UMB SCOUT FUNDS
CAPITAL PRESERVATION FUND
SEMIANNUAL REPORT DECEMBER 31, 1999
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 December 31, 1999, at $9.59 per share. For the
quarter, the Fund had a total return (price change and
reinvested distribution) of -1.66% and returned 10.41% for
the year. The Fund seeks long-term capital growth by
investing primarily in common stocks of companies whose
earnings or tangible asset values are expected to outpace
the rate of inflation.
In an effort to slow our rapidly growing economy, the
Federal Reserve appeared somewhat restrictive during the
second half of 1999, as it raised the interest rates under
its control three times. However, below the surface, the Fed
was aggressively adding reserves to our financial system to
calm any Y2K fears. It is possible that this stimulation
fueled some of the manic-like conditions in the speculative
areas of the stock market - especially those related to the
Internet and initial public offerings. Overall, the broad
market failed to exhibit that same degree of exuberance; and
natural resource-related issues were subdued following their
good performance in the first half of the year.
With the Y2K transition behind us, the Federal Reserve now
appears determined to implement a more restrictive policy
and slow our economy's rate of growth to a more sustainable
pace. While a deceleration in our domestic economy would
serve to slow the demand for natural resources, the increase
and growth in the world's other major economies should help
keep resource prices firm to higher.
In the final quarter of 1999, the Fund eliminated holdings
in Deltic Timber Corporation and IRT Property Company. At
the same time, new positions were established in Alcan
Aluminum and Broken Hill Proprietary Company, while existing
positions in Aracruz Celulose S.A., Newhall Land and
Farming, and Phelps Dodge were increased.
Thank you for your investment in UMB Scout Capital
Preservation Fund. We value you as a shareholder and welcome
your questions.
Sincerely,
/S/David R. Bagby
David R. Bagby
UMB Investment Advisors
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") or any other
government agency. These shares involve investment risks,
including the possible loss of the principal invested.
CHART - HYPOTHETICAL GROWTH OF $10,000
CHART - COMPARATIVE RATES OF RETURN
UMB Scout Capital Preservation Fund
as of December 31, 1999
Quarter 1 Year Inception
UMB Scout Capital
Preservation Fund -1.66% 10.41% -0.12%
Goldman Sachs
Commodity Index* 2.85% 40.92% -0.49%
Consumer Price Index+ 0.24% 2.68% N.A.
Producer Price
Index-Finished Goods+ 0.30% 3.05% 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.
CHART - FUND DIVERSIFICATION
CHART - TOP TEN EQUITY HOLDINGS
UMB Scout Capital Preservation Fund
Market Percent
Value (000's) of Total
Kerr-McGee Corp. $ 31.0 3.03%
Newmont Mining Corp. 29.4 2.87%
Newhall Land & Farming 27.0 2.64%
Phelps Dodge Corp. 26.9 2.62%
Aracruz Celulose 23.6 2.31%
Barrick Gold Corp. 23.0 2.24%
WMC Ltd. 21.9 2.14%
Canadian Pacific Ltd. 21.6 2.11%
Placer Dome, Inc. 21.5 2.10%
Broken Hill Propietary Ltd. 21.3 2.07%
Top Ten Equity Holdings Total: $247.1* 24.12%
As of December 31, 1999, statement of assets. Subject to change.
*Market Values are rounded; may not equal total.
CHART - HISTORICAL PER-SHARE RECORD
UMB Scout Capital Preservation Fund
Income & Cumulative*
Net Short-Term Long-Term Value Per
Asset Gains Gains Share Plus
Value Distribution Distribution Distributions
12/31/98 $ 8.91 $ 0.13 - $ 9.04
12/31/99 9.59 0.24 - 9.96
*Does not assume any compounding of reinvested distributions.
Table shows calendar distributions and net asset values.
FINANCIAL STATEMENTS DECEMBER 31, 1999 (UNAUDITED)
Statement of Net Assets
MARKET
SHARES COMPANY VALUE
COMMON STOCKS - 51.93%
Basic Materials - 20.40%
300 Alcan Aluminum Ltd. $ 12,356
1,000 ASA Ltd. 18,938
1,300 Barrick Gold Corp. 22,994
800 Georgia Pacific Corp. Timber Group 19,700
2,000 Homestake Mining Co. 15,625
300 International Paper Co. 16,931
1,200 Newmont Mining Corp. 29,400
400 Phelps Dodge Corp. 26,850
2,000 Placer Dome, Inc. 21,500
1,000 WMC Ltd 21,875
206,169
Capital Goods - 3.14%
2,500 Isco, Inc. 12,500
1,200 Valmont Industries, Inc. 19,275
31,775
Consumer Cyclical - 2.07%
2,000 Casey's General Stores 20,875
Consumer Staples - 1.94%
600 Corn Products International, Inc. 19,650
Energy - 19.56%
900 Aracruz Celulose 23,625
300 Baker Hughes, Inc. 6,319
800 Broken Hill Propietary Ltd 21,250
200 El Paso Energy Corp. 7,763
500 Halliburton Co. 20,125
800 Helmerich & Payne, Inc. 17,450
600 Imperial Oil Ltd. 12,975
500 Kerr-McGee Corp. 31,000
200 Royal Dutch Petroleum Co. 12,088
200 Shell Transportation & Trading PLC 9,850
300 Texaco, Inc. 16,294
1,000 Union Pacific Resources Group, Inc. 12,750
250 USX-Marathon Group 6,172
197,659
Financial - 2.67%
1,000 Newhall Land & Farming 27,000
Transportation & Services - 2.13%
1,000 Canadian Pacific Ltd. 21,563
TOTAL COMMON STOCKS - 51.93% 524,691
FACE MARKET
AMOUNT COMPANY VALUE
U.S. GOVERNMENT SECURITIES - 27.18%
$101,341 U.S. Treasury Notes, 3.88%, due January 15, 2009 97,921
178,493 U.S. Treasury Notes, 3.63%, due July 15, 2002 176,708
TOTAL U.S. Government Securities - 27.18% 274,629
REPURCHASE AGREEMENT - 22.27%
225,000 Northern Trust Co., 5.20%, due October 1, 1999
(Collateralized by U.S. Treasury Notes,
5.375%, due July 31, 2000) 225,000
TOTAL INVESTMENTS - 101.37% 1,024,319
Other assets less liabilities - (1.37%) (13,879)
TOTAL NET ASSETS - 100.00%
(equivalent to $9.59 per share; 10,000,000 shares
of $1.00 par value capital shares authorized; 105,375,447
shares outstanding) $ 1,010,440
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS DECEMBER 31, 1999 (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
ASSETS:
Investment securities, at market value
(identified cost 1,013,465.18) $ 1,024,319
Cash 5,488
Dividends receivable 710
Interest receivable 4,775
Total assets 1,035,292
NET ASSETS $ 1,035,292
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 1,023,380
Accumulated undistributed income:
Net investment income 1,376
Net realized loss on investment transactions (24,592)
Net unrealized appreciation on investments 10,280
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 1,010,444
Capital shares, $1.00 par value
Authorized 10,000,000
Outstanding 105,375
NET ASSET VALUE PER SHARE $ 9.59
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS SIX MONTHS ENDED DECEMBER 31, 1999 (UNAUDITED)
STATEMENT OF OPERATIONS
INVESTMENT INCOME:
Income:
Dividends $ 3,857
Interest 11,505
15,362
Expenses:
Management fees 4,121
Net investment income 11,241
REALIZED and unrealized Gain (LOSS) ON INVESTMENTS:
Net realized gain (loss) from investment
transactions (2,319)
Increase (decrease) in net unrealized
depreciation on investments (12,713)
Net realized and unrealized gain (loss)
on investments (15,032)
Net increase (decrease) in net assets
resulting from operations $ (3,791)
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS
Statements of Changes in net assets
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1999 YEAR ENDED
(UNAUDITED) JUNE 30, 1999
</CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 11,241 $ 18,585
Net realized gain (loss) from investment
activities (2,319) (21,530)
Decrease (increase) in net unrealized
depreciation on investments (12,713) 50,477
Net increase (decrease) in net assets
resulting from operations (3,791) 47,532
DISTRIBUTIONS TO SHAREHOLDERS FROM:*
Net investment income (12,779) (19,554)
Net realized gain (loss) from investment
transactions (744) (1,611)
Decrease in net assets from distributions (13,523) (21,165)
INCREASE (DECREASE) FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 17,484 and 69,739 shares sold,
respectively 168,687 645,264
Net asset value of 363 shares issued for
reinvestment of distributions 3,447 21,152
172,134 666,416
Cost of 6,895 and 33,974 shares redeemed (66,332) (319,542)
Net increase (decrease) in net assets
from capital share transactions 105,802 346,874
Net increase (decrease) in net assets 88,488 373,241
NET ASSETS:
Beginning of period 921,956 548,715
End of period (including undistributed net
investment income of $1,376 and $2,914,
respectively) $ 1,010,444 $ 921,956
*Distributions to shareholders:
Income dividends per share $ 0.13 $ 0.21
Capital gains distribution per share $ 0.02 $ 0.02
</TABLE>
See accompanying Notes to Financial Statements.
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. A summary of significant
accounting policies that the Fund uses in the preparation of
its financial statements follows. The policies are in
conformity with generally accepted accounting principles.
Investments - Common stocks traded on a national securities
exchange are valued at the last reported sales price on the
last business day of the period or, if no sale was reported
on that date, at the average of the last reported bid and
asked prices. Securities traded over-the-counter are valued
at the average of the last reported bid and asked prices.
Short-term obligations are valued at amortized cost, which
approximates market value. Investment transactions are
recorded on the trade date. Interest income is recorded
daily. Dividend income and distributions to shareholders are
recorded on the ex-dividend dates. Realized gains and losses
from investment transactions and unrealized appreciation and
depreciation of investments are reported on the identified
cost basis.
Federal Income Taxes - The Fund's policy is to comply with
the requirements of the Internal Revenue Code that are
applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required.
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, 1999 (excluding repurchase agreements and short-
term securities), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 165,397 $ -
Proceeds from sales 49,429 -
3. MANAGEMENT FEES - UMB Bank, n.a. is the Fund's manager
and investment advisor 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 shareholder 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 commissions.
UMB Bank's management fees are based on average daily net
assets of the Fund at the annual rate of .85 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.
4. REPURCHASE AGREEMENTS - Securities purchased under
agreements to resell are held by the Fund's custodian and
investment counsel, UMB Bank, n.a. The custodian monitors
the market values of the underlying securities which they
have purchased on behalf of the Fund to ensure that the
collateral is sufficient to protect the Fund in the event of
default by the seller.
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
Stock Select Fund
Regional Fund
WorldWide Fund
WorldWide Select Fund
Capital Preservation Fund
Balanced Fund
Bond Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund
Federal Portfolio
Prime Portfolio
Tax-Free Money Market Fund
*Available in Kansas and Missouri only.
INVESTMENT ADVISORS AND MANAGER
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 219757
Kansas City, MO 64121-9757
Toll Free 800-996-2862
www.umb.com
"UMB", "Scout" and the "Scout" design are registered
service marks of UMB Financial Corporation.
