UMB SCOUT FUNDS
MONEY MARKET FUND
QUARTERLY REPORT
SEPTEMBER 30, 1998
A no-load mutual fund with primary emphasis
on maximum income consistent with safety
of principal and maintenance of liquidity.
TO THE SHAREHOLDERS
The UMB Scout Money Market Fund's Federal Portfolio earned 1.28% for the
quarter ended September 30, 1998, while the Prime Portfolio earned
1.29%. The 7-day current yield on September 30 was 5.01% for the Federal
Portfolio and 5.08% for the Prime Portfolio. The Fund invests in high-quality
short-term debt instruments and seeks maximum income consistent with
safety of principal and liquidity.
An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although
the Fund seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the Fund.
Money market rates remained relatively stable in July and August, but
September was a far different story. Evidence of continued worldwide
economic weakness combined with serious economic problems in Russia
spurred widespread anticipation of an interest rate cut by the Federal
Reserve. The Fed did not disappoint the market and cut the benchmark Fed
Funds rate to 5.25% from 5.50% on September 29.
The domestic market also felt the effect of a "flight to quality" by
international investors who turned to U.S. Treasury securities for
protection from less stable markets. The yield differences between
corporate issues and Treasuries widened dramatically. The 7-day yield of
the Fund's Federal Portfolio dropped below 5.00% for the first time
since May. Given the current economic climate, it seems prudent to join
the consensus of market opinion in believing that the latest rate cut by
the Fed will be only the first in
a series.
We continue to emphasize quality in the holdings of both portfolios. At
the quarter's end, the average life of the Federal Portfolio was 20 days
and the average life of the Prime Portfolio was 15 days. Both portfolios
had more than 30% of assets maturing within one week. This structure
allows us to take advantage of the fact that rates normally spike higher
at the end of a quarter but issuers are paying premiums for maturities
under 30 days.
We want to remind all shareholders that the Fund name is changing to UMB
Scout Money Market Fund, Inc., effective October 31, 1998. However, the
ticker symbols will not change: UMFXX for the Federal Portfolio and
UMPXX for the Prime Portfolio.
We appreciate your continued interest in the UMB Scout Money Market Fund
and we welcome your comments and questions.
Sincerely,
/s/William A. Faust
William A. Faust
UMB Investment Advisors
FUND DIVERSIFICATION - PIE CHART - FEDERAL PORTFOLIO
FUND DIVERSIFICATION - PIE CHART - PRIME PORTFOLIO
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
<TABLE>
<CAPTION>
FACE Market
AMOUNT DESCRIPTION Value
PRIME PORTFOLIO
SHORT-TERM CORPORATE NOTES - 99.36%
</CAPTION>
<S> <C>
$ 11,700,000 Amgen, Inc., 5.51%, due October 6, 1998 $ 11,691,046
5,800,000 Amgen, Inc., 5.50%, due October 20, 1998 5,783,164
10,000,000 Amgen, Inc., 5.50%, due October 27, 1998 9,960,278
17,185,000 Anheuser-Busch Cos. Inc., 5.68%, due October 1, 1998 17,185,000
25,000,000 Anheuser-Busch Cos. Inc., 5.50%, due October 9,1998 24,969,444
10,000,000 Becton Dickenson, 5.51%, due October 2, 1998 9,998,469
4,720,000 Bell Atlantic Network Funding, 5.50%, due October 1, 1998 4,720,000
7,759,000 Bell Atlantic Network Funding, 5.50%, due October 7, 1998 7,751,888
3,000,000 BellSouth Telecommunications, 5.52%, due October 5, 1998 2,998,160
3,310,000 BellSouth Telecommunications, 5.52%, due October 6, 1998 3,307,462
2,169,000 BellSouth Telecommunications, 5.50%, due October 20, 1998 2,162,704
7,500,000 California Pollution Control Rev., FDG, 5.54%, due October 13, 1998 7,500,000
11,000,000 California Pollution Control Rev., 5.53%, due October 5, 1998 11,000,000
12,000,000 California Pollution Control Rev., 5.55%, due October 5, 1998 12,000,000
9,000,000 California Pollution Control Rev., 5.57%, due October 14, 1998 9,000,000
15,000,000 Chevron USA, Inc., 5.52%, due October 1, 1998 15,000,000
11,200,000 Coca Cola Co., 5.48%, due October 2, 1998 11,198,295
20,000,000 Deere & Co., 5.50%, due October 9, 1998 19,975,556
10,000,000 Disney (Walt) Co., 5.50%, due October 7, 1998 9,990,833
13,700,000 Donnelly (R.R.) & Sons Co., 5.50%, due October 15, 1998 13,670,697
8,300,000 Dover Corp., 5.51%, due October 6, 1998 8,293,648
4,300,000 Dover Corp., 5.51%, due October 8, 1998 4,295,393
7,500,000 Dover Corp., 5.52%, due October 8, 1998 7,491,950
5,000,000 Dover Corp., 5.52%, due October 20, 1998 4,985,433
1,500,000 duPont (E.I.) deNemours & Co., 5.50%, due October 6, 1998 1,498,854
15,000,000 duPont (E.I.) deNemours & Co., 5.51%, due October 16, 1998 14,965,562
8,500,000 duPont (E.I.) deNemours & Co., 5.24%, due October 22, 1998 8,474,018
10,000,000 Emerson Electric Co., 5.52%, due October 8, 1998 9,989,267
20,000,000 Gannett Co., Inc., 5.50%, due October 15, 1998 19,957,222
1,490,000 General Mills, Inc., 5.75%, due October 1, 1998 1,490,000
1,550,000 General Mills, Inc., 5.50%, due October 16, 1998 1,546,448
1,000,000 General Mills, Inc., 5.50%, due October 19, 1998 997,250
13,500,000 General RE Corp., 5.50%, due October 8, 1998 13,485,562
1,850,000 General RE Corp., 5.50%, due October 13, 1998 1,846,608
3,000,000 General RE Corp., 5.50%, due October 14, 1998 2,994,042
9,500,000 Gillette Co., 5.71%, due October 1, 1998 9,500,000
5,000,000 Laclede Gas Co., 5.52%, due October 5, 1998 4,996,933
2,500,000 Laclede Gas Co., 5.35%, due October 7, 1998 2,497,771
1,000,000 Laclede Gas Co., 5.51%, due October 20, 1998 997,092
8,185,000 Laclede Gas Co., 5.52%, due October 20, 1998 8,161,154
15,000,000 Lucent Technologies, Inc., 5.45%, due October 1, 1998 15,000,000
15,000,000 Lucent Technologies, Inc., 5.49%, due October 1, 1998 15,000,000
7,500,000 May Department Stores Co., 5.50%, due October 5, 1998 7,495,417
1,220,000 Monsanto Co., 5.52%, due October 8, 1998 1,218,691
2,000,000 Monsanto Co., 5.55%, due October 8, 1998 1,997,842
20,000,000 Motorola, Inc., 5.25%, due October 13, 1998 19,965,000
20,000,000 Penney (J.C.) Funding Corp., 5.50%, due October 23, 1998 19,932,778
10,000,000 PepsiCo, Inc., 5.50%, due October 6, 1998 9,992,361
6,500,000 PepsiCo, Inc., 5.25%, due October 20, 1998 6,481,990
4,248,000 Proctor & Gamble Co., 5.48%, due October 13, 1998 4,240,240
4,000,000 Progress Capital Holdings, Inc., 5.50%, due October 2, 1998 3,999,389
5,000,000 Progress Capital Holdings, Inc., 5.50%, due October 7, 1998 4,995,417
17,500,000 Progress Capital Holdings, Inc., 5.52%, due October 7, 1998 17,483,900
3,100,000 Progress Capital Holdings, Inc., 5.51%, due October 14, 1998 3,093,832
1,390,000 Snap On Tools Corp., 5.50%, due October 13, 1998 1,387,452
4,319,000 Snap On Tools Corp., 5.50%, due October 20, 1998 4,306,463
2,000,000 South Carolina Electric Gas, 5.50%, due October 20, 1998 1,994,194
15,875,000 South Carolina Electric Gas, 5.50%, due October 28, 1998 15,809,516
10,000,000 Texaco, Inc., 5.50%, due October 8, 1998 9,989,306
20,000,000 Texaco, Inc., 5.48%, due October 13, 1998 19,963,467
2,600,000 Times Mirror Co., 5.50%, due October 8, 1998 2,597,219
5,000,000 Times Mirror Co., 5.47%, due October 22, 1998 4,984,046
17,000,000 Times Mirror Co., 5.50%, due October 29, 1998 16,927,278
4,850,000 Toys `R' Us, 5.50%, due October 9, 1998 4,844,072
20,000,000 Wisconsin Energy Corp., 5.43%, due October 2, 1998 19,996,983
9,000,000 Wisconsin Energy Corp., 5.51%, due October 23, 1998 8,969,695
13,800,000 Xerox Capital Europe PLC, 5.50%, due October 2, 1998 13,797,892
5,000,000 Xerox Capital Europe PLC, 5.51%, due October 6, 1998 4,996,174
10,000,000 Xerox Capital Europe PLC, 5.50%, due October 16, 1998 9,977,083
609,764,900
GOVERNMENT SPONSORED ENTERPRISES - 0.98%
1,000,000 Federal Home Loan Banks, 5.70%, due April 15, 1999 1,000,000
5,000,000 Federal National Mortgage Association, 5.54%, due July 16, 1999 4,998,619
5,998,619
REPURCHASE AGREEMENT - 0.16%
1,000,000 Lehman Tri-Party Repo., 5.30%, due October 1, 1998
(Collateralized by Federal National Mortgage Strips, due July 1, 2023) 1,000,000
TOTAL INVESTMENTS - 100.58% $ 616,763,519
Other assets less liabilities - (0.58%) (3,073,411)
TOTAL NET ASSETS - 100.00%
(equivalent to $1.00 per share; 750,000,000 shares of 0.01 par value
capital shares authorized; 613,719,793 shares outstanding) $ 613,690,108
Valuation of securities is on the basis of amortized cost, which approximates market value.
</TABLE>
FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 (unaudited)
Statement of Net Assets
<TABLE>
<CAPTION>
FACE Market
AMOUNT DESCRIPTION Value
FEDERAL PORTFOLIO
GOVERNMENT SPONSORED ENTERPRISES - 94.16%
</CAPTION>
<S> <C>
$ 4,250,000 Federal Agricultural Mortgage Corporation Discount Notes,
5.44%, due October 6, 1998 $ 4,246,789
2,500,000 Federal Home Loan Banks Note,
5.70%, due April 15, 1999 2,500,000
3,996,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.46%, due October 1, 1998 3,996,000
4,440,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.42%, due October 2, 1998 4,439,332
9,578,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.44%, due October 2, 1998 9,576,554
3,232,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.45%, due October 2, 1998 3,231,511
1,400,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.46%, due October 2, 1998 1,399,788
1,250,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.45%, due October 5, 1998 1,249,243
1,941,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.15%, due October 6, 1998 1,939,612
3,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.43%, due October 7, 1998 2,997,285
2,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.45%, due October 7, 1998 1,998,183
1,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.46%, due October 7, 1998 999,090
13,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.42%, due October 8, 1998 1 2,986,299
12,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.45%, due October 8, 1998 11,987,283
13,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.42%, due October 9, 1998 12,984,342
7,500,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.41%, due October 13, 1998 7,486,475
13,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.42%, due October 14, 1998 12,974,557
1,711,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.44%, due October 14, 1998 1,707,639
11,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.45%, due October 14, 1998 10,978,351
3,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.44%, due October 15, 1998 2,993,653
19,380,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.42%, due October 16, 1998 19,336,234
3,142,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.43%, due October 16, 1998 3,134,891
14,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.45%, due October 21, 1998 13,957,611
7,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.30%, due October 28, 1998 6,972,175
1,400,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.12%, due November 20, 1998 1,390,044
5,000,000 Federal National Mortgage Association Discount Notes,
5.44%, due October 1, 1998 5,000,000
8,000,000 Federal National Mortgage Association Discount Notes,
5.22%, due October 5, 1998 7,995,360
20,730,000 Federal National Mortgage Association Discount Notes,
5.42%, due October 5, 1998 20,717,516
8,250,000 Federal National Mortgage Association Discount Notes,
5.45%, due October 6, 1998 8,243,755
2,457,000 Federal National Mortgage Association Discount Notes,
5.43%, due October 8, 1998 2,454,406
1,931,000 Federal National Mortgage Association Discount Notes,
5.43%, due October 9, 1998 1,928,670
23,500,000 Federal National Mortgage Association Discount Notes,
5.45%, due October 9, 1998 23,471,540
3,168,000 Federal National Mortgage Association Discount Notes,
5.455%, due October 9, 1998 3,164,160
1,400,000 Federal National Mortgage Association Discount Notes,
5.44%, due October 13, 1998 1,397,461
6,100,000 Federal National Mortgage Association Discount Notes,
5.445%, due October 13, 1998 6,088,928
8,000,000 Federal National Mortgage Association Discount Notes,
5.20%, due October 14, 1998 7,984,978
4,100,000 Federal National Mortgage Association Discount Notes,
5.43%, due October 15, 1998 4,091,342
2,000,000 Federal National Mortgage Association Discount Notes,
5.40%, due October 16, 1998 1,995,500
10,743,000 Federal National Mortgage Association Discount Notes,
5.42%, due October 16, 1998 10,718,738
14,000,000 Federal National Mortgage Association Discount Notes,
5.17%, due October 20, 1998 13,961,799
4,285,000 Federal National Mortgage Association Discount Notes,
5.44%, due October 20, 1998 4,272,697
4,000,000 Federal National Mortgage Association Medium Term Note,
5.54%, due July 16, 1999 3,998,895
2,000,000 Federal National Mortgage Association Medium Term Note,
6.00%, due October 26, 1999 2,000,612
1,000,000 Federal National Mortgage Association Medium Term Note,
6.04%, due October 26, 1999 1,000,340
287,949,638
REPURCHASE AGREEMENT - 6.15%
18,800,000 Lehman Tri-Party Repo., 5.30%, due October 1, 1998
(Collateralized by Federal National Mortgage Strips, due February 1, 2023,
Federal National Mortgage Strips, due July 1, 2023,
Federal National Mortgage Strips, due November 1, 2026) 18,800,000
TOTAL INVESTMENTS - 100.31% $ 306,749,638
Other assets less liabilities - (0.31%) (950,763)
TOTAL NET ASSETS - 100.00%
(equivalent of $1.00 per share; 750,000,000 shares of 0.01 par value
capital shares authorized; 305,846,998 shares outstanding) $ 305,798,875
Valuation of securities is on the basis of amortized cost, which approximates
market value.
</TABLE>
This report has been prepared for the information of the Shareholders of
UMB Scout Money Market 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.
