
Consumer Staples - 1.00%
450 Midwest Grain Products, Inc. 4,838
Energy - 18.03%
300 Dresser Industries, Inc. 9,188
200 Exxon Corp. 14,038
800 Helmerich & Payne, Inc. 16,800
600 Imperial Oil Ltd. 9,150
1,300 Maverick Tube Corp. 8,937
300 Royal Dutch Petroleum Co. 14,288
500 Union Pacific Resources Group, Inc. 6,156
250 USX-Marathon Group 8,859
87,416
Transportation - 2.99%
700 Canadian Pacific Ltd. 14,481
TOTAL COMMON STOCKS - 66.25% 321,206
Face Market
Amount Description Value
REPURCHASE AGREEMENT - 33.00%
$ 160,000 Northern Trust Co., 5.35%, due October 1, 1998
(Collateralized by U.S. Treasury Notes,
5.875%, due March 31, 1999) $ 160,000
TOTAL INVESTMENTS - 99.25% $ 481,206
Other assets less liabilities - 0.75% 3,641
TOTAL NET ASSETS - 100.00%
(equivalent to $9.13 per share;
10,000,000 shares of $1.00 par value
value capital shares authorized;
53,101 shares outstanding) $ 484,847
BASIS OF DETERMINING MARKET VALUE. Debt securities (other than short-term
obligations), including listed issues, are valued on the
basis of valuations furnished by a pricing service which utilizes both
dealer-supplied valuations and electronic data processing
techniques. Short-term obligations are valued at amortized cost.
This report has been prepared for the information of the Shareholders of
UMB Scout Capital Preservation 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 UMB Scout Funds are offered only by the
Prospectus, a copy of which may be obtained from Jones & Babson, Inc.
UMB SCOUT FUNDS
100% No-Load Mutual Funds
Stock Fund
Regional Fund
WorldWide Fund
Capital Preservation Fund
Balanced Fund
Bond Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund
Tax-Free Money Market Fund
*Available in Kansas and Missouri only.
MANAGER AND INVESTMENT COUNSEL
UMB Bank, n.a., Kansas City, Missouri
AUDITORS
Baird, Kurtz & Dobson, Kansas City, Missouri
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
Philadelphia, Pennsylvania
CUSTODIAN
UMB Bank, n.a., Kansas City, Missouri
UNDERWRITER, DISTRIBUTOR
AND TRANSFER AGENT
Jones & Babson, Inc.
Kansas City, Missouri
UMB Scout Funds
P.O. Box 410498
Kansas City, MO 64141-0498
TOLL FREE 800-996-2862
www.umb.com
"UMB" and "Scout" are registered service marks of UMB Financial
Corporation.
UMB Financial Corporation also claims service mark rights to the Scout
design.
