UMB Scout Funds
Equity Index Fund
Annual Report June 30, 2000
A no-load mutual fund that seeks to provide investment
results that track, as closely as possible, the performance
of the Standard & Poor's 500 Composite Stock Price Index.
TO THE SHAREHOLDERS
In the past year, the financial markets continued to capture the nation's
fancy. The major drivers regarding financial asset prices over the last 12
months have been earnings and interest rates, as is typically the case.
However, last fall we witnessed a temporary detour from the "norm" as we
saw what turned out to be a speculative "bubble" being created when
investors purchased anything labeled ".com." While that bubble has not
burst, it is fair to say that much of the speculative "froth" has since
been eliminated from asset valuation levels.
In an effort to get a handle on the economy, Alan Greenspan conducted a
series of six interest rate increases designed to slow the economic
environment and ease any upward pressure on inflation rates. We are
beginning to see signs that the growth rate in the economy is decreasing.
For the time being, it appears that Mr. Greenspan's efforts were successful.
But what about the future? Will the economy continue to slow? And if it
does slow, could we slip into a recession? These are very significant
questions on many investors' minds. While we do not know what the future
holds, history would suggest that the economy is going to slow during the
remainder of 2000. Keep in mind that historically, the Federal Reserve,
currently headed by Greenspan, has had difficulty "fine tuning" the
economy. It has been shown that once the economy starts to slow, keeping it
out of a recessionary environment can be difficult. In our minds, recession
poses a major potential risk which investors may have to wrestle with
during the next 12 months.
Longer term, we continue to look at the investment landscape in a positive
sense. Inflation is low, and the economy is growing nicely. As long as
these two trends are at work, we believe that financial assets will
generate satisfactory returns.
In closing, we at UMB Investment Advisors would like to thank you, our
shareholders, for your continued support of the UMB Scout Funds. We fully
understand and appreciate the trust you have placed in our hands. We will
work hard to maintain that trust.
Respectfully,
/s/William B. Greiner
William B. Greiner
Executive Vice President
Chief Investment Officer
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.
TO THE SHAREHOLDERS
The UMB Scout Equity Index Fund closed its first two months of existence,
ended June 30, 2000, at $10.02 per share and had a total return (price
change and reinvested distributions) of .20%. The Fund seeks to provide
investment results that track, as closely as possible, the performance of
the Standard and Poor's 500 Composite Stock Price Index.
We have definitely been keeping busy during the inaugural months of the
Fund. There were sixteen compositional changes within the Index during the
Fund's first two months, and the stock market has been volatile. The net
return for the Standard & Poor's 500 was a rather unimpressive .36% when
compared to the returns of the past five years.
Sixteen days into the life of the Fund, the Federal Open Market Committee
raised the federal funds rate by 1/2 of a percentage point to a level of
6.5%. The minutes of the meeting cited current reports that some businesses
appeared to be considering increasing their selling prices to maintain
their profit margins and compensate for the fact that rising wages and
benefits were no longer being offset by increased productivity. In other
words, the Federal Reserve has been worried about rising inflation as a
result of low unemployment levels and the increase of certain commodity
prices, particularly oil.
Given this environment, the sectors that outperformed were financials,
consumer cyclicals and energy. Conversely, the materials and capital goods
sectors were relative underperformers in relationship to the S&P 500.r The
remaining sectors (communications services, consumer staples, health care,
transportation and utilities) were relatively in line with the performance
of the index.
Having successfully completed our first two months of operation, we look
forward to pursuing for our investors, continued returns that closely track
the performance of the Standard & Poor's 500 in a low-cost management
style.
Thank you for your support of the UMB Scout Equity Index Fund. We welcome
your questions and comments.
Sincerely,
/s/William B. Greiner
William B. Greiner
UMB Investment Advisors
"Standard & Poor'sr","S&Pr","S&P 500r","Standard and Poor's 500" and "500"
are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for use by UMB Bank, n.a. The Fund is not sponsored, endorsed, sold or
promoted by Standard & Poor's and Standard & Poor's makes no representation
regarding the advisability of investing in the Fund.
CHART - HYPOTHETICAL GROWTH OF $10,000
UMB Scout Equity Index Fund
as of June 30, 2000
COMPARATIVE RATES OF RETURN
UMB Scout Equity Index Fund
as of June 30, 2000
Month Inception
UMB Scout Equity Index Fund 2.35% 0.20%
S&P 500* 2.47% N.A.
Lipper Multi-Cap Core* 4.22% N.A.
Lipper Growth & Income Fund Index* -0.38% N.A.
Inception - May 1, 2000.
Performance data contained in this report are for past periods only. Past
performance is not predictive of future results. Investment return and
share value will fluctuate, and redemption value may be more or less than
the original cost.
*Unmanaged index of stocks, bonds or mutual funds (there are no direct
investments or fees in these indices).
Chart - fund diversification
UMB Scout Equity Index Fund
Chart - top ten equity holdings
UMB Scout Equity Index Fund
Market Percent
Value (000's) of Total
Maverick Tube Corp. $ 1,019 3%
General Electric Co. 612 4%
Intel Corp. 528 4%
Cisco Systems, Inc. 515 3%
Microsoft Corp. 488 3%
Pfizer, Inc. 353 2%
ExxonMobil Corp. 322 2%
Wal-Mart Stores, Inc.. 303 2%
Oracle Corp. 282 2%
Nortel Networks Corp. 239 2%
Citigroup, Inc. 235 2%
Top Ten Equity Holdings Total: $3,877* 26%*
As of June 30, 2000, statement of assets. Subject to change.
*Market Values and Percents of Total are rounded; may not equal total.
FINANCIAL STATEMENTS JUNE 30, 2000
Statement of Net Assets
Market
Shares DESCRIPTION Value
COMMON STOCKS - 99.6%
Consumer Discretionary - 10.3%
50 American Greetings Corp., Class A $ 950
150 Autozone, Inc.* 3,300
150 Bed, Bath & Beyond, Inc.* 5,438
200 Best Buy Co., Inc.* 12,650
50 Black & Decker Corp. 1,966
150 Brunswick Corp. 2,485
750 Carnival Corp. 14,626
50 Centex Corp. 1,175
200 Circuit City Stores, Inc. 6,638
350 Clear Channel Communications, Inc.* 26,250
1,000 Comcast Corp., Class A Special* 40,500
150 Consolidated Stores Corp.* 1,800
50 Cooper Tire & Rubber Co. 556
500 Costco Wholesale Corp.* 16,500
150 Dana Corp. 3,178
150 Darden Restaurants, Inc.* 2,438
650 Delphi Automotive Systems Corp. 9,467
150 Dillards, Inc. 1,838
2,400 Disney (Walt) Holding Co.* 93,150
425 Dollar General Corp. 8,289
150 Dow Jones & Company, Inc.* 10,988
350 Eastman Kodak Company 20,825
200 Federated Department Stores, Inc.* 6,750
1,450 Ford Motor Co.* 62,351
150 Fortune Brands, Inc. 3,459
300 Gannett Co., Inc. 17,944
1,000 Gap, Inc. 31,250
600 General Motors Corp. 34,838
150 Goodyear Tire and Rubber Co. 3,000
50 Harcourt General, Inc.* 2,719
350 Harley Davidson, Inc. 13,475
150 Harrah's Entertainment, Inc.* 3,141
200 Hasbro, Inc.* 3,013
450 Hilton Hotels Corp. 4,220
2,700 Home Depot, Inc. 134,831
400 Interpublic Group of Companies, Inc. 17,201
150 Johnson Controls, Inc. 7,697
100 Kaufman & Broad Home* 1,982
500 K-Mart Corp.* 3,406
50 Knight Ridder, Inc. 2,659
350 Kohl's Corp.* 19,469
200 Leggett & Platt, Inc. 3,300
500 Limited, Inc. 10,814
50 Liz Claiborne, Inc. 1,763
450 Lowes Co., Inc.* 18,478
300 Marriott International, Inc., Class A 10,819
500 Mattel, Inc. 6,595
350 May Department Stores Co. 8,400
50 Maytag Corp. 1,844
1,600 McDonald's Corp.* 52,701
200 McGraw-Hill Companies, Inc. 10,800
100 Meredith Corp.* 3,376
200 New York Times Co., Class A 7,900
300 Newell Rubbermaid, Inc. 7,725
300 Nike, Inc., Class B 11,944
150 Nordstrom, Inc. 3,619
350 Office Depot, Inc.* 2,188
200 Omnicom Group* 17,813
300 Penney (J.C.) Company, Inc.* 5,531
100 Polaroid Corp.* 1,807
200 RadioShack Corp. 9,475
100 Reebok International Ltd.* 1,594
450 Sears, Roebuck and Co. 14,682
150 Sherwin-Williams Co. 3,178
50 Snap-On, Inc. 1,331
600 Staples, Inc. Retail & Delivery* 9,225
200 Starbucks Corp.* 7,638
350 TJX Companies, Inc. 6,564
150 TRW, Inc. 6,506
500 Target Corp. 29,000
100 Tiffany & Co.* 6,750
1,550 Time Warner, Inc. 117,800
300 Toys "R" Us, Inc.* 4,370
150 Tricon Global Restaurants, Inc.* 4,238
400 Tribune Company 14,001
50 Tupperware Corp. 1,100
150 VF Corp. 3,572
100 Viacom, Inc., Class A* 6,838
1,679 Viacom, Inc., Class B* 114,487
5,250 Wal-Mart Stores, Inc. 302,531
150 Wendy's International, Inc. 2,672
50 Whirlpool Corp. 2,331
50 Young & Rubicam, Inc. 2,857
1,518,569
Consumer Staples - 6.6%
100 Alberto Culver Co., Class B* 3,056
500 Albertson's, Inc.* 16,625
500 Anheuser-Busch Companies, Inc. 37,344
750 Archer Daniels Midland Co. 7,361
300 Avon Products, Inc. 13,350
300 Bestfoods, Inc. 20,775
50 Brown Forman Corp., Class B 2,688
450 CVS Corp.* 18,000
500 Campbell Soup Co.* 14,563
300 Clorox Company* 13,444
2,900 Coca-Cola Company 166,569
500 Coca-Cola Enterprises, Inc. 8,157
650 Colgate-Palmolive Co.* 38,919
600 ConAgra, Inc.* 11,439
200 Fort James Corp. 4,625
350 General Mills, Inc.* 13,388
1,250 Gillette Co.* 43,673
450 Heinz (H.J.) Co. 19,688
150 Hershey Foods Corp. 7,303
500 Kellogg Co. 14,876
650 Kimberly-Clark Corp. 37,294
950 Kroger Co.* 20,959
350 Nabisco Group Holding Corp. 9,078
1,650 PepsiCo, Inc.* 73,322
2,650 Philip Morris Companies, Inc.* 70,391
1,500 Procter & Gamble Co.* 85,875
150 Quaker Oats Co. 11,269
350 Ralston Purina Co. 6,979
300 Rite Aid Corp.* 1,969
600 Safeway, Inc.* 27,075
1,000 Sara Lee Corp. 19,313
500 Seagrams Company Ltd. 29,000
150 Supervalu, Inc. 2,859
350 SYSCO Corp.* 14,744
200 UST, Inc. 2,938
650 Unilever N.V., ADR 27,950
1,150 Walgreen Co. 37,016
150 Winn-Dixie Stores, Inc. 2,147
150 Wrigley, (Wm., Jr.) Company* 12,028
968,049
Energy - 5.5%
150 Amerada Hess Corp. 9,263
150 Anadarko Petroleum Corp. 7,397
150 Apache Corp.* 8,822
50 Ashland, Inc. 1,753
350 Baker Hughes, Inc. 11,200
300 Burlington Resources, Inc. 11,476
800 Chevron Corp. 67,850
200 Coastal Corp. 12,175
700 Conoco, Inc., Cl B 17,194
4,100 ExxonMobil Corp. 321,850
500 Halliburton Co. 23,594
150 Kerr-McGee Corp. 8,841
450 Occidental Petroleum Corp. 9,479
300 Phillips Petroleum Co.* 15,206
150 Rowan Companies, Inc.* 4,557
2,550 Royal Dutch Petroleum Co. 156,984
650 Schlumberger Ltd. 48,506
150 Sunoco, Inc. 4,417
650 Texaco, Inc. 34,613
150 Tosco Corp. 4,247
200 Transocean Sedco Forex, Inc., Ord 10,688
350 USX-Marathon Group 8,772
300 Union Pacific Resources Group, Inc. 6,601
300 Unocal Corp.* 9,938
815,423
Finance - 12.4%
300 AFLAC, Inc. 13,781
850 Allstate Corporation 18,913
1,600 American Express Co.* 83,400
300 American General Corp. 18,300
1,800 American International Group, Inc. 211,500
450 Amsouth Bancorporation 7,089
300 AON Corp.* 9,319
900 Associates First Capital Corp., Class A* 20,082
450 BB&T Corp.* 10,745
1,950 Bank of America Corp. 83,850
850 Bank of New York, Inc.* 39,525
1,300 Bank One Corp. 34,531
150 Bear Stearns Cos, Inc.* 6,244
200 Capital One Financial Corp. 8,925
200 Charter One Financial, Inc.* 4,600
1,475 Chase Manhattan Corp.* 67,942
200 Chubb Corp. 12,300
150 Cincinnati Financial Corp. 4,716
3,900 Citigroup, Inc.* 234,975
150 Comerica, Inc. 6,731
350 Conseco, Inc. 3,413
150 Countrywide Credit Industries, Inc.* 4,547
800 Federal Home Loan Mortgage Corp.* 32,400
1,150 Federal National Mortgage Association* 60,016
350 Fifth Third Bancorp 22,138
1,150 First Union Corporation 28,534
1,150 Firstar Corp. Wis. 24,222
1,100 Fleetboston Financial Corp. 37,401
300 Franklin Resources, Inc. 9,113
150 Golden West Financial Corp. 6,122
300 Hartford Financial Svcs Group, Inc. 16,781
600 Household International Corp. 24,939
300 Huntington Bancshares, Inc. 4,744
150 Jefferson Pilot Corp. 8,466
500 Keycorp 8,814
150 Lehman Brothers Holdings, Inc. 14,184
200 Lincoln National Corp. Indiana* 7,225
150 Loews Corp.* 9,000
150 MBIA, Inc. 7,228
950 MBNA Corp. 25,769
150 MGIC Investment Corp. Wisconsin 6,825
300 Marsh & McLennan Company, Inc.* 31,331
600 Mellon Financial Corp.* 21,863
450 Merrill Lynch & Co., Inc. 51,750
200 Morgan (J.P.) & Company, Inc. 22,025
1,300 Morgan Stanley Dean Witter & Co.* 108,225
750 National City Corp.* 12,798
300 Northern Trust Corp. 19,519
158 Old Kent Financial Corp. 4,213
350 PNC Financial Services Group, Inc.* 16,406
150 PaineWebber Group, Inc. 6,825
50 Progressive Corp. 3,700
150 Providian Financial Corp. 13,500
300 Regions Financial Corp. 5,963
150 SLM Holding Corp. 5,616
150 Safeco Corp.* 2,981
200 St. Paul Companies, Inc. 6,825
1,625 Charles Schwab Corp.* 54,642
150 Southtrust Corp. 3,394
150 State Street Corp. 15,909
200 Summit Bancorp* 4,925
350 Suntrust Bank, Inc. 15,991
300 Synovus Financial Corp. 5,288
150 T. Rowe Price Assoc., Inc. 6,375
150 Torchmark Corp.* 3,703
850 U.S. Bancorp 16,363
150 Union Planters Corp.* 4,191
300 Unumprovident Corp.* 5,984
200 Wachovia Corp. 10,850
650 Washington Mutual, Inc.* 18,769
1,850 Wells Fargo & Co. 71,684
1,830,957
Health Care - 11.6%
1,800 Abbott Laboratories* 80,213
150 Aetna, Inc.* 9,628
150 Allergan, Inc. 11,175
150 Alza Corp.* 8,869
1,500 American Home Products Corp. 88,125
1,150 Amgen, Inc. 80,788
100 Bard (C.R.), Inc.* 4,813
50 Bausch and Lomb, Inc. 3,869
350 Baxter International, Inc.* 24,609
300 Becton Dickinson & Co. 8,606
150 Biogen, Inc.* 9,675
150 Biomet, Inc.* 5,766
500 Boston Scientific Corp.* 10,970
2,300 Bristol-Myers Squibb Co.* 133,975
300 Cardinal Health, Inc. 22,200
150 Cigna Corp. 14,025
1,300 Eli Lilly & Company 129,838
350 Guidant Corp.* 17,325
650 HCA-Healthcare Co.* 19,744
450 HealthSouth Corp.* 3,235
150 Humana, Inc.* 731
1,600 Johnson & Johnson 163,000
50 Mallinckrodt, Inc. 2,172
50 Manor Care, Inc.* 350
300 McKessonHBOC, Inc. 6,281
200 Medimmune, Inc.* 14,800
1,350 Medtronic, Inc.* 67,247
2,650 Merck & Co., Inc. 203,056
200 PE Corp. - PE Biosystems Group 13,175
7,350 Pfizer, Inc. 352,800
1,450 Pharmacia Corp. 74,947
150 Quintiles Transnational Corp.* 2,119
50 St. Jude Medical, Inc.* 2,294
1,750 Schering Plough Corp. 88,375
350 Tenet Healthcare Corp.* 9,450
150 UnitedHealth Group, Inc.* 12,863
150 Watson Pharmaceuticals, Inc.* 8,063
50 Wellpoint Health Networks, Inc., Class A* 3,622
1,712,793
Industrials - 9.2%
150 AMR Corp.* 4,050
200 Allied Waste Industries, Inc.* 2,000
200 American Power Conversion Corp.* 8,163
700 Automatic Data Processing, Inc. 37,494
150 Avery Dennison Corp. 10,069
150 Block, (H&R), Inc. 4,857
1,100 Boeing Co. 45,995
500 Burlington Northern Santa Fe Corp. 11,469
300 CSX Corp. 6,357
450 Caterpillar, Inc.* 15,245
800 Cendant Corp.* 11,201
200 Convergys Corp.* 10,375
150 Cooper Industries, Inc. 4,885
50 Crane Company 1,216
150 Danaher Corp. 7,416
300 Deere & Co. 11,100
150 Delta Airlines, Inc. 7,584
50 Deluxe Corp. 1,178
150 Donnelley, (R.R.) & Sons Co.* 3,384
200 Dover Corp. 8,113
150 Dun & Bradstreet Corp. 4,294
50 Eaton Corp. 3,350
150 Ecolab, Inc. 5,859
500 Emerson Electric Co. 30,188
150 Equifax, Inc. 3,938
350 FedEx Corp.* 13,300
500 First Data Corp. 24,813
50 Fluor Corp. 1,581
200 General Dynamics Corp.* 10,450
11,550 General Electric Co.* 612,150
200 Genuine Parts Co. 4,000
150 Goodrich (B.F.) Co.* 5,109
150 Grainger (W.W.), Inc. 4,623
950 Honeywell International, Inc. 32,003
350 IMS Health, Inc.* 6,301
150 ITT Industries, Inc. 4,557
350 Illinois Tool Works, Inc. 19,950
150 Ingersoll-Rand Co. 6,038
150 Kansas City Southern Industries, Inc.* 13,303
450 Lockheed Martin Corp. 11,166
500 Masco Corp.* 9,032
50 McDermott International, Inc. 441
500 Minnesota Mining & Manufacturing Co. 41,250
200 Molex, Inc. 9,625
50 Navistar International Corp.* 1,553
450 Norfolk Southern Corp. 6,695
50 Northrop Grumman Corp. 3,313
100 Owens Corning 925
200 PPG Industries, Inc. 8,863
50 Paccar, Inc. 1,984
150 Pall Corp. 2,775
150 Parker Hannifin Corp. 5,138
450 Paychex, Inc.* 18,900
300 Pitney Bowes, Inc. 12,000
350 Raytheon Co., Class B* 6,738
200 Rockwell International Corp. 6,300
50 Ryder System, Inc. 947
150 Sabre Holdings Corp., Class A* 4,275
600 Southwest Airlines Co. 11,364
150 Stanley Works 3,564
150 Textron, Inc. 8,147
150 Thermo Electron Corp.* 3,159
50 Thomas & Betts Corp. 956
50 Timken Co. 931
1,950 Tyco International Ltd.* 92,381
300 Union Pacific Corp. 11,156
50 U.S. Airways Group, Inc.* 1,950
500 United Technologies Corp. 29,438
750 Waste Management, Inc.* 14,247
1,347,171
information Technology - 32.5%
350 ADC Telecommunications, Inc.* 29,356
150 Adaptec, Inc.* 3,413
150 Adobe Systems, Inc. 19,500
150 Advanced Micro Devices, Inc.* 11,588
562 Agilent Technologies, Inc.* 41,472
200 Altera Corp.* 20,388
2,700 America Online, Inc.* 142,425
450 Analog Devices, Inc.* 34,200
50 Andrew Corp.* 1,678
400 Apple Computer, Inc.* 20,950
950 Applied Materials, Inc.* 86,094
50 Autodesk, Inc.* 1,734
300 BMC Software, Inc.* 10,945
300 Broadcom Corp., Class A* 65,537
200 Cabletron System, Inc.* 5,050
150 Ceridian Corp.* 3,609
8,100 Cisco Systems, Inc.* 514,856
200 Citrix Systems, Inc.* 3,788
1,950 Compaq Computer Corp. 49,847
650 Computer Associates International, Inc. 33,272
150 Computer Sciences Corp.* 11,203
450 Compuware Corp.* 4,669
150 Comverse Technology, Inc.* 13,950
300 Conexant Systems, Inc.* 14,588
300 Corning, Inc. 80,963
3,050 Dell Computer Corp.* 150,403
2,500 EMC Corporation Massachusetts* 192,344
500 Electronic Data Systems Corp. 20,625
350 Gateway, Inc.* 19,863
1,150 Hewlett-Packard Co. 143,606
3,950 Intel Corp. 528,066
2,100 International Business Machines Corp. 230,081
200 KLA Tencor Corp.* 11,713
350 LSI Logic Corp.* 18,944
150 Lexmark Intl Group, Inc., Class A* 10,088
350 Linear Technology Corp.* 22,378
3,800 Lucent Technologies, Inc.* 225,150
300 Maxim Integrated Products, Inc.* 20,381
100 Mercury Interactive Corp.* 9,675
6,100 Microsoft Corp.* 488,000
600 Micron Technology, Inc.* 52,838
100 Millipore Corp.* 7,538
2,500 Motorola, Inc. 72,656
150 NCR Corp.* 5,842
200 National Semiconductor Corp.* 11,350
350 Network Appliance, Inc.* 28,175
3,500 Nortel Networks Corp.* 238,875
350 Novell, Inc.* 3,238
200 Novellus Systems, Inc.* 11,313
3,350 Oracle Corp.* 281,609
300 Parametric Technology Corp.* 3,300
300 Peoplesoft, Inc.* 5,025
100 Perkinelmer, Inc.* 6,613
850 Qualcomm, Inc.* 51,000
200 Sanmina Corp.* 17,100
100 Sapient Corp.* 10,694
150 Scientific Atlanta, Inc. 11,175
300 Seagate Technology, Inc.* 16,500
200 Siebel Systems, Inc.* 32,713
650 Solectron Corp.* 27,219
1,900 Sun Microsystems, Inc.* 172,781
100 Tektronix, Inc.* 7,400
500 Tellabs, Inc.* 34,219
200 Teradyne, Inc.* 14,700
1,900 Texas Instruments, Inc.* 130,506
450 3Com Corp.* 25,931
350 Unisys Corp.* 5,097
450 Veritas Software Corp.* 50,857
350 Xilinx, Inc.* 28,897
800 Xerox Corp. 16,601
650 Yahoo! Inc.* 80,519
4,778,673
Materials - 1.8%
300 Air Products & Chemicals, Inc. 9,245
300 Alcan Aluminium Ltd. 9,301
1,006 ALCOA, Inc.* 29,174
50 Allegheny Technologies, Inc. 900
450 Barrick Gold Corp. 8,185
100 Bemis, Inc.* 3,363
150 Bethlehem Steel Corp.* 544
50 Boise Cascade Corp. 1,294
150 Crown Cork & Seal Co., Inc. 2,250
900 Dow Chemical Co. 27,169
1,250 Dupont De Nemours & Co. 54,688
50 Eastman Chemical Co. 2,388
150 Engelhard Corp. 2,559
150 Freeport McMoRan Copper & Gold, Inc., Class B* 1,388
200 Georgia Pacific Corp. 5,250
50 Grace, (W.R.) & Co. * 606
50 Great Lakes Chemical Corp. 1,575
150 Hercules, Inc. 2,109
300 Homestake Mining Co.* 2,063
200 Inco Ltd.* 3,075
150 International Flavors & Fragrances, Inc. 4,528
606 International Paper Co. 18,070
150 Louisiana Pacific Corp. 1,631
150 Mead Corp. 3,788
150 Newmont Mining Corp. 3,244
50 Nucor Corp. 1,659
150 Owens Illinois, Inc.* 1,753
200 Pactiv Corp.* 1,575
50 Phelps Dodge Corp. 1,859
350 Placer Dome, Inc.* 3,347
150 Praxair, Inc. 5,616
300 Rohm & Haas Co.* 10,351
50 Sealed Air Corp.* 2,619
50 Sigma Aldrich Corp. 1,463
100 Temple Inland, Inc.* 4,200
150 USX U.S. Steel Group 2,785
150 Union Carbide Corp. 7,425
150 Vulcan Materials Co. 6,403
150 Westvaco Corp. 3,723
300 Weyerhaeuser Co. 12,900
150 Willamette Industries, Inc. 4,088
50 Worthington Industries, Inc. 525
270,678
Miscellaneous - 0.6%
575 S&P 500 Depository Receipt, Unit Ser 1* 82,533
Telecommunication Services - 6.8%
4,418 AT&T Corp. 139,704
350 Alltel Corp. 21,678
1,800 Bell Atlantic Corp.* 91,463
2,150 BellSouth Corp.* 91,644
150 Centurytel, Inc. 4,313
1,150 GTE Corp. 71,588
1,050 Global Crossing Ltd.* 27,628
900 Nextel Communications, Inc., Class A* 55,069
4,000 SBC Communications, Inc.* 173,000
1,000 Sprint Corp. 51,000
1,100 Sprint Corp. PCS* 65,450
600 U.S. West, Inc.* 51,450
3,350 WorldCom, Inc.* 153,681
997,668
Utilities - 2.3%
500 AES Corp.* 22,813
150 Ameren Corp. 5,063
420 American Electric Power, Inc.* 12,444
150 CMS Energy Corp.* 3,300
150 CP&L Energy, Inc.* 4,791
150 Cinergy Corp. 3,816
50 Columbia Energy Group 3,281
200 Consolidated Edison, Inc. 5,925
150 Constellation Energy Group, Inc. 4,884
150 DTE Energy Co. 4,584
300 Dominion Resources, Inc. 12,863
450 Duke Energy Corp 25,369
350 Edison International, Inc. 7,175
300 El Paso Energy Corp. 15,281
900 Enron Corp. 58,050
300 Entergy Corp.* 8,157
200 FPL Group, Inc. 9,900
300 FirstEnergy Corp. 7,014
150 Florida Progress Corp. 7,031
150 GPU, Inc.* 4,059
150 New Century Energies, Inc.* 4,500
200 Niagara Mohawk Holding, Inc.* 2,788
100 NICOR, Inc.* 3,264
150 Northern States Power Co., Minnesota* 3,028
200 Peco Energy Company 8,063
450 PG&E Corp. 11,081
150 PPL Corp. 3,291
50 Pinnacle West Capital Corp.* 1,694
300 Public Service Enterprise 10,389
350 Reliant Energy, Inc. 10,347
200 Sempra Energy Co. 3,400
800 Southern Co.* 18,651
300 TXU Corp. 8,850
200 Unicom Corp. 7,738
500 Williams Companies, Inc. 20,844
343,728
TOTAL COMMON STOCKS (Cost $14,542,513) - 99.6% 14,666,242
FACE Market
AMOUNT DESCRIPTION Value
REPURCHASE AGREEMENT (Cost $105,000) - 0.7%
105,000 Northern Trust Co., 6.40%, due July 3, 2000
(Collateralized by U.S. Treasury Bonds,
11.875%, due November 15, 2003) 105,000
TOTAL INVESTMENTS (Cost $14,647,513) - 100.3% 14,771,242
Other assets less liabilities - (0.3%) (51,068)
TOTAL NET ASSETS - 100.0%
(equivalent to $10.02 per share; unlimited shares
of $1.00 par value capital shares authorized;
1,469,173 shares outstanding) $14,720,174
For federal income tax purposes, the identified cost of investments owned
at June 30, 2000 was $14,648,741.
Net unrealized appreciation for federal income tax purposes was $122,501,
which is comprised of unrealized appreciation of $780,033 and unrealized
depreciation of $657,532.
*Non-income producing security.
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS JUNE 30, 2000
StatementS of Assets and Liabilities
ASSETS:
Investment securities, at market value
(identified cost $14,647,513) $14,771,242
Cash
29,928
Dividends receivable 9,351
Receivable for securities sold 219,046
Total assets 15,029,567
LIABILITIES:
Payable for securities purchased 309,393
NET ASSETS $14,720,174
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $14,579,505
Accumulated undistributed income:
Net investment income 21,611
Net realized loss on investment transactions (4,671)
Net unrealized appreciation on investments 123,729
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $14,720,174
Capital shares, $1.00 par value
Authorized Unlimited
Outstanding 1,469,173
NET ASSET VALUE PER SHARE $ 10.02
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS for the period May 1, 2000 (inception) to June 30, 2000
Statements of Operations
INVESTMENT INCOME:
Income:
Dividends $ 16,267
Interest 10,211
26,478
Expenses:
Management fees 4,867
Net investment income 21,611
REALIZED and unrealized GAIN (LOSS) ON INVESTMENTS:
Net realized loss from investment transactions (4,671)
Increase in net unrealized appreciation on investments 123,729
Net realized and unrealized gain on investments 119,058
Net increase in net assets resulting from operations $ 140,669
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS for the period May 1, 2000 (inception) to June 30, 2000
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 21,611
Net realized loss from investment transactions (4,671)
Increase in net unrealized appreciation on investments 123,729
Net increase in net assets resulting from operations 140,669
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 1,484,404 shares sold 14,730,624
Cost of 15,231 shares redeemed (151,119)
Net increase in net assets from capital
share transactions 14,579,505
Net increase in net assets 14,720,174
NET ASSETS:
Beginning of period -
End of period (including undistributed net investment
income of $21,611) $14,720,174
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 - Securities 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. At June 30, 2000,
the Fund has a net capital loss carryover of $5,000 available to offset
future realized capital gains and thereby reduce further taxable gains
distributions.
Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of the deferral of wash sale losses and
post-October losses.
The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate
characterization for federal income tax purposes due to GAAP/tax
differences in the character of income recognition.
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 period ended June 30, 2000 (excluding repurchase
agreements), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $16,122,693 $ -
Proceeds from sales 1,575,508 -
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 .40 of one percent (.40%). Through
the fiscal year ending June 30, 2001 the manager has entered into a
contractual commitment with the Fund to limit annual Fund operating
expenses to .30 of one percent (.30%) of average daily net assets. Under
this agreement, the manager may subsequently seek to recoup such amounts
waived for up to a period of three years from the date such amounts were
waived or paid. There was no per share impact on net investment income as a
result of this waiver, for the period ended June 30, 2000. 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.
5. INVESTMENT SUB-ADVISOR - UMB Bank, n.a. the Fund's manager, employs, at
its own expense, Northern Trust Quantitative Advisors, Inc. ("Northern
Trust") to assist in the day-to-day management function of the Fund.
6. SUBSEQUENT ACCOUNTING POLICY CHANGE - The Financial Accounting Standards
Board ("FASB") has issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities ("SFAS
133"). This statement, as amended by SFAS No. 137, requires all derivatives
to be recorded on the balance sheet date at fair value and establishes
standard accounting methodologies for hedging activities. The standard will
result in the recognition of offsetting changes in value or cash flows of
both the hedge and the hedged item in net investment income in the same
period. The statement is effective for the Fund's fiscal year ending
June 30, 2001. Because the Fund does not normally hold derivative
instruments, the adoption of this statement is not expected to have a
material impact on the financial statements.
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share
outstanding throughout the period.
June 30, 2000*
Net asset value, beginning of period $10.00
Income from investment operations:
Net investment income 0.01
Net realized and unrealized gain on securities 0.01
Total from investment operations 0.02
Net asset value, end of period $10.02
Total return** 0%
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 15
Ratio of expenses to average net assets 0.30%
Ratio of net investment income to average net assets 1.21%
Portfolio turnover rate 12%
Average commission rate $.0282
*The Fund was capitalized on April 12, 2000 with $100,000, representing
10,000 shares at a net asset value of $10.00 per share. Initial public
offering was made on May 1, 2000, at which time net asset value was $10.00
per share.
Ratios for this initial period of operation are annualized.
**The return is not annualized.
See accompanying Notes to Financial Statements.
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Directors of the
UMB Scout Equity Index Fund:
We have audited the accompanying statement of assets and liabilities of the
UMB Scout Equity Index Fund, including the statement of net assets, as of
June 30, 2000, and the related statement of operations, statement of
changes in net assets and the financial highlights for the periods
indicated thereon. These financial statements and financial highlights are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included verification of
securities owned as of June 30, 2000, by confirmation, or by the
application of alternative auditing procedures with respect to unsettled
portfolio security transactions. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of UMB Scout Equity Index Fund, as of June 30, 2000, the results of its
operations, the changes in its net assets and the financial highlights for
the periods indicated thereon in conformity with generally accepted
accounting principles.
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
July 28, 2000
This report has been prepared for the information of the Shareholders of
UMB Scout Equity Index Fund 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
Balanced Fund
Bond Fund
Capital Preservation Fund
Equity Index Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund - Federal Portfolio
Money Market Fund - Prime Portfolio
Regional Fund
Stock Fund
Stock Select Fund
Tax-Free Money Market Fund
Technology Fund
WorldWide Fund
WorldWide Select 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.
<PAGE>
UMB Scout Funds
Technology Fund
Annual Report June 30, 2000
A no-load mutual fund that invests principally in securities
of companies that develop, produce or distribute products
and services related to technology.
TO THE SHAREHOLDERS
In the past year, the financial markets continued to capture the nation's
fancy. The major drivers regarding financial asset prices over the last 12
months have been earnings and interest rates, as is typically the case.
However, last fall we witnessed a temporary detour from the "norm" as we
saw what turned out to be a speculative "bubble" being created when
investors purchased anything labeled ".com." While that bubble has not
burst, it is fair to say that much of the speculative "froth" has since
been eliminated from asset valuation levels.
In an effort to get a handle on the economy, Alan Greenspan conducted a
series of six interest rate increases designed to slow the economic
environment and ease any upward pressure on inflation rates. We are
beginning to see signs that the growth rate in the economy is decreasing.
For the time being, it appears that Mr. Greenspan's efforts were successful.
But what about the future? Will the economy continue to slow? And if it
does slow, could we slip into a recession? These are very significant
questions on many investors' minds. While we do not know what the future
holds, history would suggest that the economy is going to slow during the
remainder of 2000. Keep in mind that historically, the Federal Reserve,
currently headed by Greenspan, has had difficulty "fine tuning" the
economy. It has been shown that once the economy starts to slow, keeping it
out of a recessionary environment can be difficult. In our minds, recession
poses a major potential risk which investors may have to wrestle with
during the next 12 months.
Longer term, we continue to look at the investment landscape in a positive
sense. Inflation is low, and the economy is growing nicely. As long as
these two trends are at work, we believe that financial assets will
generate satisfactory returns.
In closing, we at UMB Investment Advisors would like to thank you, our
shareholders, for your continued support of the UMB Scout Funds. We fully
understand and appreciate the trust you have placed in our hands. We will
work hard to maintain that trust.
Respectfully,
/s/William B. Greiner
William B. Greiner
Executive Vice President
Chief Investment Officer
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.
TO THE SHAREHOLDERS
The UMB Scout Technology Fund closed the period ended June 30, 2000 at
$10.08 per share and had a total return of 0.81% for the two-month period
since its inception on May 1, 2000.
The objective of the Fund is to provide shareholders with long-term capital
appreciation by investing principally
in companies that develop, produce or distribute technology-related
products and services.
Due to the limited focus of this fund, it is not intended to serve as a
complete investment program by itself.
Rapid changes in investor sentiment were apparent in the Fund's returns for
the first two months. After declining 11.9% in May, Fund performance
quickly reversed, and a 14.4% return in June produced a slightly positive
result for the period.
The decline in May was a continuation of the sell-off that began in March.
Fears of rising interest rates were the primary cause for the NASDAQ
Composite Index's fall, from a record close above 5000 in early March, to
less than 3200 in late May. While the overall market was down somewhat, the
S&P 500 Index fell just over 2% for the quarter. Technology stocks were
much harder hit with the S&P High-Tech Index falling 8.57%.
Economic data released in June showed some signs that the economy might be
slowing. This was viewed positively by investors, who took it as an
indication that further interest rate increases might not be necessary. The
market rebounded quickly in June with the S&P 500 rising nearly 2.5% and
the S&P High-Tech Index gaining 10.6%.
The Fund's exposure to the large-cap technology leaders, such as Cisco,
Microsoft and Intel, helped the Fund perform in line with the S&P Tech
sector in the month of May. As the market recovered, the Fund was able to
take advantage of the rebound in some of the stocks that had experienced
significant corrections. Rambus was up over 130% for the month, and several
other holdings increased more than 60%.
Turnover in the Fund has been relatively low, but a few positions were
eliminated. As an example, BMC Software had experienced a steady decline in
its stock price and was sold, as we felt less certain about its near-term
fundamentals. Subsequent to our sale, the company announced that business
had slowed significantly, and the stock fell another 40%.
Additions to the portfolio included taking a position in the biotech
sector, as well as increasing our weighting in the communications equipment
and semiconductor industries. These two areas continue to be overweighted
in the portfolio, based on our view that the long-term growth outlook for
these industries remains very positive. We reduced our Internet exposure,
as declining advertising revenues put pressure on companies such as America
Online and Yahoo!.
Overall, we are optimistic that the second half of 2000 will be very good
for technology stocks. Although we expect that volatility will remain high,
the fundamentals of the sector indicate acceleration in growth relative to
the Y2K slowdown at the end of last year.
We are excited to be one of the new additions to the UMB Scout Fund family.
In keeping with the tradition of our other funds, we encourage your
questions and comments.
Sincerely,
/s/William B. Greiner
William B. Greiner
UMB Investment Advisors
Chart - HYPOTHETICAL GROWTH OF $10,000
UMB Scout Technology Fund
as of June 30, 2000
Chart - COMPARATIVE RATES OF RETURN
UMB Scout Technology Fund
as of June 30, 2000
Month Inception
UMB Scout Technology Fund 14.43% 0.81%
S&P High Tech Composite* 10.61% N.A.
Morgan Stanley High Tech 35* 12.01% N.A.
Hambrecht & Quist Technology* 12.04% N.A.
Inception - May 1, 2000.
Performance data contained in this report are for past periods only. Past
performance is not predictive of future results. Investment return and
share value will fluctuate, and redemption value may be more or less than
the original cost.
*Unmanaged index of stocks, bonds or mutual funds (there are no direct
investments or fees in these indices).
CHART - Fund Diversification
UMB Scout Technology Fund
CHART - top ten equity holdings
UMB Scout Technology Fund
Market Percent
Value (000's) of Total
Cisco Systems, Inc. $ 435 9%
Intel Corp. 418 8%
Microsoft Corp. 418 8%
Oracle Corp. 247 5%
Nortel Networks Corp. 219 4%
EMC Corp. 208 4%
Sun Microsystems, Inc. 200 4%
International Business Machines Corp. 177 4%
Juniper Networks, Inc. 169 3%
Hewlett-Packard Co. 157 3%
Top Ten Equity Holdings Total: $2,650* 52%*
As of June 30, 2000, statement of assets. Subject to change.
*Market Values and Percents of Total are rounded; may not equal total.
FINANCIAL STATEMENTS JUNE 30, 2000
Statement of Net Assets
Market
SHARES DESCRIPTION Value
COMMON STOCKS - 94.5%
Health care - 2.7%
715 PE Corp. - PE Biosystems Group* $ 47,101
1,826 Immunex Corp.* 90,273
137,374
INFORMATION Technology - 91.8%
623 ADC Telecommunications, Inc.* 52,254
1 Agilent Technologies, Inc.* 44
1,384 America Online, Inc.* 73,006
488 Analog Devices, Inc.* 37,088
1,114 Applied Materials, Inc.* 100,956
500 Avanex Corp.* 47,750
575 Broadcom Corp., Class A* 125,889
6,843 Cisco Systems, Inc.* 434,958
800 Computer Associates Intl., Inc. 40,950
804 Comverse Technology, Inc.* 74,772
2,896 Dell Computer Corp.* 142,809
2,708 EMC Corporation, Massachusetts* 208,347
1,255 Hewlett-Packard Co.* 156,718
3,130 Intel Corp. 418,442
1,619 International Business Machines Corp. 177,382
663 I2 Technologies, Inc.* 69,128
1,189 JDS Uniphase Corp.* 142,531
1,159 Juniper Networks, Inc.* 168,707
2,342 Lucent Technologies, Inc.* 138,764
5,227 Microsoft Corp.* 418,160
2,157 Motorola, Inc. 62,688
880 Network Appliance, Inc.* 70,840
1,895 Nokia Corp.* 94,632
3,216 Nortel Networks Corp. 219,492
2,943 Oracle Corp.* 247,396
246 Pmc-Sierra, Inc.* 43,711
875 Qualcomm, Inc.* 52,500
1,255 Rambus, Inc., Delaware* 129,265
681 Scientific Atlanta, Inc. 50,735
2,284 Solectron Corp.* 95,643
2,200 Sun Microsystems, Inc. 200,063
1,335 Taiwan Semiconductor Mfg. Co. 51,731
621 Teradyne, Inc.* 45,644
2,000 Texas Instruments, Inc.* 137,372
624 Veritas Software Corp.* 70,522
508 Xilinx, Inc.* 41,942
4,642,831
TOTAL COMMON STOCKS (Cost $4,469,181) - 94.5% 4,780,205
Face Market
Amount DESCRIPTION Value
REPURCHASE AGREEMENT (Cost $280,000) - 5.5%
$280,000 Northern Trust Co., 6.40%, due July 3, 2000
(Collateralized by U.S. Treasury Bonds,
11.875%, due November 15, 2003) 280,000
TOTAL INVESTMENTS (Cost $4,749,181) - 100.0% 5,060,205
Other assets less liabilities - (0.0%) (312)
TOTAL NET ASSETS - 100.0%
(equivalent to $10.08 per share; unlimited shares
of $1.00 par value capital shares authorized;
501,920 shares outstanding) $ 5,059,893
For federal income tax purposes, the identified cost of investments owned
at June 30, 2000 was $4,751,495.
Net unrealized appreciation for federal income tax purposes was $308,710,
which is comprised of unrealized appreciation of $444,616 and unrealized
depreciation of $135,906.
*Non-incoming producing security
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS FOR THE PERIOD MAY 1, 2000 (INCEPTION) TO JUNE 30, 2000
StatementS of Assets and Liabilities
ASSETS:
Investment securities, at market
value (identified cost $4,749,181) $ 5,060,205
Dividends receivable 292
Total assets 5,060,497
LIABILITIES:
Disbursements in excess of demand deposit cash 604
NET ASSETS $ 5,059,893
NET ASSETS CONSIST OF:
Capital (capital stock and paid-in capital) $ 4,789,053
Accumulated undistributed income:
Net investment loss (680)
Net realized loss on investment transactions (39,504)
Net unrealized appreciation on investments 311,024
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $ 5,059,893
Capital shares, $1.00 par value
Authorized Unlimited
Outstanding 501,920
NET ASSET VALUE PER SHARE $ 10.08
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS FOR THE PERIOD MAY 1, 2000 (INCEPTION) TO JUNE 30, 2000
Statements of Operations
INVESTMENT INCOME:
Income:
Dividends $ 435
Interest 4,301
4,736
Expenses:
Management fees 5,416
Net investment loss (680)
REALIZED and unrealized GAIN (LOSS) ON INVESTMENTS:
Net realized loss from investment transactions (39,504)
Increase in net unrealized appreciation on investments 311,024
Net realized and unrealized gain on investments 271,520
Net increase in net assets resulting from operations $ 270,840
See accompanying Notes to Financial Statements.
FINANCIAL STATEMENTS FOR THE PERIOD MAY 1, 2000 (INCEPTION) TO JUNE 30, 2000
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment loss $ (680)
Net realized loss from investment transactions (39,504)
Increase in net unrealized appreciation on investments 311,024
Net increase in net assets resulting from operations 270,840
INCREASE FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from 501,920 shares sold 4,789,053
NET ASSETS:
Beginning of period -
End of period (including undistributed net
investment loss of $680) $ 5,059,893
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
non-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 - Securities 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. At June 30, 2000,
the Fund has a net capital loss carryover of $40,000 available to offset
future realized capital gains and thereby reduce further taxable gains
distributions.
Net investment income and net realized gains differ for financial statement
and tax purposes primarily because of the deferral of wash sale losses and
post-October losses.
The character of distributions made during the year from net investment
income or net realized gains may differ from their ultimate
characterization for federal income tax purposes due to GAAP/tax
differences in the character of income recognition.
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 period ended June 30, 2000 (excluding repurchase
agreements), were as follows:
Other than
U.S. Government U.S. Government
Securities Securities
Purchases $ 4,791,742 $ -
Proceeds from sales 283,057 -
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 1.50 percent. Through the fiscal
year ending June 30, 2001 the manager has entered into a contractual
commitment with the Fund to limit annual Fund operating expenses to 1.10
percent of average daily net assets. Under this agreement, the manager may
subsequently seek to recoup such amounts waived for up to a period of three
years from the date such amounts were waived or paid. The fee waiver
resulted in a $0.01 per share decrease in net investment loss for the
period ended June 30, 2000. 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.
5. SUBSEQUENT ACCOUNTING POLICY CHANGE - The Financial Accounting Standards
Board ("FASB") has issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities ("SFAS
133"). This statement, as amended by SFAS No. 137, requires all derivatives
to be recorded on the balance sheet date at fair value and establishes
standard accounting methodologies for hedging activities. The standard will
result in the recognition of offsetting changes in value or cash flows of
both the hedge and the hedged item in net investment income in the same
period. The statement is effective for the Fund's fiscal year ending June
30, 2001. Because the Fund does not normally hold derivative instruments,
the adoption of this statement is not expected to have a material impact on
the financial statements.
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share
outstanding throughout the period.
June 30, 2000*
Net asset value, beginning of period $10.00
Income from investment operations:
Net realized and unrealized gains on securities 0.08
Total from investment operations 0.08
Net asset value, end of period $10.08
Total return** 1%
Ratios/Supplemental Data
Net assets, end of period (in millions) $ 5
Ratio of expenses to average net assets 1.10%
Ratio of net investment loss to average net assets (0.13%)
Portfolio turnover rate 10%
Average commission rate $.0838
*The Fund was capitalized on April 12, 2000 with 100,000, representing
10,000 shares at a net asset value of $10.00 per share. Initial public
offering was made on May 1, 2000, at which time net asset value was $10.00
per share.
Ratios for this initial period of operation are annualized.
**The return is not annualized.
See accompanying Notes to Financial Statements.
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Directors of
UMB Scout Technology Fund:
We have audited the accompanying statement of assets and liabilities of the
UMB Scout Technology Fund, including the statement of net assets, as of
June 30, 2000, and the related statement of operations, statement of
changes in net assets and the financial highlights for the periods
indicated thereon. These financial statements and financial highlights are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included verification of
securities owned as of June 30, 2000, by confirmation, or by the
application of alternative auditing procedures with respect to unsettled
portfolio security transactions. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of UMB Scout Technology Fund, as of June 30, 2000, the results of its
operations, the changes in its net assets and the financial highlights for
the periods indicated thereon in conformity with generally accepted
accounting principles.
BAIRD, KURTZ & DOBSON
Kansas City, Missouri
July 28, 2000
This report has been prepared for the information of the Shareholders of
the UMB Scout Technology Fund, 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
Balanced Fund
Bond Fund
Capital Preservation Fund
Equity Index Fund
Kansas Tax-Exempt Bond Fund*
Money Market Fund - Federal Portfolio
Money Market Fund - Prime Portfolio
Regional Fund
Stock Fund
Stock Select Fund
Tax-Free Money Market Fund
Technology Fund
WorldWide Fund
WorldWide Select 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.
